Expectations of Alignment: Examining the Link Between Financial Markets and Managerial Work

Abstract

Based on a direct observation study of eight CEOs of large corporations, this paper examines how control is exercised in an era of financial transparency. In particular, the impact and effects of the increasing power of shareholders (corporate governance, shareholder value) with regard to managerial practices are investigated. The results show that CEOs were to a great extent influenced by expectations from exchange market actors and that such expectations, in a modified form, were passed down the hierarchy. Senior managers were given discretion in their work, but their performance (on the basis of how well they met expectations) was closely watched. The exercise of control by setting and monitoring expectations resulted in some managers working to exhaustion, and also in conformity and non-constructive communication. At the end of the paper, the effects of shareholder value management are discussed in relation to the societal level regarding issues of governance ethics, organizational development and work–life balance. It is concluded that reciprocal expectations and their intended and unintended consequences deserve further study in order to increase the understanding of the dynamics of modern capitalism.

Power in Management and Organization Science

“…Short-term shareholder value became the dominant ideological purpose of the firm, often at the expense of more sustainable business practices. A similar process was noted in Tengblad's (2004) qualitative study of eight CEOs in Sweden. Financial expectations gradually shaped the CEOs sense of purpose and these values were then passed down the hierarchy to foster conformity among employees.…”

Unpacking the client(s): Constructions, positions and client–consultant dynamics

“…For example, the skepticism of more junior client employees might also reflect the threat that consultants pose to their own expertise (Sturdy, 1997b) while senior participants' concerns with presentation and image is in keeping with a practical and 'concrete' concern with the importance of shaping expectations of shareholders that 'something is being done'. Symbolism has a financial value (Tengblad, 2004). At the same time, the consultants' logics (and dynamics) should also be taken into account and this gives rise to a different reading.…”

‘No Place to Hide’? The Realities of Leadership in UK Supermarkets

“…Such claims, clearly, need to be tempered with caution (Storey 2004a(Storey , 2004b (Carlson 1951, Meindl et al 1985, Alvesson and Sveningsson 2003a, 2003b, Tengblad 2004. Even charismatic leaders are not unfettered (Robinson and Kerr 2009).…”

“…While the prescriptive literature welcomes the displacement of bureaucratic management by rote with leadership (see for example Zaleznik 1992), empirical accounts of what managers and leaders actually do underscore how the purported tenets of 'leadership' tend to disappear upon closer inspection, even at the discursive level (Meindl et al 1985, Alvesson and Sveningsson 2003a, 2003b, Tengblad 2004). Kelly (2008) has taken issue with the tendency in the leadership literature of discounting the ordinary everyday work activity of managers in lieu of a continued effort to theoretically pin down how leadership really ought to be conceptualised.…”