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The Intraorganizational Power Struggle: Rise of Finance Personnel to Top Leadership in Large Corporations, 1919-1979

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Abstract

Choosing a president in an organization is an important political decision that reflects who controls the organization and the bases for that control. In this paper, a model of power based on resources in the organization and the environment is specified in order to understand how power shifted between intraorganizational units in the 100 largest U.S. firms between 1919 and 1979. Early in the century, large firms were controlled by entrepreneurs or personnel who came up through manufacturing. In the middle decades, sales and marketing personnel controlled large firms. In the past 25 years, finance personnel have become increasingly dominant. These shifts resulted from changes in the strategy and structure of the organizations, changes in antitrust laws that promoted an increase in product-related and unrelated mergers in the postwar era, and the mimicking of firms in similar environments.
... Even when organizations share goals, they address problems differently because the search for a solution to problems (or pursuit of opportunities) happens in a context, and the structuration of an organization into subunits that exchange information shapes this context (Schulz, 2001). Similarly, decisions are made by managers occupying specific roles and holding responsibility for specific goals (e.g., Fligstein, 1987;Bidwell and Keller, 2014) and these goals naturally differ within and among organizations. Organizations have different objectives. ...
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Thesis
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Chapter
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