Prior research views cash holdings, or high‐discretionary slack, as a buffer against shocks or a catalyst for strategic change. Drawing on stakeholder salience theory, we argue that cash can also reshape managers' interpretation and prioritization of employee hiring‐related claims, thereby increasing hiring, and that this effect is more pronounced when structural influences heighten the salience of those claims. Study 1, a large‐scale field study of Belgian firms, finds a positive but diminishing relationship between cash and hiring. This relationship strengthens under conditions of greater firm dependence on specific employee groups or following an exogenous legal reform, both of which are hypothesized to make the salience of specific employee groups more apparent. In Study 2, a vignette experiment offers causal support for the hypothesized mechanism, with employee salience cues strengthening how managers translate cash into hiring allocations. Combined, our findings contribute to research on slack resources and stakeholder salience by showing that managers use high‐discretionary cash not only for buffering or strategic change but also to respond to salient stakeholders.
Abstract Social exclusion is a persistent problem in elite professions. While scholarship has emphasized structural and cultural barriers, less is known about the relational practices and mechanisms through which social exclusion is sustained. Drawing on interviews with 84 lawyers, paralegals, and managers in elite UK law firms, we develop a conceptual model of how the blurring and affirming of social and symbolic boundaries between higher‐status and lower‐status groups reproduces social exclusion. We show how both groups blur and affirm boundaries across three domains: professional work, professional space, and systems of professional advancement. Boundary blurring makes symbolic boundaries more permeable, positioning lower‐status actors as prospective professionals, while boundary affirming maintains social boundaries around professional membership. We identify and theorize the illusion of progression as a relational mechanism emerging from intertwined blurring and affirming, constructing lower‐status roles as pathways into the profession even though progression is rare. The illusion perpetuates liminality by sustaining hope, individualizing failure and undermining lower‐status groups' collective challenge to social exclusion. Our findings advance understanding of the relational mechanism through which social exclusion persists in elite professions, show how boundary blurring can sustain rather than threaten status distinctions, and help explain why organizational diversity and inclusion efforts have produced little substantive change.
Abstract Business groups (BGs) are collections of legally independent firms connected by ownership ties and are widely present in both developing and developed economies. We develop property‐rights theory (PRT) to explain this prevalence, extending its scope from the allocation of rights over a bundle of assets to the legal partitioning of assets as another allocative mechanism of property rights. Our conceptual framework complements traditional theories understanding BGs primarily as responses to institutional voids. Drawing on a large global dataset of firms, we examine how firm asset specificity and ownership sharing influence the controlling owners' decision to organize their economic activities as a BG or as a standalone firm. We find that the likelihood of adopting a BG organizational form over a standalone entity increases when (1) controlling owners rely on more firm‐specific assets, and (2) ownership is shared or potentially shared. Moreover, our findings are robust across three commonly observed firm strategic configurations: focused, vertically integrated, and diversified. Our study expands the PRT by developing a theory of property‐rights architecture, moving forward from the institutional voids perspective to explain BGs as efficient governance responses to asset and ownership complexities, hence contributing also to the strategic management and international business literatures.
Abstract The historical origins of ‘Great Man’ theories of leadership, and their contemporary offshoots, have produced an accumulated literature in which the leader's behaviours are the focal unit of analysis. This Point article surfaces five theoretical assumptions underlying the leader behavioural paradigm: leaderism, individualistic attribution, behavioural universalism, democratization of leadership, and individual‐level ontology. We discuss theoretical counterfactuals to each assumption and call for a shift in the scene of scholarly conversation, from individual leaders to relationships that incorporate context and stakeholders. This shift in the focal unit of analysis from individual leader behaviour to relationships represents a foundational theoretical pivot built on multidisciplinary foundations, attention to levels of analysis, and a deep grounding in context. By questioning the assumptions underlying 85 years of leader behaviour research, we argue that the science (episteme), skill development (techné), and contextual judgement (phronesis) of leadership could be more tightly coupled by directing the spotlight towards relationships in context rather than individual leaders. In doing so, we move the focus from leaders in action to leadership as relationships in action .
Abstract Drawing on the endogeneity of law framework, this study examines how business, legal, public, and civil society actors constructed the meaning and practice of mandatory human rights due diligence in the context of the German garment industry and the German Supply Chain Act. Using interview, document, and observation data spanning the period 2019 to 2026, our findings reveal a two‐stage process: an initial phase of contested endogenization in which actors experienced with private regulation prevented convergence on a managerialized interpretation of the law, followed by regulatory unravelling in which changes in the political‐economic climate provided avenues for substantively weakening the law and preventing its implementation. We discuss how the dual processes of managerializing a law and legalizing of organizations is complicated by three boundary conditions: the complexity of the regulatory issue, the field's regulatory maturity, and the degree of regulatory uncertainty. Connecting the endogeneity of law framework with research on the public and private governance of global supply chains allows us to theorize refinements to this framework when applied to contested, complex governance fields, and to derive a set of theoretical and practical implications for public supply chain regulation.
