Research Summary

Research Thrust

by Rakesh Khurana


I am trained in organizational sociology and my main areas of interest lie in macro-organizational theory and the dynamics of executive labor markets. To date, my research has focused on two themes. The first revolves around understanding the forces that govern the processes of chief executive officer (CEO) change in large, publicly-held corporations. I pursue research in this area primarily by combining the flexibility of network theory with a deep field-based understanding of the phenomenon. I consider myself part of a growing group of scholars who employ the network perspective and field-based knowledge to re-frame classical economic and sociological explanations of organizational decisions and market outcomes. This approach holds out the promise of a more empirically grounded model of organizational action and a conception that many organizational actions, usually thought to be primarily responsive to objective economic factors such as firm performance and incentives, are also responsive to a variety of social factors including position in a social structure. I view this approach to be a vital infusion of sociological imagination into theoretical territory and empirical settings that have suffered by its absence.

The research I have conducted on the CEO labor market has focused on four interrelated processes in this area: the factors that lead to vacancies in the CEO position; factors that affect the choice of successor; the role of market intermediaries such as executive search firms in CEO search; and the consequences of CEO succession and selection decisions for subsequent firm performance and strategic choices.

My current research plans grow out of the same interests in the social context of business leadership and the allocation of leadership positions that have motivated my research on the CEO labor market. My first set of projects focus on the 'managerial' implications of my research on the CEO labor market. Here, I am developing cases, articles, and essays about CEO succession and the problems of existence governance institutions that will be published in more managerially-oriented outlets.

The second major subject that I am now beginning to study is the evolution of management as a profession. My thoughts on this topic are rooted in the question of how certain occupations within business (not just executive management but also consulting, private equity, and investment banking) have come to require the MBA credential as a prerequisite for entry. The significance of this issue lies in its direct bearing on the question of how professional management has claimed and received legitimation for its role as the steward of a very substantial proportion of society’s material wealth and resources—a role that has itself been subject to changing interpretations over the decades since the phenomenon of professional management first appeared on the American scene.

Although there is a rich sociological literature on professions, it is focused, for the most part, on licensed professions such as medicine and law. This literature argues that professions are occupational groups that claim jurisdiction over particular arenas of work. In order to claim jurisdiction, a profession must ask “society to recognize its cognitive structure through exclusive rights” (Abbott, 1988: 59). Scholars studying professions argue that societal recognition of such claims, which is what results in the granting of professional status and privileges, is usually achieved either through the legal system or in the realm of public opinion. Law and medicine are professions that rely on the legal system (i.e., state licensing boards). Journalism and social work are examples of professions that are more dependent on public opinion for their ability to monopolize particular types of work. In this context, professional management is unique in that it has relied on neither legal authority for, nor public endorsement of, its claims of jurisdiction over managerial tasks in large publicly held corporations, investment banks, and so forth. Instead—according to my working hypothesis—its jurisdictional authority has been achieved through an interdependent relationship between university-based business schools (which derive a certain measure of their own legitimacy from the university itself, an institution that other American professions have in effect licensed to provide training and credentialing for aspiring professionals) and the corporate workplace. I intend to test this hypothesis by exploring the history of professional business education and the development of particular business occupations that have arisen and evolved in tandem with the university-based business schools.

I expect the results of my research on professions to have implications for our understanding of how, exactly, professional managers do, can, or should “contribute to the well-being of society”. Relevant questions that I hope to answer include: Where did our current shareholder-centered, agency-based view of the role of professional management come from—particularly in light of the very different one that underlay the founding of the first professional business schools and the granting to them of a place within the university? How does our current view of the role of the professional manager compare with the way that professional responsibility has traditionally been conceived in the other professions? In view of the way that professional roles have recently been evolving in professions such as law or medicine, do market forces inevitably undermine professional autonomy and standards? What would be the potential benefits and drawbacks of management becoming more like the other professions in its structure and culture than it has been during its history to date?

Nitin Nohria and I have been writing about making management a profession. HBS students have taken the lead in this area. See the oath and its signatories here. Read about it in Wikipedia, too!