Corporate Elites and Corporate Strategy: How Demographic Preferences and Structural Position Shape the Scope of the Firm

Strategic Management Journal, Forthcoming

18 Pages Posted: 4 Sep 2006

Abstract

This study combines elements of the upper echelons and agency perspectives to resolve some of the ambiguity surrounding how corporate elites affect corporate strategy. We propose and test the notion that while differences in individual characteristics of corporate elites may imply different preferences for particular corporate strategies such as diversification and acquisitions, these basic preferences, when situated in different agency contexts (e.g., CEO, outsider director, non-CEO top management team member), generate very different strategic outcomes. Our detailed empirical findings, based on extensive longitudinal governance and corporate strategy data from large U.S. corporations, also highlight the pitfalls of using aggregate units of analysis (e.g., board of directors or top management team) when studying the influence of corporate elites on corporate strategy.

Keywords: upper echelons, corporate elites, diversification, CEOs, directors, top management teams, acquisitions

Suggested Citation

Jensen, Michael and Zajac, Edward J., Corporate Elites and Corporate Strategy: How Demographic Preferences and Structural Position Shape the Scope of the Firm. Strategic Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=927981

Michael Jensen (Contact Author)

University of Michigan ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Edward J. Zajac

Northwestern University - Kellogg School of Business ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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