Effect of CEO Entrenchment on Stakeholders' Social Pressure: Critique of Power Transition (Hegemonic) Theory

Subject Areas : Management Accounting

parviz miri ¹ (Department of Accounting, Qeshm Branch, Islamic Azad University, Qeshm, Iran)
Ghodratolah Talebnia ² (Associate Professor, Department of Accounting, Science and Research Branch, Islamic Azad University, Tehran, Iran)
faegh ahmadi ³ (Assistant Professor, Department of Accounting, Qeshm Branch, Islamic Azad University, Qeshm, Iran)
Hamidreza Vakili fard ⁴ (Associate Professor of Accounting, Science and Research Branch, Islamic Azad University, Tehran, Iran)

Received: 2021-06-05 Accepted : 2021-06-05 Published : 2021-05-22

Keywords: Power Transition (Hegemonic) T, Stakeholders' Social Pressure, CEO Entrenchment,

Abstract :

Stability in office systems helps companies achieve more goals and goals by developing coherent programs and strategies. One of the theories related to this field is the theory of hegemonic stability, which is rooted in the economic layers of larger administrative systems. Expanding this theory to administrative systems, such as market-based corporate-based companies, can be effective in balancing the relationship with stakeholders and controlling potential social pressures. This research tried to be based on Power Transition (Hegemonic) Theory, examine the effect of the CEO's entrenchment on stakeholders' social pressures. On this basis, two analyzes were used to measure social pressures Meta-synthesis and Delphi Finally, with the participation of research experts, questionnaires were developed in the form of 5-choice Likert scale. Also, in order to measure the CEO's entrenchment, three criteria of tenure, managerial ownership and duty duality were used based on the definition of indicators 0 and 1. The statistical population studied in this study included all companies listed on the Tehran Stock Exchange in 2019. A total of 109 questionnaires were examined with the participation of CEOs of capital market companies through the analysis of Partial Least Squares (PLS). The test results of the research hypothesis showed that CEO entrenchment has a positive and significant effect on stakeholders' social pressure. This result is in fact a critique of power transition (Hegemonic) theory at the level of theories of representation in capital market companies And it shows that the existence of a stronghold for CEO entrenchment at the head of the government and the decision of the company in line with transition (hegemonic) theory, cannot be a factor to control the social pressures of stakeholders. Because the presence of opportunistic motivations of managers will disrupt the effective and efficient functions of the company's development path, and stakeholders will put a lot of pressure on the company to protect their interests in various ways.

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