Academic journal article Administrative Science Quarterly

Political Dynamics and the Circulation of Power: CEO Succession in U.S. Industrial Corporations, 1960-1990

Academic journal article Administrative Science Quarterly

Political Dynamics and the Circulation of Power: CEO Succession in U.S. Industrial Corporations, 1960-1990

Article excerpt

Science Quarterly, 31: 586-611

Singh, Jitendra, David J. Tucker, and Robert J. House 1986 "Organizational legitimacy and the liability of newness." Administrative Science Quarterly, 31: 171-193.

Staw, Barry M. 1976 "Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action." Organizational Behavior and Human Performance, 16: 27-44.

Tuma, Nancy B., and Michael T. Hannan 1984 Social Dynamics: Models and Methods. Orlando, FL: Academic Press. In political theories of organization, the firm is seen as a political coalition and executives as its primary political brokers (March, 1962; Cyert and March, 1963). According to political models, firm behavior responds to the interests and beliefs of the dominant coalition. Chief executive officers (CEOs) of U.S. industrial corporations play a central role in the dominant coalition, exercising their influence through both their formal authority and their informal power (Pfeffer, 1992). The formal authority of CEOs resides in their title and position in the formal structure and provides a legitimate basis to influence, if not always fully control the corporation and its dominant coalition. But the CEOs' bases for power are subject to both obsolescence and contestation, as CEOs are challenged by both internal political processes and external environmental contingencies.

This paper examines the political dynamics of executive control over the firm's coalition, as reflected in the ability of CEOs to retain their position. The principal thesis is that the dynamics of the CEO's power is subject to circulation, with contesting political coalitions more likely to emerge during periods of poor performance and with increased obsolescence of the schemas and strategies used by the CEO. This model of power builds on theories of the circulation of elites by Pareto and Michels, which were introduced to organization theory by Selznick (1957). The circulation of power connotes both the impermanence and contestation of executive control over the corporation. The model of circulation is compared and contrasted with the model of institutionalization, which has been more prevalent in contemporary organizational theory (Salancik and Pfeffer, 1977; Pfeffer, 1981; Boeker, 1989) and posits the ability of CEOs to build on their power to entrench themselves. These two theoretical models provide alternative conceptualizations of the ability of CEOs to maintain cohesive political coalitions that provide a stable base for their power.

THEORY

The dynamics of political coalitions, while central to understanding power in organizations, remains a relatively unexplored topic in organization theory. Most researchers on power in organizations have implicitly or explicitly studied it as a static or equilibrium process. In structural contingency models, for example, power is obtained by maintaining an alignment of the capabilities of individuals and subunits with the organization's environmental contingencies and resource dependencies (Hickson et al., 1971; Pfeffer and Salancik, 1978). But if the concept of power is to have independent explanatory power (March, 1966), an equilibrium model will not suffice. If the composition of the dominant coalition is in constant alignment with the firm's environment, power becomes an epiphenomenon, a mere reflection of structural contingencies. If the power of the CED and the dominant coalition are to have independent explanatory force, the composition of the political coalition must become decoupled over time from its ability to respond to the firm's environmental contingencies. To understand the role of power requires that our theories focus not just on equilibrium states but on the underlying political dynamics.

Political theories of organizations highlight the role of executive turnovers as an opportunity for realigning the firm with its environment (Pfeffer and Salancik, 1978). Poor economic performance, in particular, is seen as a triggering device for executive turnover (Tushman and Romanelli, 1985). …

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