The Politics of the Corporation (MORS 520)
Classroom: 387 Jacobs
Class time: Wednesday, 3-6
Office hours: by appt.
Brayden King
Phone: 467-6950
b-king@kellogg.northwestern.edu
Summary:
This course has at least two purposes. The first is to help generate a better understanding of
the corporation as a specific kind of social entity, explain its origins, and its sources of power.
The second is to explore the political landscape of the corporation. We will examine the political
interests of both corporations and those who inhabit them as well as political contestation of
the corporation.
Corporations are powerful social actors. They accumulate wealth, expend vast resources, and
are legally granted sovereignty and liability for their actions. In the current cultural and
economic environment, corporations are institutionally designed to use resources in a particular
way – they are accountable first and foremost to their shareholders and have an obligation to
maximize value for those shareholders. This institutional design also has implications for
corporate governance. Because of the powerful position of the corporation and its interests, the
corporation is often a target and source of political contestation.
Corporations are also locations of work and market activity. Corporations are often divided by
internal politics as groups fight for control over corporate resources or use their social networks
to advance their own interests. The struggle for internal power and control is central to the
functioning of corporations.
This class explores the political dynamics surrounding the corporate form. I use “politics”
liberally to capture the power dynamics in which corporations are enmeshed. Some of these
political battles play out in the policymaking realm of the state, but politics often spills into the
private sphere, as NGOs, activist organizations, and other groups contest the power and values
of corporations. In addition, we will examine the intra-organizational politics of corporations.
In the course we will take a broad theoretical perspective. The politics of the corporation are
important to several macro-organizational theories. Institutional theory examines the
institutional conditions that support the rise of the modern corporation and its ascendance to
great power. Resource dependence theory is interested in the relationships that undergird
power differentials and network analysis has been a useful methodology for illuminating sources
of corporate political power. Theories of corporate governance, like agency theory, are
interested in the distribution of power within organizations and the consequences this has for
organizational performance. Marxist theory has addressed the role of the corporation in
channeling and enacting class interests. Political sociology, more generally, has viewed the
corporation as an important source of political power that drives policymaking. Rather than
dedicate each class to a single theory, I’m organizing the course around issues or topics. The
format of the class is intended to show you how power and politics are components of any
theoretical view of the firm.
Grading
I base your grades on three criteria: class participation, memos, and a research proposal.
Discussion questions (20% of grade) - 50 points
Memos (40% of grade) – 100 points
Research proposal (40% of grade) – 100 points
Discussion questions
For each reading I want you to think of a question you would like to discuss in class. This
means you must come up with three questions for each class. You will then post them to the
course’s discussion board (on the BLACKBOARD site) the night before class. This means that
you will post discussion questions every Monday night (or before). You should even submit
questions on days if you plan on missing class. I will use those questions to aid our class
discussion that day.
A good discussion question is thought-provoking. Try to avoid questions that would simply
require someone in the class to summarize something from the reading. “Why” or “how”
questions are good. You might also try to make connections between the current reading and
something we’ve discussed in an earlier class. I think you’ll get the idea as we go along.
Memos
On the first day of class each student will choose two readings on which she will write memos.
Memos are one to two pages long and provide an opportunity for the student to concisely
discuss an interesting implication of the reading. I suggest the following format for a memo.
1) Begin by stating a theoretical proposition from the article/chapter. A proposition is a
statement about a causal relationship between two concepts. A very specific proposition is a
hypothesis. 2) Discuss how that proposition might be extended or applied to a different case,
another context, or a different theoretical perspective. By choosing a new context, you are
attempting to stretch the viability of the theory – see how far you can take it without breaking
the theory. You might talk about how a theory might not apply to certain situations. You might
also talk about how a different theoretical perspective makes us question the original
proposition. 3) Talk about the implications of extending the proposition. Does a different
context challenge the premises of the theory? Can you build on the proposition and make it
more general/more specific? What interesting implications does this have for a different
theory? In an excellent memo you will come up with a new proposition/hypothesis to test.
The point of doing memos is to force you to think creatively. Rather than learning theories and
spitting them out in summaries, this class will challenge you to think beyond what you read and
try to create something new. Ideally, you will use the memos as sounding boards for ideas that
you might explore further in a research project. You should not treat memos as summaries of
the readings.
In addition to writing the memos, you will present and discuss them in class. The class is
invited to comment on your ideas. I hope that students will feel free to openly question and
make suggestions to the memo writer. In other words, ideas presented in a memo are open to
challenge. The discussion part of the memo writing is intended to give you feedback and help
you to sharpen your analytical and theory-building skills.
Research proposal
At the end of the seminar each student should finish an eight to ten page research proposal.
The research proposal should be more than just an essay. You should advance theory in the
proposal. The ideal proposal would suggest new hypotheses or come up with new theoretical
propositions, and, more generally, refine our theoretical understanding of corporate politics.
You should not use the research proposal to summarize the material covered in class. Lay out
your theoretical argument in the first 4-5 pages of the proposal, and then spend the rest of the
proposal discussing details of how you plan on conducting a research project. In the readings
for the class you will notice that I include both purely theoretical pieces and empirical studies
that test hypotheses. These serve as good examples as you craft your own research ideas.
On the last day of the seminar we will talk about your research proposals. Each student will
have time to present their proposal and field questions from the class.
Schedule of Classes and Readings
Week 1 - The origins of corporate power
Adolf Berle and Gardiner Means. 2009 [1932]. Pp. 3-17 in The Modern Corporation and
Private Property. New Brunswick, NJ: Transaction.
Mark Mizruchi. 2004. “Berle and Means revisited: The governance and power of large
U.S. corporations.” Theory and Society. 33: 579-617.
Gerald Davis. 2009. Pp. 59-101 in Managed by the Markets. Oxford University Press.
Skim – Charles Perrow. 1991. “A society of organizations.” Theory and Society. 20: 725762.
Week 2 - Corporate actors and the state
Coleman, James. 1982. Pp. 1-77 in The Asymmetric Society. Syracuse, NY: Syracuse
University Press.
Jason Kaufman. 2008. “Corporate law and the sovereignty of states.” American
Sociological Review. 73: 402-425.
Ted Nace. 2003. Pp. 19-26, 191-209 in Gangs of America: The Rise of Corporate Power
and the Disabling of Democracy,
(http://www.gangsofamerica.com/gangsofamerica.pdf).
Skim – Charles Perrow. 2002. Pp. 217-228 in Organizing America. Princeton, NJ:
Princeton University Press.
Skim - Brayden King, Teppo Felin, and David Whetten. 2009. “Finding the organization
in organizational theory: A meta-theory of the organization as a social actor.”
Organization Science.
Week 3 - Class interests, the corporation, and the state
Michael Useem. 1984. Pp. 116-149 in The Inner Circle. Oxford University Press.
Alan Neustadtl and Dan Clawson. 1988. “Corporate political groupings: Does ideology
unify political behavior?” American Sociological Review. 53: 172-190.
David Vogel. 1996. Pp. 29-72 in Kindred Strangers: The Uneasy Relationship between
Politics and Business in America. Princeton, NJ: Princeton University Press.
Skim - Jill Quadagno. 1984. “Welfare capitalism and the Social Security Act of 1935.”
American Sociological Review. 49: 632-647.
Week 4 – Power and leadership inside the corporation
Philip Selznick. 1957. Chp. 1 & 2 in Leadership in Administration: A Sociological
Interpretation. Berkeley: University of California Press.
Robert Freeland. 1996. “The myth of the m-form? Governance, consent, and
organizational change.” American Journal of Sociology 102: 483-526.
Martin Gargiulo. 1993. “Two-step leverage: Managing constraint in organizational
politics.” Administrative Science Quarterly. 38: 1-19.
Skim – James March. 1962. “The business firm as a political coalition.” Journal of
Politics. 24: 662-678.
Skim - John Levi Martin. 2002. “Power, authority, and the constraint of belief systems.”
American Journal of Sociology. 107: 861-904.
Week 5 - Fields and political struggles for control
Neil Fligstein. 1996. “Markets as politics: A political-cultural approach to market
institutions.” American Sociological Review. 61: 656-673.
Michael Sauder. 2008. “Interlopers and field change: The entry of U.S. News into the
field of legal education.” Administrative Science Quarterly. 53: 209-234.
Paul Ingram and Hayagreeva Rao. 2004. “Store wars: The enactment and repeal of antichain-store legislation in America.” American Journal of Sociology. 110: 446-87.
Skim - Pierre Bourdieu. 1985. “The forms of capital.” Pp. 241-258 in Handbook of
Theory and Research for the Sociology of Education, ed. JG Richardson. New York:
Greenwood.
Skim - William Ocasio and Hyosun Kim. 1999. “The circulation of corporate control:
Selection of functional backgrounds of new CEOs in large U.S. manufacturing firms,
1981-1992.” Administrative Science Quarterly. 44: 532-562.
Week 6 - Corporate governance: shareholders and the agency problem
Armen Alchian and Harold Demsetz. 1972. “Production, information costs, and economic
organization.” American Economic Review. 62: 777-795.
Lynn Stout. 2005. “Bad and not-so-bad arguments for shareholder primacy.” Southern
California Law Review. 75: 1189-1210.
Frank Dobbin and Dirk Zorn. 2005. “Corporate malfeasance and the myth of shareholder
value.” Political Power and Social Theory. 17: 179-198.
Also comments by Richard Swedberg, Elisabeth Clemens, Mark Mizruchi and
Howard Kimeldorf, and Neil Fligstein. 199-228.
Skim - James Westphal and Edward Zajac. 1998. “The symbolic management of
stockholders: Corporate governance reforms and shareholder reactions.” Adminstrative
Science Quarterly. 43: 127-153.
Skim – Dirk Zorn. 2004. “Here’s a chief: The rise of the CFO in the American firm.”
American Sociological Review. 69: 345-364.
Week 7 – Intra-organizational politics and social movements
Mayer Zald and Michael Berger. 1978. “Social movements in organizations: Coup d’état,
insurgency, and mass movements.” American Journal of Sociology. 83: 823-861.
Klaus Weber, Hayagreeva Rao, and L.G. Thomas. 2009. “From streets to suites: How the
anti-biotech movement affected German pharmaceutical firms.” American Sociological
Review. 74: 106-127.
Debra Meyerson and Maureen Scully. 1995. “Tempered radicalism and the politics of
ambivalence and change.” Organization Science. 6: 585-600.
Skim - Douglas Creed, Maureen Scully, and John Austin. 2002. “Clothes make the
person? The tailoring of legitimating accounts and the social construction of identity.”
Organization Science. 13: 475-496.
Skim – Michael Lounsbury. 2001. “Institutional sources of practice variation: Staffing
college and university recycling programs.” Administrative Science Quarterly. 46: 29-56.
Week 8 - Extra-organizational politics and social movements
Gerald Davis and Tracy Thompson. 1995. “A social movement perspective on corporate
control.” Administrative Science Quarterly. 39: 141-173.
Brayden King. 2008. “A social movement perspective of stakeholder collective action and
influence.” Business and Society. 47: 21-49.
Tim Bartley. 2007. “Institutional emergence in an era of globalization: The rise of
transnational private regulation of labor and environmental conditions.” American
Journal of Sociology. 113: 297-351.
Skim – David Baron and Daniel Diermeier. 2007. “Strategic activism and nonmarket
strategy.” Journal of Economics and Management Strategy. 16: 599-634.
Skim – Brayden King. 2008. “A political mediation model of corporate response to social
movement activism.” Administrative Science Quarterly. 53: 395-421.
Week 9 - The politics of corporate social responsibility
David Vogel. 2005. The Market for Virtue: The Potential and Limits of Corporate Social
Responsibility. Washington D.C.: Brookings.
Week 10 – Student research proposals