political ideologies of upper echelons: implications for top executives’ pay arrangements
Open Access
- Author:
- Chin, Mun Kyun
- Graduate Program:
- Management - Business Adminstration
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- May 14, 2014
- Committee Members:
- Donald C Hambrick, Dissertation Advisor/Co-Advisor
Donald C Hambrick, Committee Chair/Co-Chair
Vilmos Fosnocht Misangyi, Committee Member
Forrest Scott Briscoe, Committee Member
Linda K Trevino, Committee Member
Karen Page Winterich, Committee Member - Keywords:
- Political Ideology of Top Executives
Upper Echelons
Top Executives' Compensation - Abstract:
- In this dissertation, I examine the influence of the political ideologies of top executives on organizational outcomes. I first test how liberal and conservative CEOs have different influences on top management teams’ (TMT) pay arrangements. Given that politically liberal CEOs believe in the importance of egalitarianism, whereas political conservatives hold to free-market principles, I propose that a firm with a more liberal CEO is likely to have greater TMT pay egalitarianism, which is defined as the degree to which pay is arranged such that executives’ financial rewards are shared collectively. In the following study, I attempt to test whether the efficacy of TMT pay arrangements varies according to non-CEO executives’ political ideologies. Liberals and conservatives assess fairness using different standards. Liberals, who strongly value egalitarianism, tend to base their judgment about fairness on the equality of outcomes; conversely, conservatives, who uphold proportionality, tend to be more accepting of unequal distribution of outcomes. Due to these divergent political ideologies, their perceptions and interpretations of similar situations will differ; consequently, the behaviors they exhibit and the choices they make in response will differ as well. Based on this argument, I test whether the direct influence of TMT pay egalitarianism on two organizational outcomes – firm performance and executive departure – is moderated by non-CEO executives’ political ideologies. By testing these relationships, this dissertation will shed light on the importance of understanding the political ideologies of upper echelons.