Abstract:
In a conceptual paper, I articulate how agentic behaviors of managers are traced to manager-selection processes that tend to favor individuals who are high on social dominance. I describe this process, term it “the agency vortex”, and explain why it results in top managers being particularly prone to act in their own self-interest. This theory has several important implications for several domains in strategy, including board structure, gender equality, compensation, and various corporate development decisions. Based on this theoretical model, I have designed a five-year research agenda which will empirically test its various implications. To this end, I have been building a proprietary database of 312 Biopharmaceutical firms covering 2700 firm-year observations, that employs pre-trained machine-learning models that generate multiple indicators of social dominance. In the first empirical paper which I will also present, my colleagues and I explore how social dominance serves as a boundary condition for the relationship between CEO duality and agency, such that CEO duality shift is associated with lower (higher) agency for individuals with low (high) social dominance. This work suggests that it is not CEO duality per se that explains agentic behavior; rather, it is explained by changes in roles coupled with personality traits