An Institutional Contingency Perspective of Interlocking Directorates

17 Pages Posted: 19 May 2020

See all articles by rosa caiazza

rosa caiazza

University of Naples Parthenope

Albert A. Cannella Jr

Arizona State University (ASU) - Marketing Department

Phillip Phan

Johns Hopkins University - Carey Business School

Michele Simoni

University of Naples Parthenope - Department of Management Studies and Quantitative Methods

Date Written: July 2019

Abstract

Interlocking directorates, in which companies are linked by the directors that serve on their boards, exist globally. It is an expression of hegemonic power exercised by the elites of a society, and has been studied with great interest by organizational sociologists, management scholars and financial economists. The interest emanates from the effect that interlocks have on wealth creation and distribution, and from the perspective that interlocks can tell us how elites in a society are networked. Although diverse theoretical perspectives have informed the research on interlocking directorates, this review shows that the Anglo‐American perspective dominates. This dominance is notable not only in the volume of Anglo‐American studies, but also in theories employed by international studies. For example, most international studies use agency theory to investigate the welfare implications of interlocks, but many countries do not use the Anglo‐American legal regime, which is the basis for agency theory. This paper expands the theoretical basis of the review to include class hegemony and resource dependence, to articulate better the causes and consequences of interlocks in the international context. The paper also extends theory by showing that institutions have an important influence on interlocks, so that the latter can be welfare‐depleting in one institutional setting, while welfare‐enhancing in another. The review concludes by discussing the implication for future research.

Suggested Citation

caiazza, rosa and Cannella Jr, Albert A. and Phan, Phillip H. and Simoni, Michele, An Institutional Contingency Perspective of Interlocking Directorates (July 2019). International Journal of Management Reviews, Vol. 21, Issue 3, pp. 277-293, 2019, Available at SSRN: https://ssrn.com/abstract=3602864 or http://dx.doi.org/10.1111/ijmr.12182

Rosa Caiazza (Contact Author)

University of Naples Parthenope

Albert A. Cannella Jr

Arizona State University (ASU) - Marketing Department

No Address Available

Phillip H. Phan

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Michele Simoni

University of Naples Parthenope - Department of Management Studies and Quantitative Methods

Via Medina 40
Via Generale Parisi, 13
Naples, 80133
United States

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