How Golden Parachutes Unfolded: Diffusion and Variation of a Controversial Practice

Abstract

W e contribute to a growing focus on variation in diffusion processes by examining the ways in which contested practices are modified as they spread among adopters. Expanding on prior diffusion accounts, we argue that the extensiveness and similarity of a practice will vary in response to both population-and organization-level mechanisms. To examine these issues, we study variation in "golden parachute" contracts, a controversial corporate governance practice that emerged and spread widely during the hostile takeover wave of the 1980s. Using a concept network approach to analyze the composition of parachute plans, we find evidence of mechanisms that both increase and decrease extensiveness and variation of golden parachutes. Our findings hold implications for accounts of practice diffusion over contested terrain by revealing substantial variation in the course of diffusion.

Practice Transfer in Organizations: The Role of Governance Mode for Internal and External Fit

“…Similarly, while there is research examining how organizations adopt practices in response to institutional pressures stemming from the environment (Fiss et al 2012), surprisingly little research has examined how organizations engage with the environment in order to create and sustain support and legitimacy for a novel practice (Kostova et al 2008). In particular, we still lack a good understanding of how these two levels-internal and externalmay be interdependent in the process of transfer.…”

“…There is a large and growing body of literature examining the diffusion of practices (Fiss et al 2012;Gondo and Amis 2013;Kennedy and Fiss 2009). This literature suggests that misfit between a particular practice and an adopting organization may trigger the response of adapting the practice along various dimensions (Ansari et al 2010).…”

“…Existing research highlights the question of the legitimacy of novel or foreign practices (Kostova and Roth 2002), suggesting that one critical task in the process of transfer will be to legitimize the new practice in the environment. For these purposes, organizations will need to engage with institutions, "comprised of regulative, normative and cultural-cognitive elements that, together with associated activities and resources, provide stability and meaning to social life" (Scott 2008, p. 48 This relates to a key argument in existing research, according to which relevant stakeholders often oppose foreign or new practices (Fiss et al 2012). However, key stakeholders may also help build a support infrastructure for the introduction of a new practice.…”

Complex field-positions and non-imitation: Pioneers, strangers, and insulars in australian fine-wine

“…Some studies have conceptualized non-imitation as a form of resistance to dominant institutional pressures (e.g., Jonsson, 2009;Marquis & Lounsbury, 2007), whereas others have addressed non-imitation in terms of the optimal distinctiveness of innovations promoted by institutional entrepreneurs (e.g., Alvarez, Mazza, Pedersen, & Svejenova, 2005;Maguire, et al, 2004). Other studies have focused on the diversity of institutionalized practices in fields (e.g., Ansari, Fiss, & Zajac, 2010;Fiss, Kennedy, & Davis, 2012;Fiss & Zajac, 2004;Jonsson & Regner, 2009;Kennedy & Fiss, 2009;Lounsbury, 2001;Powell, 1991), or have addressed successful and exemplary practices not broadly imitated (Colyvas & Jonsson, 2011;Croidieu & Monin, 2010;Negro, Hannan, & Rao, 2011;Washington & Ventresca, 2004).…”

When Does Globalization Lead to Local Adaptation? The Emergence of Hybrid Islamic Schools in Turkey, 1985–2007

“…Indeed, related research on the adoption and diffusion of field-level contested innovations and institutional logics does underscore the importance of the potential adopters' incentives and cultural fit (Kennedy and Fiss 2009;Ansari, Fiss, and Zajac 2010;Fiss, Kennedy, and Davis 2012). Similarly, mainly qualitative research reveals that institutional change and the emergence of new templates are often constituted from building blocks of locally available existing institutions (Schneiberg and Clemens 2006).…”