Safety in Numbers: Downsizing and the Deinstitutionalization of Permanent Employment in Japan

Ahmadjian, Christina L.; Robinson, Patricia A.

doi:10.2307/3094826

Cited by 426 publications

(393 citation statements)

References 57 publications

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“…Specifically, the evident difficulty of justifying the adoption of a golden parachute plan at that time should lead boards to implement plans similar to those that have already been adopted by other large corporations. Adopting a fairly standard plan allows the boards to point toward precedent as well as "safety in numbers" (Ahmadjian and Robinson 2001), which appears particularly important given the challenges in rationalizing the plan based on the timing of the adoption. Such last-minute parachutes have also been criticized as contracts that are legally not enforceable because the executives had not done anything to warrant the payout (e.g., Greenhouse 1985), but prior adoption and payout of similar plans reduces the likelihood of court challenges for the board.…”

Section: Organization-level Mechanisms Affecting Practice Variationmentioning

confidence: 99%

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

Fiss

Kennedy

Davis

2012

Organization Science

131

121

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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.

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Section: Organization-level Mechanisms Affecting Practice Variationmentioning

confidence: 99%

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

Fiss

Kennedy

Davis

2012

Organization Science

131

121

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“…That is, how do traditional practices change due to increases in market pressures (broadly defined)? Ahmadjian and Robinson (2001) examined the changing nature of the employment relation in Japanese firms during the 1990s. During the extended period of economic growth that Japan experienced from the 1950s to the late 1980s, core firms were able to make (and keep) promises of long-term employment for their workers, recruiting college graduates who intended to stay with the organization for their entire careers.…”

Section: Examples From New Institutional Theorymentioning

confidence: 99%

Prospects for Organization Theory in the Early Twenty-First Century: Institutional Fields and Mechanisms

Davis

Marquis

2005

Organization Science

484

369

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T his paper argues that research in organization theory has seen a shift in orientation from paradigm-driven work to problem-driven work since the late 1980s. A number of paradigms for the study of organizations were elaborated during the mid-1970s, including transaction cost economics, resource dependence theory, organizational ecology, new institutional theory, and agency theory in financial economics. These approaches reflected the dominant trends of the large corporations of their time: increasing concentration, diversification, and bureaucratization. However, subsequent shifts in organizational boundaries, the increased use of alliances and network forms, and the expanding role of financial markets in shaping organizational decision making all make normal science driven by the internally derived questions from these paradigms less fruitful. Instead, we argue that problem-driven work that uses mechanism-based theorizing and research that takes the field rather than the organization as the unit of analysis are the most appropriate styles of organizational research under conditions of major economic change-such as our own era. This sort of work is best exemplified by various studies under the rubric of institutional theory in the past 15 years, which are reviewed here.Key words: organization theory; social mechanisms; organizational fields; paradigms Organization theory has found itself at an interesting crossroads at the turn of the century. On the one hand, we are constantly reminded that we live in a world in which large organizations have absorbed society and vacuumed up most of social reality (Perrow 1991). Multinational corporations (MNCs) have transcended political boundaries in their sales and their production processes, and dozens of them have annual revenues that surpass the GDP of all but a few nations. Their employees are like citizens with rights, benefits, and legalistic grievance procedures (Dobbin and Sutton 1998). Just as nation-states in centuries past came to be the dominant locus of power through their monopoly on the legitimate use of physical force, MNCs dominate the world economy (and thus society) through their concentrated control of capital. States are largely stuck with agreed-upon land borders, but MNCs and their mobile investments get to choose their jurisdictions in the marketplace of laws. It hardly seems a fair fight, as large organizations continue their drive to vacuum up whatever is left of social life. This situation locates organization theory as the queen of the social sciences, uniquely able to explain the dominant social structures of our times.Yet close inspection by our theoretical confreres in law and economics reveals most organizations to be mere legal fictions with no "inside" or "outside" analogous to borders-they are simply dense spots in networks of contracts among sovereign individuals (who may themselves be mere fictions-Jensen and Meckling 1976). With corporations, there is no there there-they are simply legal devices with useful properties for raising financ...

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“…From then on, many firms have sought to accomplish restructuring through organizational downsizing -defined as the planned and permanent reduction of an organization's workforce DeWitt, 1993). Despite frequent and ongoing corporate downsizing activities -not only in the United States (Chadwick et al, 2004;Chen et al, 2001;De Meuse et al, 2004) but also in European (Filatotchev et al, 2000) and Asian countries (Ahmadjian & Robinson, 2001; Lee, 1997;Yu & Park, 2006)-and some reported improvements in corporate performance (McKinley, 1993;Sutton, 1987), expected positive outcomes of downsizing are often elusive (Cascio, 1993;Levinson, 1992).…”

Section: Introductionmentioning

confidence: 99%

Downsizing implementation and financial performance

Muñoz‐Bullón

Sánchez-Bueno

2010

Management Decision

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In the present study we explore the relationship between downsizing decisions and corporate financial performance after top management has decided to downsize. Our focus is on the financial consequences arising from the amount of downsizing and the use of disengagement incentives. For this purpose, we use a sample of downsizing announcements in the Spanish press from 1995 up to 2001. Although the results show that the amount of downsizing is not significantly related to post-downsizing profitability, the evidence provided supports the finding that the use of disengagement incentives (which motivate workers to leave the organization) is negatively related to firm performance. Our analysis helps to understand the role that strategic downsizing decisions play in explaining observed variance in the performance of downsized firms. Thus, it advances scholarly organizational research by reinforcing the concept that corporate performance is not only contingent on strategies, but also influenced by the means through which these strategies are implemented.

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Safety in Numbers: Downsizing and the Deinstitutionalization of Permanent Employment in Japan

Abstract: an Tschoegl, and seminar participants at U.C. Berkeley. Appreciation also goes to Eleanor Westney for encouraging research in this area. We also thank Dan Brass, Linda Johanson, and three anonymous ASQ reviewers.

Cited by 426 publications

References 57 publications

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

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

Prospects for Organization Theory in the Early Twenty-First Century: Institutional Fields and Mechanisms

Downsizing implementation and financial performance

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