Skip to Main Content
Have library access? Log in through your library
Decline of the Corporate Community

Decline of the Corporate Community: Network Dynamics of the Dutch Business Elite

Eelke M. Heemskerk
Copyright Date: 2007
Pages: 256
  • Cite this Item
  • Book Info
    Decline of the Corporate Community
    Book Description:

    From its inception, big business in the western industrialised world has been organised in national business communities. Central elements of these business communities are corporate board interlocks that constitute the notorious 'Old Boys Network'. This corporate elite connects the centres of corporate governance. In recent times, these networks of the corporate elite show signs of decline. Heemskerk investigates how the decline of the old boys network in the Netherlands has affected Dutch capitalism. Combining formal network analysis with insights from interviews with key corporate elite members, he shows how during the last quarter of the 20th century the Dutch business community has disappeared. This is interpreted as a drift towards a liberal market economy. However, as the study shows, even in a liberal market economy corporate directors need social networks to communicate and coordinate their strategic decisions. Hence, the corporate elite shift its meeting network to private and informal circles. To order this book, mail to ""> This title is available in the OAPEN Library -

    eISBN: 978-90-485-0170-0
    Subjects: Linguistics

Table of Contents

  1. Front Matter
    (pp. 1-4)
  2. Table of Contents
    (pp. 5-8)
  3. Tables and Figures
    (pp. 9-10)
  4. Preface
    (pp. 11-14)
    Eelke M. Heemskerk
  5. 1 Corporate Communities, Governance and Control
    (pp. 15-44)

    In the early years of the twenty-first century, it became evident that directors of a considerable number of large – and very much respected firms – were engaged in corporate fraud and severe mismanagement, leading to the (near) collapse of firms such as Enron, Worldcom, Parmalat, Ahold and many more. As a result of the fraud, value worth billions was destroyed and jobs and savings were lost. The primary driving factor behind the corporate scandals was the effort of top directors to uphold the appreciation of the shares of their firms on the stock market. These directors were deeply entangled...

  6. 2 Decline of the Corporate Network
    (pp. 45-78)

    In the shareholder-oriented Anglo-American model, liberal market mechanisms play a much more predominant role than in the Rhenish model. Corporations in Rhenish countries are, overall, more strongly embedded in networks of interlocking directorates (Heemskerk 2004b; Stokman and Wasseur 1985; Windolf 2002). Together, these board interlocks form a social interaction network that connects the top decision-making bodies of important economic actors. It serves as an opportunity structure for coordination of economic activities, other than the liberal market mechanism of competition has to offer. According to Hall and Soskice, these dense networks of inter-corporate linkages facilitate coordination between economic actors (Hall and...

  7. 3 The End of the Old Boys Network
    (pp. 79-100)

    The previous chapter showed how firms in the Netherlands have been embedded in a network of interlocking directorates, and how this network has been thinned ever since the mid-1970s. Here we leave behind the inter-firm perspective and investigate the interpersonal component of the network of board overlap instead. Interest in the corporate elite has come from critical sociologists rather than from economists, but this chapter does not aim to test the hypothesis of the existence of a cohesive ruling class. We are merely interested in the cohesion of the corporate elite and how this has changed during the past decades...

  8. 4 The Corporate Elite’s Informal Networks
    (pp. 101-130)

    The foregoing chapter investigated the interpersonal network of the directors as they are connected by their common board memberships. Following the inter-firm analysis of chapter 2, this interpersonal perspective showed how the changes in the configuration of the network of interlocking directorates severely hampered the cohesion of the corporate elite. The upper-class distinctiveness of the corporate elite had been waning ever since the 1960s, and now the meeting network in corporate boards is also in decline. However, the cohesion and interconnectedness of the corporate elite is not brought about by shared corporate board membership alone. The corporate elite meet in...

  9. 5 Formalisation of Governance
    (pp. 131-154)

    So far, the focus of this book has been on the (re)configuration of networks as a proxy for the social embeddedness of corporations and the corporate elite and as an opportunity structure for coordination. This approach rests on the assumption that (changes in) the structures of corporate board overlap and elite interaction bear significance on the way in which corporations are governed. This chapter provides insight as to how the shifts in governance networks impacted the way the corporate elite govern and supervise the corporations. The question this chapter tries to answer brings us back to the issue of shifting...

  10. 6 Conclusions
    (pp. 155-170)

    The network of interlocking directorates, mainstay of the national business community, is now disintegrating. After decades of stability, the turn of the twentieth century marks a watershed in the configuration of the corporate elite’s social network. Throughout the century, national business communities shaped and sustained corporate governance traditions and practices in industrial capitalist economies. For long, the corporate elite enjoyed a large degree of autonomy. Strong and durable relations between directors and the suppliers of capital ensured an influence of capital through ‘voice’, as opposed to an influence through the market mechanisms of ‘exit’. With relatively clearly defined goals and...

  11. Appendix I Mergers and Acquisitions in Banking
    (pp. 171-174)
  12. Appendix II: Glossary
    (pp. 175-178)
  13. Appendix III List of Top 250 Firms in the Netherlands
    (pp. 179-206)
  14. Appendix IV Big Linkers
    (pp. 207-210)
  15. Appendix V: Meetings of the Interviewees
    (pp. 211-212)
  16. NOTES
    (pp. 213-230)
  17. Literature
    (pp. 231-248)
  18. Index
    (pp. 249-254)