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

  • Rao H
  • Sivakumar K
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The coercive and mimetic conditions leading to the establishment of investor relations departments among Fortune 500 industrial firms during the 1984-1994 period are analyzed. The results show that anti-management 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.

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  • Hayagreeva Rao

  • Kumar Sivakumar

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