Corporate elites and corporate strategy: How demographic preferences and structural position shape the scope of the firm

Michael Jensen*, Edward J. Zajac

*Corresponding author for this work

Research output: Contribution to journalReview article

222 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)507-524
Number of pages18
JournalStrategic Management Journal
Volume25
Issue number6
DOIs
StatePublished - Jun 1 2004

Keywords

  • Acquisitions
  • Agency theory
  • Corporate elites
  • Diversification
  • Upper-echelons theory

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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