The managerial revolution revisited: The moderating impact of top managers’ social class position

Abstract

This article draws on early sociological critiques of the managerialist thesis to develop a new conceptualization of corporate ownership and control which is used here to inform an analysis of the propensity of large corporations to complete diversifying acquisitions in the 1960s. We categorize firms on the basis of the social class position of their top managers, focusing primarily on three types of firms, those run by: established capitalist owners, new capitalist owners and autonomous professional managers. We develop theoretical arguments that lead to two sets of predictions. First, we predict that firms run by new capitalist owners and autonomous professional managers exhibited a greater tendency than firms run by established capitalist owners to complete diversifying acquisitions in the 1960s. Second, we predict that the relationship between a firm’s financial, organizational and managerial capacities to pursue diversifying acquisitions, on the one hand, and the rate at which it completed such acquisitions, on the other, was stronger among firms run by new capitalist owners and autonomous professional managers than among firms run by other types of top managers. Finally, we conduct discrete-time event history analyses of the likelihood that firms completed diversifying acquisitions in the 1960s, which generate results that are largely consistent with our predications. © 2005, Sage Publications. All rights reserved.