Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/22522
Title: Behind the iron cage: An institutional perspective on ISO 9000 adoption and CEO compensation
Authors: Yeung, ACL 
Lo, CKY 
Cheng, TCE 
Keywords: CEO compensation
Institutional theory
ISO 9000
Issue Date: 2011
Source: Organization science, 2011, v. 22, no. 6, p. 1600-1612 How to cite?
Journal: Organization Science 
Abstract: Although institutional theorists maintain that the widespread diffusion of ISO 9000 is the result of institutional forces, they have neglected the potential gains to top management in the perpetuation of the standard. Based on a longhorizon event study with control firms to detect long-term abnormal financial gains, we investigate the impact of ISO 9000 adoption on CEO compensation in the U.S. manufacturing industry from 1994 to 2006. We find that the CEOs' total cash compensation was positively adjusted when their firms received ISO 9000 certification, and they received higher-value stock options when their firms embarked on ISO 9000 certification. However, the performance of the ISO 9000 certified firms was not improved throughout this period. Our further analyses suggest that it is likely that the CEO influences the board to obtain higher compensation under an institutionalized environment. Contrary to the traditional institutional theory-based view, we argue that a highly institutionalized environment does provide political opportunities for organizational actors to garner personal advantages.
URI: http://hdl.handle.net/10397/22522
ISSN: 1047-7039
DOI: 10.1287/orsc.1110.0652
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