From Productionist- to Shareholder-Orientation? the Strategic Orientation of Corporate Executives

Over the past decades the formal and informal institutional frameworks of national economies have been reconfigured and corporations have realigned their strategies favouring shareholders and owners over other corporate stakeholders. On the corporate level this process of financialization has been associated with a growing shareholder-orientation (Van der Zwan, 2014). Whereas the analytical focus is usually on the institutional side, scholars have lately called for reintegrating elites to understand and analyse the process of financialization, its implications and its social, political and economic effects (Morgan et al., 2015; Savage and Williams, 2008). This paper adds to the revitalization of elite research by shifting attention to central actors on the corporate level and analysing the strategic orientation of executives. The strategic orientation of executives is of particular interest as it affects their priorities and thus influences corporate strategies. The paper takes an elite-sociological perspective on the composition of the German corporate elite, combining insights from classical elite literature (e.g. Michels, 1989 [1925); Pareto, 1942 [1916]), sociological management literature (e.g. Glover, 1976; Maurice et al., 1980; Sorge and Warner, 1980) and economic sociology (Beyer, 2006; Fligstein, 1991).

Within the comparative capitalism literature, Germany is usual referred to as a classical example of a nonliberal market economy (Hall and Soskice, 2001). For long, a productionist-orientation, that is the understanding that the development, production, and improvement of products mark the central objective of corporate activity, was said to denote one of the central pillars of the German system of corporate governance (Jürgens et al., 2000). This specific orientation rested, not only on the organizational hierarchy which conceived the production department as central (Lane, 1989), but was supported also by the professional qualification of key actors within this hierarchy. The specific professional qualification of executives in Germany complemented the organizational hierarchy of firms in Germany and fostered a strategic orientation in which production figured prominently.

As in other western economies, Germany has witnessed changes in its institutional structure and corporations have adapted more shareholder-oriented strategies, that is corporate strategies with a greater concern on profitability measured by financial metrics (Jürgens et al., 2000). In this context, several studies have analysed career trajectories of German corporate leaders (e.g. Beyer, 2006; Hartmann, 2015; Höpner, 2003; Münch &Guenther, 2005; Pohlmann, 2003). Due to differences in terms of their samples (size and criteria), their applied methods and procedures, the considered period or points in time, as well as the sources used, these studies lack comparability and provide us with varying results.

This paper uses results from a longitudinal analysis of the career patterns of the German corporate elite and allows for inter-temporal comparisons for a period of five decades (1960-2015). Based on the study of the functional expertise and operational experience of corporate leaders in German industry, it is argued that despite remaining technical and production-based competencies, corporate leaders are increasingly more inclined to apply a shareholder-orientation. Rather than substituting the production-orientation associated with earlier generations of corporate leaders in Germans, the increasing shareholder-orientation seems to complement the former.