Class Effects: The Role of Social Class Background on CEO Selection and Career Outcomes

Abstract

This dissertation examines the influence of social class background on selection to the CEO position and subsequent career outcomes for CEOs. Specifically, I study how social class background may result in sociocognitive inferences that advantage those of higher and lower social class backgrounds. In the first study, I build off prior research which has highlighted the importance of upper class background for the CEO position to disentangle whether this effect is the effect of human and social capital differences or class effects. I propose that the preference for a higher social class candidate is determined by the macroinstitutional context and that the rise of a shareholder logic over the period from 1970-2013 has especially amplified this preference. Moreover, companies with greater institutional ownership are more likely to be beholden to this shareholder value orientation and express a preference for higher social class candidates. However, I theorize that collective bargaining agreements with unions can serve as a countervailing force, which prevents a shareholder value prioritization in companies and reduces the likelihood of higher social class selection while allowing those from different social class backgrounds a greater chance of attaining the CEO position. In the second study, I propose that social class background can result in inferences of managerial discretion or latitude of managerial action. I theorize that those of lower social class backgrounds are often viewed in the context of the considerable social mobility they have achieved from a position of disadvantage, and will be attributed greater capability of changing performance outcomes of the firm as a result. Conversely, I theorize that those from higher social class backgrounds are likely to be attributed lower discretion than their lower social class counterparts because they can rely on parental resources and less on their individual agency in realizing their career outcomes. The studies are largely supported and contribute to the literature in upper echelons, social class, and corporate elites and advance an understanding of how class background can affect executives at the apex of their careers.