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This paper explores the extent to which CEO ideological divergence influences firm lobbying strategy. Because a CEO’s political ideological disposition is shown to affect firm outcomes, we theorize there are nonmarket strategic implications when the governing party is divergent or convergent from their ideology. Accordingly, we integrate insights from organizational fit literature regarding value congruence and strategic complementarity in order to examine whether CEO political ideological divergence affects lobbying investment and changes the balance between internal and external lobbying activities. Further, we theorize that these outcomes are less pronounced for firms that are highly regulated. Our results support our theorizing, therefore, by identifying how CEO ideology interacts with the opposing political ideology. We unpack the ways in which CEO political ideology influences firm political behavior, thus extending research on CEO political ideology and lobbying.

Though human and relational capital are vital to the success of firms, little research exists on how these resources change in response to firms’ growth. We argue that focal firm employee-based res...

Social capital deterioration in the USA, and indeed throughout the world, has had considerable impact on professional service firms (PSFs). Governmental entities at various levels have enacted new laws and regulations (e.g. the Sarbanes Oxley and Dodd-Frank Acts in the USA) to help ameliorate this situation, but to relatively little avail. Traditional gatekeeping functions of PSFs seem to be deteriorating. Is there hope for the future? This article addresses that issue in the context of work by drawing on the insight and research of Robert Putnam and John Coffee and encouraging advancement of multiple agency theory and governance for today’s world.

The management literature has devoted increased attention to nonmarket activities of firms, such as political involvement and social responsibility, including philanthropy. While these activities m...

A letter to the editor is presented in response to the article "How Firms Shape Income Inequality: Stakeholder Power, Executive Decision Making, and the Structuring of Employment Relationships" by Adam Cobb in volume 41 of the periodical.

Little systematic research has been done on strategy implementation, yet there is a body of work providing guidance for implementation efforts. The authors examine three basic collections of work on resources and governance, managing human capital, and accounting-based control systems, explaining how these issues have implications for strategy implementation. Although the chapters in this Handbook provide many useful insights concerning issues that must be addressed in order to effectively implement firms’ strategies, there is need for more and systematic work. The purposes of this final chapter are to identify promising future research directions and to serve as a catalyst for the creation of additional collections of work that can enhance our understanding of strategy implementation. The five specific topics for which more work on strategy implementation is needed are innovation and entrepreneurship, marketing strategies and services, managing operations, managing financial assets and human capital, and strategies (international, acquisitions, differentiation).

Purpose – The rule of law and an efficient legal system are the core factors that ensure growth in BRIC economies. Weak institutions and failures with respect to the rule of law in Russia call into question its position as one of the BRIC countries. The purpose of this paper is to propose that the legitimization of newly created formal legal institutions in Russia is impossible without a new set of values that reflect the ideals of professionalism. It aims to explore the role institutional stakeholders play in establishment of the new set of professional values.Design/methodology/approach – A survey of existing legislation and academic research on professionalism and the development of the legal profession in Russia was undertaken to determine the state of the development of its formal and informal legal institutions. The role of stakeholders in the development of new professional institutions was also examined.Findings – The paper finds that the creation of formal institutions supporting the rule of law ...

Most of the research and writing in strategic management focuses on the formulation of the most appropriate strategies. Selecting the best strategy for firms to follow is very important to achieve and maintain a competitive advantage. However, many strategies fail not because they are improperly formulated, but because they are poorly implemented. Despite the importance of effectively implementing strategies, there is little research strategy implementation. Outside of the implementation of specific strategy types, such as mergers and acquisitions, perhaps the most prominent focus of strategy implementation research has been on matching the organizational structure to the strategy chosen. This handbook contributes to our understanding of strategy implementation and identifies considerable opportunities for future research on this important process, with a focus on resources, governance, human capital, and accounting-based control systems.

Corporate governance research indicates that corporate boards of directors may be overly beholden to management, which can be detrimental to firm value creation. Drawing upon agency theory and the governance law literature, we examine the effects of a new SEC rule designed to lessen managerial power by increasing large, long-term shareholders' influence in the director nomination process. We predict and find support for a positive overall market reaction to the rule's announcement as well as a greater reaction for firms with characteristics that suggest compromised board independence or greater CEO control. Moreover, we examine the implications of greater shareholder voice for another key stakeholder group, firm bondholders, and find evidence that it is also value increasing. We conclude by discussing important implications for theory and practice. Copyright © 2012 John Wiley & Sons, Ltd.

We have attempted to explain why professional service firms (PSFs) even in some of the most canonical examples (e.g., law firms) fail to follow the traditional definition. Growth in the size and geographic diversification of law firms has transformed their organizational structures and in some cases even allowed outside investment. We believe an attempt at defining organizational structure and ownership for any industry, including PSFs, is exposed to creating too many exceptions that may fall outside the confines of the definition. In particular, the problem of defining an industry is that while a given definition may in one context neatly correspond to the existing organizational structure and ownership, changes in the context can render the definition irrelevant over time. As an alternative to defining an industry, it might be more productive to examine how organizations and their respective industries become organized as contexts change.

We develop a new perspective on entrepreneurship as a dynamic, complex, subjective process of creative organizing. Our approach, which we call ‘dynamic creation’, synthesizes core ideas from Austrian ‘radical subjectivism’ with complementary ideas from psychology (empathy), strategy and organization theory (modularity), and complexity theory (self-organization). We articulate conjectures at multiple levels about how such dynamic creative processes as empathizing, modularizing, and self-organizing help organize subjectively imagined novel ideas in entrepreneurs’ minds, heterogeneous resources in their firms, and disequilibrium markets in their environments. In our most provocative claim, we argue that entrepreneurs, by imagining divergent futures and (re)combining heterogeneous resources to create novel products, drive far-from-equilibrium market processes to create not market anarchy but market order. We conclude our exposition of each dynamic creative process by offering one possible direction for future research and articulating additional conjectures that help point the way. Throughout, we draw examples from CareerBuilder—a firm that has played a major role in creating and shaping the online model in the job search/recruiting industry—and its industry rivals (e.g. Monster, Yahoo’s HotJobs) to illustrate selected concepts and relationships in dynamic entrepreneurial creation.

The article focuses on duality in the position of chief executive officer (CEO) and the role of corporate boards in monitoring the CEO and a firm's performance. Duality occurs when the CEO is also ...

In recent years, large US law firms have been undergoing significant changes. Most have switched from a professional model (P2 form) to a corporate business model, employing competitive strategies and a profit orientation. As the market for corporate legal services became more competitive, many large US law firms began to diversify the services they offer and expand their operations into new geographic regions of the country and into international markets. They even engaged in acquisitions and learned to manage and leverage their critical resources, human capital and relational capital. As a result, most of these law firms have added more professional management. All in all, the services law firms offer and the rivals with which they must contend have changed substantially over the last 15 years.

Equal employment opportunity (EEO) laws prohibit employment discrimination based on race, color, religion, sex, pregnancy, age, religion, disability, and national origin; in the United States, these laws apply to employers with fifteen or more employees. The concept means that all employees shall have an “equal opportunity” based hypothetically on their skills and performance to obtain employment and advance on the job once they have obtained such employment. In practice, though, the concept is much more complicated. In most family businesses (of which there are many), for example, family relationships/nepotism tend to play a major role in employment decisions, creating a high degree of “unequal employment opportunity” for non-family members. Moreover, the concept of “affirmative action,” discussed below, involves giving preferential treatment to members of certain groups such as veterans, those with disabilities, etc.—again something the opposite of providing “equal” opportunity to all. Our analysis, however, basically tracks the legal definition of “equal employment opportunity” in most of the developed world, which is essentially that employers must not discriminate (i.e., they should provide equal opportunity) in employment on the basis of race/color, sex, religion, age, etc.

To further knowledge about the bases of internationalization, we examined the importance of two firm resources: human capital, and relational capital derived from relations with corporate clients a...

The article examines the effects of a company's resources on its internationalization strategy. Firms must have the appropriate resources for international expansion and those resources must be bun...

We propose and test a theory of the value of racial minorities’ contribution to firm performance based on the demographic principle of proportional representation in the organization, community, and region. We conceptualize two demographic extremes, rarity and commonness in light of the predictions of institutional theory and the resource-based theory of the firm. Findings show that whether or not workforce diversity pays depends on proportional representation, which exhibits a curvilinear inverted U-shape effect. Diversity has a positive effect up to a threshold of 34 percent racial minority employees in the firm, but beyond the threshold firm performance declines. In theory, initial gains in firm profitability from the increasing legitimacy of a relatively rare minority hire erode with increasing minority hires because firm-based human and social capital resource shortages occurring after the threshold decrement firm profitability. Regional comparison suggests practicing legal services in the Midwest an...

The current study examines the direct and moderating effects of human capital on professional service firm performance. The results show that human capital exhibits a curvilinear (U-shaped) effect and the leveraging of human capital a positive effect on performance. Furthermore, the results show that human capital moderates the relationship between strategy and firm performance, thereby supporting a resource-strategy contingency fit. The results contribute to knowledge on the resource-based view of the firm and the strategic importance of human capital.

Firms employ a variety of political strategies (e.g., lobbying, contributions) in an attempt to gain influence or access to the public policy process. A variety of benefits may accrue to firms that are successful in creating a linkage with the government: information, access, influence, reduced uncertainty and transaction costs, etc. However, the direct benefits of such strategies are difficult to observe. One political strategy is studied here—personal service (having a firm representative serve in a political capacity). Event-study methodology results show that such linkages with the government positively affect firm value. These findings indicate that firm-specific benefits may result from political strategies. Copyright © 1999 John Wiley & Sons, Ltd.

Organizational leaders may respond to employee nonwork behaviors because of the possible influence on organizational image. We describe a typology of nonwork behaviors and discuss their potential implications for organizational image. We explore conditions under which organizational leaders may attempt to control employee nonwork behaviors and review the available alternatives for organizational control. We conclude by discussing the theoretical and practical implications of research on nonwork behavior.

Boards of directors' attention to monitoring represents an understudied topic in corporate governance. By analyzing hundreds of board meeting transcripts, we find that board members do not maintain constant levels of attention toward monitoring, but instead selectively allocate attention to their monitoring function. Drawing from the attention-based view, prospect theory, and the literature on power, we find that deviation from prior performance and CEO duality affect this allocation. Specifically, while negative deviation from prior performance increases boards' attention to monitoring, positive deviation from prior performance reduces it. The presence of duality also reduces the boards' allocation of attention to monitoring. Additional analysis demonstrates that the effects of duality are realized in part by the CEO-chair's control of the meeting's agenda and location. Finally, the results show that duality and deviation from prior performance interactively affect boards' attention to monitoring. In total, we find that board members do not consistently monitor management in order to protect shareholder value, a proposition often assumed within governance research; rather, our results demonstrate that board members' monitoring behaviors are contextually dependent. The contextual dependency of board attention to monitoring suggests that additional efforts may be needed to ensure the protection of shareholders' interests. Copyright © 2010 John Wiley & Sons, Ltd.

During the last several decades, the legal profession's definition of a "large" corporate law firm has gradually shifted. The rise of mega-firms, with broad geographic platforms and highly sophisticated, specialized, and profitable practice groups, has been expedited by the steady erosion of the norm against lawyer movement between firms. This change in market structure and professional ethos is attributable to a confluence of factors, including the bureaucratization of corporate legal departments; the publication of law firm financials; the delineation of individual lawyers by prominence in various regional, national, or global markets; and the challenges of maintaining shared cultural values and long-term time horizons in the face of perpetual growth imperatives driven by the promotion to partnership tournament. To date, commentators have described this process without necessarily articulating a logical endpoint. The purpose of this essay is to assemble the empirical facts of the "age of lawyer mobility" and, in turn, to offer some preliminary observations on: (a) the internal economic logic that propels the growth strategies of most large U.S. law firms; (b) how these strategies collectively produce a value proposition increasingly less attractive to clients and young lawyers; (c) structural problems within most large firms that inhibit their ability to effectively adapt to changing market conditions; and therefore (d) why many large law firms are vulnerable to small and mid-sized competitors who, by virtue of their size, have the flexibility to emphasize cost, collegiality, innovation, collaboration, and shared risks, both within the firm and with clients. Although a substantial number of large firms will continue to prosper, primarily by attracting lateral partners with the most lucrative and loyal clientele, most large firms (i.e., Am Law 200 or NLJ 250) will likely have to retool their business models in order to survive.

This Article examines the increasing "social isolation" of American workers and the role the Internet, particularly employee "blogging," can potentially play in ameliorating this situation. It builds on a path-breaking June 2006 empirical study in the American Sociological Review documenting said social isolation, and on Harvard political scientist Robert D. Putnam's classic theoretical work developing a similar theme. The Article argues that off-duty blogging by employees can play an important role in helping reverse this decline in social isolation, but that current legal structures impede this goal. This Article then proposes various reforms to address this situation. We begin Part I by examining the general role employee blogging might have as an antidote for the increasing social isolation facing American workers. Part II then presents a review of blogs and the blogging phenomenon. Part III follows with a discussion of blogs in the context of the recent afore-mentioned scholarship in the American Sociological Review and Professor Putnam's classic work. Part IV more specifically analyzes the role blogs play in the employment context, and Part V examines the protections afforded employee bloggers under the National Labor Relations Act. Part VI then looks at this issue in the context of both state common and statutory law. In Parts VII and VIII we evaluate various options for legal reform in the area. Part IX concludes the article.

A board’s work is largely dependent on the collective contributions of individual directors; thus, greater board diversity, with increased knowledge complementarity, should encourage firm performan...

This study argues that the interaction between geographic heterogeneity and human capital heterogeneity has an influence on the performance of US law firms. We consider two forms of geographic heterogeneity — international diversification (extent to which a firm is diversified across many countries) and domestic localization (extent to which a firm is focused on fewer states within its home country). We argue that when international diversification is high, human capital heterogeneity should have a positive influence on firm performance. In contrast, we argue that when domestic localization is high, human capital homogeneity (low heterogeneity) should have a positive influence on firm performance. Results suggest that it is important to distinguish between two forms of human capital heterogeneity: social (race and gender) and professional (schooling and tenure). Social heterogeneity is useful when international diversification is high. Professional homogeneity is useful when domestic localization is high.

The Internet's global reach has had a significant impact on the legal profession. This essay explains a few of the key developments in this area, including: competition fueled by outsourcing legal work to lower-wage earning lawyers around the world, "virtual work" changing client interaction and attorney work schedules, law firm reputation as a result of information availability on the Internet, work-product monitoring and the commoditization of legal services, and workforce diversity spurred by the influence of international clients.

The article discusses the regulatory aspects of reindeer games, a coined term used to describe social activities that provide some, but not all, employees with opportunities to interact with other organizational members. It has been argued that these kind of social interactions may be prohibited by Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of sex, race and religion. The author suggests that some reindeer games may be actionable under Title VII if they are linked to an employee's terms, conditions or privilege of employment. The author also notes harassment law may apply to reindeer games that are not directly linked to an employee's terms of employment, but still lead to his or her exclusion or psychological harm.

In the United States, political neutrality is widely regarded in traditional merit systems as integral to the impartial administration of federal laws and services. The 1939 Hatch Act is intended to protect such neutrality by limiting federal employees' rights to participate in partisan electoral activities. The act limits important first amendment freedoms available to other citizens, and thus, its salutary intent aside, continually arouses controversy. In fact, several recent legal developments add an intriguing new dimension to this debate that revolves around the act's potential restraint on union political activity. In 1984, the Office of Special Counsel (OSC) of the Merit Systems Protection Board (MSPB), which prosecutes Hatch Act violations, precipitated this current controversy by issuing an unsuccessfully challenged advisory opinion to the effect that federal employee unions could not use federal employees for otherwise permissible nonpartisan voter registration drives if they (the unions) had already endorsed partisan political candidates. Federal employees participating in such drives would presumably be prosecuted and could face dismissal for violating the Hatch Act.' Furthermore, in February 1985, the Special Council initiated dismissal actions against three federal union presidents because they campaigned for Walter Mondale in 1984.2 The broad issue underlying these actions is the legal applicability-direct and indirect-of the Hatch Act to federal employee unions. This particular question affects not only these unions' role in partisan politics but also the future of unionism and labor relations in the federal service. It is particularly important to unions operating predominantly in the general schedule (GS) and wage grade (WG) federal service, because these civil service employees are denied