Unintended agency: Impression management support as a trigger of institutional change in corporate governance

  • Westphal J
  • Park S
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Abstract

In this paper we describe an emergent process of institutional change in
which institutional entrepreneurs are unintentional contributors to the
change process. Our theory suggests how change in the predominant
institutional logic of corporate governance at public U.S. companies
resulted not from deliberate attempts by corporate leaders to change the
criteria by which governance is evaluated, but from the cumulative
efforts of top executives to provide ``impression management support{''}
(IM support) for individual leaders of other firms. We first discuss how
IM support has spread among corporate leaders through generalized social
exchange. Then we suggest how individual leaders, in seeking to persuade
journalists about the quality of corporate leadership at particular
other firms, tend to invoke evaluative criteria that deviate from the
prevailing institutional logic of governance. We further suggest how the
rhetoric of IM support instigated a cascading social influence process
that has contributed to changing perceptions about corporate governance
among a broad range of other corporate stakeholders. We discuss the
implications of our model for sociological perspectives on corporate
governance and the corporate elite. Finally, we consider how the
occasional negative commentary by corporate leaders about their peers,
in combination with IM support, helps to sustain the credibility of the
social system in which leaders, journalists, and other information
intermediaries operate. (C) 2012 Elsevier Ltd. All rights reserved.

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Authors

  • James D. Westphal

  • Sun Hyun Park

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