Neil Fligstein Quotes

Organizational theory is one of the most vibrant areas in sociological research. Scholars from many subfields, (medical sociology, political sociology, social movements, education) have felt compelled to study organizational theory because of the obviously important role that complex organizations play in their empirical research. But scholars who do not do organizational theory are often struck at how arcane the debates are within organizational theory. They also think most of organizational theory is about firms and thus, the theory does not seem to have much application to other kinds of social arenas.

The finance conception of the modern corporation, which currently dominates, emphasizes control through the use of financial tools which measure performance according to profit rates. Product lines are evaluated on their short-run profitability and important management decisions are based on the potential profitability of each line. Firms are viewed as collections of assets earning differing rates of return, not as producers of given goods. The firm is not seen as being a member of only one industry. Consequently if the prospect of an industry in which it participates declines, the firm disinvests. The problem for management from this perspective is to maximize short-run rates of return by altering product mix, thereby increasing shareholder equity and keeping the stock price high

The purpose of the large horizontal (same-product) mergers was to reduce the number of plants and, hence, control production enough to insure a reasonable rate of profit. Mergers would allow a newly created large firm to produce full-time in its most efficient plants, and thereby maintain prices, production, and profits.

Organizational and not financial or ownership embeddedness is likely to be a more important cause of actions of firms than anything else in the case of United States. This means efforts should concentrate on specifying models of relations between firms that focus on intra- and interorganizational processes, such as the construction of strategic action and the cultural frames by which such a construction makes sense.

The Celler-Kefauver Amendment to Section 7 of the Clayton Act has now been made effective by judicial ratification. The Supreme Court has said that the Act means exactly what it says... It prohibits acquisitions, either stock or assets, where competition in any line of commerce in any section of the country may be substantially lessened.

The forms of social organization produced the market, not the reverse... Instead of markets calling forth efficient forms of social organization, political and social interactions produced the structuring of sociologically effective markets.

Markets are social constructs that reflect the unique political-cultural construction of their business enterprises and nations.

A leading firm that controlled a large portion of the output of a given organizational field operated as a price setter. To set prices, the actors in that firm had to control their suppliers and marketing in order to increase their own efficiency and have the potential to cut off other firms from supplies or customers.

Younger and smaller firms would be more likely to adopt the MDF (Multidivisional Form) than older and larger ones.

The marketing director in each department reported directly to the department head and controlled market research and sales. More important, the marketing manager was also responsible for new product development, requesting production schedules, and controlling finished goods inventory.

The key insight of the approach is to consider that social action takes place in arenas, what may be called fields, domains, sectors, or organized social spaces... Fields contain collective actors who try to produce a system of domination in that space. To do so requires the production of a local culture that defines local social relations between actors.

... did not set out to destroy the large corporation. Instead, each attempted to protect the legitimacy of the system by using existing law against the worst offenders or proposing new laws to change the rules of the system.

Once in place as control perspectives, they are widely shared ways of reducing complexity of the world. They come into the existence in a piecemeal fashion and are articulated by representatives of the largest, most successful firms. They are propagated by the business press and informal links between organizations and then are supported by those organizations and organizational fields.

The major reasons for diversification were by this time well established : to employ excess plant capacity, to eliminate seasonal humps, to guard against dependency on one industry, to enter new expanding industries, to supplement existing product lines, to use old products to create new product, and to secure a larger share of business in general.

The firm-as-portfolio model implies both a practice (growth through diversification) and a form (the conglomerate). Unrelated diversification entails buying businesses in industries that are neither potential buyers, suppliers, competitors, or complements to the firm’s current business.