The organizational restructuring performative act under shareholder value management ideology.

AutorSaltorato, Patricia

1 Introduction

From the late 1970s on, the Shareholder Value (SHV) management ideology began to increasingly understand, control and manage companies as portfolios composed of organizational units measured by financial metrics (Dobbin & Jung, 2010). The emergence of this management ideology can be portrayed as a social construction of a bourdieusian organizational field. In this process, capital market stakeholders holding hierarchically privileged positions within the field structure, had legitimized its new functioning rules, or its habitus (Bourdieu, 1989), defining values, beliefs, myths and rituals to be perceived as symbols of value creation and to be reproduced by corporate management speeches by stakeholders sharing this ideology.

One of the most symbolic and powerful values that represents this ideology refers to the belief in the organizational restructuring processes as an instrument to create shareholder value (Froud et al., 2006). This has led organizational restructuring success narratives to be exhaustively reproduced within the field, despite the distance between their promises (creating shareholder value) and outcomes (only reducing labor costs). Taking that into account, this paper explores the case of a restructuring process undertaken in the Brazilian subsidiary of one of Fortune 500's largest and longstanding American industrial corporations, that under the capital market's pressure for increasing SHV, focused during the researched period, on several strategies to respond to this pressure, highlighting the power of this myth. Both the company's discourse and the performativity of its restructuring process symbolize to the capital market's stakeholders its belief in the value creation by means of the organizational process.

The analyzed company's annual reports portray the restructuring organizational process as a continuous strategy, by means of which the company reinforces its commitment to deliver better numbers (and, also reverse bad ones). This institutional literature revealed itself an emblematic tool through which the company honors SHV ideology, telling stories about what it intends to do (or is doing) regarding the reproduction of values made legitimate by SHV ideology, as an attempt to meet capital market stakeholders' expectations. So, although the subsidiary's disappointing restructuring results do not support the success reports, this process certainly performs its legitimizing role.

Corroborating the hypothesis of a highly symbolic context, Froud et al. (2006) stated that truly the management of large companies under the SHV ideology began to incorporate a great deal of performativity:

"When management is about doing as well as saying it is necessary to extend the concept of performance to include management initiatives that 'show' the strategy is being enacted. Under the stock market pressure, these are now a characteristic part of large company management which includes enactment as well as telling stories" (Froud et al., 2006, p. 129).

The relevance of this research lies on the proposition of an alternative conceptual relationship between the reorientation of American management discourse (Froud et al., 2006), the Agency Theory (Jensen & Meckling, 1976) and the SHV ideology (Fligstein, 1990). The SHV ideology, as presented here, intends to go beyond the traditionally used formulations of the Agency Theory as it employs the bourdieusian field notion (Bourdieu, 1989) to better explain beliefs, values, rituals and myths made legitimate by stakeholders of SHV organizational field, thus integrating the reorientation of American management discourse from the late 20th century to the emergence of the 21st century CEO Celebrity phenomenon (Wade et al., 2006; Hayward et al., 2004; Sinha et al., 2012).

2 Methodology

The current research involves a qualitative approach to explore the symbolic/performative nature of the restructuring process that took place in the Brazilian subsidiary of an American industrial corporation; it reveals the power of such a myth, as it focuses on the distance between the promises and the outcomes of the process. To do so, both a theoretical and an empirical approach were carried out, combining a set of methodological tools and data collection instruments, described below:

2.1 Theoretical approach

This approach intends to revisit and reconstruct the theories related to the themes studied here as well as to analyze the company's official documents that could help better explain and explore the empirical findings of this research. This approach was undertaken by both bibliographical and documental research.

2.1.1 Bibliographical research

Bibliographical research enabled portraying the ideology of Shareholder Value management (SHV) as a social construction marked by the mid-1970's reorientation of management discourse according to a bourdieusian notion of organizational field. Such a field symbolizes a structured/hierarchic social subsystem according to the manipulation of different sources of capital by diverse stakeholders from the capital market and its resulting acts.

In that sense, bibliographical research involved the articulation of concepts concerning the social construction of reality (Berg & Luckman, 1966); the social construction of markets (Fligstein, 1990); Agency Theory formulations (Jensen & Meckling, 1976; Dobbin & Jung, 2010); the bourdieusian Field Theory (Bourdieu, 1989); Mimetic Isomorphism (DiMaggio & Powell, 1991); and Economic Sociology (Grun, 1999; Fligstein, 1990; Bourdieu, 1989), to explore topics related to the institutionalization of SHV ideology and its corollary: financial management (Useem, 1993).

Additionally, directly related to those, we will examine the legitimacy of beliefs and values disseminated by this ideology, as well as to the honor of organizational restructuring (Froud et al., 2006) and the emergence of the CEO Celebrity (Wade et al., 2006; Hayward et al., 2004; Sinha et cil., 2012) as a means to create SHV.

Thus, based on these theoretical assumptions, this study proposes to explore the organizational restructuring case of a large American corporation's Brazilian subsidiary as a socially constructed performative act in the SHV ideology organizational field, as opposed to the direct (and passive) approach derived solely from Agency Theory formulations.

2.1.2 Documental research

This source of information provided up-to-date data about the analyzed firm influential stakeholders' movements, from 2010 to 2015, through the examination of the company's public information, reports and websites, as well as internal documents concerning the restructuring process of the Brazilian subsidiary. The business press and market analysts' opinions aired in specialized media about the company's performance from 2010 to 2015 were also considered.

The company's institutional literature here analyzed, from 2010 to 2015, was an emblematic instrument through which the company honors SHV ideology, narrating its intentions regarding the reproduction of values legitimized under that management ideology attempting to meet the expectations of the stakeholders from the capital market. The company's annual reports portray the restructuring process as a continuous strategy, through which the company's commitment to deliver better numbers (and, also reverse bad ones) is reinforced.

Although the examination of the Brazilian subsidiary's disappointing results did not support the company's success narratives, in its strict sense, the performative role that this process played, legitimized the company's devotion towards the SHV ideology discourse, and hence was understood as legitimate.

2.2 Empirical approach

Considering the bibliographical research results (Froud et al., 2006; Goldstein, 2012; Hirsch & De Soucey, 2006), it was realized that organizational restructuring processes have been used by large corporations as one of the most symbolic and powerful beliefs that represent their communion with the ideology of SHV. Moreover, and besides the documental research results (Annual Reports 2010-2015), their narratives revere such a belief, portraying the analyzed company as one that have systematically reproduced values associated to the mentioned ideology. The empirical approach of this research involved the case study of a restructuring process undertaken in the Brazilian subsidiary of one of the largest and longstanding industrial American corporations listed in Fortune 500, highlighting the gap between its promises and outcomes, also revealing the power of such a myth. The case study was empirically supported by interviews and a participant observation of a manager of the analyzed company from 2009 to 2015.

2.2.1 Case study: interviews and participant observation

This case study involved carrying out 30 semi-structured interviews from 2010 to 2015 with six managers, two directors and the company's Latin American CFO regarding the restructuring process of the researched company, hereby called Corp. These interviews were done before, during and after the restructuring process, and inside as well as outside the company. The interviewed managers were chosen based on the participant-observer-researcher's prior knowledge that they would occupy strategic positions after the restructuring. Each of these managers were interviewed four times (on average for about 30 to 40 minutes each) between 2010 and 2015. The Brazilian subsidiary only employs two directors, who were part of the interviewers' sampling; the CFO participated because he moved to Florida, a consequence of the restructuring. Directors and the CFO were interviewed twice, for approximately 30 minutes each, by the participant-observer-manager (researcher).

The participant-observation of the researcher-manager occurred from 2009 to 2015, and besides conducting these interviews, he actively participated of the restructuring process, implementing it, and therefore having access to...

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