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The origins and early diffusion of “shareholder value” in the United States

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Theor Soc (2014) 43:1–22
DOI 10.1007/s11186-013-9205-0

The origins and early diffusion of “shareholder value”

in the United States

Johan Heilbron & Jochem Verheul & Sander Quak

Published online: 12 October 2013

# Springer Science+Business Media Dordrecht 2013

Abstract The shareholder value conception of the firm and its consequences for the
functioning of corporations have been studied from a variety of disciplinary and
theoretical perspectives. In this article we examine in more detail than has been done
sofar the origins and early adoption of this particular conception. By investigating
public business sources from the perspective of field theory, we argue that the rise and
early diffusion of “shareholder value” are best understood as a function of the
changing power relations in the economic field during the first half of the 1980s.
The deep economic recession at the end of the 1970s and early 1980s led to a crisis in
the prevailing management beliefs, offering newcomers the opportunity to promote
alternative business strategies, among which the shareholder value conception be-
came dominant. The sources studied indicate that the spokespersons of the new
business conception were initially wealthy outsiders, corporate “raiders,” who used
the economic crisis to oppose management and acquire shares in undervalued firms
with the threat of restructuring and selling parts of them in the name of shareholders’
interests. Although these hostile take-overs, or threats of take-overs, were widely
contested, the Reagan administration blocked regulation and stimulated the take-over
market. The rivalry between “raiders” and public pension funds over the profits of
these takeovers led to the founding the Council of Institutional Investors (1985),

J. Heilbron
Centre européen de sociologie et de science politique de la Sorbonne (CESSP-CNRS-EHESS) &
Erasmus University Rotterdam, Rotterdam, The Netherlands

J. Heilbron (*)
Erasmus Center for Economic Sociology, Erasmus University Rotterdam, Room M 6-31,
P.O. Box 1738, 3000 DR Rotterdam, The Netherlands
e-mail: heilbron@msh-paris.fr

J. Verheul : S. Quak
Erasmus University Rotterdam, Rotterdam, The Netherlands
J. Verheul
e-mail: jverheul@itsavirus.com
S. Quak
e-mail: sanderquak@gmail.com
2 Theor Soc (2014) 43:1–22

which adopted the shareholder value doctrine inaugurating the organized activism of
public pension funds with regard to the management of firms. It was thus in all
likelihood the competition and conflict among different groups of shareholders,
primarily corporate raiders and pension funds, that triggered the shift in the balance
of power between managers and shareholders. Since managers found profitable ways
to adapt to the new balance of power, the shareholder value ideology spread rapidly
through the economic field, becoming the dominant business model of North American
firms in the second half of the 1980s.

Keywords Shareholder value . Corporate raiders . Institutional investors . Field theory .

Economic sociology

The large corporations that have dominated Western economies since the second
industrial revolution have been managed in a variety of ways. Their chief executives
allied themselves to specialists whose expertise corresponded to the dominant business
conception. Production and organisation specialists (engineers, military personnel) were
initially the predominant group, later followed by marketing specialists and, then,
increasingly by financial experts (Fligstein 1990, 2001). The last two decades of the
twentieth century saw another transformation, one in which companies tended to be
managed in the name of relative outsiders, who are not directly involved in company
affairs, who do not bear any responsibility for the daily functioning of the company, and
who often have only limited knowledge of market conditions and business opportuni-
ties: shareholders. How did it become possible that companies’ performance was judged
on the basis of their quarterly increase of shareholder value, and that other business
objectives (sales growth, innovative capacity, sustainability, increase of market share)
became subordinate to that particular aim? Although an extensive literature exists on the
newly acquired power of shareholders and the doctrine of shareholder value, some key
questions about this far-reaching transformation of corporate strategy have remained
unanswered.
It is by now well documented that the idea of “shareholder value” emerged in the
United States as a response to the economic crisis of the late 1970s and early 1980s.
Due to increased competition from Japanese companies, two oil crises (1973, 1979),
and a stagnating economy accompanied by high inflation (“stagflation”), American
companies experienced severe economic and financial difficulties (Fligstein 2001,
2005). The market value of these large, diversified firms was often below the
combined value of their assets, and after decades of growth many of them had
become so large that they had difficulty in adapting to changing circumstances
(Fligstein 2001; Lazonick and O’Sullivan 2000).
Following Neil Fligstein’s analysis, the economic crisis caused a breakdown in the
prevailing conception of how firms should be managed provoking the outbreak of a
struggle about a new business strategy (Fligstein 1990). Fligstein has called the
dominant orientation that came out of this struggle the “shareholder value conception
of control.” Because companies operate under uncertainty and seek stable relations of
exchange, they need a strategic orientation to position themselves vis-à-vis their
competitors and their internal conflicts. This strategic orientation is for Fligstein a
conception of control, because its primary function is to manage the conflictual and
Theor Soc (2014) 43:1–22 3

potentially disruptive relationships between and within companies. During the 1980s,
maximizing shareholder value became the new conception of control.
Somewhat analogous to Fligstein, other authors have described the new business
strategy as a form of corporate governance aimed at splitting up and trading business
units with the sole purpose of creating short-term shareholder value. Instead of the
previously dominant business strategy, which focused on company growth and reserv-
ing and reinvesting profits—the “retain and reinvest” strategy—serving the immediate
shareholder interest became key in the 1980s (Lazonick and O’Sullivan 2000). This
change in corporate strategy formed the core of the more general transition from
“managerial capitalism” to “investor capitalism” (Useem 1996), which can be charac-
terized as a historically new form of finance capitalism (Davis 2009; Heilbron 2005).

Various interpretations

Although this development has been interpreted and appreciated in radically different
ways, its main characteristics are fairly generally agreed upon: the power over large
corporations shifted partly from management to shareholders, diversified conglom-
erates gave way to more focused firms, and finance and financial markets became
more central in the functioning of American businesses. Although many aspects of
this transformation have been extensively researched and discussed, the origins and
early diffusion of the shareholder value conception have remained unclear. The
existing literature offers suggestions as to how the rise and dominance of shareholder
value occurred, but these interpretations diverge and none of them has been convincingly
empirically tested.
Beyond the idea that the doctrine of shareholder value was primarily carried by
corporate outsiders, there is not much consensus about the groups that initiated the
shareholder revolt and how their actions contributed to a reconfiguration of the
economic field in the United States. According to Neil Fligstein, financial outsiders,
such as institutional investors, investment banks, and pension funds, were the first to
advocate actively for more influence for shareholders (Fligstein 2001). Besides
institutional investors, Frank Dobbin, Dirk Zorn and others have added financial
analysts and hostile take-over firms to the protagonists of the new conception
(Dobbin and Zorn 2005, Zorn et al. 2005). Among these outsider groups, several
authors have argued that institutional investors were the driving force (Useem 1996;
Zorn 2004). Since then pension funds and other institutional investors had signifi-
cantly expanded their resources they gradually gained ascendancy over management.
Unlike scattered individual shareholders, they were capable of buying significant
portions of shares, which allowed them to impose their views on management,
especially since they organized themselves from the mid-1980s onwards (Davis and
Thompson 1994). Beside organized investors some authors have claimed that
“corporate raiders,” who acquired stock and reorganized companies without the consent
of management, played a significant role as well (Kochan and Useem 1992);
others do not consider “raiders” an additional, but rather the primary factor (Lipton and
Rosenblum 1991).
Aside from various groups of financial outsiders, it has also been argued that
economists were the actual source of the new conception (Lazonick and O’Sullivan
4 Theor Soc (2014) 43:1–22

2000). Financial economists like Jensen and Meckling started arguing that the relation-
ship between management and shareholders has to be conceived as one between an
“agent” and a “principal.” Management should be viewed as the principal’s agent,
because the shareholders are the company’s owners. This “agency-theory,” based upon
Jensen and Meckling’s 1976 article “The Theory of the Firm,” would have been
diffused, among others through business schools, thus progressively reshaping mana-
gerial practice (Dobbin and Jung 2010; Fourcade and Khurana 2013). This view is
consistent with the literature on performativity, according to which economic theories
and models instead of simply describing or explaining the economy actively shape and
format the functioning of markets (MacKenzie et al. 2007).
Proposing yet another version of the story, Karel Williams argued that the idea of
shareholder value was introduced during the 1980s by consultants. They would have
provided managers with the concept of “value based management,” a method of
governance that analyzes all business activities in terms of shareholder value. This
way of thinking would have offered management that was under pressure because of
low stock prices a way to defend themselves against criticism from shareholders and
to regain their support (Williams 2000, pp. 1–12).
Aside from questions of terminology and interpretation, the existing literature has
left three empirical questions unanswered. All are related to the process dynamics of
the transformation and, as such, have theoretical significance as well. First, there is a
lack of clarity about the chronology. Commonly the late 1970s and the 1980s are
mentioned in relation to the economic crisis, but without specifying the sequence of
events and the temporal pattern of change. Specifying the sequential order seems a
prerequisite for deciphering the social dynamics of the process. Second, there are
diverging views about which actors started to promote the idea that shareholders
should control companies. Not only are different groups mentioned, but the evolving
relationships and interactions among them are rarely dealt with, which makes it
difficult to understand fully the social dynamics of the change. Third, it is not clear
when and by whom the idea of shareholder value was subsequently adopted and
through which channels the diffusion took place. Here again the transformation can
be understood only when the most important groups of actors are identified and when
is understood how and why the relationships among them shifted. In this article we
provide some clarification of these three questions.

Theoretical framework

From an economic sociological perspective, the behavior of (economic) actors can be

understood from the way it is “embedded” in the most relevant set of social relations
(Granovetter 1985, Swedberg 2003, Convert and Heilbron 2007). This approach is at
odds with assumptions in both economic and culturalist understandings. Unlike the
assumptions of “undersocialized” micro-economics, firms are not isolated actors that
maximize their utility independent of their relations to other relevant actors. And in
contrast to the “oversocialized” assumptions of cultural approaches, (economic)
actors do not solely act on the basis of beliefs, ideas or norms. Economic sociologists
should instead focus on how (economic) actors are embedded in concrete systems of
social relations and how these relations affect their behavior. This premise, which
Theor Soc (2014) 43:1–22 5

Granovetter bases on network analysis, is also found in other relational approaches,

especially in the field theories of Pierre Bourdieu and Neil Fligstein (Bourdieu 2005;
Fligstein 2001; Fligstein and McAdam 2012). The relational perspective assumes that
a company’s interests are not simply given, but instead have to be defined by actors
that are positioned in a specific, relatively autonomous field that is in a dynamic
constellation of interrelated and competing firms, financiers, and their various allies,
forming the core of the economic field.
From this perspective, the first step toward understanding changes in corporate
strategy is to analyze how the structure of relationships in which large corporations
are embedded has evolved. In doing so, Bourdieu focuses on the position actors
occupy in the field in which they operate, on the volume and composition of the
capital they dispose of, and on their dispositions, that is their inclination to use these
resources in certain, and not in other ways (Bourdieu 2005). Understanding the
transformation of a field implies analyzing how groups of challengers have been
able to intervene in the existing power relations to their advantage, in this case how
the power relations between managerial elites and groups of shareholders shifted in
favor of the latter. Fligstein’s version of field theory, which has been informed by neo-
institutionalism, puts specific emphasis on business conceptions, which stabilize the
economic field over longer periods of time, until they lose their role during a crisis
and are replaced by a new conception. The shareholder value conception of the firm
illustrates that the stuggles in the economic field have an important cultural dimen-
sion. As Bourdieu and Fligstein have insisted, economic and financial interests do not
automatically lead to action, they have to be framed in a certain manner in order to
acquire legitimacy and lead to the active involvement of specific groups. In particular
for understanding periods of field transformation, insights of social movement theory
are relevant and can be integrated into field theory (Fligstein and McAdam 2012).
Since the economic field is only relatively autonomous, Bourdieu and Fligstein
have both called attention to the broader field environment, and, like Karl Polanyi
earlier, insisted on the crucial role of the state and the political and legal conditions
under which the economic field functions. For understanding the emergence of the
shareholder value conception of the firm the changing political context was immedi-
ately relevant, since it was characterized by government policies aimed at tax relief
for corporations, deregulation and market liberalization. After the presidency of
Jimmy Carter (1977–1981), who took the first steps in this direction, the Reagan
administration (1981–1989) dismantled protective measures, facilitated the market
for corporate control, and restricted union power (Fligstein 2001, 2005; Davis and
Thompson 1994). Under these conditions it became much easier to buy, reorganize
and sell firms, thus contributing directly to the shifting power relations in the
economic field from corporate executives and their social networks to shareholders
and other market-based groups.
This briefly summarized field approach can be fruitfully used to investigate both
the origins and the diffusion of corporate strategies. A number of general expectations
might be derived from field theory for this particular case. It is most likely, for
example, that the change was initiated and carried by relative outsiders, and that their
actions provoked a period of crisis and struggle with the ruling elites. It is also quite
likely that such outsiders did not distinguish themselves from the managerial elite
merely in terms of material interests and resources, but also in symbolic or cultural
6 Theor Soc (2014) 43:1–22

terms and in terms of their dispositions. The appearance of challengers and the effect
of their actions, furthermore, depend on conditions beyond the economic field proper,
and in particular on the role of the state, the juridical apparatus, and the regulators.
But such “predictions” remain rather general and run the risk of using the
empirical material merely as an illustration of theoretical propositions. Instead of
following a deductive procedure, a field perspective is more properly used heuristi-
cally and to explore the empirical material by focusing on the structure and strategies
of interrelated groups and on the power relations between them. Bourdieu never
adopted a hypothetical-deductive style, in Fligstein’s work it is not predominant, and
according to some field theory is, in fact, “diametrically opposed” to the hypothetico-
deductive model (Martin 2011, p. 282). Without lapsing into the opposite, inductivist
style, field theory is most fruitfully used as a framework that provides a general
relational perspective on the object of study as well as a number of explanatory
concepts that can account for both stability and change in relatively autonomous,
social universes, with specific stakes.

Research strategy

Following such a more exploratory research strategy, we first try to specify when and
among which groups the notion of “shareholder value” arose. Then we consider how
this new conception spread and in particular show how the diffusion was affected by
conflict and competition within the group of shareholders. Contrary to a widespread
assumption, shareholders do not form a homogeneous or unified group: their position
within the economic field differed, as did their resources, dispositions, and relation-
ships to managerial elites. The diffusion of the shareholder value conception was a
conflictual process as well, depending on changing power relations within the
economic field, which were in turn conditioned by changes in the political field,
and in particular by the politics of deregulation, which reshaped the economic field
during the 1980s. In the last section of this article, we come back to the theoretical
questions and try to formulate some implications of the case study presented.
To explore the origins and spread of shareholder value we followed an indirect
method of inquiry. In the absence of having direct access to key players, we analyzed
publications in prominent business media. This method and the selected sources
obviously have serious limitations. Much of what is relevant to such issues is not
properly covered in public media. But the limitations of public sources apply to
certain topics more than to others, and to certain actors more than others. With regard
to the question of “shareholder value,” it may be assumed that it has been discussed in
public media to a significant degree, because it dealt with the strategic issue of
whether or not firms should change their way of doing business. Such a topic can,
in principle, be legitimately researched by using public sources, although the validity
of the results of such an analysis depends on evidence from other sources. The degree
of public exposure, furthermore, varies considerably for different actors. While some
actors consistenly avoid public exposure, others actively seek it. Investment bankers,
for instance, operate under great discretion (cf. Eccles and Crane 1988). Others
groups, such as “corporate raiders,” had an interest in a public stir and often used
the media for opposing management and promoting their view. Because of the
divergent meanings of public reporting for the various parties involved, public reports
Theor Soc (2014) 43:1–22 7

cannot be assumed to have adequately represented what occurred, and they have to be
treated with caution and a sociological sense for the differential public strategies
employed by the actors.
To overcome somewhat the limitations of public sources, we chose a primary
source that is considered to be fairly reliable for developments in corporate America,
the Wall Street Journal. Information derived from this source was supplemented by
data obtained from more specialized media. Obviously these choices do not take
away the aforementioned limitations. Only further research can determine to what
extent media coverage from the chosen sources can be said to have been more or less
accurate or whether it should be complemented and corrected by other sources.
As the leading US business newspaper, the Wall Street Journal is the main source
of our analysis. We used its historical archive, which dates back to 1889 and is
available via Proquest. 1 Certain articles in this newspaper lead us to consult other
public media as well. All issues of the Institutional Investor from 1975 to 1986 were
consulted in order to have an indication about the responses and views of institutional
investors. The role of business scholars was explored through the Harvard Business
Review (using the archives of EBSCO host). 2 And for inquiring into the possible role
of economists and “agency,” theory, we consulted the Journal of Financial Economics
(available via Science Direct).3
First, we determined how the frequency of the articles in which the notion of
‘shareholder value’ occurred evolved. Then, we examined the content of the articles
in which the expression appeared, identifying both the main actor and the context of
each occurence. For each article, one actor and one context were distinguished,
because it became apparent that one actor and one context were dominant in nearly
all cases. The number of articles that displayed multiple contexts was so small that it
could be neglected. Because it was not clear in advance that the idea of “shareholder
value” was covered by a single term, we studied a number of combinations of the
terms “share,” “stock,” “holder,” and “value.” We soon discovered that “shareholder
value” was indeed the generic term, which we have therefore used throughout the article.

Shareholder value in the United States

Although “shareholder value” may seem a conception that is as old as capitalist firms,
the expression appears to be fairly recent. The term was not mentioned in the Wall
Street Journal before 1965; terms with a similar meaning did not occur either. From
1965 to 1979, only eight articles mention shareholder value. The frequency started to
increase from 1980 onwards, slowly at first, rapidly from 1983 until a first peak was
reached in 1988. From then on the frequency fluctuated (see Fig. 1). The fluctuations
seem to be related to the economic conjuncture and especially to the movement of the

1
ProQuest LCC is an online distributor of written sources and videos. ProQuest provides archives to
(among others) newspapers, journals and microfilms to universities, schools, libraries and government
agencies around the globe.
2
Ebscohost Publishing is an online distributor of written sources such as (scientific) journals, books and
reports. Ebscohost services universities, schools, libraries and governments agencies around the globe.
3
ScienceDirect is an online distributor of published scientific articles, primarily from the natural sciences
but also a selection of the social sciences.
8 Theor Soc (2014) 43:1–22

Fig. 1 Frequency of the term “shareholder value”’ in the Wall Street Journal (1965–2007)

stock market. The frequency dropped during the economic downturn in the beginning
of the 1990s, and rapidly increased during the bull market of the second half of the
1990s. When the “dotcom bubble” burst in the early 2000s, the frequency drastically
decreased, after which, when the stock market recovered, it slowly increased again.
During the period in which the expression “shareholder value” made its first
appearance, the term was used not by shareholders or their representatives but, rather,
primarily by executives (see Table 1). This applies to six of the eight articles in

Table 1 Frequency ‘shareholder value’ in the Wall Street Journal (1965–1979)

Year Actor and context Frequency

Executive board Investment fund Shareholder

1965 Company results – – 1

1967 Hostile takeover – – 1
1969 Appeal to investors – – 1
1970 – Appeal to investors – 1
1972 – – Reward executive board 1
1975 Appeal to investors – – 1
1976 Restructuring – – 1
1977 Appeal to investors – – 1
Total 8 1 1 8
Theor Soc (2014) 43:1–22 9

question. In these articles, half of which were ads, corporate executives promised
attractive dividends to new investors.
The first article in which the notion of shareholder value appeared is a report from
1965 about the company Allied Chemical, according to which the chairman of the
board announced a higher dividend, because the company results were excellent and
the prospects favorable (WSJ, 29-01-1965). The first ad with the notion of share-
holder value is from 1969 and concerned the initial public offering (IPO) of Masco.
This company was headed by Richard Manoogian, son of the founder Alex
Manoogian, and the IPO was accompanied by a clear mission statement: “It’s Masco’s
philosophy to provide greater returns to its shareholders” (WSJ, 5-5-1969). A second
ad appeared in 1975 and was signed by the chairman of Bendix: W.M. Blumenthal. In
this ad Blumenthal states that creating shareholder value is more important than the
company’s growth: “Bendix’ growth in recent years has been directed not primarily
to volume, but more specifically to what we call shareholder value.” Blumenthal
described shareholder value as the potential growth of revenues and profits:
“Shareholder value means … the ability to grow in sales and earnings” (WSJ, 22-5-
1975). This description seems to be a combination of the traditional pursuit of growth in
earnings and profits and a new conception in which shareholder value tends to prevail
over other business objectives. Other publications, however, indicate that Blumenthal,
who two years later became Secretary of the Treasury in the Carter administration, was
by no means an advocate of the strategy that was later referred to as shareholder value
(Blumenthal 1976).
The remaining four articles refer to shareholder value in a different context. In two
of them the concept of shareholder value is related to changes within a company. An
acquisition, which is reported about in 1967, was partially defined in terms of
shareholder value. Kaiser Industries, a family business, was broken up into
three parts in 1976 and the parent company was liquidated. At the press
conference after the shareholders’ meeting, Edgar F. Kaiser, member of the
supervisory board and son of the founding father, stated: “The only reason for the
liquidation is to enhance the financial position of the company’s shareholders”
(WSJ, 6-5-1976).
The early uses of the term indicate that the expression “shareholder value” was
rarely used before 1980. All articles in which it occurred are texts in which manage-
ment directly addresses shareholders and the expression “shareholder value” is
intended to appeal to their interests, since they are asked to invest in the company
or support the management with regard to specific plans. There is no indication that
the term referred to a specific conception of the company’s strategy or to a theoret-
ically based idea of corporate governance or control, such as Jensen and Meckling’s
theory of the firm. The Wall Street Journal, furthermore, did not refer to “agency
theory” or “theory of the firm” until 1987; nor was there any reference to Jensen or to
Meckling in the newspaper prior to that year. The Wall Street Journal then does not
offer support for the hypothesis that agency theory played an important role in the rise
or early diffusion of shareholder value.
The way Jensen and Meckling’s article was received in the academic journal in
which it was originally published, the Journal of Financial Economics, seems to
indicate that even in circles of financial economists, agency theory had a relatively
marginal position for quite a while. It was increasingly cited only from 1987 onwards,
10 Theor Soc (2014) 43:1–22

especially during the years 1987–1991. 4 This citation pattern suggests that agency
theory started to play an important role only after shareholder value had obtained a
significant role in the economic field itself. Agency theory thus seems to have
provided academic legitimacy after the fact, rather than exemplfying a form of
performativity.

Redefining shareholder value (1980–1982)

During the years 1980–1982 the attention for shareholder value in the Wall Street
Journal increased (see Table 2), and both the meaning and the context of the
expression changed. Shareholder value was no longer defined in terms of dividend,
but, instead, in terms of actual or potential market value of the company. This change
took place in the context of “hostile takeovers,” which put management under
pressure, while shareholders were becoming more actively and prominently involved
in business affairs. During these 3 years the new meaning became more dominant as
well. The first article in 1980 is revealing in this respect. It discussed a book called
Financial Strategy (1979), written by the business scholar William E. Fruhan Jr., who
was affiliated with Harvard Business School. Fruhan was alledgedly one of the first to
focus on the business aspects of shareholder value (WSJ, 8-3-1980). His study
discusses how shareholder value can be established in terms of market value and
cash flow, and how these can be increased by the executive board. The book only
casually refers to Jensen and Meckling’s (1976) article, “The theory of the firm.”
With three other articles, it is catagorized as one of the “most recent advances in the
theory of the capital structure.” Fruhan, in other words, regarded the article about the
“theory of the firm” as being relevant to issues of corporate finance, and not primarily
because it developed the idea of “agency” and its implications for redefining how
firms should be managed.
In the articles that followed, shareholder value obtained a different meaning. The
third article from 1980 discussed a company called Bendix. The firm sold parts of the
enterprise that were not profitable enough and that didn’t fit with its “core business.”

4
Number of citations of ´The Theory of the Firm´ (1976) in the Journal of Financial Economics (1976–1986)
excluding self-citations:

Jaar
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986
N= - - 2 - - - - 3 - 3 1

Number of citations of ´The Theory of the Firm´ (1976) in the Journal of Financial Economics (1987–1996)
without self-citations:

Jaar
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
N= 9 14 11 10 3 4 2 7 6 6
Theor Soc (2014) 43:1–22 11

Table 2 Frequency of “shareholder value” in the Wall Street Journal (1980–1982)

Year Actor and context

Management Public Business US Consultant Frequency

pension fund scholar Senate

1980 - hostile takeover (2) - Opinion piece 3

1981 - non-hostile - hostile takeover 2
takeover
1982 - hostile takeover (2) - reward executive 5
board (2)
- corporate strategy
total 5 1 1 1 3 10

After selling these parts, the company’s chairman, William M. Agee, wanted to
acquire other companies in order to increase the firm’s shareholder value (WSJ, 23-9-
1980). In an article from 1981, a pension fund, the Quebec provincial government’s
pension fund, has a leading role for the first time. In this case the executive management
was no longer the main actor in the story and the context was that of a hostile takeover.
The Canadian pension fund was planning to form a consortium for the hostile takeover
of Noranda. The consortium’s objective was to force Noranda to change its strategy and
make shareholder value its central goal (WSJ, 24-6-1981).
In 1982 Louis J. Brindisi Jr. of consulting firm Booz, Allen & Hamilton published
an interesting article. Brindisi, an expert in remuneration policy, argued that it is not
appropriate for managers to receive large pay increases when the value created for
shareholders had been limited: ‘High earnings won’t help shareholders.” According
to the author, shareholders own the company and management must therefore act in
line with their interests (WSJ, 14-6-1982).
It is quite telling that although the meaning of the notion of shareholder value was
changing, management continued to be the primary actor of the news coverage. With
one exception all articles during these years (1980–82) discuss takeovers, nearly all
hostile takeovers, but it is not the take-over firm that is central in the reports. Perhaps
following a convention from the era of managerial capitalism, management remains
at the center of the journalistic attention.

The breakthrough of shareholder value (1983–1986)

In the years from 1983 through 1986 the use of the term shareholder value increased
rapidly. The context in which the term appeared is again most frequently that of
hostile take-overs, immediately followed by related issues of restructuring and
corporate strategy. The uses of the notion of shareholder value thus seem clearly
related to a struggle over the reorientation of corporate strategy. In addition to
management, corporate raisers now appear as the second most important actor, well
before other groups. The structuring principle of the debate over shareholder value
thus appears to be the opposition between managers and raiders. Because of the
12 Theor Soc (2014) 43:1–22

widening range of actors, however, it is no longer possible to provide a combined

actor/context overview, so we provide separate tables for the context and the actors
(Table 3 and 4).
In 1983, thirteen articles refer to shareholder value, eight of which discuss the
battle between Gulf Oil and the “corporate raider” Thomas Boone Pickens. Pickens
used his own oil company, Mesa, to form a consortium that was planning to acquire
Gulf Oil, because its management did not create sufficient value for its shareholders
(WSJ, 9-11-1983). The consortium acquired shares of Gulf Oil and placed ads in the
Wall Street Journal to convoke other shareholders to vote in favor of their plan to
establish a “royalty trust.” Such a construction was used to “strip” a company from its
possessions. Alledgedly Pickens had only one goal: “We are dedicated to the goal of
enhancing shareholder value and oppose any action contrary to that goal.” He cast
doubt on the commitment of the management by stating that his consortium owned
more than 55 times the number of shares management owned: “Ask yourself which
group is more interested in maximizing the value of Gulf stock” (WSJ, 21-11-1983).
Ultimately, the consortium lost the battle for Gulf Oil, but it remained belligerent:
‘We are fully dedicated to maximizing shareholder values. That was our goal in the
beginning. We will be here when the job is finished.’ (WSJ, 14-12-1983).
Pickens’s role in this struggle is a good example. Together with other “corporate
raiders,” such as Asher B. Edelman, Oscar Wyatt Jr., David H. Murdoch, Roy M.
Huffington, and Carl Ichan, he played a key role in the breakthrough of the concep-
tion of shareholder value. They formed a vanguard of people who were most active
and publicly spoke out on behalf of the new concept. In 1983, Edelman, who was the
inspiration for the character Gordon Gekko in the movie Wall Street (1987), formed a
consortium to take over a company called Canal Randolph. He claimed that this firm
was poorly managed in terms of shareholder value (WSJ, 29-03-1983). Wyatt, an oil
millionaire, was discussed in an article when attempting to acquire Houston Natural

Table 3 Context articles Wall Street Journal (1983–1986)

Context Year Total

1983 1984 1985 1986

Hostile takeover 5 8 27 39 79
Non-hostile takeover – 2 1 4 7
Restructuring – – 13 31 44
Merger – 1 1 1 3
Corporate strategy 2 4 6 11 23
Company results – 1 2 1 4
Share buyback program – 1 1 4 6
Reward of established management – – 1 – 1
Stock price – 1 – – 1
Appeal to investers 6 6 24 14 50
Opinion piece – 1 1 8 10
Total 13 26 76 113 228
Theor Soc (2014) 43:1–22 13

Table 4 Actor articles Wall Street Journal (1983–1986)

Actor Year Total

1983 1984 1985 1986

Management 3 12 34 63 112
Raiders 9 7 27 29 72
Insurance company – – – 2 2
Investment bank – – 5 5 10
Consultant – 2 2 – 4
Individual shareholder – 3 5 – 8
Financial analist – – – 6 6
Business scholar – – 1 6 7
Economist – 1 – – 1
US Senate 1 – – – 1
FED – 1 – – 1
Rating agency (S&P) – – – 2 2
Total 13 26 76 113 228

Gas (WSJ, 14-02-1984). Huffington, also an oil millionaire, made a hostile bid for a
company called Enstar Corp. and was supported by some institutional investors
(WSJ, 20-03-1984).
Many of these corporate raiders—Pickens, Wyatt Jr., Huffington—were typically
oil millionaires/billionaires. As a result of the oil crises of 1973 and 1979, the profits
of their companies increased sharply, whereas other companies suffered from deteri-
orating profits. Besides their substantial oil profits, many of these corporate raiders
had in common that they did not belong to the traditional business elite that was
trained at the country’s leading business schools (Guilhot 2004, pp. 83–92). Pickens
started his career delivering newspapers and worked his way up in an oil company
before he started his own (obtained from www.horatioalger.com, 19-11-2008). Oscar
Wyatt Jr. was a pilot in his younger years. After spraying crops and fighting in the
Second World War he also started his own firm (obtained from www.reuters.com,
19-11-2008). Roy Huffington is also said to have started his career as a newspaper
boy to support his family after his father died when he was fourteen. He worked
himself up, studied geology, and then started his own company.
Articles from the first 4 years of the 1980s thus suggest that corporate raiders using
hostile takeovers, or the threat of such a takeover, were most active in publicly
advocating a shareholder value view of the firm. They diametrically opposed man-
agement trying to impose the strategy of maximizing shareholder value on the
companies that they acquired shares of. Although their actions were widely contested,
they were in many cases extremely profitable. When other groups started to support
the actions of corporate raiders and to emulate their tactics, the balance of power
between management and shareholders shifted in favor of the latter. Given their
increasing ownership of shares, institutional investors are of particular importance
to consider in some detail.
14 Theor Soc (2014) 43:1–22

The involvement of institutional investors

During the first years of the 1980s, institutional investors were hardly ever mentioned
in the Wall Street Journal in relation to the shareholder value movement. Initially
their approach was indeed quite different from that of corporate raiders. Institutional
investors were accustomed to refrain from directly interfering in corporate affairs. If
they did not agree with management policies, they would vote “with their feet” and
sell their shares instead of pressuring management. That is in all likelihood the reason
why pension funds and mutual funds are hardly ever mentioned as the primary actor
in the newspaper articles (cf. Table 4). It was only after the hostile takeover attempts
of raiders had proved to be very lucrative, and the Reagan administration and the
regulators refused to ban or regulate these practices, that public pension funds began
to adopt a more active stance towards management in favor of shareholders.
In the 1970s, the Institutional Investor, the leading magazine for institutional
investors, primarily contained practical advice, success stories on well performing
companies and investment funds, and “ratings” of CEOs and business analysts.
Changes in government policy and regulation were also closely followed and suc-
cinctly summarized for the readership of professional investors. During the late 1970s
and early 1980s the magazine changed and shifted from practical advice to a more
strategic approach. The second oil crisis (1979) seems to have triggered this shift.
According to the magazine the new oil crisis had resulted in an “acquisition crisis”:
“Target companies, raiders—and the financial companies caught in-between—have
been thrust into an expanded and fiery arena filled with hazards and conflicts unheard
of only a few years ago”’ (Institutional Investor, June 1979, p. 31). Although the
magazine occasionally quoted favorable views on hostile takeovers, it remained very
reticent to endorse these tactics. Detecting “target companies” for possible acquisi-
tions was explicitely not regarded to be a task of institutional investors (II, June 1981,
pp. 47–51). The Institutional Investor, furthermore, did not pay any attention either to
Jensen and Meckling’s agency theory in the period 1975–1985.
The first significant change in this respect was related to the changing political
conditions after the presidential election of Ronald Reagan. It was expected that the
policy of the Reagan administration would have a strong positive effect on the equity
markets, and the newly appointed chairman of the Securities and Exchange
Commission (SEC), John Shad, who supervised the financial markets, was widely
praised in the journal. Shad was a former investment banker who had worked in the
financial sector for 30 years and wished to change existing regulation in favor of
investors (II, April 1982, pp. 58–69). Although hostile takeovers were highly contro-
versial, both within and outside corporate America, the SEC opposed all proposals for
more regulation. Because all stringent regulation was expected to be blocked by a
presidential veto, not a single one of the many proposals for such regulation was adopted
by Congress (Bruck 1988, p. 260).
Once it had become clear that the new administration would not take any measure
to regulate takeovers and, instead, would block regulation, the Institutional Investor
printed a first article about a corporate raider—Carl Icahn. Although Icahn was
described as a “notorious corporate opportunist” and a “racketeer, who would not
give way for anyone in his search for ‘quick money,’” the same issue quoted an
investment banker claiming that the strategies of raiders were increasingly recognized
Theor Soc (2014) 43:1–22 15

in corporate America (II, October 1982). One year later, in 1983, an article called
“The New Activism at Institutions” stated that institutional investors were increas-
ingly taking an activist approach towards management and were more often voting
against their proposals: “more and more institutional shareholders … are rising up to
exert their power” (II, October 1983, p. 177). Corporate raiders are no longer
criticized for their brutal and “hostile” approach, but for the fact that their actions
were often solely in their own interest and not in the interest of all shareholders.
Raiders such as Icahn and others had the habit of bying 5 or 10 % of the outstanding
shares, while threatening to buy more. Management was inclined to buy back these
shares for a considerably higher price. This practice of “greenmailing,” as it was
called, was widespread between 1979 and 1984. For blocks of stock that were
repurchased companies paid prices that were on average 5 to 50 % higher than the
market price (Kosnik 1987). It was in particular this practice of greenmailing and the
tensions it generated among shareholders that provoked institutional investors to take
a more active stance themselves (cf. II, January, 1984, pp. 87–88).
By 1984, several articles in the Institutional Investor were explicitely devoted to
the promotion of shareholder value. Corporate raiders were portrayed in a positive
manner as pioneers in influencing management: “Operators like … T. Boone Pickens
Jr. and the Bass family have exploited stockholder discontent masterfully, producing
fantastic payoffs in the process” (II, May 1984, p. 186). In the same year, a second
interview with corporate raider Icahn was published, in which he lashed out at the
“‘self-serving” management of American corporations. Icahn believed that institu-
tional investors should oppose these practices and stated that the time had come to do
so in an organized manner (II, October 1984, p. 11). Six months later the magazine
announced the founding of the Council of Institutional Investors (1985). This council,
which twenty-two public pensions funds were members of, stated that it would take
on the enhancement of shareholder value in an organized manner (II, May 1985, pp.
107–122). Unlike the far more cautious company pension funds, public pension funds
advocated an active shareholder value approach. It was a trustee of the California
Public Employees’ Retirement System (CalPERS), Jesse Unruh, who initiated the
creation of the council. What triggered his action was a contemporary case of
“greenmailing.” In 1984 Texaco had repurchased 10 % of its shares from raiders,
the Brass brothers, for $55 per share, while the official share price stood at $35. Since
the CalPERS was one of the largest shareholders of Texaco, but did not receive the
same offer as the raiders, its trustee contacted other public pension funds to undertake
action and draft a Shareholder Bill of rights. In this statement the unequal treatment of
shareholders was explicitly rejected within the framework of defining the common
interests and rights of shareholders (Monks and Minkow 1991).
It seems quite likely that the establishment of the Council of Institutional Investors
and a few contemporary related initiatives tipped the balance of power between
managers and investors in favor of the latter. Corporate raider T. Boone Pickens
founded the United Shareholders Association (1986), which advocated the interests
of individual shareholders from the same view. The U.S.A., as it was characteristi-
cally abbreviated, was an association that could be joined by anyone who owned
shares for a total of one hundred US dollars or more. Its goal was to promote the
interests of shareholders and it took a clear stand against poorly performing manage-
ment (Tortorello 2004). The organized efforts of shareholders and the activities they
16 Theor Soc (2014) 43:1–22

undertook in the second half of the 1980s and the beginning of the 1990s represented
something of a social movement that succeeded in organizing and unifying share-
holder interests (Davis and Thompson 1994).
Aside from raiders, institutional investors and financial economists, two other
groups have been mentioned with regard to the rise of shareholder value: consultants
and investment bankers. Consultancy firms and investment banks can initiate and
often accompany processes of corporate change, but their role is fundamentally
dependent on the primary actors to whom they offer their services. In that sense it
is unlikely that they had the same weight as take-over firms or institutional investors.
Given their intermediary role, it is most plausible that they worked for both targeted
as well as for take-over firms. It is difficult, however, to assess their role in the
shareholder movement on the basis of public sources like the Wall Street Journal.
Consultants and investment bankers operate discretely and only rarely and selectively
seek the media, which makes it understandable that consultancy firms and investment
bank appear only relatively late in the coverage of the Wall Street Journal.
Prior to 1984, consultants in the Wall Street Journal were not associated with the
idea of shareholder value; in 1984 and 1985 only 4 articles had consultants as their
main actor. All of these articles were in fact ads from consultancy firms offering their
services to companies to help them increase their market value. In these ads a high
share price was presented as the best protection against a hostile takeover: “You owe
your shareholders the best defense” (WJS, 01-03-1984). It could be inferred that
consultants were indeed involved in the spread of shareholder value, but, initially,
rather to defend the interests of management by whom they were hired. During these
years, the “value based management techniques” were also used by management to
protect their own position. Consultants have probably contributed to the spread of
shareholder value, particularly after business schools had adjusted their curricula to
the new trend. Yale’s and Harvard’s business schools, for example, started to offer
courses in which the creation of shareholder value during restructuring, mergers, and
acquisitions was central. At Harvard Business School, it was Michael Jensen and
Michael Porter who took the initiative (WSJ, 12-8-1985). If Harvard Business Review
can be considered a valid source for indicating the involvement of consultants, it can
be noted that shareholder value—with the exception of articles in 1955 and
1981—appears relatively late as well; it is not mentioned until 1986.5
Investment banks appeared in the Wall Street Journal as main actors in relationship
to shareholder value only from 1985 onwards. Given their highly discrete mode of
operation, it is probably typical that consultants and investment banks appeared in the
coverage of the Wall Street Journal only when the shareholder value view had already
become a legitimate business conception. It is quite plausible that after management
was forced to meet the demands of activist shareholders, business specialists such as
consultants and investment bankers were hired to develop and implement the new

5
Articles mentioning the term “shareholder value” in the Harvard Business Review

Year
1955 1981 1986 1987 1988 1989 1990
N= 1 1 3 2 1 3 3
Theor Soc (2014) 43:1–22 17

corporate strategy. Yet given the limited significance of public media for understanding
the operations of these groups, other sources would have to be used to properly examine
their role in the shareholder movement.

Shareholder value as the dominant vision on the firm

From around 1985, the shareholder value conception seems to have acquired a
predominant position among the main actors in the economic field. While the notion
was hardly ever mentioned before 1980, it had become widely used. In the beginning
of the 1980s the term and the idea associated with it was used primarily by corporate
raiders in their battles with management; by the mid-1980s various actors used it.
After initial resistance, management by the mid-1980s seems to have accepted that
shareholders were an actor that needed to be taken into account more seriously
(Useem 1993). This acceptance seems to have translated into a double strategy. On
the one hand managers sought to reduce the risk of the increasing power of share-
holders. They did so by adopting “poison pills,” a takeover defense that sharply
increases the costs of a firm for a hostile buyer (Davis 1991), and by introducing
“golden parachutes” for themselves in case they were fired after a takeover (Fiss et al.
2012). At the same time managers became more cooperative towards shareholders
and their organizations, and in return they negotiated additional compensation pack-
ages, which would depend on the creation of shareholder value (share packages,
premiums, bonuses, stock options, etc.). The spread of shareholder value as a central
business objective was thus accompanied by a considerable increase in executive
compensation, which partly explains why the new doctrine was relatively quickly
embraced by managerial elites. The spread of shareholder value during the 1980s and
the beginning the 1990s coincides clearly with the rise of executive compensation,
which explains a significant part of the rising inequalities in income and wealth
(Lazonick 2013).
In response to this change in managerial attitude, raiders also adapted their tactics. In
1985, the often discussed corporate raider Pickens stated that his own company Mesa
would no longer conduct hostile takeovers. Instead, he would set up an investment fund
that would not act as a takeover machine, but as a management partner: “I have no plans
right now other than to be just a general partner” (WSJ, 27-08-1985). The British raider
James Goldsmith similarly announced that he would cooperate with management to
achieve the common goal of enhancing shareholder value: “Sir James is expected to
attend his first meeting of the Crown Zellerbach Board in San Francisco tomorrow …
and has promised to work together with Crown's board to maximize shareholder value
through restructuring Crown” (WSJ, 12-06-1985).
The fact that corporate raiders publicly declared their taking a more cooperative
stance probably indicates that the attitude of the executives had changed. Managers
increasingly focused on enhancing shareholder value themselves and hired consul-
tants and investment banks to execute the new strategy. In the mid-1980s several
executives were quoted in the Wall Street Journal, explaining that they wanted the
best for their shareholders. Chairman J. Hugh Liedtke of Pennzoil, for instance, stated
that he was not busy with “empire building”: “we’re not going to grow at share-
holders expense’ (WSJ, 22-11-1985). The change resulted in remarkable financial
18 Theor Soc (2014) 43:1–22

transactions. In 1986, Colt Industries, for instance, decided to pay out $1.5 billion to
its shareholders before taking a $1.4 billion loan that was intended for acquisitions in
order to enhance its shareholder value even more (WSJ, 21-06-1981).
The finding that the shareholder conception of the firm seems to have gained a
prominent and well established position in the economic field around 1985 corre-
sponds to findings of research on proxy statements, regulatory documents, and
market reactions to stock repurchase plans: by the mid-1980s prevailing beliefs about
corporate governance had shifted from a managerial to a shareholder conception of
the firm (Davis and Thompson 1994; Zajac and Westphal 2004).

Empirical conclusions and theoretical implications

A fairly clear pattern concerning the origins and early spread of shareholder value has
emerged from the Wall Street Journal and the other sources we consulted. After a
small number of incidental occurrences in the 1960s and 1970s, the public use of the
notion quickly increased from 1980 onwards becoming the catch word for a new way
of managing firms. Shareholder value was no longer simply defined in terms of
dividend, as it had been before, but came to be conceived as the actual and potential
market value of firms. This change was initiated by corporate raiders, who
threatenend to take over companies that did not generate sufficient value for their
shareholders. In these takeover battles they turned against established management in
the name of enhancing shareholder value, which—they argued—was companies’
only legitimate objective.
That the struggle between managerial elites and activist shareholders was settled in
favor of the latter in a relatively short timespan can be explained by the swift change
in attitude of public pension funds. As a result of the collectivization of share
ownership, institutional investors had accumulated more potential power than dis-
persed individual investors ever had. The rivalry between raiders and public pension
funds over the profits of hostile take-overs led to the founding of the Council of
Institutional Investors (1985), which adopted the shareholder value view of the firm
and inaugurated an activist stance with regard to the management of firms. Central to
the social dynamics of the process was the conflict and competition between different
categories of shareholders, corporate raiders, and public pension funds, which pro-
voked the organization of institutional investors, thus shifting the balance of power
between managers and shareholders. Since managers found profitable ways to adapt
to the new balance balance of power, the shareholder value ideology spread rapidly
through the economic field, becoming the dominant business model of North American
firms in the second half of the 1980s.
Two analytically distinct developments had made these operations possible, one
located within the economic field itself, the other in the political realm. First, many
corporate raiders had earned their fortunes during the oil crises, when other compa-
nies went through a sharp economic downturn that had undervalued their stocks. As
far as corporate raiders did not only use their own capital, they relied on new
investment techniques such as the so-called junk bonds, low valued and traditionally
hard to sell corporate bonds. This concentration of financial resources during a deep
economic crisis enabled a relatively small group of outsiders to gain power over even
Theor Soc (2014) 43:1–22 19

some of the largest corporations. Second, the deregulation of the economy by the
Reagan administration made hostile takeovers much easier to execute than before and
government policies also favored owners of capital in various other ways (Fligstein
2005, pp. 126–127). The combination of these two developments shifted the balance
of power in favor of activist investors, which had few ties and loyalties to established
management and who pursued their interests disregarding those of other groups of
share and stakeholders.
Although there are good reasons to be cautious about findings based on a limited
sample of public sources, our study has found no indications that other groups may
have played an equally important role as the corporate raiders. This applies in
particular to financial economists such as Jensen and Meckling who developed the
agency theory of the firm. It seems that corporate raiders and their closest allies did
not need agency theory to advocate a shareholder view and justify their financial
operations. According to the sources examined, agency theory does not seem to have
generated much interest in the beginning, neither in the business world nor in the
academic community. There are some indications that the attention for agency theory
increased mainly after the shareholder value doctrine had been adopted by institutional
investors, which suggests that it has had a legitimizing rather than a performative
function.
Theoretically, the rise and early spread of shareholder value seems best understood
from a field perspective. But the case study we presented raises questions not only of
field theory as compared to other theoretical perspectives, but also of issues that are
internal to this approach. Field theory today includes different varieties, ranging from
more culturalist versions that center on the shared understandings of actors in a
field to institutionalist accounts in which organizations are the main actors and
(de)institutionalization is the central process, to the more structural versions of Bourdieu
and Fligstein that we have relied upon in this article (see Fligstein and McAdam 2012;
Martin 2011).
Instead of limiting the analysis to either cultural or economic change, or for that
matter to general features of financialization and neoliberalism,an approach in terms
of field dynamics is broad enough to capture the various dimensions of the transfor-
mation studied, while at the same time being able to include a plurality of actors.
Central to the more structural approach we have followed are the shifting power
relations between interrelated groups, each of them occupying a particular position in
the economic field and endowed with a set of resources the uses of which are
associated with particular dispositions and strategies. The shareholder value concep-
tion of the firm was typically articulated by a group of outsiders, raiders, the actions
of which provoked the involvement of another group: public (but not corporate)
pension funds. This involvement of particular groups and the dynamic interactions it
produced under specific political conditions was the predominant characteristic of the
reconfiguration of the economc field that took place in the first half of the 1980s.
As our case study suggests, this version of field theory offers distinct analytical
advantages over other versions and approaches. First, it is better suited to explore and
explain the dynamics of the business world than individualist perspectives, which
ignore relatively cohesive groups of actors, and macro approaches, which assume
more or less homogeneous interest groups or classes and abstract from the actual
differentiation of the economic and financial groups involved. Without inquiring into
20 Theor Soc (2014) 43:1–22

the changing relations among a variety of groups and their specific power basis, field
transformations remain unintelligible.
Second, this type of field approach opposes primarily economic as well as cultural
accounts, acknowledging instead the interrelationship of material and symbolic
dimensions. Economic interests are not simply given, they need to be defined and
interpreted in certain ways to obtain legitimacy, and these interpretations are part and
parcel of the cultural and cognitive frameworks that orient business practices. Cultural
understandings and frameworks are not disjunct from material interests, neither in the
ways they are produced nor in the ways they are used.
Third, field theory in the more structural sense enables the integration of different
temporalies, which are an important feature for understanding historical transforma-
tions. In this case it allowed articulating a relatively slow, structural socio-economic
change (the rise of institutional investors) with the more punctual revolt of a small
vanguard of outsiders (raiders). It was the revolt of the latter during a period of crisis
that provoked the organized intervention of powerful investors, thus producing the
structural change that until then had remained latent. Although the actual power shift
from managers to shareholders happened in a remarkably short period of time, it took
place within a much longer and more gradual process of change in the relationships
between managers and shareholders (for these issues see Gorski 2013).
Fourth, a field approach to the economy includes, as Bourdieu, Fligstein, and others
have argued, incorporating the broader field environment, in particular that of the state
and law. During the first years of the Reagan administration, the lucrative operations of
corporate raiders became an example for public pension funds only when it had become
clear that the government and regulating bodies would not intervene in the take-over
market but would, on the contrary, consistently favor shareholders’ interests.

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Johan Heilbron is a historical sociologist, member of the Centre Européen de Sociologie et de Science
Politique de la Sorbonne (CESSP-CNRS-EHESS) in Paris, and affiliated with the Erasmus Center for
Economic Sociology (ECES) in Rotterdam. His work is on the development of the social sciences, the
transformation of economic fields, and transnational exchange and cultural globalization. For more
information see: http://cse.ehess.fr/ or http://www.eur.nl/fsw/research/eces/home/.
22 Theor Soc (2014) 43:1–22

Jochem Verheul studied sociology at Erasmus University Rotterdam, where he wrote his masters thesis on
the spread of shareholder value. His interest is in economic and cultural sociology. He is affiliated with the
Erasmus Center for Economic Sociology (ECES), and is the owner of the consultancy firm It’s a virus.

Sander Quak is a postdoctoral researcher at the Erasmus Center for Economic Sociology (ECES) in
Rotterdam. He obtained his PhD at the Erasmus University Rotterdam with a study on Transnational Firms
and Their Corporate Labor Policy. Case Studies on Philips and ING in the Netherlands and the United
States, 1980–2010 (2012). He is currently engaged in a research project on the development of the
pharmaceutical industry. His research interests lie in the field of economic sociology and include the
sociological study of markets, firms, and investors. For more information, see http://www.eur.nl/fsw/
research/eces/home/.

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