Organization and Strategy Seminar（2016-15）

Topic:When the boss is not always the boss: Hierarchical inconsistency and organizational misconduct

Speaker: Yidi Guo, INSEAD

Time: Friday, 4 November, 08:30-10:00 am

Location: Room 213, Guanghua Building 2

Abstract:

Hierarchy is a defining feature of organizations, and individuals can be embedded simultaneously in multiple hierarchies within an organization. This paper draws attention to hierarchical inconsistency – incongruent rank orders in the formal and informal hierarchies of the corporate elite (i.e. strategic decision makers such as board members and executives). This study argues that hierarchical inconsistency breaks collusion among corporate elite and prevents firms from fraudulent conduct. This effect of hierarchical inconsistency is particularly strong in complex institutional environments and corporate elite compositions where both formal and informal hierarchies are well accepted. These arguments are tested in the empirical context of family firms in China, where business and family hierarchies may confer superiority on different individuals. This study contributes to the corporate governance literature by enhancing understanding of how formal organizational structures and informal social relationships interact and jointly influence governance effectiveness.

Introduction:

Yidi Guo is a doctoral candidate specialized in Strategy at INSEAD. Her research focuses on strategic management in complex institutional environments. She studies how corporate elites make strategic decisions and how middle managers implement strategies in the presence of incompatible institutional pressures. She uses contexts of emerging markets, with special interest in family firms and state-owned enterprises where competing norms and rules prevail. Her dissertation "Hierarchical Inconsistency and Strategic Decision Making: Evidence from Family Business in China" was awarded the2015 Dissertation Research GrantbyStrategy Research Foundation (SRF). Her research on how middle managers manage the political environment to achieve market goals is forthcoming inStrategic Management Journal. Prior to her academic career, Yidi was a consultant at Roland Berger Strategy Consultants and a manager at a large state-owned enterprise in China. She received a Bachelor's degree in Management Information Systems and a Master's degree in Management Science and Engineering from Tsinghua University.

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