Institutional Sources of Boundary-Spanning Structures: The Establishment of Investor Relations Departments in the Fortune 500 Industrials

Hayagreeva Rao and Kumar Sivakumar
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Hayagreeva Rao: Goizueta Business School, Emory University, Atlanta, Georgia 30322
Kumar Sivakumar: Georgia State University, University Plaza, Atlanta, Georgia 30303

Organization Science, 1999, vol. 10, issue 1, 27-42

Abstract: The authors analyze the coercive and mimetic conditions leading to the establishment of investor relations departments among Fortune 500 industrial firms during the 1984–1994 period. The results show that antimanagement resolutions brought to a vote by social movement activists significantly contributed to the establishment of investor relations departments. Intense scrutiny by financial analysts also impelled firms to create such departments. Whereas social movement activists framed shareholder rights as a problem and compelled organizations to uphold them, professional analysts subtly coerced organizations to signal their commitment to investor rights by creating boundary-spanning structures. That solution was transmitted through board interlocks to other organizations.

Keywords: corporate governance; investor relations; shareholder activism; institutional theory; social movements; mimesis (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (51)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:10:y:1999:i:1:p:27-42

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