INDEX
Abbott, Andrew, 205
adverse selection, 33
agency problem, 34
Allen, Herbert, 59
American Express Company, 6–7, 127, 163–66, 242n23, 249n32
analysts. See financial analysts
anti-takeover legislation, 55–56
Apple Computer, 59
Armstrong, C. Michael, 33, 78, 91, 168
Association of Executive Search Consultants, 130, 135
AT&T, 33, 40, 78, 91, 168, 231, 258n34
authority, 156–59
charismatic, 69, 160, 195–96, 207–8, 212
managerial, 53
rational, 157, 207–8, 212, 250n39
Bachelder, Joseph, 16
Baker, Wayne, 31
Bank One Corporation, 1–19, 24–30
charisma/leadership sought by, 4, 6, 14–15, 24–25, 29, 174
external pressures on, 42–43, 91
search process of, 4–6, 12–17, 24–26, 28, 35–36
stock prices of, 1, 4, 17, 18, 26
Barber, James, 216
Barron’s, 253n58
Beck, John, 129
Berkshire Hathaway, 59
Black-Scholes pricing formula, 192
boards of directors, 81–117, 208–11
chairman/CEO combinations and, 26, 184, 197–98, 232
dismissal of CEOs and, 67, 87–90, 198
election of, 66
failed searches and, 149–50
firm performance/CEO relationship, belief in, 36, 67–68, 106, 109–11, 167–70
group norms of, 84–85
impression management and, 175, 177
investor capitalism and, 86
managerial capitalism and, 53–54, 61–62, 86
social networks and, 30–31, 41–42, 82–91, 118. See also executive search firms; interlocking directorates; search process
bonuses, 242n30
Booz Allen & Hamilton, 121–22
Brooks, David, 71
Brunswick, Roger, 24
business press, xiv, 74–78, 215–17
CEO compensation and, 193
financial analysts and, 77–78
firm performance/CEO relationship, belief in, 111, 212–13
on internal candidates, 65
investor pressure and, 58
as legitimating authority, xii, 18, 36, 40, 42, 73, 113, 216–17, 262n15
pressure to appoint CEOs and, 93–94, 189
stock prices and, 91
Business Week, 58, 71, 75, 113
Byrne, John, 72, 124, 131, 256n13
Caldwell, Philip, 86
California Public Employees’ Retirement System (CalPERS), 57–58
candidate pools: identification of, 47, 103–6, 124–25, 137–38, 140, 176
job mobility and, 42, 182–83, 202–4
performance sorting and, 106, 109–11, 205
position matching and, 106–9, 205
social matching and, 103–14, 116–17, 167, 172–73, 180, 189–90, 205, 211
status matching and, 111–14, 171–72, 205
Carnegie, Andrew, 158
Carroll, Glenn, 22
Carter, Jimmy, 55
caste system (India), 49
CEOs (chief executive officers): attention-getting ability of, 78
compensation of, xii–xiii, 26, 30, 37, 67, 128, 135, 179–80, 184, 190–95, 197, 200–202, 228–29, 258n35
corporate governance and, 26, 184, 197–98, 232
dismissal of, 34, 59–60, 67, 87–90, 126, 151, 169, 198, 229–30
firm performance and, 21–24, 26, 36, 60, 67–68, 106, 109–11, 167–70, 195, 232
job mobility and, 42, 182–83, 202–4
separation agreements of, 3–4, 11
succession preferences of outgoing, 62, 86–87, 93, 162, 167, 176. See also search process
Chandler, Alfred, 52–53, 86, 161
charisma, x, xii, 20–21, 67–73, 152–56
characteristics of, 173–74, 260n7
impression management and, 175
organizational structure and, 160–70
personal handicaps and, 155
social/cultural context of, 51–52, 156–59, 170–71. See also leadership; individual CEOs
Chicago Sun-Times, 32
Chicago Tribune, 32
Chrysler Corporation, 71–72
Cisco Systems, 75–76
Citicorp, 9–10
closed markets, xiv, 48–50, 105, 116, 163, 180, 206, 217–18
Coca-Cola Company, 59
Cohen, Michael, 215
College Retirements Equity Fund (CREF), 57–58
Commercial Credit Corporation, 7
Commons, John, 269n39
Compaq Computer Corp., 65
compensation packages: bargaining power and, 179–80, 184
for CEOs, xii–xiii, 26, 30, 37, 67, 128, 135, 190–95, 197, 200–202, 228–29, 258n35
external consultants and, 128, 135, 193, 258n35
confidentiality, 32–33, 127, 143
conglomerates, 45–46
Conseco, 188
Cook, Phillip J., 193–94
Corbin, Juliet, 227
Corporate Board Member (magazine), 78
corporations: controlling authority in, 52–53, 156–57, 195–96, 207–8, 212
governance structures of, 26, 184, 197–98, 232
innovative strategies in, 133
organizational shift in, xiv, 51–61, 68–71, 86, 126, 158–59
ownership in, and stock options, 192
performance of, 21–24, 26, 36, 54–55, 60, 67–68, 106, 109–11, 167–70, 195, 232
regulation/deregulation of, 53, 55, 65, 69, 246n14
societal impacts of, 199–200
turnover data in, 228–30
Council of Institutional Investors (CII), 58–59
Crane, Dwight B., 24
Crystal, Graef, 30
deregulation, 55, 65, 69, 246n14
Digital Equipment Corp., 90
Dimaggio, Paul, 45
Dimon, James (Jamie), 6–19, 24, 26–27, 32–33, 35, 91, 174, 184–85
Dobryzynski, Judith, 258n34
Douglas, Mary, 105
Drexel Burnham Lambert, 133
Dunlap, Al, 34, 67, 72, 114, 178, 188, 252n58
DuPont Company, 70
Durkheim, Emile, 218
Eastman Kodak Company, 77–78, 137
economic individualism, 158–59, 212
education, business, 71, 125, 212–15
Egon Zehnder International, 130
electrical utility industry, 43–44
Enron Corporation, x–xi, 192, 212, 217, 251–52nn50, 58, 267n28
Executive Recruiter News, 130
executive search firms, 42, 47–48, 120–28
CEO compensation and, 128, 135, 193, 258n35
confidentiality and, 32–33, 127, 143
as coordinators, 140–42
credentials, professional, of, 130
identification of candidates by, 103–4, 124–25
as intermediaries, 25, 137–40, 142–47, 176, 177
legitimacy and, 36–38, 133, 147–50
research methodology on, 221–35
specification sheet development and, 96, 137, 140
external CEO market, ix, xiv, 79–80
as break from tradition or routine, 162–67
CEO compensation and, 193–94, 200–202, 228–29
as closed market, xiv, 48–50, 105, 116, 163, 180, 186–88, 203
high risk of, 32–35, 143–45, 180–81, 188–90, 228
legitimacy, search for, in, 36–41, 107, 147–50, 173, 181, 189, 228
opening of, 207–20
rationality/irrationality of, 21–27
research methodology on, 221–35
size of, 27–32, 228, 245n54, 248n21
as socially constructed institution, 41–48, 207, 212
societal consequences of, 199–206
trust and, 2–3, 31–32, 181, 204–6, 269n39
Fast Company (magazine), 70
Federal-Mogul Corp., 112–13
Festinger, Leon, 90
charisma, creation of, by, 262n15
firm performance/CEO relationship, belief in, 111
internal candidates and, 65, 125–26
as legitimating authority, xii, 25, 36, 40, 42, 78
pressure to appoint CEOs and, 93–94, 189
First Chicago NBD, 1–4, 13, 15, 51
Fisher, George, 77–78
Ford, Henry, 157
Fortune, 58, 71, 74–76, 90, 113
Frank, Robert H., 193–94
Freud, Sigmund, 156
Friedman, Milton, 204
Friel, Tom, 145
fundamental attribution error, 240n7
Gambetta, Diego, 269n39
Gee, Edwin, 125–26
Geertz, Clifford, 144–45
General Electric Company, 61–64, 93, 171–72, 202, 252n58
General Motors Corporation, 58–59, 65, 90, 127
Gerstner, Lou, 65, 69, 163, 170, 180, 264n28
Gillette Company, The, 59, 67, 151–52
Glass-Steagall Act, 9–10
Glazer, Nathan, 70
Goldman Sachs, 133
Goodman, Joan, 18
Granovetter, Mark, 43–44
Greenspan, Alan, 23
handicaps, personal, 155
Harvard Business Review, 71
Harvard University Business School, 129
Hawley, Michael, 59, 67, 151–52
Hayek, Friedrich von, 219, 269n39
Hayes, Gary, 24
Heidrick & Struggles International, 121–22, 126, 135, 137
Hewlett-Packard Company, 65–66, 109, 151–52
Heymann, Nick, 172
Hill, Linda, 268n35
Holthausen, Robert W., 234
human resources departments, corporate, 124
impression management, 175, 177
individualism, economic, 158–59, 212
industry consolidation, 65
information collection, 14, 33–35, 102–3, 114–17, 138–39, 176, 181, 184–85, 189
institutional investors, xii, 56–59, 90, 149, 211–12. See also shareholders
Institutional Shareholder Services, 58
interlocking directorates, 34, 85, 114, 232–35. See also boards of directors
internal CEO market, ix, 46, 161–63, 181
financial analysts and, 65, 125–26
information collection and, 102
legitimacy, search for, and, 40
liabilities of, 15–16, 51, 61–67, 169
loyalty and, xiii
International Brotherhood of Teamsters, 57–58
International Paper Company, 125–26
interviews, 14–15, 124–25, 146–47, 174–79, 181
investor capitalism, ix, xiv, 56–61, 64–67, 85, 159, 199, 201
investors.
See institutional investors; shareholders
Istock, Verne, 4, 14–16, 24, 32, 51, 174
Ivester, Douglas, 59
Jacobs, Donald P., 2
job mobility, 42, 182–83, 202–4
Johnson & Johnson, 181–82
journalists.
See business press
Keynes, John Maynard, 155–56
Kohlberg Kravis Roberts, 56, 59
Korn/Ferry International, 121–22, 264n32
Kravis, Henry, 59
Larcker, David L., 234
Lay, Kenneth, 267n28
leadership, xii, 20, 71, 99, 107–8, 152–53, 174–75, 210, 214–15. See also charisma; individual CEOs
legitimacy, search for, 36–41, 107, 133, 147–50, 173, 181, 189, 199, 228
leveraged buyout organizations (LBO), 55–56
life insurance industry, 44
Livermore, Ann, 66
Lucent Technologies, 59, 67–68, 109
Madsen, Doug, 160
management consulting industry, 121, 123
managerial capitalism, xiv, 52–56, 61–62, 64, 68, 71, 85, 157–59, 199
March, J. C., 105
markets: closed, xiv, 48–50, 105, 116, 163, 180, 206, 217–18
commodities, 31
mediated, 258n36
self-regulating, 217–20
Marshall, Alfred, 269n39
Marx, Karl, 218
Mathisen, Tyler, 78–79
Mayo, Michael, 17
McGinn, Richard, 67
McKinsey & Company, 121–22, 130
mediated markets, 258n36
Merton, Robert, 111, 257nn17–18, 265n5
middleman occupations, 132–33
Miller, Heidi, 26
multi-business firms, 45–46
Murphy, Kevin, 194
mutual funds, 73
NASDAQ Composite Index, 191
Nasser, Jacques, 61
NBD Bancorp, 51
news media, 3, 23, 25, 261n12. See also business press
Nohria, Nitin, 216
Novak, David, 26
Olesky, Beth Green, 129–30
“organization man,” the, 68, 71
owner-based capitalism, 52–53, 158
Peat Marwick, 122
performance-cue effects, 23
performance sorting, 106, 109–11, 205
Perot, Ross, 58
personnel departments, corporate, 124
Pfeffer, Jeffrey, 196
Philip Morris U.S.A., 70
Pickens, T. Boone, 56
Piper, Tom, 83
Platt, Lou, 151–52
Podolny, Joel, 112
Polaroid Corporation, 168
Popper, Karl, 210
Porter, Michael, 268n35
Pounds, William, 104
Powell, Walter, 45
professional networks, 125, 213
profitability, corporate, 54–55. See also stock prices
Protestant ethic, 158–59, 200–202
proxy rules, 59
Quaker Oats Company, 162
raiders, corporate, 55–56
Reagan, Ronald, 55
Redmond, Andrea, 4, 6, 12–14, 32
reference-group theory, 257n17
Reinganum, Marc R., 231
Reynolds, Russell, 129–30
Ricardo, David, 269n39
Robinson, James, III, 7, 127, 163–66, 249n32
Rockefeller, John D., 158
Russell Reynolds Associates, 4, 32, 121–22, 126, 129, 135–36, 196
Salmon, Walter, 162
Scholes, Myron, 265n5
Schumpeter, Joseph, 269n39
Scott Paper, 178
Scott, Richard, 36
search process: candidate pools, creation of, and, 47, 103–14, 124–25, 137–38, 140, 176
consensus on candidates and, 154, 170
information collection and, 14, 33–35, 102–3, 114–17, 138–39, 176, 181, 184–85, 189
in internal successions, 62, 86, 93, 162–63, 167, 176
interviews and, 14–15, 124–25, 146–47, 174–79, 181
research methodology on, 225–28
search committees and, 92–95, 189
selection criteria and, 20–25, 49, 79, 135, 160–61, 173–74
specification sheets and, 5, 95–103, 137, 140. See also executive search firms
Seidel, Barbara, 148
selection criteria, 20–25, 49, 79, 135, 160–61, 173–74. See also specification sheets
self-made man myth, 159
self-regulating markets, 217–20
separation agreements, 3–4, 11
ServiceMaster, 70
shareholder capitalism.
See investor capitalism
shareholders, 2, 4, 21, 25, 42, 52, 54–55, 73–74, 87, 149, 190. See also institutional investors
Shearson Lehman, 163–64
Shils, Edward, 250n39
Shivdasani, Anil, 66
Skilling, Jeffrey, x–xi, 217, 251–52nn50, 58
Smith, Adam, 269n39
Snell, Richard, 112–13
Snow, Peter, 160
social construction, 43, 219, 244n44
Social Darwinism, 202
social matching, 105, 108, 114, 116–17, 167, 172–73, 180, 189–90, 205, 211
social networks, 30–31, 41–42, 82–91, 118
Sørensen, Aage, 205
specification sheets, 5, 95–103, 137, 140. See also selection criteria
Spencer Stuart & Associates, 121–22, 126, 135–36, 264n32
Standard & Poor’s 500 Index, 191
Stanley Works, The, 137, 171–72
status gambling, 145
status matching, 111–14, 171–72, 205
Stempel, Robert, 58–59, 65, 127, 151
stock options, 66–67, 81–82, 191–92, 242n30
stock prices: financial analysts’ effect on, 77–78, 91
outsider CEOs and, 17–18, 26, 65, 91, 112–13
technology industries and, 109
of troubled corporations, 1, 4
Strauss, Anselm, 227
Sullivan, Barry, 13
Sumner, William Graham, 202
Sunbeam Corporation, 34, 67, 178, 188, 252n58
takeovers, 55–56
Teamsters Union, 57–58
Temin, Peter, 203
Tilly, Charles, 244n44
Tocqueville, Alexis de, 204
tournament theory, 64
Trani, John, 171–72
transaction-costs, 47
Travelers (firm), 6–10
Tribbett, Charles, III, 4, 12–14, 32–33
trust, 2–3, 31–32, 181, 204–6, 269n39
Tuma, Nancy B., 230
Turner, Frederick Jackson, 204
Vancil, Richard M., 231
Van Mannen, John, 267n32
Veblen, Thorstein, 112, 269n39
wages, average workers’, 191, 201
Wall Street Journal, 77
Wal-Mart, 171
Walters, John, 33, 91, 168, 258n34
Weber, Max, 48–49, 69, 156–58, 160, 199, 200, 204–5
Weill, Sanford (Sandy), 6–11, 24, 163
Welch, Jack, 61, 69, 93, 153, 155, 170, 202, 252n58
Wendt, Gary, 188
Westinghouse Electric, 249n32
Whitmore, Kay, 151
Xerox Corporation, 59, 188, 263n28
Yermack, David, 66
Zeien, Al, 96