Economic Sociology Seminars

Andrew Schrank, Brown University, The Watson School of International and Public Affairs

Pyramid Schemes:  Culling the Ranks in Hierarchical Organizations

What do political purges, military coups, pension schemes, social safety nets, mandatory retirement programs, tenure and partnership votes, and “golden handshakes” have in common? We argue that they all contribute to "culling" in pyramidal organizations that face at least broad constraints on the size and composition of middle management; develop a “crude functionalist” (Zuckerman 2003) account of their origins, pace, and consequences; and discuss the implications for both organization theory and macro-sociology. Our starting point is a bivariate, ideal-typical portrait of pruning, or culling, that differentiates personnel policies along two dimensions: whether
they’re mandatory or voluntary, on the one hand, and whether they’re proactive or reactive, on the other. When pyramidal organizations have both the foresight and latitude they need to anticipate and address “managerial bloat,” we argue, they impose mandatory exit initiatives on a proactive basis. When they lack both foresight and latitude, however, they take post hoc, discretionary measures to encourage early exit on a voluntary basis, often at great cost. When they have foresight but lack the latitude they’d need to mandate exit from the middle ranks, they tend to embrace or exploit proactive programs that, in effect, buy white-collar workers out of their jobs on a voluntary and systematic basis. And when they lack foresight but have ex post facto latitude, they respond to inefficiencies, imbalances, and conflicts in the middle ranks by carrying out mass layoffs and dismissals, often at the behest of organizational outsiders, insurgents, or heavyweights who justify their efforts by invoking the "mismanagement" or “disloyalty” of their forerunners. We demonstrate the plausibility and generality of the account by reconsidering four major debates—over the East Asian developmental state, Latin American military coups, purges in totalitarian societies, and corporate downsizing in the United States—in organizational perspective.

Philipp Brandt, Sciences Po

TBA

Elizabeth Bruch, University of Michigan

TBA

Minjae Kim, Yale School of Management

TBA