Close
About
FAQ
Home
Collections
Login
USC Login
Register
0
Selected
Invert selection
Deselect all
Deselect all
Click here to refresh results
Click here to refresh results
USC
/
Digital Library
/
University of Southern California Dissertations and Theses
/
Quango reforms and challenges in South Korea: social relations, informal networks, and hidden actions
(USC Thesis Other)
Quango reforms and challenges in South Korea: social relations, informal networks, and hidden actions
PDF
Download
Share
Open document
Flip pages
Contact Us
Contact Us
Copy asset link
Request this asset
Transcript (if available)
Content
QUANGO REFORMS AND CHALLENGES IN SOUTH KOREA:
SOCIAL RELATIONS, INFORMAL NETWORKS, AND HIDDEN ACTIONS
by
Hyang Won Kwon
A Dissertation Presented to the
FACULTY OF THE USC GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PHILOSOPHY
(POLICY, PLANNING, AND DEVELOPMENT)
December 2012
Copyright 2012 Hyang Won Kwon
ii
DEDICATION
This dissertation is lovingly dedicated to my family,
self-sacrificing dad and mom,
and to my beloved and exceptionally devoted wife, rabbit.
iii
ACKNOWLEDGEMENTS
This dissertation was built on a great deal of trial and error, and I would never have
been able to get through it without the guidance of my adviser, the insight of my
committee members, the emotional support of my family and friends, and the substantive
help of my supportive colleagues.
I would like to express my deepest appreciation to my adviser Dr. Peter J. Robertson.
To be very honest, there was a time when I strayed off in dark not knowing how to carve
out a path for future. And there was a time when I was in a total loss of courage. My
adviser as a magnificent teacher as well as mentor patiently supported and encouraged
me to get through all that.
I would also like to express my heartful gratitude to my committee members Dr.
David Suarez and Peer C. Fiss. As I repeatedly talked to them, not only as a student but
also a big fan of their research and scholarship, I’ve learned a lot about the right attitude
toward research. Without their research and class, I would never have been able to
develop my dissertation.
Speaking of my family and my wife, it always brings tears to my eyes. During my
years in Ph.D. program, my family had to overcome a great deal of sufferings. With all
that, nevertheless, my beloved father and mother have never lost faith in me, and
supported me with all their heart. Also, Eun-Ju Lee, who has been the best friend for
more than 14 years, and who became my wife at last, had sat and waited for me with pray
all throughout my years in the program. Their love lifts me and makes me glow always.
In addition, I owed substantive help and support to my colleagues in developing my
dissertation. Dr. Ji-Eun Moon and David Hyuck Lee provided me with a great amount of
commitment to data collection and analysis. Without their input, my dissertation would
have never been possible.
Last but not least, I am extremely thankful to those who gave me support and aid. I
will never be able to thank them enough. I thank Dr. Do-Lim Choi, Robert Myrtle, Terry
Cooper, Juliet Musso, and Christopher Weare for all of their commitment and guidance.
I thank Laura Yoneda, Sally Pratt, Matthew Marchack, and Kamille Mosqueda of the
Graduate School for understanding and supporting me. I thank all my cohort and my
friends near and close for uplifting me all the time. Thank you all. Blessing.
iv
TABLE OF CONTENTS
Dedication ...................................................................................................... ii
Acknowledgements ...................................................................................... iii
Abstracts of Chapters ................................................................................ viii
Chapter 1: Setting the Scene, Problems, and Directions ........................... 1
1.1. Preface ............................................................................................................................................................. 1
1.2. Quango Reforms and Problems ........................................................................................................... 4
1.2.1. Administrative Reforms: Quangocratization and Boardization ...................................... 4
1.2.2. Problems: Depoliticization and Hidden Action ..................................................................... 7
1.2.3. Research Direction: Informal Networks and Hidden Influence .................................... 8
1.3. Research Topic, Questions and Subjects ........................................................................................ 10
1.3.1. Research Questions: Staffing and Financing ........................................................................ 10
1.3.2. Research Subject: South Korean Quangos (East Asian Case) ...................................... 12
Chapter 2: Concept and Case Selection .................................................... 14
2.1. Concept: Quangos .................................................................................................................................... 14
2.1.1. Public Sector Reform Movement ............................................................................................... 14
2.1.2. Conceptualizing Quangos ............................................................................................................. 17
2.1.3. Motivation for Creation ................................................................................................................. 25
2.2. Quango Challenges: Hidden Action Problems............................................................................. 33
2.2.1. Rhetoric-Reality Gap: Depoliticization and Reality .......................................................... 33
2.2.2. Quango Boards: Safeguard versus Collusion ....................................................................... 35
2.3. South Korean Quangos .......................................................................................................................... 37
2.3.1. Overview .............................................................................................................................................. 37
2.3.2. Mapping Stakeholder Relationships ........................................................................................ 41
2.3.3. Politico-Administrative Norms and Values in South Korea .......................................... 45
v
2.3.4. Incompatibility Problems .............................................................................................................. 51
Chapter 3: Theory - Informal Networks and Hidden Politics in Quangos
....................................................................................................................... 53
3.1. Elite Network and Inner Group Politics ......................................................................................... 53
3.1.1. Elite Networks and Public Decisions ........................................................................................ 53
3.1.2. Class Politics Conundrum ............................................................................................................ 55
3.2. Debate – Quango Rationality .............................................................................................................. 58
3.2.1. Myth: Operationally Closed ........................................................................................................ 58
3.2.2. Reality: Operationally Political .................................................................................................. 61
3.3. Informal Network and Hidden Action ............................................................................................ 63
3.3.1. Informal Network as Social Mechanism ................................................................................. 63
3.3.2. Hidden Action Problems ............................................................................................................... 64
3.4. Network Theoretic Approach ............................................................................................................. 64
3.4.1. The Concept of Social Structure and Organizational Study .......................................... 66
3.4.2. Social Network Perspective in Management Research .................................................... 68
3.4.3. Social Influence Effects .................................................................................................................. 78
Chapter 4: Design and Method .................................................................. 80
4.1. Research Design ........................................................................................................................................ 80
4.1.1. Sequential Mixed Methods Design ............................................................................................ 80
4.1.2. Preceding QUL and Following QUN ........................................................................................ 82
4.2. Exploration Procedures ......................................................................................................................... 83
4.2.1. Setting Direction ............................................................................................................................... 83
4.2.2. Interview Procedure ........................................................................................................................ 85
4.3. Model Establishment .............................................................................................................................. 88
4.3.1. Initial Findings from QUL ........................................................................................................... 88
4.3.2. Holistic Model .................................................................................................................................... 92
4.3.3. Subset Models and Research Questions .................................................................................. 96
4.4. Inferential Procedures ............................................................................................................................ 97
vi
4.4.1. Setting Direction ............................................................................................................................... 97
4.4.2. Sample Population ........................................................................................................................... 97
4.4.3. Data ........................................................................................................................................................ 98
Chapter 5: Sub-Model 1 – Board Structural Independence .................100
5.1. Independence of Quango Boards .................................................................................................... 100
5.2. Theory and Hypothesis ....................................................................................................................... 102
5.2.1. Why Board Controls Matter .................................................................................................... 102
5.2.2. Board Structural Independence .............................................................................................. 104
5.2.3. Inner Group Politics and Social Relations .......................................................................... 105
5.3. Measures ................................................................................................................................................... 110
5.3.1. Dependent Variable ...................................................................................................................... 110
5.3.2. Independent Variables ................................................................................................................ 112
5.3.3. Control Variables .......................................................................................................................... 114
5.4. Analysis ...................................................................................................................................................... 116
5.5. Results ........................................................................................................................................................ 119
Chapter 6: Sub-Model 2 - Firm-level Expenditures ...............................128
6.1. Expenditures and Social Embeddedness ..................................................................................... 128
6.2. Theory and Hypothesis ....................................................................................................................... 130
6.2.1. Hidden Agency Costs of Quangos .......................................................................................... 130
6.2.2. Inner Group Bias and Fiscal Decisions ................................................................................ 131
6.2.3. Network Centrality and Bargaining Power of CEOs ..................................................... 133
6.3. Variables ................................................................................................................................................... 134
6.3.1. Dependent Variable ...................................................................................................................... 134
6.3.2. Independent Variables ................................................................................................................ 136
6.3.3. Control Variables .......................................................................................................................... 138
6.4. Analysis ...................................................................................................................................................... 139
6.5. Results ........................................................................................................................................................ 142
vii
Chapter 7: Discussion ................................................................................150
7.1. Rhetoric-Reality Gap between De-politics and Informality ................................................ 150
7.2. Originality/Value ................................................................................................................................... 153
7.3. Limitations ............................................................................................................................................... 154
7.4. Next Steps (‘Future Research Agenda’) ...................................................................................... 156
References ...................................................................................................159
Appendix A. Template of Semi-Structured Interview Questions .........193
Appendix B. Typeof South Korean Quangos (as of year 2011) ............195
Appendix D. QS World University Ranking (2010-2011) .....................197
viii
ABSTRACTS OF CHAPTERS
Chapter 1: Setting the (1) Scenes, (2) Problems, and (3) Directions
(1) Administrative reforms, since the 80s, toward the infusion of business logics
and practices into public sector entail two elements: Quangocratization and Boardization.
Quangocratization means a trend of transferring of certain governmental functions and
authority into arm’s length semi-autonomous non-governmental organizations or
quangos, while boardization prompts adopting corporate-style governing boards in those
organizations. (2) Despite the popularity, the business-inspired reforms are subject to
informal influences or ‘hidden actions’ from party politics, which will likely gravitate the
management toward merely ‘defensive strategies’ to hedge political bias and concomitant
costs from public eyes. (3) Drawing on network perspectives, this study views elite
networks and inner politics as substantial source of political influences over quango
management with particular regard to staffing and financing. South Korean case was
considered as viable research subject in that its administrative culture and ethos are
largely collectivist and relational, and also that its quango reforms have been thought to
having incompatibility issue in terms of politicization.
ix
Chapter 2: (1) Concept of Quango and (2) Case Selection
(1) Quango is a denominator term to tag a cluster of hybrid non-state or semi-state
entities that fulfill a public function as policy instruments with a degree of independence
and autonomy from governments by sitting at arm’s length distance. The central
rationale of creating quangos involves the separation of administration from politics, and
the implementation of business-style practices for the sake of continuity, specialty, and
responsiveness. Nevertheless, a ‘rhetoric-reality gap’ commonly exists in relation to ‘the
depoliticization design’ and needs to be appreciated critically because the theory of
depoliticization and managerialism are often questionable. Arguably, quangos may not
completely be immune from political influences. (2) This issue was dealt critically in the
case of South Korean quangos. Two characteristics are salient. First, the reforms were
externally forced, and second, they were government-centric and top-down. Given its
administrative culture is relational and collectivist, incompatibility problems between
implanted treatment and cultural contexts are anticipated, which makes the case
interesting and worth looking into.
Chapter 3: Theory - Informal Networks and Hidden Politics in Quangos
Quango rationality states that the domain should be insulated from special interest
of a partisan because party politics is oriented toward a motivation of vote maximization
rather than of public welfare at large. In reality, the management is nevertheless
intertwined with politics as bureaucratic decisions with regard to resource allocations of
x
governmental grants and personnel appointments of senior executives are largely
political. It makes ex ante design of quangos to be operationally closed mythical.
Quango rationality may be impaired when the management is exploited to the interest of
a limited segment of dominant and consolidated social members. When this happens,
quango rationality will be translated into a disguised class-wide rationality. At negative
tone, a verdict was typically made on informal networks and inner group politics which
may lead to hidden action problems such as collusion. Three families of theoretical
mechanisms are thought, in this study, to best explain the phenomenon, including
homophily, proximity, and social support. Together with social network analysis
techniques, the theories account for in-group bias of social influence effects.
Chapter 4: Design and Method
The overall research design takes a form of the sequential mixed methods design
that consists of two sequential phases: (a) preceding qualitative inquiry, and (b) following
quantitative inference. The first phase aims to explore less known issues of quango
management with regard to (a) the causes and consequences of hidden action problems,
and (b) the elements constituting informal networks, including key players and contents
of ties. The results of interviews were thematically analyzed to develop a theoretical
model as to the link between informal ties and outcomes. The initial findings suggested
two primary outcomes, such as (a) impaired independence of boards, and (b) loose
implementation of expenditure, as a function of inner group politics by (a) politicized
xi
CEOs, and (b) collusive boards in quangos. Based on the two outcomes, two subset
models were established and then tested against a larger sample for generality and
relevance.
Chapter 5: Sub-model 1 – Board Structural Independence
The installment and implementation of corporate-style boards in quangos are not
necessarily linked to rigid board controls unless boards are materially independent from
both external political influences and internal management. Given that quango CEOs are
commonly appointed politically, the boards are a significant locus to maintain quango
rationality. The archetype of board independence points to the role of non-executive
outside directors who are more socially distanced from senior executives. As it has often
been challenged by an iron triangle of president, minister, and quango CEOs, it was
tested if social cohesion amid the agents leads to a more aspiration for inner group
politics and therefore to reduce board structural independence of outsiders to neutralize
internal pressure for controls. Defining board structural independence as an overall
functional proximity between CEOs and outside directors, social proximity between the
actors was regressed against the defendant variable. Overall, the results showed the
hypothesized relations among the variables.
xii
Chapter 6: Sub-model 2 – Firm-level Expenditure
Being a steward of public money, quangos have a degree of autonomy and
independence in making fiscal decisions. When the decisions are not well linked to
public interest at large, but to opportunism and agency costs, the rationale for the
autonomy and independence will be compromised. Since quangos as arm’s length
apparatus of governments are less visible or noticed from public eyes, it was reasoned
that the propensity of being hidden costs or shadow domains to conceal costs of the
governments from public scrutiny will likely be large. Albeit there are structural designs
to thwart the propensity such as (a) regulatory review by parental ministries or cabinets,
and (b) oversights by internal governing boards, inner group politics may bias the fiscal
decisions toward self-serving purposes. Popular press has pointed out that the oligarchic
triangle resulted in excessively benevolent monetary benefits, other than compensation,
to quangos in a form of non-fixed discretionary expenditure. The expenditure was
regressed against cohesiveness of the triangle and network centrality of CEOs to see if
social cohesion and network-conferred power actually led to empathetic monitoring and
increased agency costs. Overall, the results confirmed the hypothesized links between
the variables.
xiii
Chapter 7: Discussion and Conclusion
Overall, the findings suggested that there is the rhetoric-reality gap in the apolitical
mode of quangos in South Korea. This would make the reforms a part of defensive
practice for the party governments either to hedge their costs or to expand political
influence through staffing. It implies that the theory of public administration needs to
extend toward the aspect of interpersonal informality and social relations as it tended to
focus exclusively on macro level analysis of structural treatments or inter-organizational
networks. Social aspects and their outcomes have been largely neglected. Some
originalities and values are found. First, as a sort of crossover research, this dissertation
brings in conventional subject (‘corporate governance’) of business research into public
administration research. Second, it broadens network research in public administration
into networks among the top to explain organizational outcomes. Third, the classic
debate as to the dichotomy of administration-politics is touched on by raising a critical
point that the orientation is guiding in macro-design (‘ex ante’) while it needs constant
appreciation in operation (‘ex post’). Some limitations and future research agenda were
offered.
1
CHAPTER 1: SETTING THE SCENE, PROBLEMS, AND
DIRECTIONS
1.1. PREFACE
This dissertation begins with a critical mind about waste, abuse, and bias in public
sector organizations with a particular focus on semi-autonomous hybrid entities or, more
commonly, quangos
1
. It is an irony that quangos, which were originally invented as a
treatment for inefficiency and unresponsiveness of governments, are widely accused of
being a source of such illness now. Today, both popular discourse and academic debate
claim that the sector of quangos needs a critical appreciation as often delegated authority
and power to carry out public functions serve on the special interests of partisans. As a
result, the sector becomes merely a ‘political hive’ or ‘hidden expansion’ of party
governments. Indeed, the entities have been largely blamed for nepotism of managers,
loose fiscal management, entrenchment of board directors, and norms of deference to
political leaders. Thus, the entities have often been called an ‘enclave of political elites’
or ‘shadow territory of governments.’ Despite the potential pathologies, the concept of
1
The term quango is an abbreviation of Quasi‐autonomous Non‐governmental organizations. It was coined first
by Baker (1982) to tag intermediate sector organizations that are arm’s length distanced from bureaucratic
governments, but delegated with functions that were once undertaken by the governments in British context.
Today, the term is being used with generality to refer to a variety of third sector arm’s length entities across
countries. This dissertation uses the term throughout the chapters for coherence.
2
quangos was adopted by almost all countries as an important policy tool as part of 1980’s
global administrative reform movement toward market- and business-oriented
governments such as new public management (NPM). Now the size of the entities in
terms of budgetary expenditures generally tends to be larger than that of the central
governments. These days, the sector becomes too big to be hidden in the shadow.
The combination of the size, prevalence and potential of the pathologies make the
organizations interesting subjects with heightened significance. Being stewards of public
resources, quangos are charged with significant roles and responsibilities that may affect
public welfare at large to a substantial extent. However, as aforementioned, the
organizations may not be immune to political vagaries that hamper disinterested
implementation of public functions. Despite the importance, the sector has been given
insufficient scholarly attention so far. In particular, empirical accounts of the sources and
consequences of the quango pathologies are few.
Bearing this recognition in the critical mind, this dissertation pays particular
attention to power networks of upper-echelon elites as a source of political influence in
quangos. It is reasoned that the principles of administrative reform for quangos,
including desynchronizing management from politics and the infusion of business
orientation into management, may be compromised by hidden influences channeled
through power network, resulting in political biases or loose management. Inspired by
traditional Mertonian (1947) insight, it is alluded that purposive action of structural
3
reforms may not necessarily be linked to intended consequences because of interruptions
by less visible social forces such as social networks. Here, particular attention is placed
on social embeddedness amid the elites. The originality of this dissertation lies in the fact
that it puts embeddedness at the center of empirical analysis in public sector
organizations.
1.1.1. Organization of the Dissertation
The arguments proceed as follows. The remainder of Chapter 1 maps out contexts
and features of so-called quango reform, and outlines some problems that are embedded
in the reform. After setting the scene, it ends by identifying the research questions of this
study. In Chapter 2, the concept of quangos is addressed in terms of definition,
motivation of creation, and potential challenges. It is then located in the South Korean
context to suggest why the case is worth investigation. In Chapter 3, theoretical
resources to address quango problems are presented and discussed, and analytic strategies
to apply into the quango context are provided. In Chapter 4, the overall design and
method are described. In Chapter 5 and Chapter 6, empirical examination of two issues
is conducted: (a) board structural independence (chapter 5) and (b) firm-level
discretionary expenditure (chapter 6). Chapter 7 wraps up by discussing overall findings,
originality, value, limitations, and future research directions.
4
1.2. QUANGO REFORMS AND PROBLEMS
1.2.1. Administrative Reforms: Quangocratization and Boardization
Since the mid-1980s administrative reforms toward the infusion of business logic
and practices into the public sector have been a major trend of public administration in
almost all countries, now more commonly called ‘managerialism’(Newman and Clarke
1997) or ‘new public management’(Dunleavy et al. 2006; Hood and Peters 2004). Before
the reforms, hierarchical governmental bureaucracy was the predominant organizational
model used to fulfill public functions such as providing public goods or services
(Dunleavy et al. 2006; Hood and Peters 2004). The model was more suited to
accomplishing highly routine tasks with rule-based uniformity and without discretion.
This traditional mode of government is today challenged by complex societal problems
2
,
and forced to develop new models of ‘governance’(Goldsmith and Eggers 2004; Ansell
and Gash 2007).
The reforms have been oriented to transforming the architecture of hierarchical
governments into the market-based (Donahue 2002), business-oriented (Hood and Peters
2004), and democratic (Bogason and Musso 2006) modes of public management. Most
reform programs were enmeshed in the imperatives of more efficient (‘business-like’)
2
Goldsmith & Eggers (2006:10) suggest four major contextual changes: (1) third-party governments like non-profit,
and private firms, (2) joined-up governments of multiple government agencies, (3) the digital revolution, and (4)
increased citizen demand for democracy or customized service.
5
and inclusive (‘democratic’) public functioning. The reforms of quasi-autonomous non-
governmental organizations or quangos are associated with this ethos of ‘moving-
beyond-bureaucracy’ sentiment (Flinders and Smith 1999; Hogwood 1995; Van Thiel
2000, 2004; Wilson 1995). The presumption was made that the infusion of business-
oriented ideas and practices would enhance the efficiency and effectiveness of public
service provisions. The entire enterprise of quangos is a manifestation of the prescribed
treatment (Pollitt and Talbot 2004).
Two elements are salient in the package of quango reform: (a) quangocratization
(Van Thiel 2004) and (b) boardization (Wilks 2007).
First, ‘quangocratization’ means macro-level structural redesign of governments
by which certain governmental functions and authority that are more operational rather
than policy core
3
are transferred into a range of third party organizations (semi-public and
semi-private) such as executive agencies, contract companies, or voluntary charities
(Greve, Flinders, and Van Thiel 1999; Van Thiel 2000). Quasi-nongovernmental semi-
autonomous organizations or quangos are a denominator term that is commonly used to
include the variety of these organizations (Greve, Flinders, and Van Thiel 1999), and
‘quangocratization’ (Flinders and Smith 1999) or ‘agencification’ (Pollitt et al. 2004)
describes the trend and fashion of a growing reliance on quangos for public goods
production and public service delivery.
3
In this sentence, ‘policy core’ refers to a set of top‐level decision‐making functions such as, for example,
planning of macro economic development that requires a high level of consciousness and specialty. It is
distinguished from routine operation or implementation.
6
Second, ‘boardization’ is a reform program, along with quangocratization, that
prompts adopting and implementing ‘corporate-style board governance’
4
in quangos as
alternative control mechanism (Wilks 2007). The boardization reform program prescribed
the de-synchronization between public management and party politics through adopting
corporate-type board governance as an alternative institutional method to control and
direct the management. In that this program assumes that insulating the management
from political vagaries is a precondition for protecting stakeholders’ wellbeing against
political biases, it resonates with the spirit of the traditional notion of ‘politics-
administration’ dichotomy (Svara 2001; Overeem 2008). Both boardization and politics-
administration dichotomy share an idea that insulating public management from political
vagaries would enhance continuity, efficiency, and client-oriented responsiveness
(Bourdeaux 2008).
In sum, the administrative reforms entailing quangocratization and boardization are
based on the ideological and pragmatic shift to corporate-style management of public
sector administration.
4
The term ‘corporate‐style’ is used here to refer to the practice of corporate governance which has been
invented and developed in contemporary business corporations to control and direct a company’s management
toward the interest of shareholders. Other types of board governance such as nonprofit governance and public
governance are the adoption of the idea and practice of corporate‐style governance in a newer context.
7
1.2.2. Problems: Depoliticization and Hidden Action
Despite the popularity of the reform programs, there is a great deal of risk that the
apolitical mode of public management is subject to informal influence from party
politics, and then that the benefits of independence, which are conferred by
depoliticization or managerialism, will be impaired (Bertelli 2006; Dunleavy et al. 2006).
While the structural design of quangos ideally requires boundary between administration
and politics to be impenetrable, in reality administration of quangos is infiltrated by
political influences. The problem is that ‘the infiltration’ would be associated with
carefully-schemed ‘hidden action’(Bertelli 2006) or defensive management techniques
such as ‘symbolic decoupling’(Meyer and Rowan 1977; Fiss and Zajac 2006) to hedge
managerial autonomy from unwanted institutional demands from the public by taking
merely symbolic gestures while avoiding more substantive actions in response to the
demands.
The likelihood of a gap between a depoliticized design and hidden political action
leads to a reappreciation of the practice of quangos in terms of their political
disinterestedness. In reality, quangos may be easy prey for political predator for various
reasons. First, quangos are relatively less known and visible to the public even though
they control a great amount of public money as public stewards (Eger 2006). It leads
quangos to be called pejoratively as hidden or shadow sectors of governments
(Abrahamson and Choelsoon 1994). Second, quangos are generally subject to
institutional pressure from their parent ministries because, to a varying extent, quangos
8
are dependent economically on ministerial sponsorship through budget allocations or
direct grants (Pollitt and Talbot 2004). Third, the economic dependency of quangos may
be linked to their political subordination with regard to political appointments or
nepotism of top managers (Bertelli 2006, 2008).
In sum, whereas depolticization is a structural solution to enhance the credibility
of quango administration by desynchronizing it from politics which are tied into a short-
term electoral cycle of self-interested vote-maximizing politicians, the assumption may
be compromised unless such potential political infiltration is monitored and controlled
properly. Given that agency costs caused by infiltration can be passed on to society at
large, and that the amount of public money executed by qunagos is considerable, an
essential tension between depoliticization and hidden action should be critically
appreciated. Otherwise, quango reforms may merely gravitate toward ‘a mode of blame
avoidance’ or ‘a mere façade’ for hedging managerial incompetence of public
administration unless reviewed and investigated critically.
1.2.3. Research Direction: Informal Networks and Hidden
Influence
This dissertation pays particular attention to social relations and informal networks
at the top of the public sector as social conduits through which political influences are
infiltrated or channeled (Berry et al. 2004; Borgatti and Foster 2003). Drawing on the
9
network perspective of organizational research along with the concepts of social
embeddedness (Granovetter 1985), social capital (Burt 1997, 2000), and social support
(Cook and Whitmeyer 1992), this study is based on the arguments of how ‘upper-echelon
elite networks’(Hambrick and Mason 1984) are linked to politicization of quangos
through communal bonding. It is reasoned that, when the insulation of quangos from
political influences is challenged, it may increase the chances that the business-inspired
structural reforms are decoupled from de facto operations.
The idea of ‘inner group politics’ (Useem 1978) that states consolidation of top
elites may serve their own interest is taken to the forefront of this study as the primary
theoretical base. The meso-level mechanism of informal networks of inter-personal ties
in public sector management is seriously under-researched (Berry et al. 2004). Despite
the plethora of public administration research adopting network perspectives, the focus of
concern has been placed on upper-level macro networks such as, for instance, inter-
organizational agency networks for collaborative service delivery (Agranoff and
McGuire 2001).
10
1.3. RESEARCH TOPIC, QUESTIONS AND SUBJECTS
1.3.1. Research Questions: Staffing and Financing
To address an overarching research question of ‘how social relations and informal
networks at the top of the public sector are conducive to inner group politics?’, there are
three prerequisites for analytic purposes. First, the key agents that constitute the social
relations and networks need to be defined. Second, the types and content of the ties need
to be clarified. Third, the outcomes of inner group politics or hidden action problems
must be specified.
Based on exploratory qualitative interviews, two empirical research topics were
identified. The topics deal with the link between the antecedents and outcomes of the
problems of inner group politics. The outcomes include (1) political biases in staffing
(‘staffing’), and (2) loose implementation of expenditures (‘financing’). Each outcome
corresponds to a distinct empirical research which can be found in Chapter 5 and Chapter
6, respectively.
1.3.1.1. Political Biases in Staffing (‘staffing’)
As the position of quango CEO has widely been accused of political appointment or
nepotism, the installment and implementation of corporate-style boards in quangos are an
important boundary condition for holding management accountable to public interests
11
(Wilks 2007). The practice of quango boards is, however, not necessarily linked to rigid
board control if the boards are not sufficiently independent (Westphal 1998). Drawing on
power control theory of governing boards, the composition of non-executive outside
directors in quango boards is investigated as a degree of politicization of the CEOs.
Overall, it is hypothesized that a higher degree of infiltration of external political
influences, which is channeled through CEOs’ social relations with elected politicians,
will lead to politicized boards and to board capture at the cost of impairment of
independence.
1.3.1.2. Loose Implementation of Expenditures(‘Financing’)
Quangos are able to spend more project expenses at their discretion when senior
executives are socially proximate to their regulators who have authority over the fiscal
decisions of quangos.
The pejorative term ‘shadow government’ implies that the arm’s length bodies of
government such as quangos do not indeed reduce civil service size through business-like
efficiency, but merely give the impression of size reduction to avoid criticism by
concealing or decoupling certain functions into the shadow area of governments such as
quangos (Abrahamson and Choelsoon 1994). Due to less visibility to the public, it has
been acknowledged that quangos are easily tempted to spend public money loosely.
Ironically, this tendency often results in size enlargement of aggregate government
12
sectors rather than size reduction (Gist and Hill 1984; Hood and Peters 2004). The theory
of hidden action problems of quangos directly points to this irony (Bertelli 2006, 2006).
Overall, it is hypothesized that a higher degree of collusion between quango
management and party politics will be increased when they are socially more connected
to each other.
1.3.2. Research Subject: South Korean Quangos (East Asian Case)
The case of South Korea was particularly chosen as a research site given two
central reasons. First, considering that this dissertation focuses on relational aspects of
social behavior, East Asian countries like South Korea might be best suited to the
perspective. In East Asian countries, the dominant societal norms and ethos are largely
collectivist. It implies that behaviors of social agents can be explained to a great extent
by the social relations in which they are embedded. Compared to Western countries
where norms and ethos of behaviors are largely individualistic, the effects of networks
might be more conspicuous. Second, what then makes South Korea different from other
East Asian countries such as China and Japan is that the nature of quango reforms is quite
different in two ways. For instance, the reform was oriented top-down by bureaucratic-
centered initiatives, and it took the form of compliance to externally forced rules and
standards by an international regime because of national economic crisis. As the reform
was implemented top-down, there may be incompatibility issues between structural
13
design of Western-origin quango reforms and operation culture of South Korea contexts.
Together, these two aspects make the case distinctive and worth investigation.
14
CHAPTER 2: CONCEPT AND CASE SELECTION
2.1. CONCEPT: QUANGOS
2.1.1. Public Sector Reform Movement
The trend towards business-inspired administration reforms was driven by
ideological pragmatic paradigm shift about governmentality (Kettl 2002; Dubnick and
Frederickson 2010; Hood and Peters 2004; Osbourne and Gaebler 1992). Due to a
growing complexity and uncertainty of societal problems along with contextual change of
globalization (Sassen 1996) and multiculturalism(Taylor 1994), the social pressure
demanding governments to be more adaptable, efficient, and transparent increased
(Robertson 1992; Sassen 1996). In response, two streams of reform movement prevailed.
First, ‘mangerialism’ that marks a new role of public administration as business-type
management for more efficiency and customer orientation (‘market-based governance’)
(Donahue and Nye Jr 2002; Moore 2002). Second, ‘democratic inclusiveness’ that
prompts policy processes to be more inclusive through institutionalized participation of
stakeholders (‘democratic governance’) (Bogason and Musso 2006). Together, these two
streams share a commonality that the over-centralized mode of public administration is
no longer valid for providing public services or goods.
15
It prompted the hierarchical governments to transform into functionally
differentiated units while maintaining the policy core, which is a set of top-level decision-
making functions distinguished from routine operation or implementation, and to devolve
such functions to semi- or non-governmental organizations such as executive agencies,
government enterprises, contract companies, and nonprofit charities. A set of transfer
mechanisms, including outsourcing, contracting, and structural disaggregation, has been
adopted and implemented in different combinations in different countries (Mulgan 2003).
Quangos were a part of the reform programs.
In sum, the trend generally boils down to two features like below.
9 First, on the supply side the reforms impel a division between policy making
(‘steering’) and implementation (‘rowing’) (Osbourne and Gaebler 1992). The
rationales include (a) reducing task burden of routine implementation from
politicians (Thompson 1967; Christensen and LÆGreid 2003), (b) securing
continuity of policies by insulating them from vote-cycle-bounded politicians who
have the propensity of vote-maximizing populism or interestedness(Jasper 1988), (c)
enhancing efficiency of implementation by letting experts (e.g. hired executives)
carry out the function(Flinders 2004), and (d) giving impetus to apathetic attitude of
public officials through infusing competitive and market-based logics into the
systems (Bourdeaux 2008). That is, the reforms have instrumentalities for
enhancing effectiveness and efficiency of government operation.
16
9 Second, on the demand side the reforms propel public decisions to be more
horizontally collaborative and democratically inclusive. The rationales include (a)
connecting policy formulation with street-level knowledge and co-productive
capacity (Bogason and Musso 2006), (b) stimulating innovations emergent in
deliberative policy decisions (Rethemeyer 2007), (c) promoting ‘strong democracy’
toward the end goals of actualization of liberal democracy (Bingham, Nabatchi, and
O'Leary 2005), and (d) building social capitals with the community constituencies
(Imperial 2005). That is, the reforms aimed to enhance qualities of decision making
by upholding democratic values and deliberative impetus.
The two features imply some points. First, the reform programs reflect the
administrative themes of the U.S. and other English speaking countries. The norms of
liberal democracy or the notion of ‘the public as customer’ have the origin embedded in
the countries (Boin, James, and Lodge 2006). The practices may best work out where
cultures are more egalitarian and discursive. When the distribution of social powers is
highly eschewed and culture of concealment prevails, the devolved and deliberative mode
of decision-making will not least function well. Second, the spread of the reforms across
the countries is the outcome of either isomorphic benchmarking or strategic acquiesces to
global standards. Either way, a critical appreciation regarding the spirits or ideologies
17
was systematically missing. It may have led to incompatibility problems between
contexts and practices.
2.1.2. Conceptualizing Quangos
2.1.2.1. Definition and Features
Quangos are here defined as a cluster of hybrid non-state or semi-state entities that
fulfill a public function as policy instruments with a degree of independence on a
single or limited area[s] and with autonomy from party governments
5
by sitting at
arm’s length distance. Considering that other definitions of previous research generally
tend to count only government agencies which are under strong controls of departments
as quangos, this definition is more extensive because it incorporates non-state entities
including non-profit or private entities if they carry out a public function under legal
relationships (e.g. contracts) with governments. In this way, quangos are seen here more
as a territory (‘cluster’) wherein a range of state as well as non-state organizations cluster
together insofar as they perform public functions in legal collaboration with
governments.
6
About this extended definition, some nonprofit researchers may raise a
5
Governments in liberal democratic countries are typically run by elected politicians who are involved in the
dominant party. It makes the governments not static but changing according to a result of election. To refer to
this nature of election‐based change of governments by party politics, the term ‘party governments’ is used here.
18
concern that nonprofits or charities should be distinguished from quangos because they
are not located in government sectors. In addition, some business researchers may also
question how business companies can be regarded a form of public sector organizations.
Nevertheless, in reality undefined hybridity of publicness is not uncommon. For example,
certain nonprofit organizations, particularly in South Korea, are much devoted to tasks
supporting governments, and these organizations are connected to the governments in
terms of contractual relationships and budgetary allocations, but at the same time they are
dependent on funders and their charitable giving. For another example, there are certain
private companies that undertake governmental functions such as national defense or
education through contractual relationships with governments. This hybridity actually
blurs the boundary between the for-profit, non-profit, and public sectors. Therefore, as
an answer to this intractable definition problem, this dissertation provides a definition
that clusters them together based on public functioning in legal relations with
governments as a central condition. As a result, it broadens the definition of quangos to
include some nonprofit and private companies.
To provide more detailed accounts of the definition, specific features that
characterize quangos are outlined below.
9 Governmental creation or endorsement (‘outcome of governmental purposeful
action’): Quangos are the outcome of state-initiated action (Cole 2000). The amount
and types of devolution are based on public laws, and the design and architectures
19
are consciously schemed by the ministries. This feature emphasizes
instrumentalities of quangos as policy tools (Payne and Skelcher 1997). While
lobby groups are capable of exerting some degree of influences over policy making,
they are not counted as quangos since they are not created or endorsed by
governments. In comparison, contracting companies or nonprofit charities so long
as they undertake governmental functions through contracts, they are classified as
quangos because they possess governmental endorsement.
9 Legal relationship with governments: This feature distinguishes private companies
and nonprofits with quango character from those not. For instance, certain non-profit
or for-profit organizations fill a public function in support of governments because
they are in legal relationships with governments in terms of ownership, sponsorship,
or contracts. This legal relationship is what distinguishes non-profit or for-profit
with quango character from voluntary charities and companies’ corporate social
action. The legal relationships with governments tend to grant monopolistic legal
status onto the organizations, and in return they are guided, directed, or controlled by
the governments.
9 Political independence and autonomy: Some extent of independence and
autonomy is an important condition for quangos that is distinguished from other
apparatus of governments such as ministries and political agencies. Quangos should
not be placed under direct controls of governments although created or endorsed by
20
them. The management is required to be run by hired professional executives, and
equipped with governing boards as internal control mechanisms (Wilks 2007).
Nevertheless, it does not necessarily mean that the management is completed apart
from controls of ministries. It is accountable to the ministries as to managerial
outcomes such as productivity or performance. Based on the performance outcomes
such as productivity and cost-saving efficiency, the ministries can set either the level
of rewards or penalties (even abolishment of the organization or termination of
contracts).
9 Single Purpose (Specialty): Quangos undertake a single or limited functional area
of policy domains. These functional areas include, but not limited to, (a)
commissioning, purchasing or delivering certain public services, (b) adjudicating
over individual decisions made by public bodies, or (c) advising public policy
makers on a particular issue area (Deacon and Monk 2000).
This section outlined the four features rather than inventing or suggesting a
neologism by sticking to a given term and idea of quango but redirecting the definition to
a public functioning organization that has legal relationship with governments (Greve,
Flinders, and Van Thiel 1999). Nevertheless, it is the diversity inherent in country-
specific trajectories of quango development that inhibits conceptual clearness. Until the
term quango was coined as a denominator to encompass the wide range of diversity by
21
Baker (1982), a great deal of labels was unsystematically used to define arm’s length
bodies, for example, such as agencies (Pollitt et al. 2004), government corporation
(Willoughby 1927), public authority (Leigland 1994), special district (Hawkins 1976),
non-elected public bodies (Payne et al. 2011; Payne and Skelcher 1997), or distributed
public governance (Flinders 2004), etc.
Each definition and labeling however turn to a particular feature to be claimed as
quango while generally neglecting more a holistic topology. This means that the subject
of quango has been suffering from deficiency of theoretical mapping to capture the
diversity and complexity(Davis 1996; Gash and Rutter 2011). One exception is found in
Eger’s (2006) topological mapping where two general categories of (a) governing
autonomy and (b) financial autonomy were applied to differentiate the organizations in
U.S. context as shown below.
22
Figure 1. Topology based on Governance and Financial Aspects
Governing Autonomy
Limited Moderate High
Financial Autonomy
Limited
Controlled
Authority
Governing
Authority
Directly
Accountable
Authority
Moderate
Controlled
District
Governing
District
Directly
Accountable
District
High
Controlled
Commission
Governing
Commission
Directly
Accountable
Commission
Eger (2006:131)
Although Eger’s (2006) typology establishes a simple and clear map for
classification, the categories may not be able to completely capture the diversity and
complexity as the variable of autonomy points only to a particular aspect of the quango
features. The variable is however not sufficient to claim for generality because other
aspects such as ministerial responsibility, task areas, specialization, or finances may also
be important categories worth being regarded. Still, the theoretical originality and value
of the topology should be appreciated.
23
2.1.2.2. Sub-sectional Mapping
To capture the diversity and complexity in a more intuitive framework, this section
establishes a sub-sectional mapping of quangos. Previously, it was argued that the
definition is extended by incorporating some non-profit and for-profit organizations when
they are in legal relationship with governments. The sub-sectional mapping intends to
represent more systematically and intuitively why non-profit and for-profit organizations
would be classified as quangos.
Some features were used to describe categories to classify the organizations,
including (a) public functioning (as a primary precondition), (b) finances, (c) ministerial
responsibility, (d) independence/autonomy from governments (Eger, 2006), (e) control
mechanisms, (f) task specialization, (g) decision-making references, and (h) tasks, as
shown in table below.
24
Table 1. SubSectional Mapping of Quangos
Sector Government Sector QUANGO Sector (Quasiautonomous Nongovernmental Organizations) Civic Sector
Function Public Function (‘Public Interest and Public Goods’)
Domain Public Domain Private/Community Domain
Sub‐Section Ministries Contract Agencies
(Traditional
Boards)
Public Bodies or
StateOwned
Enterprises
Contracting
Companies/
Privatization
Nonprofits/Charities Social Actions both
Civic and Corporate
Definition Hierarchical unit
under direct control
of ministers
Quasi‐autonomous
part of department
Arm’s length bodies
but publicly funded
Private companies
or privatized state‐
owned companies
Voluntary
organizations
performing public
functions
Self‐motivated public
actions, movements,
or participatory
bodies
Finances State Budget State Budget State Budget, Levying,
or Fees
Capital Market or
Stock Exchange
Donations or
Subsidies
Self‐funded
Ministerial
Responsibility
Yes Yes Partial Partial/No Limited/No No
Independence
from
Governments
Direct control by
ministers
Direct control by
ministers through
a mixture of
direction and legal
or quasi‐legal
frameworks
Formally and legally
‘independent
governing boards’
with limited
ministerial control
Formally and
legally
independent
governing boards
with no direct
ministerial control
Independent boards
of trustee
Independent
Control
Mechanism
Direct political and
legal
Framework
Documents
Statues Contracts/Market
Regulation
Contracts/Co‐
optation
No
Specialization Policy and planning Integration of
policy and
operations
Operational
Implementation
Service
provisions/Goods
production
Service
provisions/Goods
production
No
Decision
Making
Reference
Rule and Laws Externally imposed
rules with some
local discretion
Local discretion with
some general rules
Local discretion
with bylaws
Local discretion with
missions and bylaws
Collective/Emergent
Tasks
(examples)
Setting policies Advice/Judging
quality
Supervision/Research
/Fees/Licensing
Material
supply/Facilities
Social
service/Facilities
Mobilization of
agenda,
resource/Contributes
to community
Inspired by and selectively derived from Greve et al. (1999:142), Van Thiel (1999:177), and Pollitt et al. (2004:35)
25
In the map, whether an organization carries out a public function in relation with
governments is suggested as a core binding condition. To put it simply, quangos are
those entities that possess legal status of public sector organizations performing public
functions as they are in legal relation with governments. The relation typically includes
ownership or sponsorship. When governments possess ownership over an organization,
the organization goes under direct or indirect control by the governments. This aspect of
control is provided in the elements such as ‘independence from governments’ and
‘control mechanism’. Similarly, when governments provide sponsorship to an
organization through contracts or levy, the organization not only garners financial support
from governments but also is guided by them (Benford 1997; Davis et al. 2005). This
aspect is represented in the elements such as ‘finances’ and ‘decision-making reference.’
This mapping incorporates contracting companies, privatization, and contracting
nonprofits into quangos insofar as they are in tandem with governments in terms of
ownership and sponsorship, and as they are thus under direct or indirect control by
governments.
2.1.3. Motivation for Creation
The motivation for creating quangos is two folds: (a) functional (‘quango as tools’)
and (b) institutional (‘quango for legitimacy’). First, research generally argues that
quangos are important policy tools for implementation (Bemelmans-Videc, Rist, and
Vedung 1998). Since quangos are thought to be functional with regard to saving
26
administrative costs and increasingly customer-oriented responsiveness, the spread of
quango reforms was explained as strategic adoption by governments to enhance
managerial effectiveness and efficiency. Second, the adoption of quangos is largely
based on symbolic motivations rather than practical reasons in order to meet the
isomorphic pressure of global standards. This resonates with the idea of neo-
institutionalism that points to social agents’ isomorphic adaptation to institutional
pressure for legitimacy (‘quango for legitimacy’)(Frumkin and Galaskiewicz 2004).
Indeed, South Korean quango reforms can be characterized by forceful pressure by an
international regime such as International Monetary Fund or IMF. To meet the global
standards imposed by the regime, the quango reforms were implemented by South
Korean governments in a state-centered and top-down fashion.
This section seeks to offer a theoretical synthesis of the motivation for creating
quangos based on the two accounts. Following Oliver (1991)’s insightful framework that
outlines the strategic options that can be used in response to institutional pressure, the
two aspects (e.g. functional and institutional) of the motivation for quango creation are
illustrated below.
(1) Functional perspective (‘quango as tools’)
Most common accounts are given to the idea that quangos are attached with some
functional utilities that are favored by the party governments. The utilities include (a)
27
ideological control, (b) technological ascendancy, (c) customer-oriented responsiveness,
and (d) structural flexibility, and (e) cost savings.
9 Ideological Control: The party governments as political coalition may use quangos
as means of extending or embedding their ideological stance on public policy
(Bertelli 2006; Fine and Sandstrom 1993). It conceives the governments as
coalition of party politics that seeks to infuse its values and norms into policy
decisions. By politically appointing quango senior executives who have value
congruence with the elected politicians, the governments are able to foster the
ideology of the party (Kalev, Shenhav, and De Vries 2008). The account of
ideological control is suited to corporatism nations where the nexus between the
state, the hybrid agencies, and the business is strongly collaborative (Moskalev and
Park 2010; Downs 1957).
9 Technological Ascendancy: Quangos tend to be preferred by politicians and
political executives who are generalists rather than specialists in terms of policy
implementation. Since quangos are run by independent experts, the creation of
quangos is a way for generalist politicians or executives to be supported by
technical experts on policy issues (Van Thiel 2004). Also, quangos are typically
single, or limited, purpose[s] entities, which make them highly concentrated on a
particular field of public policy. The delegation to quangos relieves the generalist
28
executive from workload, and makes implementation more technologically
advanced.
9 Customer-oriented Responsiveness: Quangos are one way to bring the
government closer to citizens by sitting implementation at arm’s length to social
groups (Donahue 2002). As compared to highly centralized command-and-control
bureaucracy, quangos, as disparate organizations embedded in the community, are
advantageous in addressing people issues, examining processes, aligning values,
and building trust (Banaszak-Holl et al. 1998; Graddy and Morgan 2006). By
establishing communication channels for closer contacts, it helps to enhance
customer-oriented responsiveness (Goldsmith and Eggers 2004).
9 Structural Flexibility: The creation, modification, and abolishment of quangos are
relatively less difficult than those of other governmental units such as ministries or
departments. This flexibility makes political executives prefer quangos as policy
tools (Van Thiel 2000). For example, in times of economic upswing, private
organizations can be hived into the public sector and turned into quangos, whereas,
in times of economic downswing, the public sector can be hived off into quangos.
Similar to switching on and off, political executives leverage the size and functions
of the governments with heightened flexibility through hiving in and out.
9 Cost Savings: It was anticipated that the creation and operation of quangos lead to
efficiency gains that can relieve fiscal stress (Dunleavy 1991; Mueller 1979).
29
Public choice theory revealed that economic upswing is associated with
governmental expansion while economic downswing is linked to quango expansion
(Davis 1996; Hinds et al. 2005). That is, according to the theory, politicians make a
choice considering economic conditions, and it implies that politicians as
practitioners view quangos as cost saving mechanisms.
(2) Institutional Perspective (‘quango for legitimacy’)
The creation of quangos tends to take a form of responses to external forces from
institutional environments, as neo-institutionalism posits (Meyer and Rowan 1977;
Powell and DiMaggio 1991). It points to the need for legitimacy of the governments in
the wider social structure (Suchman 1995). While the governments are mainly regarded
as coercive social forces that impose pressure upon other social units, the governments
per se were rarely seen as being subject to institutional pressure (Frumkin and
Galaskiewicz 2004). The governments nevertheless operate under demands and
expectations of institutional constituencies such as higher-tier international regimes or the
citizens as tax payer and voter. Quangos, in this regard, can be considered as strategic
responses to such institutional pressures, and it may account for the politicians’
motivation of creating quangos.
30
9 Buffering: Quangos function as buffer or bypass from any criticism against
governments on politically sensitive issues (Payne and Skelcher 1997). The entities
of quango are often seen as lessen administrative burden from political executives
(Bertelli 2006; Niskanen 1975). Since policy failures impose blame upon
politicians, the adoption of quangos has effects in distributing responsibility of
potential policy failures. Thus, quangos can function as blame avoidance for
politicians by buffering blame through distributed responsibilities.
9 Concealing: In coping with the demands for a reduction in civil service size,
creating and transferring functions into quangos give the impression of size
reduction that is not necessarily linked to de facto reduction (Abrahamson and
Choelsoon 1994). Removing certain units and personnel from departments to
quangos has effects to give impression of size reduction to the public (Abrahamson
and Choelsoon 1994; Baker and Faulkner 1993; Gioia et al. 1994). When the
‘impression management or sense-giving’(Fiss and Zajac 2006) of the size
reduction is decoupled from substantive implementation, it becomes institutional
tactics of concealing. As the authority over decisions of budgetary allocations is in
the hands of the parental ministries, the concealment is feasible depending on the
will-to-do of the ministries.
31
9 Imprinting
7
: Quangos are legacy of former administrations so path-dependently
imprinted in the systems (Marquis 2003). Once structural arrangements are put in
place and set in motion, it is difficult to change them because it will require solid
rationalizations. The institutions are thus prone to be path-dependent (Bebchuk and
Roe 1999). When quangos are byproducts of the former administration, it is likely
that the organizations are persistent in the succeeding administration, too. If the
change is to be made, it will likely be modest or less substantial because the
organizational members might be resistant to the change (Frumkin and Andre-Clark
2000; Frumkin and Galaskiewicz 2004).
9 Co-optation: Quangos and their boards can be used for stakeholder cooptation by
involving them in decision-making processes (Pfeffer 1972). It is not an
uncommon practice for quango boards to appoint positions to members of labor
unions. Similarly, academic groups and media representatives tend to be allowed
for the positions. Compared to a position in central governments, a position in
quangos might be less subject to institutional resistance from the public as it is less
visible and less valued. It makes quangos an ideal locus of co-optation of external
stakeholders.
7
Marquis (2003) defines, by citing Stinchcombe (1965:142) ‘imprinting’ as the groups, institutions, laws,
population, characteristics, and sets of social relations that form the environment keep the characteristics of the
era when it was founded until present (Stinchcombe 1965; Marquis 2003).
32
9 Mimicry: The adoption of quangos may be merely reflection of fashions
(Abrahamson 1996; Abrahamson and Fairchild 1999) or fads (Hogwood 1995).
The diffusion of global administrative reform can be partly explained by mimicry of
less advanced nations adopting ideologies and practices of more advanced nations
to catch up with them(Dacin 1997). The motivation of mimicking others’ template
assuming it promises advancement to account for diffusion of certain practices has
been regarded extending our knowledge about behavioral mechanisms of diffusion
(Deephouse 1996; Deephouse and Carter 2005; Kraatz and Zajac 1996). So-called
isomorphism in neo-institutionalism addresses this point (DiMaggio and Powell
1983; Scott 2001, 2008; Scott and Alford 1991).
Table 2. Motivation of Creation: Functional and Institutional Perspectives
Functional Aspect (‘quangos as tools’) Institutional Aspect (‘quangos for legitimacy’)
Ideological Control Buffering
Technology Concealing
Responsiveness Imprinting
Flexibility Cooptation
Cost saving Mimicry
33
2.2. QUANGO CHALLENGES: HIDDEN ACTION PROBLEMS
2.2.1. Rhetoric-Reality Gap: Depoliticization and Reality
At the heart of quango reforms lies the belief or presumption that (a) the infusion of
business-orientation into public management, and that (b) the insulation of public
management from political considerations, will likely lead to managerial efficiency and
responsiveness (Flinders, 2004:902). It has long been acknowledged that the sources of
governmental pathologies are derived from both (a) the entrenchment of public officials
and (b) the influence of political vagaries. The reformers who are concerned with
entrenchment viewed the business logics such as competition and market-based
evaluation as an impetus to stimulate the officials to be more like businessmen who are
attentive to managerial efficiency and performance. Also, it was reasoned that the
continuity of public officials’ task implementation apart from election cycles is seen as a
source of securing responsiveness of governments to the public interest at large because
politicians who are concerned with reelection tend to pay more attention to short-term or
special-interest decisions that may contribute to more gain at the election. The movement
of market-oriented and business-like administrative reforms was normatively and
practically drawn from the ideas.
Nevertheless, a ‘rhetoric-reality gap’ commonly exists in relation to the design of
de-politicization and marketization (Van Gramberg 2002). Although the rhetoric theme
of ‘market-based governments’ and ‘business-inspired entrepreneurship of public
34
management,’ provided certain structural treatments such as ‘contracting out’ or
‘performance-based incentives,’ it is questionable whether the de facto implementation is
not biased or distorted because the implementation for selecting right contract partners or
fairly evaluating them can be subject to political influences rather than objective and
rational. Likewise, even though the rhetoric theme of ‘de-politicization’ led to the rise of
arm’s length semi-autonomous bodies that are run by independent managers with
expertise, it is also questionable whether the independence is not compromised by
informal influences from a special interest of party politics (Van Thiel 2000).
When the gap between rhetoric and reality is large, the reforms may merely be
rhetoric-only fad or fashion. A worse scenario is that the reforms are simply being
‘defensive techniques’ or ‘symbolic practices’ to attain legitimacy through so-called
window-showing, while hedging hidden actions such as political contaminations or
managerial biases. As Bertelli (2006) insightfully stated, therefore, the ex ante structural
treatments ought to be followed by ongoing ex post evaluation and control to check on
the hidden actions. Toward this end, there is a set of institutional instruments that
oversees quangos so that they are held accountable to the public. The central archetype
of such instruments is the internal governing boards which are placed within the
organization to monitor and control the management. Given that the position of quango
CEOs are susceptible to political influences because the management is dependent upon
their parental departments and the legislature with regard to budgetary allocations, the
significance of the board members as alternative and independent watchmen becomes
very salient. This point is where this dissertation places its critical examination.
35
2.2.2. Quango Boards: Safeguard versus Collusion
2.2.2.1. Definition
Quango governing boards are designed to act as an alternative or supplemental
institution that conducts vigilant monitoring and oversight over the management by
materially independent non-executive directors who come from outside of the
organization. In most important aspects, quango boards resemble corporate-style boards
or so-called corporate governance. For example, first, quango CEOs sit on the boards as
do corporate CEOs. Second, quango CEOs are obliged to report to the boards as do
corporate CEOs. Third, independent outside directors possess substantial responsibility
for tough-minded monitoring and control over the management, as do corporate outside
directors. Fourth, there are executive inside directors who are distinguished from outside
directors as their primary roles involve strategic advice giving to the senior managers, as
do corporate inside directors. Fifth, there are auditors on quango boards who are
equivalent to chairmen on corporate boards, whose roles include convening board
meetings, channeling communication, and representing the entire board. A slight
difference is that quango auditors are supposed to possess technical expertise in fiscal
management. Since quangos are essentially delegated to deal with public money as
stewards of public interest, financial transparency and rigorousness, in addition to
strategic or innovative aspects, are regarded critically by the management.
36
In sum, quango boards are an ultimate location of safeguarding stewardship of
public resources and public purposes as an alternative or supplement to ministerial
control. Similar in many aspects to corporate boards, quango boards have substantial
roles prohibiting management from (a) impairing its stewardship of public resources
(Stanton 2009), and (b) hampering its public purposes (Pollitt and Talbot 2004).
2.2.2.2. Social Relations
The informal influences from politicians or elected administrators that are accrued
probably from social relations can distort power and control in the public sector which is
less prophesized or overlooked in new public management thinking (Capezio, Shields,
and O'Donnell 2011). In terms of qualities and instrumentalities of quangos, if the
management is not properly held accountable, it will not be able to attain aforementioned
functional and institutional goals.
However, when boards are infiltrated by political influences, it will likely result in
autocratic dominance by the political domain over public management. Specially, in the
public sector there is no strict equivalent of shareholders, or ‘owners,’ no property rights,
and no equivalent of maximizing profits or shareholder value. It leads quango boards to
be neglected by public eyes as compared to corporate boards that are under shareholder
pressure for value (Freeman 1984). Bertelli (2006) points out that there are hidden action
problems between ex ante design and ex post control of quangos, including patronage
politics, the political bias of appointments, the abuses of patronage, financial
37
irregularities, and mismanagement. Although he did not explicitly bring up quango
boards as a focus of the argument, the problems are taken care of by the boards. So, the
boards are a significant factor both in theory and in practice.
2.3. SOUTH KOREAN QUANGOS
2.3.1. Overview
2.3.1.1. Background – Economic Crisis
South Korea initiated the programs of administrative reforms as it went through
national financial moratorium in 1997 (Kim 2000). The emergent fiscal aids were
injected from International Monetary Fund (IMF), and the aids were attached with the
strings which demand the governments to comply with global standards of administrative
reform programs. The global standards prescribed a set of reform treatments to enhance
transparency and efficiency of the governments. Included were (a) reduction in size of
governments, (b) installment of arm’s length agencies, (c) privatization, (d) information
disclosure, (e) adoption of independent corporate-style boards in public sector
organizations, (f) performance evaluation by independent committee, and (g)
institutionalized fiscal review by the legislature (Bemelmans-Videc, Rist, and Vedung
1998). The set of standards was intended to secure the credibility of the government for
paying off the debts to the international regime, and to revitalize the sustainable
competency as a member of global economy. In effect, the administrative reform in
38
South Korea takes a form of acquiescence or compliance to institutional pressure
imposed by the international regime as a result of the external shock of economic crisis.
2.3.1.2. Bureaucrat-centered Movement
The style of the reforms took a form of bureaucrat-centered top-down movement.
The administration created some regulator government initiatives that are charged with
functions of directing and guiding administrative reforms. The outcome was the
Planning and Budget Commission (PBC) and the Office of Government Reform (OGR)
which were established in 1998. The commission was charged with a key role in
planning and implementing reform. Since the reforms were a response to economic crisis,
the implementation had to be a prompt action. The top-down orientation represented the
need for time-saving efficiency in pushing reform (Jwa 2001; Nam 2004). This type of
reform was not without some problem: For example, the monopoly of the initiatives over
reform agenda resulted in more resistance and decreased cooperation from other agencies,
departments, or the legislature (Jung 1999).
The initiatives paid particular attention to the sector of quangos as an epicenter of
administrative reforms. As a verdict for government failures was made on bigger and
wasteful structures of governments, a form of quangos was regarded as a solution to
reducing the size of governments. Under the slogan of ‘small but efficient,’ the reform
agenda was mostly focused on the devolution of governmental functions into the sector
of quangos. Regarding the quango reform, two elements as methodology were salient.
39
(a) Reducing open-ended political control and uncurbed state intervention by the
methods of transferring certain parts of ministries to private ownership or arm’s length
regulatory bodies or quangos with clearly defined terms of reference (‘let the managers
manage’) (Flinders and Buller 2006).
(b) Building autonomous boards and placing emphasis on managing for results
through strategic planning, result-based budgeting and reporting, and the use of formal
contracts to stipulate performance targets for external contractors and senior managers
(‘make the managers manage’) (Hefetz and Warner 2004).
As a result, the rise and prevalence of quangos became major trends in South
Korean governmental reform, like in almost all other countries. The reform is however
distinct from other countries in two central aspects. First, the reform was externally-
forced and highly government-centered. Second, the motivation of creation was placed
more on a reduction in size of government rather than on an infusion of business
influences into governments.
First, what makes distinct the reform in Korea from other countries lies in the facts
that (a) the reform was externally forced and (b) it was government-centered. Because
the reform was implanted without considering whether it would be compatible with
40
administrative contexts in the nation or not, it was thus anticipated that administrative
frictions would commonly exist in the implementation in coordinating overlapping tasks
between departments, and in controlling behaviors of hired executives. More importantly,
as with less considerations of cultural congruity or compatibility, critical examination as
to a fit between structural treatments and operational culture were systematically missing.
Second, the South Korean quangos were derived from bureaucratic and traditional
motivations with an exclusive focus on enhancing value for money in public sector
through a reduction in size of governments. Therefore, professional or managerial
autonomy was treated as a lower priority. Of the four styles of quango creation suggested
by Van Thiel (2006) as presented in the table below, the Korean cases are closer to
bureaucratic and traditional motivations. It can found in the facts that most positions of
senior managers and board directors were filled with retired officials or politicians who
are identified with predominant party in the governments. The exchange of personnel
across governments and quangos is not uncommon. This resulted in the quangos being
equal to the extension of the governments. Given that the structural design of quangos is
intended for managerial independence from party governments, this exchange may have
effects that the management of quangos is affected by influences from governments.
41
Table 3. Four Styles of QUANGO Creation (Van Thiel, 2006:123)
2.3.2. Mapping Stakeholder Relationships
Stakeholder mapping is a popular heuristic for describing the management
environment by outlining complex contextual relationships in a relatively concise model
(Mitchell, Agle, and Wood 1997; Freeman 1984). An organization is enmeshed in a
complex web of interconnected and interwoven relationships with a variety of entities
(Clarkson 1995; Donaldson and Preston 1995). Yet, managers tend to be attentive to
certain classes of entities as stakeholders due to limited available resources such as time
and money; and the certain classes of entities are valuable source to separate out and
explain primary or secondary foci of management (March 1962). According to Mitchell,
Agle, and Wood (1997:854), stakeholders can be identified by their possession or
attributed possession of one, two, or all three of the following attributes: (a) the
stakeholder’s power to influence the firm, (b) the legitimacy of the stakeholder’s
42
relationship with the firm, and (c) the urgency of the stakeholder’s claim on the firm, or
simply (a) power, (b) legitimacy, and (c) urgency. Based on these attributes, stakeholders
include, but are not limited to, owners or non-owners, actors or those acted upon, those
existing in a voluntary or an involuntary relationship, rights-holders, contractors, moral
claimants, resource providers, risk-takers or influencers, and legal principals to whom
agent-managers bear a fiduciary duty.
The primary stakeholders in South Korean quangos are presented in the figure
below. The assessment was a part of the outcome from qualitative interviews with field
practitioners to explore themes for analysis. Alongside with the major focus of research,
it was asked for informants to identify central stakeholders and content of relationship.
The results were thematically analyzed and represented in a form of stakeholder
relationship map as shown below. The graphical mapping of relationship provides an
intuitive view toward management contexts where the quangos operate. In the map,
quangos are placed in the center as the relationship is operational environments
surrounding quangos.
43
Figure 2. Quango Stakeholder Relationship Map
In the stakeholder relationship, quangos are under the influence of legal principals
to whom agent-quangos bear fiduciary duty. The legal principals are two folds, either
direct legal relationship or indirect normative relationship. Parental ministries along with
president have direct legal relationship with quangos, ministries make bureaucratic
decisions on budget allocation and executive appointment, and quangos are obliged to
report to the ministries about fiscal facts. The chain of legal bounds from president to
ministries to quangos is a common feature that is found in other countries. Also, the
The Public
Assembly President
Ministries
QUANGO
Court
Labor Unions Clients
Expert Groups
Interest Groups
Accountable to
Control/Monitor from
44
court and the legislature are charged with legal scrutiny with regard to quango
management. Together, the apparatus of the governments, including president, ministries,
court, and legislature has direct legal relationship with quangos. On top of the
relationship, the public in general is a fundamental principal to whom the entire
governments are accountable, from a normative perspective. Yet, in liberal democratic
countries where representative governments are delegated with authority to rule through
voting mechanism, the relationship is largely indirect. The legal stakeholders therefore
include the governments at large, and ministries and president are most salient.
Besides legal relationship, quangos operate under influences from pressure groups
such as labor unions, clients group, expert groups, and interest groups. Among those,
labor unions possess substantial power as some quangos tend to allow positions on
governing board to the members of labor unions. Quango labor unions are typically
affiliated with broader labor unions ranged from business to public sectors, and the
affiliations grant certain degree of power onto the unions. Moreover, the common status
of senior executives as politicians with less managerial expertise makes it hard for them
to exert dominance over technical issues. Labor unions as internal organizational
members are thus capable of exercising a certain degree of influence over practical
decisions as reflected in the board positions held by members of the unions. In contrast,
the other groups such as clients group, expert groups, and interest groups have less
influence over the management. Due to the routine nature of tasks, voices from the
groups are treated less substantially in the decision making.
45
2.3.3. POLITICO-ADMINISTRATIVE NORMS AND VALUES IN SOUTH
KOREA
The insights from cultural studies or neo-institutionalism point to the significance of
indigenous contexts, such as societal norms and value systems, in shaping or guiding
behaviors (Frank and Fahrbach 1999; Geertz 1973; Scott 2008). Contexts have been
defined in various ways, and included many elements: culture, ideology, and ethos.
Together, the elements share a commonality of being a frame of reference for action, or
being an action impelling quality through affecting beliefs and norms (Goll and
Sambharya 1995; Goll and Zeitz 1991). In social science disciplines, the elements are
analytically integrated into the concept of ‘institutions’ that, as regulative, normative, and
cognitive structures, are the sources of order shaping behaviors, and the institutional
environment is conceived as the meaning system in which social agents reside (Palmer
and Biggart 2007; Scott 2008). In this view, behaviors are not individualistic
(‘endogenous’) but contextually-guided (‘exogenous’), and thus variant across local
contexts (Zucker 1989).
Institutions point out the significance of contexts because each institutional
environment is characterized by its particularity accrued from context-specific
trajectories through an historic path (Meyer 2006). When it comes back to the reform of
quangos, the global spreads were based on the presumption that benchmarking from
Anglo-American models to other regions has context-free generality (Dunleavy et al.
2006). What was then neglected was an appreciation with regard to the resonance
46
between the treatments and the particular context (Boin, James, and Lodge 2006). Albeit
this point was made in the previous accounts of (a) administrative culture (Goll and
Sambharya 1995; Goll and Zeitz 1991) and (b) policy style (Van Thiel 2006), little was
made in the case of quango reform in East Asian countries. Asian management research
has been claimed to contribute to global scholarly conversation by developing theory or
theoretically grounded models as it can introduce new phenomena or concepts into
existing theoretical framework or refine theoretical concepts and hypotheses (Ghemawat
2002; Maruyama 1984). Nevertheless, insufficiency in volume of such research has also
been generally acknowledged. Particularly as to the topics of quango reforms in Asian
countries and incompatibility problems, there is virtually no relevant research (Carboni
2010).
In effect, this dissertation, more or less, contributes to filling the space between
implanted practice and actual operation by showing that the relational nature of
administrative culture in South Korea may distort the implementation. South Korea is a
very idiosyncratic country in terms of institutional environment because its regulatory,
normative, and cognitive contexts are in salient comparison with other Western countries.
To outline the unique nature of the institutional environment in South Korea, Scott
(2008:51)’s classification of three elements of institutional systems is adopted for
analytic convenience. The three elements include (a) regulative institutions, (b) cognitive
institutions, and (c) normative institutions. Drawing from comparative cultural studies
and political science studies, the three elements were outlined below.
47
Table 4. Three Pillars of Institutions
Scott (2008:51)
2.3.3.1. Regulative Institutions: State Structure and Political Systems
Centralized/Majoritarian. Lijphart (1984) identified the South Korean
governments as highly centralized and majoritarian where the propensity of
administrative-centric systems of government prevails. With a unitary ethnic
composition, historical memory, and cultural traits, and with relatively small
geographical size, South Korea generally lacks the tradition of federalism. In addition, it
also lacks a multi-party political system
8
as most power is prone to be monopolized by
the central administration. The term bureaucratic authoritarianism was coined to point to
8
In appearance, the political system of South Korea can be seen as a multi‐party system, but administrative
history shows that a dominant ruling party has predominated over administrations. Over 60 years’
administrative history, the predominance was overcome by the other party only twice (for a total of ten years).
48
the situation (Park 1991).The checks and balances by the legislature are relatively weak
as the president maintains substantial influence over the party where he or she is affiliated,
and as the legislature is unicameral. The combination of unitary state structure
(‘executive predominance’) and majoritarian executive governments (‘bureaucratic
authoritarianism’) classifies South Korea as a highly centralized-administrative state
where pluralistic social forces are suppressed and centralized planning becomes a
dominant mode of policy making (Muto 2000). Run by strong core, the top
political/administrative elites may have a high degree of power and discretion over not
only public administration but also other sectors such as business and civil society.
49
Figure 3. State Structure and the Nature of Executive Government
Nature of Executive Governments
Majoritarian Intermediate Consensual
State Structure
Centralized
(Unitary)
e.g. South Korea
United Kingdom
e.g. France
e.g. Italy
Netherland
Intermediate e.g. Sweden e.g. Finland
Decentralized
(federal)
e.g. United States
Adapted from Pollitt (2004:50) and Lijphart (1984:219)
2.3.3.2. Cognitive Institutions: The Politico-administrative Culture
Collectivism/Concentrated Power. According to Hofstede’s (2001) index
9
of
comparison of national cultures with regard to administrative ethos and organizational
norms, South Korea turns out to be a strong collectivist society where the personal
relationship prevails over tasks, and to show the tendency of relatively high concentration
of social power where the distribution of all powers is concentrated in the hands of a
small segment of the upper class. It implies that South Korea is a highly stratified society
where power is held by cohesive few people. The subordinates learn that it can be
dangerous to question a decision of the monolithic power holders, and controls by leaders
9
The index is based on the data of cross‐national survey collected in a large multinational corporation: IBM. The
analysis was limited to 50 countries from 5 continents, including North America, South America, Asia, Europe,
and Australia.
50
are least limited because norms of obedience prevail. In the monolithic society, the norm
is particularistic meaning that treating one’s friends better than others (‘favoritism’) is
natural and ethical, and sound business practice. In comparison, in the individualistic and
pluralistic society, the norm is universalistic treating everybody alike. Preferential
treatment of one over others is considered bad behavior and even unethical.
Table 5. Hofstede’s Index of Individualism and Power Distance
Selectively adopted from Hofstede (2001:87;215)
2.3.3.3. Normative Institutions: Social Norms
Confucianism Value. It has been generally acknowledged that South Korea has
Confucianism value as administrative cultures (Kim, 2000). It is characterized by the
pursuit of group harmony at the cost of individual happiness or self-expression. As it
places harmony and human warmth as the cardinal principle, norms of other-
51
regardedness and mutual-aid are strongly empathized. The five most significant
elements are drawn from the principle that explain the Confucianism value: (a)
particularism, (b) reciprocity, (c) in-group/out-group distinction, (d) the role of
intermediaries, and (e) the overlap of personal and public relationships (Yum 1988).
Together, they imply that the value places emphasis on more collectivistic and less
business-minded process orientation and communication patterns. It draws a sharp
distinction from the value of Western countries where individualistic and self-expressing
normative schemes guide behaviors. An assumption is made that market-oriented and
business-inspired idea and practice may be less resonant with the norms of Confucianism
value that shows the propensity of paternalism inhibiting fair market trade or negotiation.
2.3.4. Incompatibility Problems
Together, South Korea’s political systems (‘Unitary-Majoritarian’), administrative
culture (‘Collectivist/Concentrated Power’), and societal norms (‘Confucianism’), may
have the potential for incompatibility problems between business-inspired NPM reforms
and societal norms or values (Boin, James, and Lodge 2006). Even though the reforms
intrinsically reflect the Western-origin themes, the adoption of the reforms by the Eastern
countries was carried out without much considerations of compatibility. Especially, the
reforms in South Korea were characterized by the nature of external implant and
government-centric top-down initiation. The adoption was driven to meet the
requirements of the global financial institution, and the reforms were attached least with
52
critical appreciation with regard to compatibility. Given that the reforms are essentially
about structural rearrangements of the governments, the ‘fit’ between the structural
design and the administrative culture needs to be appreciated (Bradshaw 2009; Thornton
and Ocasio 1999).
Since the NPM reforms propel to limit administrative power through delegation and
disaggregation of governmental functions, it was reasoned that administrative elites in the
ministries may be motivated to maintain the power through hidden influences over the
third party agencies or organizations which undertake the functions. This tendency may
also prevail in managing quangos. The parental ministries typically maintain authority
over quango management with regard to executive appointment or budgetary allocations.
As Bertelli (2006) lucidly stated, the ex ante design of NPM-inspired quango reforms are
necessarily followed by ex post political controls by the ministries. It is then where
contexts, such as political systems, administrative culture, and normative value,
determine a degree of administrative predominance over the organizations.
53
CHAPTER 3: THEORY - INFORMAL NETWORKS AND
HIDDEN POLITICS IN QUANGOS
3.1. ELITE NETWORK AND INNER GROUP POLITICS
3.1.1. Elite Networks and Public Decisions
Problems arise when the relational aspect of quango management is exploited to the
interest of a limited segment of social members, rather than to the social welfare at large
(Domhoff 2009). Several studies documented that the architecture of elite networks
serves as a potent medium for forming the social group (DiMaggio and Useem 1978;
Useem 1978, 1985); thus for resulting in coordinated practices oriented toward shared
interests of a partisan (Palmer and Barber 2001). The findings described that the
aggregate connectivity of elite networks is ‘remarkably stable’ or ‘resilient to changes’
(Davis and Greve 1997) and appears to be ‘intrinsic property’ to collectively protect
shared interests. Alongside the studies on social capital and group behavior, the net
effects of the social networks are thought to include communicative easiness (D'Aveni
and MacMillan 1990; Rogers and Bhowmik 1970), mutual trust (Larsen et al. 2004; Six
2007), shared interest (Doz 1996; Belliveau, Iii, and Wade 1996), behavioral similarity
(Villadsen 2011; Mizruchi 1989; Baker 1990), preference coordination (Bradbury and
Lichtenstein 2000; Gattani et al. 2008), and cognitive congruence (Enz 1988; Jackson et
54
al. 1991). Together, these effects are seen as consolidating the social partisan; either
social class or exclusive enclave (Useem 1982). The upshot is a view of the stratified and
segregated global structure of networks constituting the society; and the relatively small
but cohesive upper echelon is highly coordinated in protecting shared interests, values,
and styles
10
(Hambrick, Geletkanycz, and Fredrickson 1993; Hambrick and Mason 1984).
The network effects of social groups are embodied in ‘Inner Group Hypothesis’
(DiMaggio and Useem 1978; Useem 1978, 1984). It claims that an existence of power
elites and their inner group is a frequent source of policy decisions that are geared toward
a unified special interest of partisan. The exploitation of societal resources to serve the
interest of elites, more or less, resonates with the view of Mills (1956) which calls
attention to the interwoven interests of elites of the political, governmental, corporate,
and military elements of society (Mills 2000, 1956). Putting together, both inner group
politics and power elite suggest three common features of the societal view.
9 Presence of politically dominant and consolidated social groups that are
interwoven across different social elements
9 Greater influence of these members on public and private decision-making
bodies
10
To some readers, this view may be reminiscent of Marxist economic and socio‐political world view (Lindsay
2008) as it implicitly states class conflicts within capitalist society. However, the divergent point is that it does
not relate to class‐wide macro social conflicts, but to oligarchic elite politics in particular social sectors such as
governmental or corporate sectors.
55
9 A more unified political consciousness and orientation of public sector elites
toward the inner class/group interest
3.1.2. Class Politics Conundrum
Extending the sociological insights of ‘inner group politics of power elite’ to the
domain of public sector organizations, many studies have already documented that such
groups have substantial influence over ideological and pragmatic controls of public
decisions (Mulgan 2003). For instance, Domhoff (1967)’s ‘theory of class-domination of
power’ describes that the upper class and the closely related corporate community play an
important role in framing debates over public policy and in shaping public opinion.
Albeit the coalitions are called ‘nonpartisan’ or ‘bipartisan’ because they are not
identified with politics, they function as the real ‘political party’ that has a hand in
creating the framework of the government and the political climate
11
. Similarly, Mill’s
(1956)’s theory of power elites and Useem (1978)’s ‘theory of inner circle’ point to the
injection of upper-class-wide interest into public policy. The conundrum of the upper-
class politics involves that the decisions of public sectors are guided by special interest of
partisans, not by the public at large.
It is not uncommon phenomenon in modern capitalist nations that coherent elites
groups across different social elements (e.g. government, corporations, and media) have
11
Domhoff’s theory of class‐dominance can be accessed via http://www2.ucsc.edu/whorulesamerica/
56
formed and been consolidated over time, and the groups are engaged in a unified or
shared interest. Some claim that a natural tendency of humans is to prefer socially-
proximate others, and that it accounts for how network-conferred biases in behaviors are
universal phenomena that are frequently observed (Barabasi 2002; Margarethe and Bird
1993). The nature of small world of power elites is a frequent aspect of the modern
society where communicative transactions and trades are inexorably essential for survival
and prosperity (Parsons 1951; Luhmann 1995). Since the networks are often attached to
the benefits of such communications, the high degree of unified and interconnected elite
group formation, albeit not all intended, can be understood as granting strategic
advantages onto the group members (Galaskiewicz 1997; Zald and Lounsbury 2010).
The rationality of public decision making mostly by the governments then needs to
be appreciated critically. Predominant economic perspectives (e.g. Public Choice
Theory) toward the motivation of public decisions tended to suggest individualistic and
self-interest maximizing agents as key decision-makers (Dunleavy 1991; Mueller 1979);
and the rational decision is made according to rigid benefit-and-cost analysis (Davis and
Mizruchi 1999; Roy 1997). This rational assumption is little attentive to social structure
as a critical factor accounting for shaping motivations because the rationality is equated
with individual calculation by rational reasoning. However, the concept of rationality is
not necessarily bounded by a unit of individual. For example, group rationality often has
precedence over individual rationality, likewise class rationality often does so as well
(Useem 1982). It is probably because, either that humans are intrinsically social, or that
collaborative operation is conducive to more enhanced long-term gains, the rationality of
57
decisions often reflects the social groups or affiliations to which a social agent is attached
(Davis 1999; Smith, Murphy, and Coats 1999).
Extending the argument into the sector of quangos, it is also likely that the sources
of quango rationality that include the insulation from politics and the infusion of business
orientation may not be immune from such inner group politics (Mulgan 2003). The
sector is often susceptible to institutional pressures given from the governments and the
legislature with regard to budgetary allocations, personnel appointments, and
performance evaluation; at the same time the sector is also often dependent upon other
sectors such as governments, politics, business, academics, and media to attain the
needed resources such as monetary resources, candidate executives, political support,
professional advice, and institutional legitimacy. It pictures the sector of quangos not
completely closed from the others; instead closely interconnected and intertwined the
others with strategic impetus (Palmer and Barber 2001). As such, it makes mythical to
conceive quangos as a completely apolitical mode of public organizations. It will be
discussed in more detail in the next section.
58
3.2. DEBATE – QUANGO RATIONALITY
3.2.1. Myth: Operationally Closed
3.2.1.1. Quango Rationality
The idea of quango rationality is grounded on the assumption that the infusion of
business-like ideology and practice into public sector organizations, and the insulation of
such business-style entities from political vagaries (‘de-politicization’) will likely
enhance responsiveness (‘value for client orientation’), efficiency (‘value for money’),
and flexibility (‘adapting to societal change’). Because politicians are generally oriented
toward a motivation of vote maximization rather than of public welfare at large, the idea
indicates the need for independent and autonomous operation of quangos are immune to
such political influence (Boin, James, and Lodge 2006; Carboni 2010). The primary
methods toward quango rationality are, ideally, seen as the combination of two elements
such as (a) disinterested and professional decisions made by expert senior managers
without political considerations, and (2) monitors and controls by tough-minded
watchmen such as board directors, elected ministers, and parliamentary members who are
directed to public welfare at large. In essence, rationality is equated with a conceptual
compartment of quangos which is operationally closed from the other sectors while run
by independent experts.
59
3.2.1.2. Politics-Administration Dichotomy
The theoretical roots of quango rationality are traced back to the traditional debate
regarding politics-administration dichotomy. The debate was triggered by divergent
points of view toward whether public administration is, or ‘should be’, more like the field
of business or the field of politics. As a metaphor of Janus lucidly pictures, public
administration tends to have both management and policy in character; and the paradox
represents the existence of a contradictory and exclusive relationship between politics
and administration. The diverging points of view are represented well in the statements
below (Overeem 2008).
“The field of administration is a field of business. It is removed from the
hurry and strife of politics; our own politics must be the touchstone of all
theories” (Wilson 1887).
“Nothing is more central in thinking about public administration than the
nature and interrelations of politics and administration” (Waldo 1948).
The unabated debate resulted in two diverging streams of public administration into
policy studies and management studies. Not grounded upon a unified assumption, it
resulted in the persistent unclearness with regard to primary values, norms, roles,
60
functions, and methods of public administration. In effect, it has been widely
acknowledged that the field of public administration suffers from identity crisis (Kettl
2000; Agranoff and McGuire 2001). As if a pendulum swinging between two poles, the
orientation of public administration has been shifting between business-inspired
treatments and politics-aspired interventions according to the major societal changes of
the times (Kettl 2000). Arguably, the administrative reforms of quango may have been
called from the repositioning of the pendulum onto the Wilsonian pole of more business
orientation because economic downswing calls for entrepreneurial and corporate-style
governments for efficiency.
3.2.1.3. Puzzlement
However, it is questionable that this conceptual seal-off has feasibility or even
possible in reality. I have already stated above that the social sectors are interwoven and
mutually-affective; and it implies that drawing a fine line to delineate definite boundaries
around each sector is only conceptually possible. It is then perplexing because there is an
evident gap between conceptual treatment and substantive reality. Considering that
global administrative reforms movement is grounded upon the assumption that the
structural design of political insulation and business infusion has practical as well as
normative utilities, the conceptual compartment of quangos deserves more critical
examinations (Romzek and Dubnick 1987; Szanton 1991).
61
3.2.2. REALITY: OPERATIONALLY POLITICAL
3.2.2.1. Relational Aspect
Quango management in reality is, to a great extent, embedded in the relationship
with significant others for the sake of obtaining needed resources such as personnel,
finance, and legitimacy. Ironically, it makes quango management intrinsically political
and relational as opposed to the quango rationality assumption (Bertelli 2006; Bertelli
2008). As represented in the stakeholder map in Chapter 2, a quango is surrounded by
the domains –politics, government, business, academic, and other stakeholders –that
constitute quango contexts. As with inter-dependence and inter-connectedness, the sector
of quangos cannot easily be seen as an individual compartment in which the domain is
operationally closed. The welfare of each domain is inexorably associated with how well
to deal strategically with the relations with the others. That is, a more realistic picture of
quango management is embedded in ecological systems of political environments where
mutual communication and interactions matter for survival or prosperity (Singh, Tucker,
and Meinhard 1991).
3.2.2.2. Demolishing Dichotomy
Quangos need communicative interactions with the other domains because they are
mutually intertwined and affective. For monetary transfer, personnel exchange,
knowledge sharing, or regulatory action, it is imperative to strategically maintain and
manage good relations across the domains. For instance, quangos are dependent upon
62
government for material sponsorships (Koppell 2000), which makes quangos engage in
communication with political leaders. The dependency often resulted in that quangos are
subject to political influences from the leaders, and guided by their will. Also,
considering the nature of political appointment of CEOs common in quangos, the
proximity between the managers and the politics is not likely far. It implies that, at least
in terms of relations between politics and quango management, the presumption of
dichotomy might be of less explanatory power. The interconnectedness stretches beyond
the dyad of administration-politics. For example, quangos need to engage in interactions
with academics to garner guiding knowledge and personnel, with business personnel for
managerial techniques, and with clients and interest groups for their social support and
legitimacy. All in all, the dichotomy assumption is, to some extent, mythical as it least
fits with operational reality.
3.2.2.3. Systems Perspectives
Ontologically, this point is much resonated with Luhmann (1995)’s view of ‘the
society as social systems’ where a set of functionally differentiated sub social systems are
“intrinsically communicative” and “mutually intertwined.” Although each sub system
tends to have a distinctive mode of communication, each system is dependent on each
other for the sake of exchanging resources that are operationally needed (Luhmann 1995;
Luhmann 1995). Together, the communicative mode of operations of the sub social
systems contributes to functional operation of the whole system or modern society
63
(Parsons 1951). It provides substantial insights as a way of conceiving the society in
terms of interconnected and communicative nature amid social elements such as sectors,
classes, and groups, which deserves more attention and incorporation into public
administration research for theoretical sophistication around the debate over the dynamics
between politics and administration (Hansen and Ejersbo 2002).
3.3. INFORMAL NETWORK AND HIDDEN ACTION
3.3.1. Informal Network as Social Mechanism
Informal network is a typical condition through which social actions are gravitated
toward the interests of a favored segment of society. As Davis & Mizruchi (1999) have
illustrated, informal relations are often extended to formal decisions. It makes (inter-
personal) informal network an important behavioral predictor accounting for
organizational decisions (Useem and Karabel 1986; Westphal, Boivie, and Ming Chng
2006).
At negative tone, in many social problems, a verdict was made on informal
network, or dark network (Raab and Milward 2003), that leads to collusion, cheating, or
even crime of organizations (Baker and Faulkner 1993). This so-called dark side of
social capital is divergent from the dominant view of network in organizational research
which focuses on strategic advantages, at positive tone, in terms of needed resource
acquisition (Agranoff and McGuire 2001; Borgatti and Foster 2003). A few exceptions
64
are found in the lineage of organizational studies, including organizational criminology
(Baker and Faulkner 1993), and social contagion and conspiracies (Brass, Butterfield, and
Skaggs 1998).
3.3.2. Hidden Action Problems
The issue of informality in quangos was embodied lucidly in the notion of Hidden
Action Problems, as coined by Bertelli (2006a). It bases the argument upon the
observation that “the insulation of quangos from political considerations can be
challenged by political influence through informal networks as the meso-level
mechanism.” Albeit not readily visible, the influence may affect public accountability of
quango management substantially. This point makes the NPM-oriented ontological
concepts such as ‘politics-administration dichotomy’ (Svara 2001) and ‘political
insulation of agencies’ (Flinders 2004) mythical and susceptible to reality-rhetoric gap in
de facto operation.
3.4. NETWORK THEORETIC APPROACH
Social network research, at the inter-personal, inter-unit, and inter-organizational
levels of analysis, in organizational research has extended our understanding about
organizational life (Borgatti and Foster 2003; Fombrun 1982). The perspective differs
65
from traditional perspectives that places the concept of social structure and structured
patterns of interaction at the center of analysis whereas the traditional perspectives
examine on individual actors in isolation (Brass et al. 2004); thus the network research
pays attention to relations rather than attributes (Bradbury and Lichtenstein 2000; Scott
2000, 2000). The perspective has also extended to the study of public administration, and
broadened our knowledge and insights about the relational aspects of public sector
organizations (Berry et al. 2004).
Social embeddedness as a behavioral predictor has extended our understanding of
many behavioral and social phenomena in organizational contexts (Uzzi 1996; Burt
2000). As with technological development of social network analysis, quantitatively-
driven network-theoretic approach has gained popularity (Cook and Whitmeyer 1992).
This network theoretic approach is distinguished from conventional individual-oriented
methods of collecting and processing data in that it uses network variables which are
determined only through relations among multiple actors (Knoke and Kuklinski 1982;
Scott 2000, 2000).
As this dissertation focuses on social relations and informal networks at the top of
public sector organizations, the network theoretical perspective may have strong analytic
advantages. This section will address how the perspective has been utilized in the
organizational studies, and will use that in this dissertation.
66
3.4.1. THE CONCEPT OF SOCIAL STRUCTURE AND ORGANIZATIONAL
STUDY
Defining social network as a set of nodes and the set of ties representing some
relationship, or lack of relationship, between the nodes, and referring these nodes as
actors (individuals, work units, or organizations) (Brass et al, 2004:795), it is structured
social patterns of interaction that affect behavior and cognition of social agents. The
analysis reflects the sociological tradition of social structure research. Before it deals
with empirical studies of network research, this section provides a brief note regarding
the social structure research.
Many influential theorists, including Durkheim (Durkheim 1997), Parsons (Parsons
1951), Levi-Strauss (Levi-Strauss 1974), Marx (Lindsay 2008), Weber (Weber 1978),
Merton (Merton 1957), Coser (Coser 1977), Blau (Blau 1977), Coleman (Coleman 1998),
and many others, have developed the concept of social structure that affects agents’
cognition and their behaviors (Cook and Whitmeyer 1992). The sociological idea that
agents do not operate in a social vacuum but in the friction of social structure has tempted
many researchers into empirical investigations on what, when, and how a social agent’s
choice is affected by the social structure of various sorts (Burt 1992; Hirsch 1997). The
sociological view is diverged from the premise of neoclassical economics family views,
including public-choice theory (Mueller 1979), agency theory (Jensen 1994), rational
actor model, and the new institutional economics (Donaldson 1990), which opts for
deductive and trans-historical models of human choices (Friedland and Alford 1991;
67
Granovetter 1985) in that it considers social structure as macro forces guiding individual
behaviors. The sociological view opts for institutional analysis as to how human choices
are guided or even bounded by society as social systems (Luhmann 1995; Parsons 1951;
Stern and Barley 1996). Here, the sociological view can be seen equivalent to study of
social systems insofar as it investigates human behaviors and social phenomena.
If we label them collectively as social structure studies or structuralism, virtually
every research on organizations might then fall into the category in that organizations as
human artifacts fundamentally connotes the organized structure either as an instrument
for particular goals or as a context in which actors are enmeshed and interacted
(Stinchcombe 1965; Cook and Whitmeyer 1992). In short, an organization is a particular
sort of structure; thus organization studies are essentially studies of structures (Cook and
Whitmeyer 1992; Sewell 1997). Indeed, the elaboration of general organization theories
with which we are familiar now is to a great extent indebted to the insights that an
organization as a social unit is embedded and enmeshed in social relations among the
agents, and the relationship either limits or enables the organization’s choice and thereby
its outcomes (Monge and Contractor 2003; Stern and Barley 1996). For example,
institutional theory and resource dependence theory point to the importance of an
organization’s social relations with the agents either as pressures or as opportunities
affecting the organization-level decisions. In this view, an organization as a social agent
cannot be considered analytically apart from the social contexts in which it operates
because social environment has a great deal of influence upon the organization not only
as a pressure but also as nourishment (Oliver 1991, 1992).
68
This relational nature of organizational life was represented well in the term of
embeddedness by Granovetter (1985) spearheaded by Polanyi (1957) and Schumpeter
(1950), and has led to a big popularity among the concerned researchers thus far
(Rethemeyer and Hatmaker 2008; Gattani et al. 2008). Of the streams of social structure
research in organizations, network analysis has a distinct empirical value and therefore is
noteworthy. It is because that social network is relatively observable and quantitatively
measurable structure as compared to the others of sorts like norms, cultures or cognitive
schemes. Therefore, it may have fitted more into empirically-grounded and practically-
guided organizational research.
3.4.2. Social Network Perspective in Management Research
3.4.2.1. In Organizational Studies
Because it is relatively more observable and quantitatively measurable as compared
to other social phenomena, network has gained popularity and developed into a network-
theoretic perspective blended with social network methods (Knoke and Kuklinski 1982;
Cook and Whitmeyer 1992). This network theoretic approach is distinguished from
conventional individual-oriented methods of collecting and processing data in that it uses
network variables which are determined only through relations among multiple nodes. In
contrast, individual-oriented variables, or attributes, are independent from the relations.
Some good examples of such individual-oriented variables include demographic
information like age and weight which relate to characteristics of individuals while some
69
of network variables include centrality and distance which can only be determined within
social relations (Scott 2000, 2000).
In organizational research, both network variable[s] and individual attribute[s] are
collectively used to explain behavioral and social phenomena of organizations.
Depending on which roles are served by networked relationship, there are various
orientations of network-theoretic research. Together, these orientations can be clustered
into two dominant orientations in network perspectives on organizational studies: (a)
networks as an instrument for resources, and (b) networks as an institutional constraint
(Fombrun 1982). The diverging point between these two orientations depends on either
networks are conceived of as an instrument for needed resource acquisition or as a
constraint of social pressures from institutional players.
Network as an Instrument for Resources: The former perceives the networks in
which an agent is embedded as resourceful contexts enabling one to get connected to
resource-filled others (Astley and Sachdeva 1984; Bonacich 1987). In line with some
theoretical lineages such as social capital, social support theory, social exchange theory,
and resource dependence theory, this view conceptually pictures an agent who is
consciously and strategically positioning him- or herself in the patterns of relationship
with others so as to obtain needed resources (McDonald and Westphal 2011). In this
way, the agent is capable of extracting some benefits from the relationships, so the
70
networks are considered a sort of resource fields where the needed resources can be
obtained (Westphal and Zajac 1997; Nooteboom 2000).
Network as an Institutional Constraint: In contrast, the latter orientation, networks
as constraints, perceives the networked relationship as imposing a certain degree of social
pressures and expectations upon an agent (Rowley 1997). Aligned with institutional
theory as an analytic framework, this orientation counts an agent as inherently enmeshed
in the friction of social interaction with the others, and as thereby being under constant
social pressures stemming from norms or rules latent in the interaction (Villadsen 2011;
Zald and Lounsbury 2010; Barman 2007). In so far as the agent is not completely apart
from the social interaction, the actor cannot but conduct toward the socially valued or
legitimate ways of action, and the norms or rules are contingent upon the particular
interaction or relationship where the agent is embedded. In this way, the agents are
viewed as constrained by socially-constructed (other-imposing) demands and
expectations in their choices, so the networks are seen as social contexts imposing
particular constraints upon the agents.
Together, the two diverging perspectives account for either strategic aspect or
institutional aspect in light of agents’ choice problems. Although the respective
perspectives exclusively acknowledge a particular aspect in explaining the choice
problems for analytic purposes, these two aspects ought not to be treated apart from each
71
other. Rather, it is much reasonable to assume that a social agent is located at the
intersection of both aspects where both opportunities and constraints given by the
networks simultaneously influence them (Oliver 1992, 1991). But, the comparative
extent of the influence will likely vary across the specifics of the social contexts, and the
specifics will most likely be determined by how the social interaction of relationships is
configured and operated. This recognition is where structural analysis of relationships
(social network analysis) meets the two theoretical orientations, as from a structuralist
perspective, the links between structured patterns of interaction and an agent’s choice
have been persisting topics of interest (Mohr 2000). The structuralist perspective rests on
the assumption that an actor’s position in a network accounts for variations of behavioral
choices and performance outcomes because the position is attached to variations in
conditions for resources as well as constraints.
To summarize, this section argues that there are two complementary perspectives
on networks either as an instrument or an institutional constraint, and that these point to
either strategic or institutional aspect with regard to actors’ choice problems,
respectively. It then goes on to point out that, since the varying degree of the aspects is
attached to the actor’s position in the networks, structural analysis of social relations can
be used in explaining the actors’ choice problems. In the following two sections, I will
demonstrate the concrete example studies consistent with the arguments as a form of
literature review with a particular focus on management research.
72
3.4.2.1.1. Stream 1: Strategic Stance – Network as an Instrument
The strategic orientation viewing network as an instrument that gives strategic
advantages or benefits to an actor has been paid comparatively more academic attention
than the institutional orientation (Rethemeyer and Hatmaker 2008; Burt 2000). In the
tradition of strategic management, the idea that there is a comparatively better-connected
position in a network which might result in the actor’s better performance inspired many
organizational studies. The fragments of many theoretical bases, including social capital
(Adler and Kwon 2002; Belliveau, Iii, and Wade 1996), social support (McDonald and
Westphal 2011), social exchange (Eisenstadt 1980), social influence (Geletkanycz and
Hambrick 1997), and resource dependence (Pfeffer and Salancik 1978), in fact share a
common theoretical narrative that “ties to resource-filled others” is linked to a better
performance (Borgatti and Foster 2003). This insight as to “structure matters to
performance of actors” attracted a number of organizational researchers who are
concerned about the conditions related to firm-level better performance into structural
analysis of networks through which the firm operates (Brass 1984).
This stream of research looking into the relational aspects of organizational life in
light of strategic benefits derived from social connections. This line of research is at its
core two premises: (1) performance is enhanced when one is better-connected, and (2)
one’s better-connectedness can be observed and measured quantitatively (Burt 2000).
The premises are seen to hold the same regardless of levels of analysis, such as inter-
73
personal, inter-unit, and inter-organizational levels. Some case examples of the stream
can be seen in the various studies of compensation (Barkema and Pennings 1998;
Belliveau, Iii, and Wade 1996; Carpenter and Sanders 2002; David, Kochhar, and Levitas
1998; Eriksson 1999; O'Reilly, Main, and Crystal 1988), employment (Baysinger and
Hoskisson 1990; Muhlau 2000; Tschirhart et al. 2009), mobility (Podolny and Baron
1997), turnover (Jackson et al. 1991; Jensen and Warner 1988; Margarethe and Bird
1993; Moynihan and Pandey 2008; O'Reilly, Caldwell, and Barnett 1989; Somers 1995),
satisfaction (Schalk, Torenvlied, and Allen 2011; Hurlbert 1991; Higgins 1987;
Kemelgor 1982), conflict (Grissom 2010; Smith, Murphy, and Coats 1999; Widmer
1993; Useem 1984; Coleman 1957), and financial income (Baron and Markman 2003;
Dalton et al. 1999).
This line of research is distinct from organizational studies adopting methodological
individualism when investigating performance in organizational contexts because it deals
with an array of relational aspects between multiple actors, such as flows of information
(‘communication’), affect (‘friendship’), goods and services (‘workflow’), and influence
(advice) (Monge and Contractor 2003; Contractor and Eisenberg 1990). Together, the
relational aspects that take place in interaction are conceived as advantage, and the link of
such advantage to network structure was analytically visited by organizational research.
74
3.4.2.1.2. Stream 2: Institutional Stance – Network as an Institutional
Constraint
The institutional orientation viewing network as an institutional constraint that
limits and guides actors enmeshed in the relationship has been paid relatively less
attention than the strategic orientation viewing network as an instrument. A primary goal
of this stream of organizational research is to explain and predict how a network of
influence external to the organization affects its behavior and structure (Rowley 1997).
Consistent with institutional theoretical perspectives, this orientation posits that
organizational choice is limited by a variety of external pressures like demands and
expectations. Since its survival is contingent on its compliance with such demands and
expectations from institutional constituents of various sorts surrounding the organization,
its behavior and structure are likely guided toward a direction of compliance with such
demands and expectations.
Nevertheless, not all such forces invariably affect the organization’s choices for
some reasons. First, some constituents are more significant than the others (Mitchell,
Agle, and Wood 1997). In this event, the organization is more likely to attend to the calls
of the more significant ones. Second, the organization is capable of exerting some degree
of resistance against such external pressures, and the degree is a function of power
possessed by the organization (Marquis and Lounsbury 2007; Oliver 1991). This implies
that if one can analyze the conditions determining power distribution in and around the
organization in a relational context, one then will be able to explain and predict the
75
conditions determining the degree and the directionality of resistance, or compliance, of
an organization. This point is where social network analysis meets institutional theoretic
approach of organizational research. Although institutional theory suggests one world
view where choices of social actors are guided and limited by social forces accrued from
social relations, it is actually devoid of an analytic tool to investigate the conditions
determining such social forces. Using concepts of power accrued from social network
(Emerson 1962), this stream examines characteristics of relationship structures and their
impact on organizations’ behaviors rather than characteristics of individual organizations.
This line of research is so rare in number. An exception can be found in
stakeholder theoretic approach which describes how organizations respond to
stakeholders in the multiple and interdependent interactions that simultaneously exist in
stakeholder environment. Even though Rowely (1997) lucidly paved a way to empirical
strategies for stakeholder theoretic approach in organizational research, the state of
stakeholder theory development is still at its nascent phase.
The institutional stance is where organizational research in public administration
would best fit in. It is mainly because that public administration essentially points to the
conditions inducing policy compliance with the systems of institutional regulations. It
draws a notable distinction from strategic stance of network research that would better fit
in business management research as it deals with the conditions affecting firm-level
performance. In the context of public administration, individual performance of a focal
organization is not located at its core as the concept of performance in public sectors is
76
multifaceted and therefore elusive. In addition, public organizations tend to be more
susceptible to institutional demands and expectations (Frumkin and Galaskiewicz 2004).
Therefore, the institutional stance of network research offers a power conceptual as well
as methodological perspective through which to study the conditions affecting power
dynamics between regulators and the regulated.
3.4.2.2. In Public Management Research
Given the utility and strength of the approach, it has promptly infiltrated into public
management research since the 2000s. The research shows some common features like
below (Villadsen 2011).
9 Focusing on macro-level analysis of inter-organizational networks (Agranoff and
McGuire 2001; McGuire 2006)
9 Emphasizing instrumentalities of networks as policy tools (Graddy and Chen 2006;
Hill and Lynn Jr 2005)
9 Guided by an ideology of business-inspired administrative reforms of horizontal
network governance (Goldsmith and Eggers 2004)
As a sort of counter-thesis, this dissertation suggests three research agendas.
9 Looking into non-organizational networks of inter-personal relations on channels
such as governing boards (McCambridge 2004; Stone and Ostrower 2007)
77
9 Heeding downsides of informal networks in terms of public accountability as a
caveat (Romzek 2000; Schillemans 2011)
9 Critically redeeming the reform if macro structural reforms are accompanied by
appropriate implementation at operational level (Bertelli 2006, 2006)
For analytic purposes, governing boards in public sector organizations are taken as
a research subject. In business management research, boards are a conventional locus
where social networks of elites at the top are investigated and correlated against the
various firm-level outcomes (Hambrick and Mason 1984). In the typical setting, the
networks involved a formal network such as interlocking networks among corporate
governance (Brass et al. 2004). It is largely due to the feasibility of data and analysis.
However, recent studies began to be extended to informal networks in some studies
regarding recruitment, compensation, and turnover (Ostrower and Stone 2010). It is
based on the observation of “extending relations from golf course to board room” (Davis
&Mizruchi, 1999:215). Despite the popularity of corporate governance research, studies
of governing boards in public sector organizations are very rare (Grissom 2010).
78
3.4.3. Social Influence Effects
12
‘Social influence effects’(Fiss 2006) that foster behaviors of mutual support are
explained by three families of theoretical mechanisms such as homophily, proximity, and
social support (Monge and Contractor 2003). These theories provide underlying
mechanisms for similarity-attraction bias embedded in inter-personal interactions,
Alongside the theory of social capital (Adler and Kwon 2002), deferential and benevolent
behaviors within management contexts have been examined critically in relation to
certain strategic advantages such as promotion and compensation (Finkelstein 1992).
To illustrate each theory respectively, first the concept of homophily is defined as
“similarity that is thought to ease communication,” and has been studied on the basis of
similarity in age, gender, education, prestige, social class, tenure, occupation, and role
empathy (McPherson, Smith-Lovin, and Cook 2001). Along with the similarity-
attraction principle (Belliveau, Iii, and Wade 1996) and the theory of self-categorization
(Turner and Oakes 1986; Hogg and Terry 2000), homophily is posited to reduce the
psychological discomfort that may arise from cognitive inconsistency (Jackson et al.
1991).
Second, the concept of proximity is defined as “likelihood of communication by
increasing the probability that individuals interact,” and has been studied on the basis of
co-membership, physical proximity, and clique (Monge et al. 1985; Sarkissian and Schill
12
For more detailed description regarding theoretical mechanisms, refer to Monge and Contractor (2003:223)
79
2004). The physical proximity can also include geographical proximity between two or
more agents, which is thought to enhance frequency and depth of physical contacts. It is
hypothesized that increased contacts bear increased familiarity and comfort between the
agents.
Third, the concept of social support means norms of mutual support accrued from a
shared social membership (O'Reilly 1988). The social circles can include a variety of
social groups, such as marriage, friends, relatives, professional associations, and informal
clubs. The class-wide inner group can also be taken as a social circle (McDonald and
Westphal 2011).
Together, these three family theories constitute the mechanisms of social influence
effects and their in-group bias as organizational outcomes. In the Chapter 5 and Chapter
6, the hypotheses were generated based on these theoretical mechanisms to explain inner
group bias of quango management, and hidden action problems as its outcome.
80
CHAPTER 4: DESIGN AND METHOD
4.1. RESEARCH DESIGN
4.1.1. Sequential Mixed Methods Design
The overall research design follows a form of the sequential mixed methods design
that consists of two sequential phases: (1) a preceding qualitative inquiry and (2) a
following quantitative inference (Creswell 2009; Creswell and Clark 2007). The intent of
the two-phase design involves that the results of the first phase (‘qualitative’) can help
develop or inform the second phase method (‘quantitative’) (Uzzi 1996). This design is
based on the premise that a preceding exploration is needed for one of several reasons
(Creswell & Clark, 2007:75): (a) guiding theories are unknown or insufficient, (b)
variables are unknown, (c) instruments or measures are not available, and (d) sources of
information such as informants, key actors, or data archive are unidentified. The design
is best appropriate when studies address unknown and nascent phenomenon without
guiding frameworks or theories. The exploration phase discovers ‘grounded’
components of theory, and the explanatory phase tests the validity of the emergent
theories against larger samples or to different groups (Morgan and Smircich 1980).
Given that the exploration method follows qualitative inquiries to discover emergent
theories embedded in social phenomena, it is resonant with grounded theory methods
81
(Charmaz 2006; Glaser 1978, 2007). Both share some common features: thematic
coding (Holton 2007), formal theory development (Glaser 2007), and abduction of logics
(Reichertz 2007). Distinguishing feature of the mixed methods is that it contains an
inferential test for generality with quantitative emphasis, whereas grounded theory
method is regarded as a complete form of research as it is (Chiovitti and Piran 2003; Dey
1999; Glaser and Strauss 1967; Strauss and Corbin 1990).
Figure 4. Sequential Mixed Methods Design
Based on extensive literature reviews on the topic of the link between elite networks
and policy decisions, it was validated that the area of topic is least explored so guiding
theories and variables are devoid. It is why the exploratory model is suited to the
research questions posed in the dissertation. Since it addresses covert social relations and
their outcomes, relevant variables, measures, and propositions are rare. As with the
recognition, the mixed-methods are counted as a best appropriate answer in terms of
‘methodological fit’(Edmondson and McManus 2007) with central theme of research.
Brief descriptions regarding each phase are suggested below.
Exploration of Theory
Preceding QUL
Validation of Theory
Following QUN
82
4.1.2. PRECEDING QUL AND FOLLOWING QUN
13
(1) Preceding Qualitative (‘QUL’)
This dissertation deals with less known social phenomenon of informal aspects of
public management. The exploration stage was thus necessary to identify the elements
that constitute informal networks. The exploration can provide several practical utilities:
(a) instrument development (Braun and Clarke 2006), (b) taxonomy development (Tuma
and Hannan 1984), and (c) preliminary direction setting (Alvesson and Skoldberg 2000).
In this study, the combination of the three utilities was needed because the researcher set
out to investigate the phenomena without guiding knowledge about (a) key actors, types
of relations, and contents of ties constituting elite networks, (b) antecedents, mechanisms,
and consequences of network formation. The exploration thus include all the elements
such as setting the general direction, identifying key actors and their relations, developing
measures, seeking out data sources, establishing taxonomical models, and stating testable
propositions. The primary intent is for emergent testable theories, so it followed thematic
theory building techniques (Uzzi 1996; Holton 2007).
13
In this dissertation, following Creswell (2009) an abbreviated form of QUL and QUN was used to denote
qualitative and quantitative methods for succinctness.
83
(2) Following Quantitative (‘QUN’)
Once a theoretical scheme is put into place, it is tested and validated against larger
sample for generality. Since the exploration phase is based on qualitative interviews with
a small sample, it is hard to claim for generality (Sash and Corley 2006). To be more
confident about the solidity of the theory, the inferential techniques of statistics is used.
Larger sampling frame includes 286 South Korean quangos as of 2010. The combination
of the testable hypotheses, variables, and measures drawn from the preceding exploration
was tested against the sample to examine how inter-personal social relations of elite are
correlated with firm-level outcomes of quangos. The method is quantitative using
statistical inferential techniques.
4.2. EXPLORATION PROCEDURES
4.2.1. SETTING DIRECTION
The preceding phase first used ‘in-depth case study approach’(Yin 1984) to make
the researcher informed of an in-depth picture of the case of South Korean quangos
(Galaskiewicz 1997). This ‘theoretical saturation’(Corbin and Strauss 1990; Corbin and
Strauss 2007) was a precondition for identifying issues of concern and viable informants.
Extensive textual data including popular press, government statements, management
reports, annual survey, academic research, and video documentary were first collected
84
and critically reviewed (Breiger 2000; Siggelkow 2002). For the assessment, conclusions
were drawn for issues and informants, and theory and research on the management of
quangos.
Two sets of critical issues and research questions were drawn:
9 First, the epicenter of quango reform is linked to enhancing independence and
quality of governing boards, but attempts are often inhibited as the sector is subject
to political influences.
9 Second, the sector is often seen as hidden costs of government as loose fiscal
management and benevolent monetary rewards are prevalent.
In both cases, the sources of problems were generally thought to be politicization of
the management as the appointment of senior executives tends to be based on
considerations of informal ties to political executives. For example, favoritism in terms
of appointing senior executives is not uncommon in the field. The appointment
mechanism is prone to be predominantly guided by top-level political executives such as
president, ministers, and high-ranked officials. The appointment is largely based on
considerations of informal ties such as political contributions to presidential campaign,
co-membership of prestigious social groups, affiliations of informal meetings, congruity
in ideological stance, and seasoned partnership in certain functional or professional areas.
85
Given that such considerations are not associated directly with managerial expertise, the
political bias or informal orientation of quango management might be a source of the
downfalls.
4.2.2. INTERVIEW PROCEDURE
After setting the broad direction of research in a pilot study
14
, the researcher
proceeded on investigation into the case more in-depth by interviewing field practitioners.
An emphasis was placed on two categories in particular:
9 First, the elements constituting power networks in terms of key actors, types of
relations, and contents of ties.
9 Second, the causes and consequences of power networks in the public sector
organizations.
In selecting the informants, ‘intensity sampling or elite sampling’ was employed
(Acar, Chao Guo, and Kaifeng Yang 2008). It suggests interview participants are
approached based on their experiential expertise and/or authority on a particular subject
(Patton 2002). The experts and authorities were seen as being equivalent to seniority and
high-rank status in the field. Based on the criteria, I interviewed 15 senior executives, 12
14
The pilot study refers to a set of preliminary interviews conducted before in‐depth interviews with more
field practitioners.
86
senior-level public officials, and 5 board directors from the quango sector and
government in South Korea to explore the issues. An advantage of interviewing the
people of this type is that the senior officials and executives are involved in all key
aspects of the sector and consequently have firsthand knowledge relevant to the
management.
I selected the interviewees based on seniority, on average more than 15 years of
experience in the field, and accessibility. Sampling method was based on snow balling
techniques considering expertise and seniority (Creswell 2009; Fankfort-Nachmias and
Nachmias 2006). A first informant, who is a senior level official in a central department,
was introduced by a former academic advisor of the researcher, and the snow balling
started from there. I contacted each interviewee by phone and gave them a brief
description about the purposes and logistics of the interviews. Also, I revealed to them
that this research was reviewed and qualified by IRB, and that the personal information
will remain anonymous. I got invited to interview 11 senior executives, 9 senior-level
public officials and 4 board directors, and interviewed the rest of them by phone. In
some cases, some interviewees introduced me to other persons who fall outside the
sample frame but would be helpful sources of my research, such as an official in the
national assembly and a review director in the evaluation committee embedded in the
Budget and Planning Department. On average, the interviews lasted for an hour, but
three interviewees were very devoted and spent more than two hours. The talks were
audio recorded and transcribed, and thematically analyzed using a computer-aided textual
analysis program, Atlas.ti (Gioia and Chittipeddi 1991; Gioia and Thomas 1996).
87
The interviews were conducted in three phases: (a) open-ended pre-interview (N=2),
(b) semi-structured in-depth interview (N=24), and (c) following frequent contacts to
validate during coding processes.
First, the open-ended pre-interviews were conducted on two Ph.D. students in the
Sol Price School of Public Policy. These students were current public managers who
worked for central governments of South Korea, and who undertake tasks of reviewing
financial flows between quangos and departments. The interviews took a form of
moderately directive inquiries in a casual setting over lunch. Some questions are given to
the informants about (a) the major themes regarding quango problems, (b) the conditions
generating the problems, (c) the key actors of substantial impact, (d) other candidate
informants, and (e) sources of data for acquiring needed information. Based on the
interviews, a preliminary picture about (a) outcomes, (b) determinants, (c) subjects, and
(d) interviewees/information sources were drawn, and this helps build more rigidly
structured scripts for subsequent interviews.
Second, semi-structured in-depth interviews with the field practitioners were
conducted using the scripts garnered and tailored through the preceding interviews. Two
general categories were taken into consideration with a particular attention such as (a) the
elements constituting power networks, and (b) the causes and consequences of power
networks. About the first category, the informants were asked to identify key actors,
types of relations, and contents of ties, while about the second, the causes and
consequences of power networks in the public sector organizations were asked. The
88
interviews were transcribed using a computer-aided word processor program, MS-Word
2007, and then were imported into Altlas.ti (Braun and Clarke 2006) for thematic
analysis. I had to make some qualitative decisions in coding processes regarding which
themes will be more suited to the research questions. In order to reduce biases stemming
from such qualitative decisions, I hired a doctoral student and taught him how to use and
operate the program. As a result, two independent researchers came to conduct a coding
on the chunk of textual data, and the results were tested for inter-rater reliability. Once a
working framework was developed, it was verified by some interviewees who
participated in the interviews for validity (Cohen 1968).
Third, some contacts were made during the coding process to the informants to
validate as models develop when logical linkages connecting themes need to be
appreciated. The results were conducive to testable subset models.
4.3. MODEL ESTABLISHMENT
4.3.1. Initial Findings from QUL
Initial Findings: Generally, it was confirmed that hidden action problems are being
taken seriously by field practitioners, and political influence channeled by informal
networks are substantial forces behind the problems. The informal networks are thought
89
to moderate controls over quango management by institutional watchmen, or even lead to
collusive behavior among them.
“Play at a High Altitude”: First, when certain CEOs of the enterprises are socially
or politically close to the heads of the government bodies, those are likely to be more
advantageous in obtaining the resources. This is called widely by field practitioners as
“play at a high altitude.” Those CEOs who have a great deal of political power and
influence at the top would actually be preferred by the members of the enterprise because
they will get them more monetary benefits as well as social power. Those CEOs who
have good connections with politicians, particularly president, or the heads of the central
government departments can play at a high altitude. Since the performance of the sector
is not readily observable and measurable, the organizational members tend to be less
attuned to performance issues. Rather, they are inclined to be more attentive to the three
core resources, such as money for more financial benefits, workforce for more
manpower, and information for more bargaining power. As a result, the CEOs who can
play at a high altitude tend to have more power and authority within the organization.
Also, the power and authority are positively associated with firm-level outcomes such as
acquisitions of such resources from the parental governments.
“A Child Born of Collusion”: Second, when board members in total are socially
or politically close to the CEO, they can exert more power and authority at discretion.
90
This board governance with friendly allies was accused of a primary source of lax
management and accountability failures. Given that the parental departments tend to
administer the multiple enterprises simultaneously, it is unlikely for them to effectively
monitor and control the enterprises. In addition, there is a persistent informational
asymmetry lying between the two parties. It makes board governance an ultimate vehicle
to resolve principal-agent problems. But, in many cases, the board governance tends to
be filled with friendly allies. The interviewees used a term of “a child born of collusion”
to indicate this phenomenon. As a result, the CEOs who have such board governance
tend to have more power and authority over the organization.
These findings generally corroborated the initial frameworks derived from textual
data. Both politicized CEOs and collusive boards are taken as affecting loose
management and political biases in the sector. The raw findings are attached with
theoretical accounts to substantiate the arguments.
4.3.1.1. Politicized CEOs –“Playing at a high altitude”
CEOs were thought generally to be the most significant key players in most
managerial decisions of quangos. The CEOs tended to possess attributes of higher class
or elite backgrounds, and ‘norms of deference’ (Westphal and Stern 2006) to them amid
officials and directors were widespread. They have unchallenged power within the
91
organization that is equivalent to that of corporate senior executives or CEOs. Not only
internally but also externally, CEOs are capable of exerting influence. For instance, a
CEO with higher political power can demand for more pecuniary welfare or budgetary
allocation from the parental ministries. In addition, the CEO can resist institutional
pressure for scrutiny or monitoring from the legislature.
Ironically, a high degree of political power accrued from social relations to
politicians was seen by organizational members as desirable qualifications and favorable
conditions. CEOs with a higher political power can better attain needed resources from
the ministries; and it will likely lead to more welfare benefits to the organizational
members. This capability was called in the street-level ‘playing at a high altitude.’
When CEOs possess power enough to play at a high altitude with political leaders, the
organizations might operate under favorable and benevolent environments which are
likely to lessen burdens.
4.3.1.2. Malfunctioning Boards –“A child born of collusion”
The other condition that gives CEOs a higher power is malfunctioning governing
boards. As discussed earlier, the adoption of corporate-style boards is the cornerstone of
quango reform. Since political appoint of the CEO positions is not uncommon in South
Korea, the scrutiny from politicians and ministries may not be sufficient in terms of
control mechanisms. When collusive action happens between the governments
(‘principal’) and the quangos (‘agency’), there is no other institutional mechanism to
92
monitor and control the action. It makes controls of governing board important
alternative institutional mechanism to hold them accountable. As internally sitting, the
boards are charged with close examination from tough-minded eyes.
In principle, board controls supplement external political controls over quangos
with more professional expertise and proximity. However, the informants generally
claimed that governing boards are not functioning right because they are not materially
independent from the management, and because norms of director action to be
subordinate to the CEO’s decision-making authority are prevalent. It results in boards
being merely passive rubber-stamps. This condition was called in the street-level “a
child born of collusion.” It implies that boards become collusive forum of quango
management and board directors. The point of general agreement was however that
quango boards were functioning as ‘elite enclave’ and ‘rubber stamp,’ and non-executive
outside directors are often ‘a child born of collusion’ rather than ‘tough and vigilant
watchmen.’ As the boards were not functioning appropriately, the political bias of
quango CEOs is easy to be unfettered, which will likely cause hidden action problems.
4.3.2. Holistic Model
A holistic model or conceptual map that pictures the link between social relations
and hidden actions was developed from thematic analysis using both inductive and
deductive techniques (Cowgill et al. 2008). Such analysis allows for a full range of
themes and subthemes to emerge (Bogdan and Biklen 1992; Braun and Clarke 2006).
93
Following Cowgill et al’s (2008)’s protocol for content analysis, the first coder read
through the texts and identified initial themes with regard to key players, conditions, and
outcomes of quangos, and then the second coder pile-sorted the body of themes into a
logical structure of frequency themes. Once the structure was set, fine refinement was
followed and checked consistency between the coders (Cohen’s k = 0.72) (MacQueen et
al. 1998).
Figure 5. Model of Elite Relations and Quango Outcomes
Governments
President, Ministers,
Vice Ministers
Quango
Senior Executives or
CEOs
Governing Boards
Auditors,
Inside/Outside
Directors
Cohesion
“Play at a high
altitude”
Cohesion
“A child born of
collusion”
Decision Outcome
‘Staffing’
‘Financing’
Key Players Conditions Outcomes
94
4.3.2.1. Two Critical Issues: ‘Staffing’ and ‘Financing’
The results of thematic coding displayed the models of elite relations and quango
outcomes. The issues identified by the informants as being most critical for explaining
quango problems are broadly two folds: (a) staffing and (b) financing.
First, political biases in selecting and appointing quango staffs such as senior
executives, auditors, and board directors are taken significant by the field practitioners
(‘staffing’). The positions in quangos especially when granted with higher authority and
responsibility are regarded as a sort of war spoils of presidential election. The selection
and appointment based on political considerations such as, for example, contribution to
election processes account largely for the position holdings. The problem latent in the
political aspect is that it may compromise the principle of disinterest of public
management. An informant pointed out politically-biased quangos which functions as
research institutes are often guided by elected politicians on their scientific reports by
generating results that are customized or tailored toward desired outcomes by the
politicians. When public sector organizations are run by politicized executives who
would serve on special interest of partisan politics, decision rationality might be damaged.
This point was made repeatedly and consistently by the entire informants.
Second, political biases in financing quangos are taken critical by the field
practitioners. It is often claimed pejoratively that the sector of quangos is hidden sector
of government in terms of costs. In almost all countries, the hybrid sector tends to
implement larger budgets than do central governments. Given the size, the fiscal
95
decisions have significant impact on social welfare at large; but since the sector is
relatively less visible and noticeable to the public, the sector is often accused of loose or
lax management. Being steward of public money, the organizations should be under a
vigilant scrutiny and operational transparency. The point was also made repeatedly and
consistently by the entire informants.
4.3.2.2. Salient Key Players
Three groups are identified as salient key membership including (a) government, (b)
quango management, and (c) governing boards. Together, these groups constitute
quango contexts. In the group of government, there are key players such as the president,
prime minister[s], and minister[s]. The president is an ultimate power holder over the
whole enterprises of the administration. In South Korea, the president has an authority to
arrange the entire governmental sector through appointing executives. Quango
management is intrinsically run by senior executives or CEOs. The executives are in
possession of most predominant power within the organization. To check and balance
their power, auditors and directors on boards are charged with monitor and control over
the management. However, those board members are generally subordinate to the
management because the executives are often connected directly to top-level elected
politicians who have de facto power over the sector. Also, the appointment of auditors is
thought to be largely political, and it has been widely acknowledged as a source of
agency problems. The role of auditors, which is often compared to that of chairmen in
96
corporate boards, is very significant as auditors review most of managerial decisions and
exercise substantive influence over the management. Whereas outside directors hold part
time positions on a voluntary basis, the position of auditors is full time position
equivalent to other top-level executives. Finally, non-executive outside directors are
important actors charged with monitoring and controlling the management on behalf of
public interest. The archetype of corporate-style governing board practice in quangos
involves roles of independent and disinterested outside directors who share no interest
with the CEO.
In sum, three key groups constitute quango contexts, and the dynamics between key
players such as the president, ministers, CEOs, auditors, and board directors explain
decisions made in quango contexts.
4.3.3. Subset Models and Research Questions
Albeit the model streamlines the conceptual picture about the link between quango
management and social relations at the top, the model itself is not readily testable for
generality. Therefore, the model is dissected into two separate and testable sub-set
models. First set deals with staffing issue by looking at board structural independence as
a function of social relations between the key players. Second set addresses financing
issue by investigating annual increase of non-fixed discretionary expenditure
implemented by quango CEOs as a function of the social relations.
97
4.4. INFERENTIAL PROCEDURES
4.4.1. Setting Direction
More concise and concrete research questions were posed to test for generality
against sample. The questions are drawn from preceding thematic analysis. Details of
each model will be described in more detail in Chapter 5 and Chapter 6. To mention
briefly, each model addresses different issue of agency problems as discussed above.
Each model will be tested using the data fitting the elements (‘variables’) of models.
4.4.2. Sample Population
The sample population is 286 South Korean quangos as of year 2011. The number
varies year by year as some might be newly established, abolished, or merged. The
sector is relatively flexible and easily changing; thus it was required to snapshot a certain
year for operational purposes (Wilson 1995). Year 2011 was chosen for this reason. In
this year, there were 286 organizations, 287 CEOs, and 2610 board directors. Since this
dissertation uses network theoretic methods, the population cannot be reduced through
sampling. Chances that the information on network data is severely damaged are high
because relational nature of network data makes taking out or adding in significant agents
into networks will shift relational information drastically (Scott 2000, 2000).
98
4.4.3. Data
The data were constructed by consolidating two distinct sets of data into a unified
set by organization. The two sets are (a) organizational data of quangos and (b) network
data of sector elites.
First, organizational characteristics such as financial facts, personnel, location, size,
age, sponsorship, board structure, compensation, and parental departments are obtained
from open data archive of ALIO Public Management Information Platform
(http://www.alio.go.kr). This platform is an extensive and detailed archive about South
Korean quangos. As with high characteristics of publicness, quangos are ‘recommended’
to open their management information to the public through the platform. But, since it is
not ‘mandated,’ some information is missing occasionally. Despite the downside, the
information itself is highly reliable, and is often referred by both media coverage and
academic research. Thus, it was thought to be reasonable source of data.
Second, the construction of network data follow two-mode network matrix which is
constituted by person-and-affiliation matrix. Once the information is garnered, the
person-and-affiliation matrix can be transformed into a person-to-person or affiliation-to-
affiliation depending on analytic purposes. It has advantages when direct links between
persons are hidden and unobservable as the links are assumed by co-membership of an
affiliation or co-occurrence of an event (Borgatti, Everett, and Freeman 2002; Knoke and
Kuklinski 1982; Mohr 2000). Toward this end, information on affiliations or social
groups was needed. The data were obtained from a media archive of personal
information, the Chosun Media Archive (http://db.chosun.com), where personal
99
information of high profile figures is collected. The information was coded in a person-
to-affiliation matrix, and then transformed into a person-to-person matrix by UCINET 6.2
(Borgatti, Everett, and Freeman 2002).
The two sets of data were consolidated later into a unified set. The aggregation was
done against organization so that the data have a form of organizational scores. The
scores, for example, include the degree of CEOs’ social similarity with the president,
ministers, and auditors, or the average network centrality of board directors. In this way,
two sets of data construct one set through aggregation.
100
CHAPTER 5: SUB-MODEL 1 – BOARD STRUCTURAL
INDEPENDENCE
5.1. INDEPENDENCE OF QUANGO BOARDS
The installment and implementation of corporate-style boards in quasi-autonomous
non-governmental organizations are important parts of administrative reform since the
1980s (Baker 1982; Flinders and Smith 1999). This so-called boardization (Wilks 2007)
aims to shift the locus of institutional controls over public sector agencies from
government to autonomous governing boards with more managerial emphasis (Dubnick
and Frederickson 2010; Gash and Rutter 2011). It is based on the assumption that the
insulation of quango management from political influences, which is oriented to short-
term vote maximization rather than public interest at large, would enhance managerial
efficiency and responsiveness (Mulgan 2003). This accounts for the motivation of
adopting the idea and practice of corporate-style boards in quangos.
Nevertheless, corporate-style quango boards are not necessarily linked to rigid
board control over management if the boards are not independent (Westphal 1998, 1999).
The independence implies that boards are materially or socially detached from incumbent
senior executives so that they exert vigilant monitoring, overriding, and controlling over
the decisions that are made by the executives (Rosenstein and Wyatt 1990; Westphal
101
1998). The archetype of board independence is the non-executive outside directors who
come from outside the organization and have no shared interests or values with the
management (Rosenstein and Wyatt 1990). The independence of the outside directors is
generally thought to be a boundary condition for managerial efficiency and
responsiveness.
Although the popular press has been lamenting quangos as not being a trustworthy
steward of public money, but causing hidden costs of governmental ineffectiveness,
academics have been largely ignorant of the conditions that guide vigilant controls of
quango boards such as structural independence (Dubnick and Frederickson 2010). While
the programs of quango reform have paid exclusive attention to macro-structural
arrangements such as market-based contractual designs and structural disaggregation of
arm’s length bodies from ministries, micro-operational mechanisms such as governing
boards have been much neglected in public administration research. Thus, quango boards
and their independence deserve more attention as a substantial institution for rigid check
and control to hold them accountable to the public.
102
5.2. THEORY AND HYPOTHESIS
5.2.1. Why Board Controls Matter
5.2.1.1. Political Appointment of Quango Senior Executives
Political appointment of CEOs is common in South Korean quangos, and even
taken for granted by the majority of field experts. Politicians tend to favor political CEOs
because it (a) reduces uncertainty of principal-agent relations, (b) attenuates the use of
power in exchange relationships, and (c) provides congruence of political ideologies that
blunt conflicts between regulators and quangos (Cole 2000; Hirst 1995). Given that the
political appointment is common and even considered natural, board controls over the
management become very important in holding quangos accountable. Also, given the
elusive nature of outcome measurability in public sector organizations, close examination
by vigilant boards is a critical condition to inhibit agency opportunism and collusion
caused by the political appointment.
There are two conflicting perspectives on the political appointment: (a)
‘infiltration,’ or championing the practice in a bid for reducing agency opportunism of
quangos and (b) ‘collusion’ implying oligarchic domination by inner group politics.
103
(1) ‘Infiltration’
In principal-agent relationships, interpersonal commitments and familiarity
attenuate the use of power in exchange relationships, and blunt opportunism as it reduces
transaction costs by reducing uncertainty of relationship and agency costs (Westphal,
Boivie, and Ming Chng 2006). It resonates with the concept of trust-based commitment
and social capital between the parties (Adler and Kwon 2002; Burt and Knez 1996).
Appointing those who are close to elected politicians of governments as quango CEOs,
provides advantages for managing agency relationship with quangos as agents: (a)
ideological congruence (Edwards 1995), (b) communicative ease (Duronto, Nishida, and
Nakayama 2005), and (c) opportunism reduction (Shen 2003). That is, political
appointment is a strategy of infiltration of governments to better communicate with and
control over the agencies.
(2) ‘Collusion’
When utilized, the political appointment easily leads to collusive actions and hidden
action problems (Bertelli 2006). Social cohesion or value congruence is thought to
neutralize vigilant evaluations in the relationship, and to result in the parties becoming
more sympathetic and empathetic toward each other (Belliveau, Iii, and Wade 1996; Fiss
2006; Geletkanycz and Hambrick 1997; Wade, O'Reilly, and Chandratat 1990).
Appointing CEOs who are close to the politicians then will likely impair general public
interest due to the internal politics oriented toward a particularistic interest (James 2003).
104
That is, there is a risk for the political appointment likely linked to collusion between
administration and politics over public resources.
5.2.1.2. Why Board Controls Matter?
Informal ties and value congruence between CEOs and politicians may have the
potential to harm the spirit of business orientation and administration-politics dichotomy.
When quango management is not immune to, or even subject to, political influences, it
means that it operates under less scrutiny and control. Given quangos are being stewards
of public money, they may exacerbate public interests at large (Flinders and Buller 2006).
Governing boards of quangos, just like corporate boards in the private sector, are a
critical safeguard against such abuses of power.
5.2.2. Board Structural Independence
The archetype of board independence is the non-executive outside director whose
roles involve monitoring, overriding, and controlling the decisions made by incumbent
executives (Rosenstein and Wyatt 1990; Westphal 1998). The outside directors are
thought to be detached materially from the executives because there are no shared
interests or values. The detachment makes the outside directors independent with more
disinterestedness better serving stakeholder interests. On the contrary, when not
105
independent sufficiently, there is a potential for ‘board capture’ and ‘board collusion’
(Hambrick and Finkelstein 1995; Hambrick and Mason 1984).
Some structural features of corporate boards are theorized to be linked to bargaining
advantages of board directors over the management: (a) more diverse board (Kang,
Cheng, and Gray 2007), (b) less (executive) inside directors and entrenched executives on
boards (Ryan Jr and Wiggins III 2004), and (c) more socially distanced outsiders from
executives (Westphal and Zajac 1997).
In quango contexts, the composition of boards is not an outcome of internal or
endogenous bargaining within governing boards as ‘bargaining framework’ of corporate
sector posits (Arthur 2001; Hermalin and Weisbach 1998). Rather, it tends to be preset
by public laws that determine the size and roles of quango boards through top-down
legislation processes (Flinders and Smith 1999). Reflecting the context-specific nature,
board structural independence is seen as more linked to social aspects such as ‘outside
board directors who lack social similarity with CEOs.’
5.2.3. Inner Group Politics and Social Relations
5.2.3.1. Iron Triangle of Political Players
In South Korean quango contexts, the process of new outside director selection is
typically the outcome of bargaining among three key parties, such as quango CEOs, other
106
incumbent directors on board, and the government (Bourdeaux 2008; Carboni 2010).
Looking into the selection process of new outside directors, new outside directors are first
recommended as the outcome of bargaining between the CEO and the other directors on
board. In this process, CEOs tend to prefer those who are socially close to themselves as
outside directors because they will more likely be sympathetic and accommodating with
decisions by the CEOs (Westphal and Zajac 1995; Yangmin and Cannella Jr 2008). On
the contrary, the incumbent other directors are required to select those who will be more
vigilant in monitoring the management. In this conflicting view, whether a new director
is chosen reflecting CEOs’ or other directors’ preference is determined by the amount of
bargaining power possessed by each party in the context because it involves a sort of
bargaining or deal (Arthur 2001; Hermalin and Weisbach 1998). Once new directors are
selected, the list of candidate directors is then reported to the parent ministry for
approval, and then to the president consecutively (Koppell 2000; Rich 1989).
These three key actors are supposed to carry out check and balance function in the
process of new director selection to thwart attempts to fill the positions with like-minded
friends or interest-sharing partners who would not be tough or vigilant in monitoring and
controlling the management. Political scientists have described this relationship using a
metaphor of triangle as it involves three key parties with balanced power (Breton 1974;
Leigland 1994). In theory, the balance of power is horizontal and one party is not
subordinate to another. In reality, however, there are still some chances that one or two
parties are capable of possessing predominance over the others, or that the distance of the
107
three parties is close enough to resulting in collusive actions (Van Thiel 2004; Yesilkagit
and van Thiel 2012).
As the result of preceding interviews illustrates, in the particular context of South
Korea, social cohesion between quango CEOs and elected politicians in the government
is the soil for inner group politics. Since the relationship tends to monopolistically
determine decisions over outside director selection, considering social proximity between
the CEOs and the salient actors in the government as a factor accounting for outside
director selection and resultant board structural independence would be valid. About the
salient actors in the government, the president and minister[s] in the parent department
are primary actors. Thus, it generates two hypotheses as follows.
H1-1: CEOs’ social proximity to president will likely lead to more inner group
politics, and therefore reduce board structural independence of outsiders.
H1-2: CEOs’ social proximity to ministers of parental departments will likely lead
to more inner group politics, and therefore reduce board structural independence
of outsiders.
5.2.3.2. Collusion within Boards
Since the first proposal of new outside director is formulated as the outcome of
bargaining between CEOs and incumbent directors on board, it is also reasonable to
108
consider the relationship as a factor affecting board structural independence (Arthur
2001). It is assumed here that social proximity between the CEO and the incumbent
directors on board may result in selecting new directors with less hostility toward the
CEO because the proximity fosters amicable bargaining. In South Korean quango
context, by the way, the entire board tends not to involve in the bargaining process
because it demands a great deal of commitment and resource. As a representative of the
entire board, an auditor, who is equivalent to a chairman of corporate boards, typically
takes up a role of dealing with a negotiation or bargaining with the CEO. Thus, it
generates a hypothesis like below.
H 2-1: CEOs’ social proximity to auditor on the boards will likely lead to more
inner group politics, and therefore reduce board structural independence.
Former top-level public officials who sit on quango board after retirement are not
uncommon in South Korea (Kim 2000; Park 1991). It results in mutual benefits to
quangos and the officials themselves in two primary reasons. First, having the officials
on board is advantageous to quangos as their social networks which have accumulated
over their tenure may bring more communication channels to the government. The
channels are advantageous to quangos in a variety setting of negotiation, request, or even
conflict with the government. Second, for the officials, the position of board directors
promises stable financial benefits and continuing social status after retirement.
109
Nevertheless, it should be noted that former public officials on board may also increase
the likelihood of turning CEOs into possessing more political connectivity with the
government. Particularly when former officials sit on board as inside directors, whose
roles are being a wingman rather than a watchman, it might add more political
connections to CEOs. It then generates a hypothesis like below.
H 2-2: More inside directors of former public officials as closer material distance
from ministries, and will likely lead to more inner group politics, and therefore
reduce board structural independence of outsiders.
5.2.3.3. Elite Education of CEOs
In South Korea, elite education accounts largely for belonging to a top echelon
social class because it increases the likelihood of connecting to social contacts with
higher class actors (Lee and Brinton 1996). Especially when it comes to elite class in the
government or political parties, the power is not hereditary. It is rather pursued and
obtained by prestigious educations and credentials. Thus, social status in Korea is
normally equated with elite education. Given a relatively small territory and population,
it is conducive to a high degree of social cohesion of those in elite education. This
implies that the chance that those who received elite education constituting a coherent
segment of elite class is high. Extending this logic into quango CEOs, it is assumed that
CEOs with elite education will more be attached to elite class in the government.
110
H 3-1: CEOs with elite education will likely be attached to power accrued from
inner group politics, and therefore reduce board structural independence of
outsiders.
5.3. MEASURES
5.3.1. Dependent Variable
Board structural independence was measured using the proportion of outside
directors who share same functional background with CEOs (Hambrick, Geletkanycz,
and Fredrickson 1993; Westphal and Zajac 1997). The functional similarity was
measured by the combination of two measures including the same type of functional area
and the same type of education degree (Michel and Hambrick 1992; Randel and Jaussi
2003). The same type of functional area was counted if a director has primary experience
in the same type of functional area with the CEO. Eight types of functional areas are
established to classify the types, such as: (a) art, (b) science, (c) media, (d) engineering,
(e) government, (f) business, (g) politics, and (h) laws. This classification is also used to
count the same of education degree.
The proportion was calculated by summing the number of outside directors who
have either same functional or educational background with CEOs, and dividing them by
total outside directors’ number as shown below.
111
The proportion of outside directors socially proximity to CEOs
=
∑
Where:
n: the number of outside directors who have either same functional or educational back
ground with the CEO
N: the number of total outside directors on the board
The measure has continuous value ranged 0 to 1, which means 0 is complete
dissimilarity whereas 1 is complete similarity between the directors and the CEO in terms
of functional or educational backgrounds. Since complete similarity means complete
dependence logically, value 1 here is equal to complete dependence. Since the target
variable of concern is structural independence of boards, the value needs to be reversed
so that value 1 is equal to complete independence. Thus, the values are subtracted from 1.
As a result, 1 becomes complete independence and 0 becomes complete dependence.
Board Structural Independence = 1 ‐ the proportion of outside directors socially proximity to
CEOs
112
5.3.2. Independent Variables
9 CEOs’ Social Proximity to President: A similarity score was computed by the
portion of social and functional features shared by quango CEOs and president. Six
categories include: (a) birth place, (b) high school, (c) college, (d) religion, (e)
functional background, and (f) work place. The proportion was calculated by
summing the number of shared features, and dividing them by total number six. The
measure has continuous value ranged 0 to 1, which means 0 is complete dissimilarity
whereas 1 is complete similarity. In South Korean contexts, the similarity of such
categories tends to increase the likelihood of co-membership of social clubs which
entails informal social meetings, such as school reunion, fraternity, fellowship, or
vocational association.
Similarity or dissimilarity index is a typical measurement used to gauge social
proximity between dyadic relations (Hambrick, Geletkanycz, and Fredrickson 1993;
Zajac and Westphal 1998). The strength of the index is that it provides a simple and
straightforward way to operationalize social proximity with regard to relational
strength (Fiss 2006). Nevertheless, it should be noted that the index is not without
weakness as it assumes categories having equal weights. In reality, different
categories nevertheless may have more practical significance than others. One way to
address the issue is to assign weight to each category according to importance. It then
follows a problem of determining appropriate level of weights given to each category.
113
Without theoretical validation, decisions of weighting would be much arbitrary or
illegitimate.
15
9 CEOs’ Social Proximity to Minister: It was measured by the same score which
was used above. If there are two ministers in the parent department, the scores were
calculated for the two ministers, and then averaged.
9 CEOs’ Social Proximity to Auditor[s]: It was measured by the same score
which was used above. When there are two auditors on the board, two scores were
generated on two auditors, and then averaged.
9 Inside Directors of Former Public Officials: The ratio of inside directors who
were retired public officials was measured by summing the number of the inside
directors, and dividing them by the total number of inside directors.
15
Although not performed in this dissertation, one possible way is to determine appropriate level of weights by
running regression using each category as dummy independent variables against dependent variable, and
determine the level according to beta coefficient of each category. For example, weight for category 1 will be
expressed as‘w1=|b1| / (|b1|+|b2|+|b3|+|b4|)’ [Acknowledgement to Jay kwon in Economics department for
inspiring discussion]. For this dissertation, however the process was not conducted, it will be reflected in
further development.
114
9 CEOs with Elite Education: Elite education was measured by referring to the
top 100 of QS World Report College Ranking Systems as of year 2010. The annual
posting include top 500 international college rankings. Elite education was defined as
those who have undergraduate or doctoral degree[s] from the top 100. It was coded
as a dummy variable. 0 is non-elite status whereas 1 is elite status. The reason why it
is treated as a dummy rather than continuous variable reflecting the rank or score
index is that the ranking of individual institution is not static over time. However,
overall configuration of top notch rankings in general is less static. Thus, it was
thought more reasonable to reflect the overall 100 ranking as a factor rather than to
count individual score in defining elite education.
5.3.3. Control Variables
9 CEOs with Non-Management Background: Drawing from resource
dependence theory (Casciaro and Piskorski 2005; Pfeffer and Salancik 1978), CEOs’
less managerial expertise may increase the level of dependence of CEOs on board
directors with regard to management decisions. In the condition where such less
managerial expertise of CEOs, selecting outside directors based on social or political
considerations will be offset by the needs for more specialty or expertise in
managerial skill-sets. Thus, it was reasoned that CEOs’ less managerial expertise is
inversely linked to board independence. It was coded as a dummy variable; 0 is non-
management background whereas 1 is management background.
115
9 Ratio of Inside Directors with Managerial Expertise: In tandem with the logic
above, the ratio of inside directors who have managerial expertise or familiarity with
the firm was considered a factor accounting for selection of outside directors. Inside
directors mean board directors who are internally promoted inside the firm, which is
distinguished from outside directors in that outside directors are those who are
selected externally outside the firm (Davidson et al. 2008; Elsayed 2009; Gourevitch
2003). The roles of inside directors involve giving advice or providing information to
CEOs rather than monitoring or controlling. As with the supportive or supplementary
role of the directors, they are commonly referred to as executive directors to be
distinguished from outside directors or non-executive directors. It was reasoned that
a higher ratio of inside directors with managerial expertise will decrease CEOs’ need
for outside directors with such expertise, and result in a more room for selecting
outside directors based on social and political considerations. To measure the
managerial expertise of inside directors, those inside directors who have a
professional degree of finance, accounting, or business in general, are counted, and
then divided by the total number of inside directors on board.
9 Ratio of Government Funding to Total Revenue: The ratio of government
funding to total revenue was counted as an indicator that shows the degree of
dependence of a quango on the parent department (Banaszak-Holl et al. 1998; Guo
2007; O'Regan and Sharon 2002). When the dependence is high, political regulators
116
are more tempted to infiltrate political influences through political appointment of
CEOs as the salience of agent costs is considerable.
9 Rural Location: Assuming that board structural independence is inversely linked
to a higher degree of proximity between the CEOs and the government, geographic
location might also be considered a factor that affects the proximity (Bielefeld and
Murdoch 2004; Kono et al. 1998). As studies on urban sprawl showed, South Korea
is highly concentrated in the capital city in terms of government authorities and
politics (Kim 2000). The capital city or Seoul is therefore a primary epicenter of
central politics. When positing that geographic proximity is associated with social
proximity, it can be then reasoned that quangos which are located in the capital city
are more likely to be proximate to central politics than those in rural area. To verify
this point, a dummy variable is used to measure whether a quango is located in the
capital city or rural area. It is coded “1” if a quango is in the capital city and “0”
otherwise by simply referring to addresses of the organizations.
5.4. ANALYSIS
Before estimating board structural independence, the idiosyncratic structure of the
data needs to be appreciated to obtain more efficient estimation. The data of quangos are
117
clustered into five distinctive types
16
according to funding composition and organization
size. The clusters are highly unbalanced in terms of size (e.g. MA = 14, SMA = 13, FGE
= 17, CGE = 66, and OTR = 176), and the number of clusters is fairly small (N = 5).
When there are clusters or groups attached with unobserved fixed-effects specific to each
group, standard OLS estimation or random effect model is likely less efficient in terms of
goodness-of-fit because it assumes that observations are not correlated each other
(Johnston and DiNardo 1997). In the data, potential fixed effects are funding
composition and organization size that are specific to each cluster of quango type. If
such cluster-specific effects are present, the results of standard OLS estimation are likely
be biased downward by underestimating the true variance or standard errors, which
overall makes a model less efficient (Gelman and Hill 2007; Hun Myoung 2009). Thus,
the potential clustering effects should be first tested.
Tests for clustering effects or fixed effects involve an F-test. If we reject a null
hypothesis (p-value < 0.05), cluster-specific variances are present which makes fixed
effects models might be more efficient than standard OLS estimations. As a result of the
test, p-value was equal to 0.287 meaning that cluster-specific variances are not detected;
thus fixed effects estimations are not necessarily more efficient than standard OLS
16
Five types include (1) MA (Market-type Agency): Less than 15% government funding as revenue, (2) SMA (Semi-
market-type Agency): Over 15% government funding as revenue, (3) FGE (Fund Management Government
Enterprise): Contract entities undertaking fund management functions (4) CGE (Contract Government Enterprise):
Contract entities in general other than FGEs. (5) OTR: Other organizations not specified in the four types.
118
estimations. Nevertheless, it does not necessarily mean that standard OLS estimations
can readily be more efficient than fixed effects because they do not show that random
effects are present. LM test (the Breusch & Pagan Lagrangian Multiplier test) helps to
determine if random effects are present in the data. If we reject a null hypothesis (p-
value<0.05), random effects are present and fixed effects are not appropriate estimation.
The result was equal to 1.00, thus the null hypothesis was not rejected. It means that
random-effects are not appropriate. Overall, the results showed that the data has no
cluster-effects present in the data, but it has no random effects as well. This implies that
the observations have a certain degree of variances across cluster, but the impact of such
effects is not substantive. In order to reflect this idiosyncratic nature of data and to
represent cluster-specific effects in the models, pooled OLS with robust clustered
standard error is opted for. To make salient the difference across the types, dummy
identifiers for five types of quangos were attached to the models.
Pooled OLS Regression with five dummy identifiers was used to estimate board
structural independence. Since the models include variables of social network, regression
analysis was conducted against the entire sampling population of 286 South Korean
quangos. When using social network variables, sampling is not appropriate because
partial information through sampling often distorts and mal-represents the complete
information (Bland et al. 1997). Therefore, the complete set of sampling population was
used for statistical analysis.
119
5.5. RESULTS
Descriptive statistics and correlations are reported in Table 6 and Table 7,
respectively. Descriptive statistics show that quango CEOs generally have a high degree
of similarity with external political executives such as president and ministers at 0.632
and 0.788 respectively. This implies that the degree of coherence in the iron triangle of
CEOs, the president, and ministers is high, and that unity of power networks might be
strong. In contrast, CEO similarity with auditors is slightly below 0.5, which implies that
social similarity between CEO and auditors is modest. The ratio of government officials
sitting on boards as inside directors is fairly lower at 0.176 than expected. Considering
that norms of deference to CEOs are prevalent, and that CEOs are prone to possessing a
great deal of authority within the organization, the role of government officials as inside
directors for co-optation may be limited. It may be because CEOs themselves can carry
out political bridge functions. Also, the degree of elite education backgrounds of CEOs
is lower at 0.206 than expected. It may be either because the standards on elite education
used in this study was strict by limiting to only top three domestic institutions, or because
elite education is not counted as conclusive credentials for CEO position.
Overall, the descriptive statistics show that the coherence of the iron triangle or
power networks is fairly high, and personal attributes such as elite education are not
counted as significant credentials in explaining CEO position.
120
Table 6. Descriptive Statistics
Dependent Variable Mean S.D. Observations
Board Independence .573 .240 280
Independent Variable
CEO proximity to President .632 .166 236
CEO proximity to Minister .788 .160 280
CEO proximity to Auditor .483 .150 181
Ratio of Gov Officials in Inside Directors .176 .228 242
CEO Elite Education .206 .331 264
Control Variables
CEO Non‐Management .401 .490 277
Ratio of Insiders with Management Expertise .422 .409 280
Ratio of Gov Funding to Total Revenue .365 .356 286
Dum Rural Location .209 .407 286
Dummy Identifiers
17
17
To facilitate readers’ understanding regarding why mean values of dummy identifiers as represented like
above and how distribution of the types is shaped, a descriptive statistics is suggested below.
Type Sum Mean Std. Dev. Min Max
MA 14 .0480510 .126143 0 1
SMA 13 .0454545 .208664 0 1
FGE 17 .0594406 .236861 0 1
CGE 66 .2307692 .422063 0 1
OTR 176 .6153846 .487357 0 1
According to the table, a vast majority of quangos is occupied by market‐type agency (n = 176), and it is followed
by semi‐market‐types agency. Combining these two types account for the majority number of South Korean
quangos. Mean values of the dummy variables are calculated by sum of each type divided by total number of
observation (n = 286).
121
Type1. MA (Market‐type Agency) .480 .126 286
Type2. SMA (Semi‐Market‐Type Agency) .045 .208 286
Type3. FGE (Fund Mgm Gov Enterprise) .059 .236 286
Type4. CGE (Contract Gov Enterprise) .230 .422 286
Type5. OTR (Other types) .615 .487 286
The pair-wise correlation table shows that the links between the variables are
generally consistent with the hypothesized relations. The impacts of social similarity
between CEOs and the president, ministers, and auditors are salient by significant at 0.01.
Another salient variable is the ratio of government funding to total revenue of quangos.
As an index of dependence on governments, the dependence is linked to less
independence of boards
122
Table 7. Pairwise Correlations among the Variables
Significance Level, *P≤0.1, **P≤0.05, ***P≤0.01
1
2
3 4 5 6 7 8
9 10 11 12 13 14
1. INDEPENDENCE
2.CEO_PRESIDNT ‐.420 ***
3.CEO_MINISTER ‐.290 *** .104
4.CEO_AUDITOR ‐.230 *** .094
.007
5.CEO_ NONMGM ‐.040
.180*** .015 .236***
6.CEO_ELITE EDU .025
.042
.142** .171** ‐.246***
7.MGM_INDIR ‐.258 *** ‐.172*** ‐.021 ‐.128* ‐.122** .068
8.GOV_INDIR ‐.038
.010
.036 .155** .220*** ‐.032 ‐.111*
9.GOV_FUNDING ‐.230 *** .348*** .015 .398*** .186** ‐.085 ‐.198** .197**
10.RURAL .133 ** ‐.026
‐.013 ‐.136* .158** ‐.046 ‐.046 .135** ‐.111*
11.TYPE1_MA .103 * .068
.104* .217*** .208*** .010 ‐.178*** .218*** .190*** .072
12.TYPE2_SMA .072
‐.031
‐.112* ‐.025 ‐.079 ‐.092 .038 .027
.041 ‐.078 ‐.692***
13.TYPE3_FGE ‐.020
.051
‐.040 ‐.022 ‐.076 ‐.070 .024 ‐.133** ‐.117** ‐.056 ‐.318*** ‐.137**
14.TYPE4_CGE ‐.086
‐.121* .003 ‐.190*** ‐.121** .167*** .166*** ‐.192*** ‐.223*** .042 ‐.287*** ‐.124** ‐.057
15.TYPE5_OTR ‐.025
‐.021
‐.021 ‐.152** ‐.111* .060 .135** ‐.184*** ‐.194*** .011 ‐.276*** ‐.119** ‐.054 ‐.049
123
Table 8 displays the results of regression estimation for board structural
independence. Model 1 in table 8 is based on standard OLS estimation without
considerations of quango types, whereas the other models reflect the effects of quango
types as a dummy variable. As discussed above, board structural independence is
operationalized as the ratio of outside directors who share no functional similarity; and
the dependent variables have continuous value ranged from 0 to 1. 0 means complete
dependence while 1 means complete independence.
Overall, the results provide strong support for Hypothesis 1-1 and Hypothesis 1-2.
Hypothesis 1-1 predicts that social similarity between CEOs and the president is
inversely associated with board structural independence as a higher degree of CEOs’
politicization leads to passive boards. Hypothesis 1-1 is supported statistically significant
at α = 0.01. Hypothesis 102 predicts that social similarity between CEOs and ministers in
parental department is inversely associated with board structural independence. This
hypothesis is supported statistically significant at α = 0.01. Together, it implies that both
the president and ministers are a substantial source of political power of quango CEOs.
Those CEOs who have a high degree of social similarity with those political executives
tend to possess a high degree of power and motivation to arrange governing boards as
being more submissive. Hypothesis 2-1 predicts that social similarity between CEOs and
auditors on board is inversely associated with board structural independence as it fosters
norms of collusion in board. This hypothesis is supported statistically significant at α =
0.05. In effect, three actors including the president, ministers, and auditors, who are
identified by the interviewees as key players who have a substantive power over quango
124
management, all turn out to have significant explanatory power for board structural
independence. Alongside the variables of social similarity, Hypothesis 2-2 predicts more
inside directors of former public officials which implies channels for closer political
distance between quangos and governments are inversely associated with board structural
independence. The result displays expected direction of relation, but not significant.
CEOs’ personal attribute such as elite education background is hypothesized
associated inversely with board structural independence in Hypothesis 3-1. The result
however reports an opposite direction of relation from the hypothesis not significant. As
the beta coefficients are pretty low, and directions are not consistent with hypothesized
relations, it is tempting to disregard to the variable. Yet, the researcher consulted with
the informants about the result, and understood that what matters most is not CEOs’ elite
education backgrounds but CEOs’ similarity with educational backgrounds with de facto
power holders. To clarify this point, the variable is decided to be kept in the models.
Furthermore, the results for control variables provide interesting discussion points.
First, the ratio of inside directors who have management expertise turns out to be
significant at α = 0.05. The higher ratio implies chances that CEOs can garner
managerial advice on technical issues from inside-directors increase. When CEOs can
mobilize higher managerial expertise, the role of outside directors as vigilant monitors
will likely shrink. This expected direction is validated that the ratio is negatively linked
to board structural independence. The higher the ratio of inside experts is, the lower
board independence is. Likewise, the attribute of CEOs as non-management background
125
is positively linked to board structural independence. When CEOs lack managerial
knowledge, they will likely be reliant on fellow directors for advice or guidance.
The ratio of government funding to total revenue is included as control variable.
The ratio is an indicator to the extent which a quango is dependent on the parental
department with regard to monetary resource. It implies two aspects. First, higher
dependence means the nature of the entity is less oriented to market-type or business-type
operations. It then signifies that the management operates under less risk and less need
for strategic decisions or innovations. The position of CEOs, in this case, will be more
likely be entrenched and subject to political appointment. The finding supports this
expected relation. The higher reliance on government funding turns out to be inversely
associated with board structural independence.
Geographical location in rural areas is included as a control variable. As the sector
of quangos is highly centralized in the capital city, Seoul, it is anticipated that
geographical sitting in the city is associated with more chances for CEOs to gain access
to political leaders and lead to more politicized CEOs. In short, the city is seen as a locus
of inner group politics. The expectation is not statistically significant but displays an
anticipated direction of beta coefficient.
Dummy identifiers are used to display variations of effects across types of quangos.
The result shows that only the market-type organizations (MA) are associated with
structural independence of board. It is consistent with my theoretical point of view
because market-type quangos are least dependent on the government with regard to
126
funding and personnel. A distance from government influences on such resources seems
to grant more market-orientation for the organizations, and thereby the boards could be
more structurally independent. In contrast, the FGE (Fund Management Government
Enterprises) type of quango turned out to be associated with less structural independence
of board. This implies that government control and influence are a condition that thwarts
structural independence of board governance.
127
Table 8. Result of OLS Regression
All standard errors are clustered robust standard error. Significant level, *p≤0.1, **p≤0.05, **p≤0.01
DV: Board Independence Outside Directors Dissimilarity with CEOs
Model 1 Model 2 Model 3 Model 4 Model 5 Model6
Beta Std. Beta Std. Beta Std. Beta Std. Beta Std. Beta Std.
IVs
CEO_PRESIDNT ‐ .392
***
.061 ‐.390
***
.058 ‐.393
***
.063 ‐.392
***
.061 ‐.394
***
.060 ‐.389
***
.059
CEO_MINISTER ‐.377
***
.106 ‐.391
***
.111 ‐.381
***
.113 ‐.382
***
.115 ‐.377
***
.107 ‐.375
***
.106
CEO_AUDITOR ‐.225
**
.086 ‐.260
**
.096 ‐.230
**
.097 ‐.231
**
.085 ‐.227
**
.090 ‐.227
**
.087
CEO NONMGM .028 .025 .025 .025 .027 .026 .033 .025 .027 .025 .027 .025
CEO ELIT EDU ‐.050 .037 ‐.055 .036 ‐.055 .038 ‐.061 .039 ‐.043 .042 ‐.049 .038
CVs
MGM INDIR .111
**
.014 0.126
***
.011 .109
**
.014 .115
**
.013 .115
**
.015 .114
**
.014
GOV INDIR .111
*
.038 0.088
**
.025 .111
*
.037 .105
*
.036 .106
*
.036 .107
*
.039
GOV FUNDING ‐.074 .025 ‐0.063 .025 ‐.066 .029 ‐.087 .025 ‐.076 .025 ‐.076 .025
RURAL DUMMY .022 .048 0.013 .049 .020 .049 .008 .050 .023 .048 .023 .049
Dummy
MA .122
**
.013
SMA ‐.035 .020
FGE ‐.111
***
.011
CGE ‐.030 .030
OTR ‐.025 .020
N 140 140 140 140 140 140
R .434 .446 .435 .445 .434 .434
R
2
.390 .399 .386 .397 .386 .385
128
CHAPTER 6: SUB-MODEL 2 - FIRM-LEVEL
EXPENDITURES
6.1. EXPENDITURES AND SOCIAL EMBEDDEDNESS
The status of autonomy of quangos on the fiscal decisions is based on the
assumption that the decisions are driven by professional expertise, not by political
considerations (Flinders 2004; Flinders and Buller 2006). That is, the insulation of
quango fiscal management from political influences accounts for why quangos are
granted, to some extent, with autonomy and independence. The infusion of business-like
ideology and practice into public sector organizations aims essentially to be a steward of
public money by increasing the value for money (‘efficiency’) through corporate-style
management.
This business-inspired efficiency explains the rise of non-state hybrid organizations
or, more commonly, quangos as administrative reform programs (Baker 1982; Cole
2000). The programs entail two principles on fiscal management: (a) outcome-based
allocation of government money (Dubnick and Frederickson 2010), and (b) increased
discretion of quangos on fiscal decisions such as expenditure and investment (Gist and
Hill 1984).
129
Nevertheless, when the assumption of de-politicization is violated as quangos are
affected by external political influences, and thus oriented toward a particular interest
over public interest at large, the status of autonomy and independence will likely be
questioned (Pollitt and Talbot 2004; Szanton 1991). Indeed, given that quango senior
executives generally tend to be appointed through political considerations such as
nepotism or spoils, the violation may not be uncommon (Deacon and Monk 2000; Wilson
1995).
The aspect of political bias of quango fiscal decisions would explain public blame
for waste of public sectors (Davis 1996; Hart, Haughton, and Peck 1996). Opportunism
and agency costs are embedded in the organizations, and they inhibit them from being a
steward of public money who is accountable to public interest (Davis, Schoorman, and
Donaldson 1997; Donaldson and Davis 1991). Some studies pointed out that, when the
adoption of corporate-style idea and practice is decoupled from de facto operation, it will
merely be strategic steps taken to outflanking or blame avoidance (Van Thiel 2006;
Oliver 1991; Baker 1982; Bertelli 2006; Deacon and Monk 2000; Payne and Skelcher
1997). This point deserves an attention as it addresses an issue of quango management in
terms of its stewardship of financial accountability.
130
6.2. THEORY AND HYPOTHESIS
6.2.1. HIDDEN AGENCY COSTS OF QUANGOS
The idea that public administrators are selfless or loyal servants without any
propensity of being opportunistic or self-serving was considered mythical by public
choice (Mueller 1979; Downs 1957). In this view, the governments can often pursue the
varied objectives that benefit only small group of party members (Gist and Hill 1984).
The objectives can include personal pecuniary gains, personal power, image in history,
and lofty personal ideologies (Breton 1974). The special interests often engage in
collusive actions between legislature and governments in a form of logrolling (Tullock
1959; Downs 1957).
Although the validity of this idea has been proved in the context of governments, it
may be applicable to agency problems which are embedded in ministry-quango
relationship. The arm’s length apparatus of governments are less visible domains from
public eyes, so more often than not they are seen as hidden costs or shadow governments
that conceal costs of governments from public scrutiny (Eger 2006; Mayhew 1980). To
thwart the propensity of opportunism of public managers, and the collusion politics
between ministries and quangos, some structural treatments are adopted such as
performance-based allocations of resources (Dubnick and Frederickson 2010) and
corporate-style governing boards (Wilks 2007).
131
The problems arise when the structural mechanisms do not operate appropriately in
controlling agency costs. This happens particularly when the principals and agents have
social or cognitive attachments to each other, or when both parties are more directly
intertwined with shared interests (Baker and Faulkner 1993; Santerre and Neun 1986).
6.2.2. INNER GROUP BIAS AND FISCAL DECISIONS
Structural design to monitor and control agency problems of quangos involve two
mechanisms: (a) regulatory review by parental ministries or cabinets, and (b) oversight
and controls by internal governing boards. In South Korean quango setting, party
governments have top-down authority to approve or disapprove of fiscal proposals which
are submitted by the management of quangos. Because agency type quangos are
dependent on the ministries for decisions regarding allocated budgets or permitted
expenditures, those quangos are politically subordinate to them. The principle of de-
politicization generally holds in implementing granted resources, but it does not well hold
in the decision of granting per se. The ministries can determine the amount of grants, and
the items of quango expenditures (Bertelli 2008; Wilson 1995).
When the decisions are made by outcome-based or public-need-based rationality, it
should be fine. Problems however arise when the decisions are biased toward social
attachments (Uzzi 1996). It is reasoned that governmental resources, which are accrued
from public money, are easy to be allocated to agencies based on informal relations,
rather than business rationality. Due to the elusiveness of the measurement of
132
performance or effectiveness of public management, the decisions might be subjective or
susceptible to informality (Jackson and Holland 1998).
Such inner group bias may be formed in the intertwined relations amid most salient
key players. In South Korea, an iron triangle between the president, ministers, and
quango senior executives relates to the inner group.
18
The popular press has claimed that
the oligarchic triangle resulted in excessively benevolent monetary benefits, other than
compensation, to quangos in a form of ‘discretionary expenditure.’ The expenditure is
non-fixed item of costs that can be spent at discretion of the senior executives. As the
external regulators are not sufficiently rigid on the amount and uses, the costs are often
seen as open to private uses. As such, the costs have been accused of a representative
waste of public sector.
H 1-1: CEOs’ informal proximity to president will likely lead to more
discretionary expenditure.
H 1-2: CEOs’ informal proximity to the minister of Ministry of Strategy and
Finance will likely lead to more discretionary expenditure.
18
About the salient actors, the previous chapter already discussed that a collusive relationship between quango
CEOs, auditors, and the government is a condition for inner group politics which biases decisions made by the
quango management. Following the line of discussion, this chapter also looks at how the relationships affect
fiscal decisions of the management.
133
H 1-3: CEOs’ informal proximity to auditors on boards will likely lead to more
discretionary expenditure.
6.2.3. NETWORK CENTRALITY AND BARGAINING POWER OF CEOS
The model of representative democracy conceives that the government is the party
in control of the legislature (Niskanen 1971, 1991; Stein 1981). In almost all countries
that adopt the idea and practice of liberal democracy, the regime is managed by elected
political executives who come from the dominant party of parliaments or legislature
(Muto 2000; Waldo 1948). The political nature of public management implies that
seemingly neutral bureaucratic decisions are also subject to political considerations of the
special interests (Koppell 2000).
Since the top executives of the governments are shaped by party politics and
election mechanisms, social links to the members of the domain parties account for
bargaining power of policy actors. Besides the president and ministers, the party
members in general also have voting power over policy decisions as well as regulatory
authority over the outcomes. Thus, in liberal democracy, these members would constitute
a powerful segment of policy decisions.
H 2-1: CEOs’ high centrality within informal networks of the dominant party
members will likely lead to more discretionary expenditure.
134
H 2-2: Outside directors’ high centrality within informal networks of the
dominant party members will likely lead to less discretionary expenditure
6.3. VARIABLES
6.3.1. Dependent Variable
The average rate of increases in non-fixed discretionary expenditures during the
CEOs’ tenure position: The rate was computed by the average rate of annual increases in
the expenditures during the CEOs’ tenure. CEOs are typically appointed based on
political considerations, and this makes their tenure tend to be in line with election cycles,
year 4 to 5 on average. Each year, budgetary reviews are conducted by both ministries
and parliaments, and in most cases the budgets of quangos increase reflecting national
prices. The increase rate is thought here to be not invariant across quangos because the
difference of bargaining power across the quango executive managers.
135
The Average Rate of Increases in Non‐fixed Discretionary Expenditures
during the CEOs’ Tenure Position
Average Rate =
∑
Y
Y
Y
N
Where:
Yt = The amount of expenditures of Year t
Yt‐1 = The amount of expenditures of Year t‐1
N = CEO’s tenure of office
Unit = One million Won (Korean Currency) Æ About 1,000 dollars (i.e. $905.40)
The non-fixed discretionary expenditures are typically utilized by senior executives
to private uses. As the items of expenditure are not defined and specified by laws,
chances of private uses are fairly high. In contrast, the fixed expenditure such as payroll
costs or production costs tend to have a limited room for discretionary implementation as
the items for uses are predetermined by laws. The uses are under annual monitoring and
scrutiny by parental ministries, auditors, and the legislature. Due to its relative high-
visibility, the fixed expenditure cannot be utilized by senior executives. Given the
conditions, senior quango executives typically seek out a way to increase the non-fixed
discretionary expenditure while to decrease the fixed one.
136
6.3.2. Independent Variables
9 CEOs’ Informal Proximity to President. Informal proximity is defined as a
shared experience of direct physical contacts through year-overlapping co-
membership in a certain groups, affiliations, organizations, or activities. The types of
co-memberships include (a) governmental commission, (b) corporate boards (e.g.
Hyundai), (c) presidential transition committee, (d) college student councils, and (e)
religious groups. The proximity was counted if a CEO has a year-overlapping
membership with president one of the types of social groups. The proportion was
calculated by summing the number of the co-memberships, and dividing them by the
total number of categories.
9 CEOs’ Informal Proximity to the minister of Ministry of Strategy and Finance.
The same measure above was used. The minister of Ministry of Strategy and Finance
is taken as the most salient actor based on the qualitative interviews with the
informants who possess de facto authority over bureaucratic decisions with regard to
monetary resource flows. The minister has more substantial influence than the
ministers in parental departments of quangos in dealing with fiscal decisions of
central governments do.
137
9 CEOs’ Informal Proximity to auditors on boards. The same measure above was
used.
9 CEOs’ Centrality with the Networks of Ruling Party Members. Network
centrality was measured by employing the Bonacich Centrality Index (i.e. normalized
score) of social network analysis. From the sociological approach to power, network
centrality is generally assumed to produce power (Bonacich 1987; Mizruchi and
Bunting 1981). The dyads are seen as linked if they share at least one of the co-
memberships. The ego-centric centrality scores of quango CEOs were computed
against the networks of ruling party members (N=183).
Bonacich Centrality ‐ C
∑ r
C
N
Where:
N = Number of individuals linked with i
Rij = Intensity of the particular link
Cj = Centrality of the individuals linked with i
138
6.3.3. Control Variables
9 Outside Director’s Centrality with the Networks of Dominant Party
Members. The same Bonacich Index was used against the outside directors. It was
reasoned that the network-conferred power of the directors may offset that of quango
CEOs, and will be a precondition for rigid monitoring.
9 Ratio of Outside Directors with Business Expertise. Those outside directors
who have professional degree of finance, accounting, or business in general, or have
functional backgrounds of corporate executives, are counted as having managerial
knowledge or expertise. The ratio was calculated by summing the directors with
managerial expertise and experience, and dividing them by the total number of
outside directors.
9 Organizational Size. Size of quangos may account for budgetary increases
because typically bigger quangos tend to undertake more critical functions in more
close collaboration with the governments. The size is therefore equated with power
and authority of the organization. Logarithm of the sum of total capitals and assets is
calculated.
139
6.4. ANALYSIS
Before estimating average increase of non-fixed discretionary expenditures during
CEOs’ tenure, the idiosyncratic structure of the data needs to be appreciated to obtain
more efficient estimation
19
. The data of quangos are clustered into five distinctive types
20
according to funding composition and organization size. The clusters are highly
unbalanced in terms of size (e.g. MA = 14, SMA = 13, FGE = 17, CGE = 66, and OTR =
176), and the number of clusters is fairly small (N = 5). When there are clusters or
groups attached with unobserved fixed-effects specific to each group, standard OLS
estimation or random effect model is likely less efficient in terms of goodness-of-fit
because it assumes that observations are not correlated each other (Johnston and DiNardo
1997). In the data, potential fixed effects are funding composition and organization size
that are specific to each cluster of quango type. If such cluster-specific effects are present,
the results of standard OLS estimation is likely be biased downward by underestimating
the true variance or standard errors, which overall makes a model less efficient (Gelman
and Hill 2007; Hun Myoung 2009). Thus, the potential clustering effects should be first
tested.
19
Tests that are used in this section for data structure overlaps mostly with the ones employed in the previous
chapter because the same set of data was examined.
20
Five types include (1) MA (Market-type Agency): Less than 15% government funding as revenue, (2) SMA (Semi-
market-type Agency): Over 15% government funding as revenue, (3) FGE (Fund Management Government
Enterprise): Contract entities undertaking fund management functions (4) CGE (Contract Government Enterprise):
Contract entities in general other than FGEs. (5) OTR: Other organizations not specified in the four types.
140
Tests for clustering effects or fixed effects involve an F-test. If we reject a null
hypothesis (p-value < 0.05), cluster-specific variances are present which makes fixed
effects models might be more efficient than standard OLS estimations. As a result of the
test, p-value was equal to 0.312 meaning that cluster-specific variances are not detected;
thus fixed effects estimations are not necessarily more efficient than standard OLS
estimations. Nevertheless, it does not necessarily mean that standard OLS estimations
can readily be more efficient than fixed effects because it does not show random effects
are present. LM test (the Breusch & Pagan Lagrangian Multiplier test) helps to
determine if random effects are present in the data. If we reject a null hypothesis (p-
value<0.05), random effects are present and fixed effects are not appropriate estimation.
The result was equal to 1.00, thus the null hypothesis was not rejected. It means that
random-effects are not appropriate. Overall, the results showed that the data has no
cluster-effects present in the data, but it has no random effects as well. This implies that
the observations have a certain degree of variances across cluster, but the impact of such
effects is not substantive. In order to reflect this idiosyncratic nature of data and to
represent cluster-specific effects in the models, pooled OLS with robust clustered
standard error is opted for. To make salient the difference across the types, dummy
identifiers for five types of quangos were attached to the models.
Pooled OLS Regression with five dummy identifiers was used to estimate board
structural independence. Since the models include variables of social network, regression
141
analysis was conducted against the entire sampling population of 286 South Korean
quangos. When using social network variables, sampling is not appropriate because
partial information through sampling often distorts and mal-represents the complete
information (Bland et al. 1997). Therefore, the complete set of sampling population was
used for statistical analysis.
142
6.5. RESULTS
Table 9. Descriptive Statistics
Dependent Variable
Mean S.D. Observations
Expenditure .611 .221 269
Independent Variables
Proximity to President .562 .281 246
Proximity to Minister .225 .085 279
Proximity to Auditor .483 .103 190
Centrality of CEO in Ruling Party (log) .692 1.483 286
Centrality of Outsider in Ruling Party (log) .816 .184 236
Ratio of Outsider with Business Expertise .459 .277 282
Organization Size (log) 10.476 2.746 262
Dummy Identifiers
22
Type 1. MA .615 .487 286
Type 2. SMA .230 .422 286
Type 3. FGE .059 .236 286
22
About descriptive information of dummy identifiers, the information must be same as the ones used in the
previous chapter because the same set of quangos was examined. Thus, the same footnote used in the previous
chapter was copied here to facilitate readers’ understanding regarding why mean values of dummy identifiers as
represented like above and how distribution of types of quangos is shaped, a descriptive statistics is suggested
below.
Type Sum Mean Std. Dev. Min Max
MA 14 .0480510 .126143 0 1
SMA 13 .0454545 .208664 0 1
FGE 17 .0594406 .236861 0 1
CGE 66 .2307692 .422063 0 1
OTR 176 .6153846 .487357 0 1
According to the table, a vast majority of quangos is occupied by market‐type agency (n = 176), and it is followed
by semi‐market‐types agency. Combining these two types account for the majority number of South Korean
quangos. Mean values of the dummy variables are calculated by sum of each type divided by total number of
observation (n = 286).
143
Type 4. CGE .048 .216 286
Type 5. OTR .045 .208 286
Descriptive statistics and correlations are displayed in Table 9 and Table 10,
respectively. Descriptive statistics show that CEOs’ social proximity to president
through informal networks is fairly high as it is equal to 0.562. In contrast, social
proximity to ministers is lower than expected. Yet, it may be consistent with the reality
in some aspects. First, the research considers ministers only in the two departments such
as Ministry of Knowledge and Economy and Ministry of Strategy and Finance which
have substantive authority in approval of fiscal decisions made by quangos, but the
ministers of the departments are not in the position of selecting or appointing quango
CEOs. Thus, it seems reasonable that CEOs and the ministers share limited social
linkages. Second, in Korean contexts the positions of quango CEOs are often regarded as
the war spoils of presidential election. Thus, the positions are prone to be filled with
election staffs who contribute to presidential election, or with members of political party
with which president is affiliated. It explains why informal connectivity between the
president and quango CEOs is fairly high. It is also evidenced by high network centrality
of CEOs in the network of parliamentary members in ruling party at 0.692 of normalized
score. The pair-wise correlation table shows that the links between the variables are
overall consistent with the hypothesized links.
144
Table 10. Pairwise Correlations among the Variables
Significant Level, **P≤.05, ***P≤.01
1 2 3 4 5 6 7 8 9 10 11 12
1. EXPENDITURE
2. CEO_PRESIDNT .239***
3. CEO_MINISTER .055 .071
4. CEO_AUDITOR .144** .042 .043
5. CEO_CENTRALITY .158** .686*** .067** .030
6. OUTSIDER_CENTRALITY ‐.113 ‐.130 ‐.143 ‐.102 ‐.155**
7. ORG_SIZE ,094 .081 .074 .376*** .053 .158**
8. BUSINESS_RATIO ‐.110** ‐.567** ‐.013 ‐.130** ‐.188** ‐.121** .254***
9. TYPE1_MA .089 .032 .101 .128 ‐.067 .020 ‐.307*** ‐.075
10. TYPE2_SMA ‐.015 ‐.013 ‐.108 .032 .062 ‐.038 ‐.050 .173** ‐.693**
11. TYPE3_FGE .116 .064 ‐.041 ‐.034 .034 .087 .078 ‐.009 ‐.318** ‐.138
12. TYPE4_CGE .058 ‐.106 .003 ‐.152 ‐.034 ‐.050 .410 ‐.060 ‐.287 ‐.124 ‐.057
13. TYPE5_OTR ‐.130 ‐.009 .025 ‐.118 .028 ‐.017 .307 ‐.096 ‐.276 ‐.119 ‐.055 ‐.049
145
Overall, the descriptive statistics and pair-wise correlation show there is a high
degree of social cohesion between elected politicians and quango CEOs as assumed.
Table 11 displays the results of regression estimation for increase in discretionary
expenditure during CEOs’ tenure. Model 1 in table 3 is based on standard OLS
estimation without considerations of quango types, whereas the other models reflect the
effects of quango types as dummy variables. As discussed above, dependent variable is
the average rate of increases in non-fixed discretionary expenditures during the CEOs’
tenure position. The rate has continuous value ranged from 0 to 1, and the mean value of
the rate is 0.611 as descriptive statistics reports.
The family hypotheses H1-1, H1-2, and H1-3 predict that CEOs’ informal
proximity to those who are in position to review and control fiscal decisions of CEOs will
likely lead to more annual increase in discretionary expenditure. It is implied there that
informal proximity may bear inner group bias in fiscal oversights. Hypothesis H1-1
counts the president as being in the position, while Hypothesis H1-2 and Hypothesis H1-
3 count ministers and auditors as being in the position, respectively. Overall, the results
provide support for Hypothesis H1-1 and H1-3 with statistical significance at α = 0.05.
However, H1-2 is not supported by the result as it is not statistically significant. In terms
of impact of beta coefficients, the president turns out to be most significant player
capable of exerting substantive power at β = 0.234, as predicted by Hypothesis 1-1. The
result also reports that auditors are substantive actor at β = 0.195. The results are
consistent with reality-based intuition because the positions of quango CEOs are prone to
146
be regarded war spoils of president election; and it implies that the CEOs are likely to be
affiliated with president in regard to party political affiliations or interpersonal social
groups. Normally, running partners of election tend to be those who are identified or
affiliated closely with candidates as those are more trustworthy. On the contrary,
ministers do not possess power to select or appoint quango CEOs rather the ministers
themselves are appointed by political considerations so as are quango CEOs. This point
was validated by some informants through following interviews. To sum up, the findings
are generally consistent with practitioners’ experience.
Hypothesis 2-1 predicts that high network centrality of CEOs is positively
associated with more increase in non-fixed discretionary expenditure whereas Hypothesis
2-2 predicts that high network centrality of outside directors has inverse relationship with
the expenditure. The two hypotheses show hypothesized direction of relationship, but
turn out not to be statistically significant. After the non-results came out, following
interviews to validate this point were conducted. The informants suggested that in
political arena overall centrality within power networks is not equated with de facto
power standing because even within the ruling party there is power conflict over next
election; thus it makes the party constituted by some coalitions. It was suggested further
that better measure would be identifying a dominant coalition and recalculate centrality
within the coalition. It seems to be perceptive advice. However, because it is beyond the
scope of this dissertation, it remains for further development.
147
Two control variables are included in the models. Although hypotheses were not
formulated for the variables, it is worth discussing because the variables also offer
theoretical implications. First, organizational size (log of capital) is included because
bigger size of organizations might grant more power to CEOs and concomitant more
discretionary expenditure as pecuniary incentives. The result however reports that the
variable is not statistically significant while the direction of relation matches the
hypothesis. Considering that organization size has provided empirical evidence for CEO
power standing within the organization, the non-result is interesting (Bradshaw 2009;
Finkelstein 1992). It may imply that public sector organizations are more subtle about
CEO power because the operation is largely political. Second, the ratio of business
outsiders on governing board is incorporated because large number of the outsiders
means that board vigilance on controlling management will be likely increased. Thus, it
was expected that the ratio is inversely associated with increase rate of expenditure.
However, the result did not support this.
Types of quangos are included in the models as dummy identifiers, and the findings
are interesting. The result shows that types of quangos such as FGE and CGE which are
dependent on governmental funding as their primary revenue tend to increase the non-
fixed discretionary expenditure at α = 0.05. The findings are consistent with so-called
inner group hypothesis (Useem 1982) that higher fiscal dependence is equated with closer
working relationship and, in turn, with increased chances for cohesive connectivity.
According to this hypothesis, those CEOs who are sitting in government-type quangos
are more likely to identify themselves with government officials, and to grant them more
148
administrative power and authority. This argument was supported by the results that only
the cases of government-types quangos are positively associated with the expenditure
regardless of their size.
149
Table 11. Results of OLS Regression
All standard errors are clustered robust standard error. Significant level, **p≤0.05, ***p≤0.01
DV: Expenditures during CEOs’ Tenure
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Beta Std. Beta Std. Beta Std. Beta Std. Beta Std. Beta Std.
IVs
CEO_PRESDNT .234 ** .021 .243** .021 .232** .021 .284 ** .021 .276** .021 .260** .021
CEO_MINISTER .051 .017 .045 .018 .053 .018 .049 .017 .068 .017 .063 .017
CEO_AUDITOR .195
**
.016 .192
**
.016 .195
**
.016 .017
**
.015 .197
**
.015 .186
**
.016
CEO_CENTRALITY .093 .019 .096 .019 .091 .019 .108 .019 .093 .019 .089 .019
OUTDIR_CENTRAL ‐.106 .203 ‐.110 .204 ‐.106 .203 ‐.086 .200 ‐.076 .204 ‐.115 .202
CVs
ORG_SIZE .091 .009 .084 .009 .075 .009 .045 .003 .032 .010 .094 .009
BUSINESS_RATIO ‐.111 .146 ‐.112 .110 ‐.137 .112 ‐.123 .116 ‐.128 .113 ‐.129 .117
Dummy
TYPE1_MA .049 .042
TYPE2_SMA .020 .042
TYPE3_FGE .194
**
.095
TYPE4_CGE .182** .078
TYPE5_OTR ‐.137 .078
N 150 150 150 150 150 150
150
CHAPTER 7: DISCUSSION
7.1. RHETORIC-REALITY GAP BETWEEN DE-POLITICS AND
INFORMALITY
Overall, the findings of this dissertation suggested that there is the rhetoric-reality
gap in the apolitical mode of quangos because it is not immune to informal influences
from party politicians (Bertelli 2006). According to the findings, the South Korean
quangos are subject to political influences which are channeled through power networks
of elites; and most salient key players are the heads of the administration including
president and ministers. Considering that South Korea is characterized by
majoritarianism with regard to political systems, the findings are consistent with the
context, but in terms of the magnitude of their impact on the management of quangos
they were surprising because their statistical significance was fairly high (Amenta and
Poulsen 1996; Bertelli 2006). It implies that the political influences are of substantive
impact the management rather than modest affect. It would make quangos vulnerable to
blames for being defensive practice to hedge quangos’ political bias and hidden costs by
party political influences. This point is resonant with the arguments of ‘inner group
politics’ (DiMaggio and Useem 1978; Useem 1984; Useem 1978, 1979, 1982, 1984,
1985, 1988; Useem and Karabel 1986) and ‘elite dominance’ of governments (Domhoff
151
2009). Chances that power and authority over policy decisions and public administration
are high when the upper-class of elites is coherent, and structural reforms can be rhetoric-
only if class-wide interest is rationalized through legitimate forms of decision-making
institutions (McDonald and Westphal 2011). Overall, this dissertation corroborated this
point empirically.
The theory of public administration has long been neglecting this aspect of social
class, social relations, and decision bias potential in the public sector organizations.
Being largely a normative science, it tended to outline a set of normative principles about
appropriate norms and codes of conduct to guide behaviors of public officials into public
interest. In the meantime, less visible social aspects such as social networks and relations
have not been infiltrated into the field. When it addresses social network as central foci
of the research, it generally tended toward macro-level effectiveness of inter-
organizational collaboration while largely overlooked inter-personal or inter-unit
networks, not to mention power networks of elite. The systematic missing is largely due
to the fact that the elite networks are covert and their relations are hard to be measured.
In this respect, this study has sought to provide a way to tap into the problems by
referring to the studies of corporate governance research in business management studies.
By doing so, this dissertation expected to pave a way to empirically investigating the
phenomena with more rigorous methods. Moreover, it expected to point the
directionality of research to studies of elites in public sector organizations. Although
152
there is an ample amount of public sector leadership, empirical examination of the
conditions that affect behaviors of the sector leaders into either accountable or
unaccountable ones is virtually none. Given the huge amount of power and responsibility
granted to public sector leaders, social conditions like social embeddedness affecting
their behavior deserve more attention. While being oriented to normative accounts, this
aspect has been overlooked so far.
The trend of administrative reforms and quangos as byproducts has been dominant
mode of reinventing or restructuring governments to cure their inertia, waste, and
political bias. The reforms have been devoted to structural designs such as
disaggregation, privatization, and contract-out. The structural arrangements are however
not necessarily conducive to intended outcomes because a complex interaction of various
factors can thwart the course of process into a random direction. Thus, critical
considerations of operational process need to be incorporated into the examination. In
other words, the trend of administrative reforms ought to be assured if the structural
treatments are accompanied by operational compatibility or vice versa. Social factors can
bias operations, and it would result in unintended consequences. This dissertation
implicitly touched on this issue to suggest some caveats to blind proponents of
government reforms who believe in that ideas and practices of market-oriented
governments and business-like administration will readily lead to a market-like and
business-like efficiency in public sector. Nevertheless, operational biases from social
153
factors can gravitate to the structural arrangements toward undesirable consequences.
This dissertation would like to be a logical rationale for concerned scholars who are
anxious about blind adoption of business orientation into public sector.
7.2. Originality/Value
This study should be understood as crossover research that incorporates typical
subjects (e.g. corporate governance) of business research into the contexts of public
administration research (Ahrens, Filatotchev, and Thomsen 2009; Bowen 1994; Daily,
Dalton, and Cannella 2003; Davis 2005). Whereas the infusion of business-inspired
practices such as governing boards marks the trend of governmental reforms, the boards
of public organizations have not been paid sufficient attention (Villadsen 2011;
McCambridge 2004; Grissom 2010). Given the long tradition of public administration
research as being normative science, such micro- and process-oriented stance may require
more lead time to be applicably imported (Denhardt 1984). This study is an initial step to
extend corporate governance research into quangos to account for their agency costs.
Whereas there is a plethora of network research in public administration, they tend
to be exclusively focusing on inter-organizational networks and their effectiveness as
alliance benefits. The studies broadened the scope of public management research
because they moved beyond the cage of bureaucracies. Still, micro dynamics stemming
from inter-personal networks in public sectors and their outcomes have largely remained
154
as least explored territories. This dissertation is an initial attempt to pave a way to the
territories and to point scholarly interests into the way.
The classic and still persistent debate regarding the dichotomy of administration-
politics, and the identity issue of public administration, are implicitly touched on. The
debate generally seeks to ontologically draw a fine line or dissolve the line, but more
critical point of view ought instead to be placed on the gap between macro-design (‘ex
ante’) and micro-operation (‘ex post’) of the designed dichotomy. Without it, the debate
will be endless because there are always counter evidences supporting both aspects of
rigid distinction or non-distinction. This study recognizes this aspect heedful of both
over-simplification of rigid dichotomy and over-complication of non-dichotomy.
7.3. Limitations
Despite the significant value and originality, this study is not without some
limitations.
First, the generality of findings is limited to South Korean cases. As discussed
earlier, quango reform follows country-specific trajectories. It might be explained
partially by operational culture or administrative ethos, but the validity is confirmed only
when empirically corroborated. Thus, it is not comfortable enough to claim for
generality of the findings. Still, by revealing that social relations function as forces
155
influencing quango management in tangible areas such as board structure and fiscal
decision, the findings provide valuable insights stretching beyond local contexts.
Second, because the information of public sector organizations tend to be covert
and not to be completely accessible to the public, there are, to some extent, missing
values embedded in the data. It ended up with a reduced number of sampled
organizations from 286 to 140 in Chapter 5 and 150 Chapter 6. Indeed, when the
researcher conducted coding on personal information, information on politicians is prone
to be limited. Although the amount of missing values is not so significant, completeness
of the data is still not attained. Given that the analysis uses network data, it is possible
that incompleteness of such data might lead to distorted information regarding networked
relationship, but it should only be considered inevitable limitations of empirically-
grounded and data-driven social science research. Likewise, it should be admitted that
the media archive may not present perfect information because missing or bias present in
the data sources can be anticipated. Despite the likelihood, given the extensiveness and
accuracy of the media archive, it was assumed that the trustworthiness should be high.
Third, the analysis is cross-sectional capturing just a particular moment of time, so
it generally lacks of showing the patterns of trend. One may argue that, in this regard, the
analysis cannot be completely representative to the reality. In response to the verdict, the
ALIO data platform was established just a couple of years ago, and is still in the process
of updating, so the chances of data acquisition were inherently limited. In addition, as
quango management is cyclic annually dependent on annual budgetary cycles of the
156
governments, the snapshot of a year-long period can be taken as a sort of sampling which
can claim for generality.
Fourth, some other limitations at analytic level were already presented in result
section of Chapter 5 and Chapter 6. For example, when indexing similarity and
dissimilarity in dyadic relations, it was assumed that each category (e.g. birth place, high
school, college, and religion) has same weight. But, in reality different category may
have different significance. Similar such issues with regard to operationalizations need
not to be addressed again in detail, but I thought it is worth referring here. Further
development ought to follow to advance research.
7.4. NEXT STEPS (‘FUTURE RESEARCH AGENDA’)
Public policy or public management as the outcome of elite networks should be
fertile locus of research. Network research has been prevalent in public administration
research, and it has been confirmed that there is a plethora of network research in the
field. Despite the popularity, however, little research has been conducted on the link
between inter-personal relations at the top and a variety of macro-policy decisions and
organizational decisions (Villadsen 2011). Potential candidate target variables may
include, but not limited to, behavioral similarity (Mizruchi 1989), budgetary allocation
(Gilbert and Specht 1974; Stein 1981), distributed policy (Rich 1989), contract agency
selection (Pollitt and Talbot 2004), agency death (e.g. abolishment, demise, bankruptcy,
157
or dissolution) (Jacobson 1997; Sutton 1987), and intra-restructuring (Van Thiel 2006). A
variety of potential research can be addressed depending on what target outcomes are
considered with regard to a function of inter‐personal relations at the top of public sector.
Figure 6. Multidimensional Theoretical Framework
Formal Structure
Behavioral
Structure
Behavioral Process
Task Formalization
/Incentive Structure
(i.e. Economics)
Power Positions
(i.e. Politics)
Team Decision‐Making
(i.e. Social Psychology)
Laws and Regulations
(i.e. Laws)
Social Networks
(i.e. Sociology)
Symbolic Management
(i.e. Semiotics/Sociology)
Structure‐
oriented
Process‐oriented
(Hambrick, Werder, and Zajac 2008; Huse et al. 2009)
Admittedly, public administration research has been oriented toward studies of
formal structure such as regulation, formalization, and incentive design (Agranoff and
McGuire 2001; Rethemeyer and Hatmaker 2008). The potential applicability of
interpersonal networks and its impact in public sectors therefore would be able to move
beyond the structure orientation of the research. By extending into more behavioral or
process-oriented dimension of theoretical framework, it is claimed here that theory of
public administration will likely be more enriched and sophisticated. As a sort of cross-
158
over research, this dissertation seeks to pave a solid way to boom of promising but
unexplored public sector phenomena.
In addition, the research framework and methods can be extended to other subjects.
For instance, other types of public organizations have governing boards and political
decision making such as school boards, ministry boards, and evaluation commissions.
These will be viable subjects. In a related vein, research foci of inter-personal networks
and their outcomes are not confined in quangos but applied to other relational parts of the
government apparatus including, but also not limited to, ministries-legislature, ministries-
president, and inter-governmental relations.
Last but not least, since quangos are global trends, the strategies of theorization may
be extended toward another country; and the results can also be compared from a
comparative perspective. Since quango reform has been most salient in European
countries such as Great Britain, Netherland, and Sweden, theoretical and pragmatic
accounts tended to be based on the cases of those countries. Relatively, evidence from
other parts of the world such as East Asian countries or United States has been
insufficient. It implies that there are still many research tasks that should be carried out
by researchers. I am hoping that this dissertation will be a corner stone for future studies
that look into the link between elite networks and policy outcomes.
159
REFERENCES
Abrahamson, Eric. 1996. Management Fashion. The Academy of Management Review 21
(1):254-285.
Abrahamson, Eric, and Park Choelsoon. 1994. Concealment of Negative Organizational
Outcomes: An Agency Theory Perspective. The Academy of Management Journal
37 (5):1302-1334.
Abrahamson, Eric, and Gregory Fairchild. 1999. Management Fashion: Lifecycles,
Triggers, and Collective Learning Processes. Administrative Science Quarterly 44
(4):708-740.
Acar, Muhittin, Chao Guo, and Kaifeng Yang. 2008. Accountability When Hierarchical
Authority Is Absent. The American Review of Public Administration 38 (1):3-23.
Adler, Paul S., and Seok-Woo Kwon. 2002. Social Capital: Prospects for a New Concept.
The Academy of Management Review 27 (1):17-40.
Agranoff, R., and M. McGuire. 2001. Big questions in public network management
research. Journal of public administration research and theory 11 (3):295-326.
Ahrens, Thomas, Igor Filatotchev, and Steen Thomsen. 2009. The Research Frontier in
Corporate Governance. Journal of Management and Governance:1-15.
Alvesson, M., and K. Skoldberg. 2000. Reflexive Methodology: New Vistas for
Qualitative Research. London: SAGE Publications.
Amenta, Edwin, and Jane D. Poulsen. 1996. Social Politics in Context: The Institutional
Politics Theory and Social Spending at the End of the New Deal. Social Forces
75 (1):33-61.
160
Ansell, Chris, and Alison Gash. 2007. Collaborative governance in theory and practice.
Journal of Public Administration Research and Theory 13:543-571.
Arthur, N. 2001. Board Composition as the Outcome of an Internal Bargaining Process:
Empirical Evidence. Journal of Corporate Finance 7 (3):307-340.
Astley, W. Graham, and Paramjit S. Sachdeva. 1984. Structural Sources of
Intraorganizational Power: A Theoretical Synthesis. The Academy of Management
Review 9 (1):104-113.
Baker, A. 1982. Quangos in Britain. London: MacMillan.
Baker, Wayne E. 1990. Market Networks and Corporate Behavior. American Journal of
Sociology 96 (3):589-625.
Baker, Wayne E., and Robert R. Faulkner. 1993. The Social Organization of Conspiracy:
Illegal Networks in the Heavy Electrical Equipment Industry. American
Sociological Review 58 (6):837-860.
Banaszak-Holl, Jane, Susan Allen, Vincent Mor, and Thomas Schott. 1998.
Organizational Characteristics Associated with Agency Position in Community
Care Networks. Journal of Health and Social Behavior 39 (4):368-385.
Barabasi, A. L. 2002. Linked: The New Science of Networks. New York: Perseus
Publishing.
Barkema, Harry G., and Johannes M. Pennings. 1998. Top Management Pay: Impact of
Overt and Covert Power. Organization Studies 19 (6):975-1003.
Barman, Emily. 2007. An institutional approach to donor control: From dyadic ties to a
field-level analysis. American Journal of Sociology 112 (5):1416-1457.
Baron, R. A., and G. D. Markman. 2003. Beyond social capital: The role of
entrepreneurs' social competence in their financial success. Journal of Business
Venturing 18 (1):41-60.
161
Baysinger, Barry, and Robert E. Hoskisson. 1990. The Composition of Boards of
Directors and Strategic Control: Effects on Corporate Strategy. The Academy of
Management Review 15 (1):72-87.
Bebchuk, Lucian Arye, and Mark J. Roe. 1999. A Theory of Path Dependence in
Corporate Ownership and Governance. Stanford Law Review 52 (1):127-170.
Belliveau, Maura A., Charles A. O'Reilly Iii, and James B. Wade. 1996. Social Capital at
the Top: Effects of Social Similarity and Status on CEO Compensation. The
Academy of Management Journal 39 (6):1568-1593.
Bemelmans-Videc, Marie-Louise, Ray C. Rist, and Evert Vedung. 1998. Carrots, Sticks
& Sermons. New Brunswick: Transaction Publishers.
Benford, Robert D. 1997. An insider's critique of the social movement framing
perspective. Sociological Inquiry 67 (4):409-430.
Berry, Frances S., Ralph S. Brower, Sang Ok Choi, Wendy Xinfang Goa, HeeSoun Jang,
Myungjung Kwon, and Jessica Word. 2004. Three Traditions of Network
Research: What the Public Management Research Agenda Can Learn from Other
Research Communities. Public Administration Review 64 (5):539-552.
Bertelli, Anthony. 2006. The Role of Political Ideology in the Structural Design of New
Governance Agencies. Public Administration Review 66 (4):583-595.
Bertelli, Anthony M. 2006. Delegating to the Quango: Ex Ante and Ex Post Ministerial
Constraints. Governance 19 (2):229-249.
———. 2006. Governing the Quango: An Auditing and Cheating Model of Quasi-
Governmental Authorities. Journal of Public Administration Research and
Theory 16 (2):239-261.
———. 2008. Credible Governance? Transparency, Political Control, the Personal Vote
and British Quangos. Political Studies 56 (4):807-829.
162
Bielefeld, Wolfgang, and James C. Murdoch. 2004. The Locations of Nonprofit
Organizations and Their For-Profit Counterparts: An Exploratory Analysis.
Nonprofit and Voluntary Sector Quarterly 33 (2):221-246.
Bingham, L. B., T. Nabatchi, and R. O'Leary. 2005. The new governance: Practices and
Processes for stakeholder and citizen participation in the work of government.
Public Administration Review 65 (5):547-558.
Bland, S. H., E. S. O'Leary, E. Farinaro, F. Jossa, V. Krogh, J. M. Violanti, and M.
Trevisan. 1997. Social network disturbance and psychological distress following
earthquake evacuation. Journal of Nervous and Mental Disease 185:55-78.
Blau, P. 1977. Inequality and Heterogeneity: A Primitive Theory of Social Structure.
New York: Free Press.
Bogason, Peter, and Juliet A. Musso. 2006. The Democratic Prospects of Network
Governance. The American Review of Public Administration 36 (1):3-18.
Bogdan, R. C., and S. K. Biklen. 1992. Qualitative Research for Education: An
Introduction to Theory and Methods. Boston: Allyn & Bacon.
Boin, Arjen, Oliver James, and Martin Lodge. 2006. The New Public Management
'Revolution' in Political Control of the Public Sector: Promises and Outcomes in
Three European Prison Systems. Public Policy and Administration 21 (2):81-100.
Bonacich, Phillip. 1987. Power and Centrality: A Family of Measures. American Journal
of Sociology 92 (5):1170-1182.
UCINET 6.216 for Windows: Software for Social Network Analysis. Analytic
Technologies, Harvard, MA.
Borgatti, Stephen P., and Pacey C. Foster. 2003. The Network Paradigm in
Organizational Research: A Review and Typology. Journal of Management 29
(6):991-1013.
163
Bourdeaux, Carolyn. 2008. Politics versus Professionalism: The Effect of Institutional
Structure on Democratic Decision Making in a Contested Policy Arena. Journal
of Public Administration Research & Theory 18 (3):349-373.
Bowen, William G. 1994. Inside the Boardroom: Governance by Directors and Trustees:
John Wiley & Sons Inc.
Bradbury, Hilary, and Benyamin M. Bergmann Lichtenstein. 2000. Relationality in
Organizational Research: Exploring The Space Between. Organization Science 11
(5):551-564.
Bradshaw, Patricia. 2009. A contingency approach to nonprofit governance. Nonprofit
Management and Leadership 20 (1):61-81.
Brass, Daniel J. 1984. Being in the Right Place: A Structural Analysis of Individual
Influence in an Organization. Administrative Science Quarterly 29 (4):518-539.
Brass, Daniel J., Kenneth D. Butterfield, and Bruce C. Skaggs. 1998. Relationships and
Unethical Behavior: A Social Network Perspective. The Academy of Management
Review 23 (1):14-31.
Brass, Daniel J., Joseph Galaskiewicz, Henrich R. Greve, and Wenpin Tsai. 2004. Taking
Stock of Networks and Organizations: A Multilevel Perspective. Academy of
Management Journal 47 (6):795-817.
Braun, Virginia, and Victoria Clarke. 2006. Using Thematic Analysis in Psychology.
Qualitative Research in Psychology 3 (2):77-101.
Breiger, Ronald L. 2000. A tool kit for practice theory (Analysis of correspondence,
techniques). Poetics 27 (2-3):91-115.
Breton, A. 1974. The Economic Theory of Representative Government. Chicago: Aldine
Publishing Co.
Burt, R. S. 1992. Structural Holes: The Social Structure of Competition. Cambridge, MA:
Havard University Press.
164
Burt, R. S., and M. Knez. 1996. Trust and third-party gossip. In Trust in Organizations:
Frontiers of Theory and Research, edited by R. M. Kramer and T. R. Tyler.
Thousand Oaks, CA: Sage.
Burt, Ronald S. 1997. The Contingent Value of Social Capital. Administrative Science
Quarterly 42 (2):339-365.
———. 2000. The Network Structure of Social Capital. Research in Organizational
Behavior 22:345-423.
Capezio, Alessandra, John Shields, and Michael O'Donnell. 2011. Too Good to be True:
Board Structural Independence as a Moderator of CEO Pay-for-Firm-
Performance. Journal of Management Studies 48 (3):487-513.
Carboni, Nadia. 2010. Professional Autonomy versus Political Control. Public Policy and
Administration 25 (4):365-386.
Carpenter, Mason A., and W. M. Gerard Sanders. 2002. Top management team
compensation: the missing link between CEO pay and firm performance?
Strategic Management Journal 23:367-375.
Casciaro, Tiziana, and Mikolaj Jan Piskorski. 2005. Power Imbalance, Mutual
Dependence, and Constraint Absorption: A Closer Look at Resource Dependence
Theory. Administrative Science Quarterly 50 (2):167-199.
Charmaz, K. 2006. Constructing Grounded Theory. Thousand Oaks, CA: Sage.
Chiovitti, Rosalina F., and Niva Piran. 2003. Rigour and Grounded Theory Research.
Methodological Issues in Nursing Research 44 (4):427-435.
Christensen, Tom, and Per LÆGreid. 2003. Coping with Complex Leadership Roles: The
Problematic Redefinition of Government-owned Enterprises. Public
Administration 81 (4):803-831.
165
Clarkson, Max B. E. 1995. A Stakeholder Framework for Analyzing and Evaluating
Corporate Social Performance. The Academy of Management Review 20 (1):92-
117.
Cohen, Jacob. 1968. Weighted kappa: Nominal scale agreement provision for scaled
disagreement or partial credit. Psychological Bulletin 70 (4):213-220.
Cole, Michael. 2000. Quangos: UK Ministerial Responsibility in Theory and Practice.
Public Policy and Administration 15 (3):32-45.
Coleman, J. S. 1957. Community Conflict. New York: Free Press.
Coleman, James. 1998. Foundations of Social Theory: Belknap Press of Harvard
University Press.
Contractor, N. S., and E. M. Eisenberg. 1990. Communication networks and new media
in organizations. In Organizations and Communication Technology, edited by J.
Fulk and C. W. Steinfield. Newbury Park, CA: Sage.
Cook, K. S., and J. M. Whitmeyer. 1992. Two Approaches to Social Structure: Exchange
Theory and Network Analysis. Annual Review of Sociology 18:109-127.
Corbin, J. M., and J. M. Strauss. 2007. Basics of Qualitative Research: Techniques and
Procedures for Developing Grounded Theory. 3rd ed. Thousand Oaks, CA: Sage.
Corbin, Juliet, and Anselm Strauss. 1990. Grounded Theory Research: Procedures,
Canons, and Evaluative Criteria. Qualitative Sociology 13 (1):3-21.
Coser, Lewis A. 1977. Masters of Sociological Thought: Ideas in Historical and Social
Context. 2nd ed: Fort Worth: Harcourt Brace Jovanovich, Inc.
Cowgill, Burton O., Laura M. Bogart, Rosalie Corona, Gery Ryan, and Mark A. Schuster.
2008. Fears About HIV Transmission in Families With an HIV-Infected Parent: A
Qualitative Analysis. Pediatrics 122 (5):e950-e958.
166
Creswell, John W. 2009. Research Design: Qualitative, Quantitative, and Mixed
Methods. 3rd ed. Thousand Oaks, CA: SAGE Publications, Inc.
Creswell, John W., and Vicki L. Plano Clark. 2007. Designing and Conducting Mixed
Methods Research. Thousand Oaks, CA: SAGE Publications, Inc.
D'Aveni, R. A., and I MacMillan. 1990. Crisis and the content of managerial
communications: A study of the focus of attention of top managers in surviving
and failing firms. Administrative Science Quarterly 35:634-657.
Dacin, M. Tina. 1997. Isomorphism in context: The power and prescription of
institutional norms. Academy of Management Journal 40 (1):46-81.
Daily, Catherine M., Dan R. Dalton, and Jr. Cannella, Albert A. 2003. Corporate
Governance: Decades of Dialogue and Data. The Academy of Management
Review 28 (3):371-382.
Dalton, Dan R., Catherine M. Daily, Jonathan L. Johnson, and Alan E. Ellstrand. 1999.
Number of Directors and Financial Performance: A Meta-Analysis. The Academy
of Management Journal 42 (6):674-686.
David, Parthiban, Rahul Kochhar, and Edward Levitas. 1998. The Effect of Institutional
Investors on the Level and Mix of CEO Compensation. The Academy of
Management Journal 41 (2):200-208.
Davidson, Wallace, Yixi Ning, David Rakowski, and Eahab Elsaid. 2008. The
antecedents of simultaneous appointments to CEO and Chair. Journal of
Management and Governance 12 (4):381-401.
Davis, Gerald F. 2005. New Directions in Corporate Governance. Annual Review of
Sociology 31 (1):143-162.
Davis, Gerald F., and Henrich R. Greve. 1997. Corporate Elite Networks and Governance
Change in the 1980s. American Journal of Sociology 103 (1):1-37.
167
Davis, Gerald F., D. McAdam, W. Richard Scott, and Mayer N. Zald. 2005. Social
Movements and Organization Theory. Cambridge, U.K.: Cambridge University
Press.
Davis, Gerald F., and Mark S. Mizruchi. 1999. The Money Center Cannot Hold:
Commercial Banks in the U.S. System of Corporate Governance. Administrative
Science Quarterly 44 (2):215-239.
Davis, Howard. 1996. QUANGOS and local government: A changing world. Local
Government Studies 22 (2):1-7.
Davis, J. H., F. D. Schoorman, and T. Donaldson. 1997. Toward a stewardship theory of
management. Academy of Management Review 22:20-47.
Davis, T. C. 1999. Revisiting Group Attachment: Ethnic and National Identity. Political
Psychology 20 (1):25-47.
Deacon, David, and Wendy Monk. 2000. Executive Stressed. The Harvard International
Journal of Press/Politics 5 (3):45-66.
Deephouse, David L. 1996. Does isomorphism legitimate? Academy of Management
Journal 39 (4):1024-1039.
Deephouse, David L., and Suzanne M. Carter. 2005. An examination of differences
between organizational legitimacy and organizational reputation. Journal of
Management Studies 42 (2):329-360.
Denhardt, Robert B. 1984. Theories of Public Organization. Belmont, CA: Brooks/Cole
Publishing Company.
Dey, I. 1999. Grounding Grounded Theory: Guidelines for Qualitative Inquiry. San
Diego, CA: Academic Press.
DiMaggio, Paul J., and Walter W. Powell. 1983. The iron cage revisited: Institutional
isomorphism and collective rationality in organizational fields. American
Sociological Review 48 (2):147-160.
168
DiMaggio, Paul J., and Michael Useem. 1978. Social Class and Arts Consumption: The
Origins and Consequences of Class Differences in Exposure to the Arts in
America. Theory and Society 5 (2):141-161.
Domhoff, G. William. 2009. Who Rules America? Challenges to Corporate and Class
Dominance: McGraw-Hill Humanities.
Donahue, John D. 2002. Market-based Governance and the Architecture of
Accountability. In Market-based Governance: Supply Side, Demand Side, Upside,
and Downside, edited by J. D. Donahue and N. J. J. S. Washington, D.C.:
Brookings Institution Press.
Donahue, John D., and Joseph S. Nye Jr. 2002. Market-based Governance: Supply side,
demand side, upside, and downside. Washington, D.C.: Brookings.
Donaldson, Lex. 1990. The ethereal hand: Organizational economics and management
theory. Academy of Management Review 15 (3):369-381.
Donaldson, Lex, and James H. Davis. 1991. Stewardship Theory or Agency Theory:
CEO Governance and Shareholder Returns. Australian Journal of Management
16 (1):49-64.
Donaldson, T., and L. E. Preston. 1995. The stakeholder theory of the corporation:
Concepts, evidence, and implications. Academy of Management Review 20:65-91.
Downs, A. 1957. An Economic Theory of Democracy. New York: Harper and Row.
Doz, Yves L. 1996. The evolution of cooperation in strategic alliances: Initial conditions
or learning processes? Strategic Management Journal 17:55-83.
Dubnick, Melvin J., and H. George Frederickson. 2010. Accountable Agents: Federal
Performance Measurement and Third-Party Government. Journal of Public
Administration Research and Theory 20 (suppl 1):i143-i159.
Dunleavy, Patrick. 1991. Democracy, Bureaucracy and Public Choice: Economic
Explanations in Political Science: Prentice Hall.
169
Dunleavy, Patrick, Helen Margetts, Simon Bastow, and Jane Tinkler. 2006. New Public
Management Is Dead? Long Live Digital-Era Governance. Journal of Public
Administration Research and Theory 16 (3):467-494.
Durkheim, Emille. 1997. The Division of Labor in Society. Edited by L. A. Coser: Free
Press.
Duronto, Patricia M., Tsukasa Nishida, and Shin-ichi Nakayama. 2005. Uncertainty,
anxiety, and avoidance in communication with strangers. International Journal of
Intercultural Relations 29:549-560.
Edmondson, Amy C., and Stacy E. McManus. 2007. Methodological Fit in Management
Filed Research. Academy of Management Review 32 (4):1155-1179.
Edwards, Jeffrey R. 1995. Alternatives to difference scores as dependent variables in the
study of congruence in organizational research. Organizational Behavior and
Human Decision Processes 64 (3):307-324.
Eger, Robert J. 2006. Casting Light on Shadow Government: A Typological Approach.
Journal of Public Administration Research and Theory 16 (1):125-137.
Eisenstadt, S. N. 1980. Cultural orientations, institutional entrepreneurs and social
change: Comparative analyses of traditional civilizations. American Journal of
Sociology 85 (4):840-869.
Elsayed, Khaled. 2009. Board size and corporate performance: the missing role of board
leadership structure. Journal of Management and Governance:1-32.
Emerson, Richard M. 1962. Power-dependence Relations. American Journal of Sociology
27 (1):31-41.
Enz, Cathy A. 1988. The Role of Value Congruity in Intraorganizational Power.
Administrative Science Quarterly 33 (2):284-304.
Eriksson, Tor. 1999. Executive Compensation and Tournament Theory: Empirical Tests
on Danish Data. Journal of Labor Economics 17 (2):262-280.
170
Fankfort-Nachmias, Chava, and David Nachmias. 2006. Reserach Methods in the Social
Sciences. 6th ed. New York: Worth Publishers.
Fine, Gary Alan, and Kent Sandstrom. 1993. Ideology in Action: A Pragmatic Approach
to a Contested Concept. Sociological Theory 11:21-38.
Finkelstein, Sydney. 1992. Power in Top Management Teams: Dimensions,
Measurement, and Validation. The Academy of Management Journal 35 (3):505-
538.
Fiss, Peer C. 2006. Social influence effects and managerial compensation evidence from
Germany. Strategic Management Journal 27 (11):1013-1031.
Fiss, Peer C., and Edward J. Zajac. 2006. The symbolic management of strategic change:
Sensegiving via framing and decoupling. Academy of Management Journal 49
(6):1173-1193.
Flinders, Matthew. 2004. Distributed Public Governance in Britain. Public
Administration 82 (4):883-909.
Flinders, Matthew, and Jim Buller. 2006. Depoliticisation: Principles, Tactics and Tools.
British Politics 1 (3):293-318.
Flinders, Matthew V. , and Martin Smith, J., eds. 1999. Quangos, Accountability, and
Reform: The Politics of Quasi-Government: Palgrave Macmillan.
Fombrun, Charles J. 1982. Strategies for Network Research in Organizations. The
Academy of Management Review 7 (2):280-291.
Frank, Kenneth A., and Kyle Fahrbach. 1999. Organization culture as a complex system:
Balance and information in models of influence and selection. Organization
Science 10 (3):253-277.
Freeman, R. Edward. 1984. Strategic Management: A Stakeholder Approach. Boston:
Pitman.
171
Friedland, Roger , and Robert R. Alford. 1991. Bringing Society Back In: Symbols,
Practices, and Institutional Contradictions. In The New institutionalism in
organizational analysis, edited by W. W. Powell and P. J. DiMaggio. Chicago:
University of Chicago Press.
Frumkin, Peter, and Alice Andre-Clark. 2000. When missions, markets, and politics
collide: Values and strategy in the nonprofit human services. Nonprofit and
Voluntary Sector Quarterly 29 (1):141-164.
Frumkin, Peter, and Joseph Galaskiewicz. 2004. Institutional Isomorphism and Public
Sector Organizations. Journal of Public Administration Research and Theory 14
(3):283-307.
Galaskiewicz, Joseph. 1997. An Urban Grants Economy Revisited: Corporate Charitable
Contributions in the Twin Cities, 1979-81, 1987-89. Administrative Science
Quarterly 42 (3):445-471.
Gash, T. O. M., and Jill Rutter. 2011. The Quango Conundrum. The Political Quarterly
82 (1):95-101.
Gattani, Gino, Simone Ferriani, Giacomo Negro, and Fabrizio Perretti. 2008. The
structure of consensus: Network ties, legitimation and exit rates of U.S. feature
film producer organizations. Administrative Science Quarterly 53:145-182.
Geertz, C. 1973. The Interpretation of Culture. New York: Basic Books.
Geletkanycz, Marta A., and Donald C. Hambrick. 1997. The External Ties of Top
Executives: Implications for Strategic Choice and Performance. Administrative
Science Quarterly 42 (4):654-681.
Gelman, Andrew, and Jennifer Hill. 2007. Data Analysis Using Regression and
Multilevel/Hierarchical Models. New York NY: Cambridge University Press.
Ghemawat, Pankaj. 2002. Global vs. Local Products: a Case Study and a Model. In
STRATEGY. HARVARD.
172
Gilbert, Neil, and Harry Specht. 1974. "Picking Winners": Federal Discretion and Local
Experience as Bases for Planning Grant Allocation. Public Administration Review
34 (6):565-574.
Gioia, Dennis A., and Kumar Chittipeddi. 1991. Sensemaking and Sensegiving in
Strategic Change Initiation. Strategic Management Journal 12 (6):433-448.
Gioia, Dennis A., and James B. Thomas. 1996. Identity, image, and issue interpretation:
Sense-making during strategic change in academia. Administrative Science
Quarterly 41:370-403.
Gioia, Dennis A., James B. Thomas, Shawn M. Clark, and Kumar Chittipeddi. 1994.
Symbolism and Strategic Change in Academia: The Dynamics of Sensemaking
and Influence. Organization Science 5 (3):363-383.
Gist, John R., and R. Carter Hill. 1984. Political and Economic Influences on the
Bureaucratic Allocation of Federal Funds: The Case of Urban Development
Action Grants. Journal of Urban Economics 16 (2):158-172.
Glaser, Barney G. 1978. Theoretical Sensitivity: Advances in the Methodology of
Grounded Theory. Mill Valley, CA: Sociology Press.
———. 2007. Doing Formal Theory. In The Sage Handbook of Grounded Theory, edited
by A. Bryant and K. Charmaz. Thousands Oaks, CA: SAGE Publications.
Glaser, Barney G., and A. L. Strauss. 1967. The Discovery of Grounded Theory:
Strategies for Qualitative Research. Hawthorne, NY: Aldine de Gruyter.
Goldsmith, Stephen, and William D. Eggers. 2004. Governing by Network. Washington,
D.C.: The Brookings Institutions.
Goll, Irene, and Rakesh B. Sambharya. 1995. Corporate ideology, diversification and
firm performance. Organization Studies 16 (5):823-846.
Goll, Irene, and Gerald Zeitz. 1991. Conceptualizing and Measuring Corporate Ideology.
Organization Studies 12 (2):191-207.
173
Gourevitch, Peter A. 2003. Review: The Politics of Corporate Governance Regulation.
The Yale Law Journal 112 (7):1829-1880.
Graddy, Elizabeth A., and Bin Chen. 2006. Influences on the size and scope of networks
for social service delivery. Journal of Public Administration Research and Theory
16:533-552.
Graddy, Elizabeth A., and Donald L. Morgan. 2006. Community Foundations,
Organizational Strategy, and Public Policy. Nonprofit and Voluntary Sector
Quarterly 35 (4):605-630.
Granovetter, Mark S. 1985. Economic action and social structure: The problem of
embeddedness. American Journal of Sociology 91 (3):481-510.
Greve, Carsten, Matthew Flinders, and Sandra Van Thiel. 1999. Quangos—What's in a
Name? Defining Quangos from a Comparative Perspective. Governance 12
(2):129-146.
Grissom, Jason A. 2010. The Determinants of Conflict on Governing Boards in Public
Organizations: The Case of California School Boards. Journal of Public
Administration Research and Theory 20 (3):601-627.
Guo, Chao. 2007. When Government Becomes the Principal Philanthropist: The Effects
of Public Funding on Patterns of Nonprofit Governance. Public Administration
Review 67 (3):458-473.
Hambrick, D. C., M. A. Geletkanycz, and J. W. Fredrickson. 1993. Top executive
commitment to the status quo: Some tests of its determinants. Strategic
Management Journal 14:401-418.
Hambrick, Donald C., and Sydney Finkelstein. 1995. The Effects of Ownership Structure
on Conditions at the Top: The Case of CEO Pay Raises. Strategic Management
Journal 16 (3):175-193.
Hambrick, Donald C., and Phyllis A. Mason. 1984. Upper Echelons: The Organization as
a Reflection of Its Top Managers. The Academy of Management Review 9
(2):193-206.
174
Hambrick, Donald C., Axel v. Werder, and Edward J. Zajac. 2008. New Directions in
Corporate Governance Research. Organization Science 19 (3):381-385.
Hansen, Kasper M., and Niels Ejersbo. 2002. The relationship between politicians and
administrators – a logic of disharmony. Public Administration 80 (4):733-750.
Hart, Trevor, Graham Haughton, and Jamie Peck. 1996. Accountability and the Non-
elected Local State: Calling Training and Enterprise Councils to Local
Account.429-441.
Hawkins, Robert B. 1976. Self-Government by District: Myth and Reality. Stanford, CA:
Hoover Institution Press.
Hefetz, Amir, and Mildred Warner. 2004. Privatization and its reverse: Explaining the
dynamics of the government contracting process. Journal of Public
Administration Research and Theory 14 (2):171-190.
Hermalin, Benjamin E., and Michael S. Weisbach. 1998. Endogenously Chosen Boards
of Directors and Their Monitoring of the CEO. The American Economic Review
88 (1):96-118.
Higgins, E. Tory. 1987. Self-discrepancy: A theory relating self and affect. Psychological
Review 94 (3):319-340.
Hill, Carolyn J., and Laurence E. Lynn Jr. 2005. Is Hierarchical Governance in Decline?
Evidence from Empirical Research. Journal of Public Administration Research
and Theory 15 (2):173-195.
Hinds, Scott, Nicolas Sanchez, David Schap, Jürgen G. Backhaus, and Richard E.
Wagner. 2005. Public Enterprise: Retrospective Review and Prospective Theory
Handbook of Public Finance: Springer US.
Hirsch, Paul M. 1997. Review essay: Sociology without social structure: Neoinstitutional
theory meets brave new world. American Journal of Sociology 102 (6):1702-
1723.
175
Hirst, Paul. 1995. Quangos and Democratic Government. Parliamentary Affairs 48
(2):341-359.
Hogg, Michael A., and Deborah J. Terry. 2000. Social identity and self-categorization
processes in organizational contexts. Academy of Management Review 25 (1):121-
140.
Hogwood, Brian W. 1995. The 'Growth' of Quangos: Evidence and Explanations.
Parliamentary Affairs 48 (2):207-225.
Holton, Judith A. 2007. The Coding Process and Its Challenge. In The Sage Handbook of
Grounded Theory, edited by A. Bryant and K. Charmaz. Thousand Oaks, CA:
Sage Publications.
Hood, Christopher, and Guy Peters. 2004. The Middle Aging of New Public
Management: Into the Age of Paradox? Journal of Public Administration
Research and Theory 14 (3):267-282.
Hun Myoung, Park. 2009. Linear Regression Models for Panel Data Using SAS, Stata,
LIMEDEP, and SPSS. The University Information Technology Services (UITS)
Center for Statistical and Mathematical Computing, Indiana University.
Hurlbert, J. S. 1991. Social networks, social circles, and job satisfaction. Work and
Occupations 18:415-430.
Huse, Morten, Robert Hoskisson, Alessandro Zattoni, and Riccardo Viganò. 2009. New
perspectives on board research: changing the research agenda. Journal of
Management and Governance:1-24.
Imperial, Mark T. 2005. Using collaboration as a governance strategy: Lessons from six
watershed management programs. Administration and Society 37 (3):281-320.
Jackson, Douglas K., and Thomas P. Holland. 1998. Measuring the Effectiveness of
Nonprofit Boards. Nonprofit and Voluntary Sector Quarterly 27 (2):159-182.
176
Jackson, Susan E., Joan F. Brett, Valerie I. Sessa, Dawn M. Cooper, Johan A. Julin, and
Karl Peyronnin. 1991. Some differences make a difference: Individual
dissimilarity and group heterogeneity as correlates of recruitment, promotions,
and turnover. Journal of Applied Psychology 76 (5):675-689.
Jacobson, Joanne. 1997. Studebaker: The life and death of an American corporation -
Critchlow,DT. Nation 264 (8):32-34.
James, Oliver. 2003. The Executive Agency Revolution in Whtehall: Public Interest
versus Bureau-Shaping Perspectives. Gordonsville, VA: Palgrave Macmillan.
Jasper, James M. 1988. The Political Life Cycle of Technological Controversies. Social
Forces 67 (2):357-377.
Jensen, Michael C. 1994. Self Interest, Altruism, Incentives, and Agency Theory. Journal
of Applied Corporate Finance 7 (2):40-45.
Jensen, Michael C., and Jerold B. Warner. 1988. The distribution of power among
corporate managers, shareholders, and directors. Journal of Financial Economics
20:3-24.
Johnston, J., and J. DiNardo. 1997. Econometric Methods. 4th ed. New York: McGraw-
Hill.
Jung, Yong-Duck. 1999. Globalization and the Institutional Persistence of the
Developmental State in Korea. In The IPSA Structure and Organization of
Government Conference. University of Wisconsin-Madison.
Jwa, Sung-Hee. 2001. A New Paradigm for Korea's Economic Development: From
Government Control to Market Economy: Palgrave.
Kalev, Alexandra, Yehouda Shenhav, and David De Vries. 2008. The State, the Labor
Process, and the Diffusion of Managerial Models. Administrative Science
Quarterly 53:1-28.
177
Kang, Helen, Mandy Cheng, and Sidney J. Gray. 2007. Corporate Governance and Board
Composition: diversity and independence of Australian boards. Corporate
Governance: An International Review 15 (2):194-207.
Kemelgor, B. H. 1982. Job satisfaction as mediated by the value congruity of supervisors
and their subordinates. Journal of Organizational Behavior 3:147-160.
Kettl, Donald F. 2000. Public Administration at the Millennium: The State of the Field.
Journal of Public Administration Research and Theory 10 (1):7-34.
———. 2002. The Transformation of Governance. Baltimore: Johns Hopkins University
Press.
Kim, Pan Suk. 2000. Administrative Reform in the Korean Central Government: A Case
Study of the Dae Jung Kim Administration. Public Performance & Management
Review 24 (2):145-160.
Knoke, David, and James H. Kuklinski. 1982. Network Analysis. In Series: Quantitative
Applications in the Social Sciences, edited by M. S. Lewis-Beck. Newbury Park,
London, New Delhi: Sage Publications.
Kono, Clifford, Donald Palmer, Roger Friedland, and Matthew Zafonte. 1998. Lost in
Space: The Geography of Corporate Interlocking Directorates. The American
Journal of Sociology 103 (4):863-911.
Koppell, Jonathan Gideon. 2000. The Politics of Quasi-government: Hybrid
Organizations and Control of Public Policy, University of California, Berkeley,
United States -- California.
Kraatz, Matthew S., and Edward J. Zajac. 1996. Exploring the limits of the new
institutionalism: The causes and consequences of illegitimate organizational
change. American Sociological Review 61:812-836.
Larsen, Larissa, Sharon L. Harlan, Bob Bolin, Edward J. Hackett, Diane Hope, Andrew
Kirby, Amy Nelson, Tom R. Rex, and Shaphard Wolf. 2004. Bonding and
bridging: Understanding the relationship between social capital and civic action.
Journal of Planning, Education, and Research 24 (1):64-77.
178
Lee, Sunhwa, and Mary C. Brinton. 1996. Elite Education and Social Capital: The Case
of South Korea. Sociology of Education 69 (3):177-192.
Leigland, James. 1994. Public Authorities and the Determinants of Their Use by State
and Local Governments. Journal of Public Administration Research and Theory:
J-PART 4 (4):521-544.
Levi-Strauss, Calude. 1974. Structural Anthropology: Basic Books.
Lindsay, A. D. 2008. Karl Marx's Capital: Chandra Chakravarti Press.
Luhmann, N. 1995. Social Systems. Stanford: Stanford University Press.
Luhmann, Niklas. 1995. Chapter 10. Society and interaction. In Social Systems. Stanford,
CA: Stanford University Press.
MacQueen, Kathleen M., Eleanor McLellan, Kelly Kay, and Bobby Milstein. 1998.
Codebook development for team-based qualitative analysis.
March, James G. 1962. The Business Firm as a Political Coalition. Journal of Politics 24
(4):662-678.
Margarethe, F. Wiersema, and Allan Bird. 1993. Organizational Demography in Japanese
Firms: Group Heterogeneity, Individual Dissimilarity, and Top Management
Team Turnover. The Academy of Management Journal 36 (5):996-1025.
Marquis, Christopher. 2003. The pressure of the past: Network imprinting in
intercorporate communities. Administrative Science Quarterly 48:655-689.
Marquis, Christopher, and Michael Lounsbury. 2007. Vive la résistance: Competing
logics in the consolidation of community banking. Academy of Management
Journal 50 (4):799-820.
Maruyama, Magoroh. 1984. Alternative concepts of management: Insights from asia and
africa. Asia Pacific Journal of Management 1 (2):100-111.
179
Mayhew, Bruce H. 1980. Structuralism Versus Individualism: Part 1, Shadowboxing in
the Dark. Social Forces 59 (2):335-375.
McCambridge, Ruth. 2004. Underestimating the Power of Nonprofit Governance.
Nonprofit and Voluntary Sector Quarterly 33 (2):346-354.
McDonald, Michael L., and James D. Westphal. 2011. My Brother's Keeper? CEO
Identification with the Corporate Elite, Social Support among CEOs, and Leader
Effectiveness. Academy of Management Journal 54 (4):661-693.
McGuire, M. 2006. Collaborative public management: Assessing what we know and how
we know it. Public administration review 66 (1):33-43.
McPherson, Miller, Lynn Smith-Lovin, and James M. Cook. 2001. Birds of a Feather:
Homophily in Social Networks. Annual Review of Sociology 27:415-444.
Merton, Robert. 1957. Social Theory and Social Structure. London: The Free Press of
Glencoe.
Meyer, John W., and Brian Rowan. 1977. Institutional organizations: Formal structure as
myth and ceremony. American Journal of Sociology 83 (2):340-363.
Meyer, John W., and Meyer Rowan. 1977. Institutionalized organizations: Formal
structure as myth and ceremony. American Journal of Sociology 83 (2):340-363.
Meyer, Klaus. 2006. Asian management research needs more self-confidence. Asia
Pacific Journal of Management 23 (2):119-137.
Michel, John G., and Donald C. Hambrick. 1992. Diversification Posture and Top
Management Team Characteristics. The Academy of Management Journal 35
(1):9-37.
Mills, C. Wright. 1956. The Power Elite. 1st ed. New York NY: Oxford University Press.
———. 2000. The Power Elite. 2nd ed. New York NY: Oxford University Press.
180
Mitchell, Ronald K., Bradley R. Agle, and Donna J. Wood. 1997. Toward a Theory of
Stakeholder Identification and Salience: Defining the Principle of Who and What
Really Counts. The Academy of Management Review 22 (4):853-886.
Mizruchi, Mark S. 1989. Similarity of Political Behavior Among Large American
Corporations. American Journal of Sociology 95 (2):401-424.
Mizruchi, Mark S., and David Bunting. 1981. Influence in Corporate Networks: An
Examination of Four Measures. Administrative Science Quarterly 26 (3):475-489.
Mohr, John W. 2000. Introduction: Structure, institutions, and cultural analysis. Poetics
27 (2-3):57-68.
Monge, P. R, L. W. Rothman, E. M. Eisenberg, K. I. Miller, and K. K. Kirste. 1985. The
dynamics of organizational proximity. Management Science 31:1129-1141.
Monge, Peter R., and Noshir S. Contractor. 2003. Theories of Communication Networks.
New York: Oxford University Press.
Moore, Mark H. 2002. Privatizing Public Management. In Market-based Governance:
Supply Side, Demand Side, Upside, and Downside, edited by J. D. Donahue and
N. J. J. S. Washington, D.C.: Brookings Institution Press.
Morgan, Gareth, and Linda Smircich. 1980. The Case for Qualitative Research. 5
(4):491-500.
Moskalev, Sviatoslav, and Seung Park. 2010. South Korean Chaebols and Value-Based
Management. Journal of Business Ethics 92 (1):49-62.
Moynihan, Donald P., and Sanjay K. Pandey. 2008. The Ties that Bind: Social Networks,
Person-Organization Value Fit, and Turnover Intention. Journal of Public
Administration Research and Theory 18 (2):205-227.
Mueller, Dennis C. 1979. Public Choice. New York: Cambridge University Press.
181
Muhlau, P. 2000. The governance of the employment relationship. Amsterdam: Thela
Thesis.
Mulgan, Richard. 2003. Holding Power to Account: Accountability in Modern: Palgrave
Macmillan.
Muto, H. 2000. Thinking New Government Sector: From an Administrative State to a
Political State, Decentralized Society, or Civic Governance. In The NIRA-NAPA
2000 Joint Tokyo Conference.
Nam, Il Chong. 2004. Recent Developments in the Public-Enterprise Sector of Korea. In
Governance, Regulation, and Privatization in the Asia-Pacific Region, edited by
T. Ito and A. O. Krueger: University of Chicago Press.
Newman, Janet, and John Clarke. 1997. The Managerial State: Power, Politics and
Ideology in the Remaking of Social Welfare. Sage.
Niskanen, W. A. 1971. Bureaucracy and Representative Government. Chicago: Aldine
Atherton.
———. 1975. Breaucrats and Politicians. Journal of Law and Economics 18:615-644.
———. 1991. A Reflection on Bureaucracy and Representative Government. In The
Budget-Maximizing Bureaucrat: Appraisals and Evidence, edited by A. Blais and
S. Dion. Pittsburgh, PA: University of Pittsburgh Press.
Nooteboom, Bart. 2000. Learning by Interaction: Absorptive Capacity, Cognitive
Distance and Governance. Journal of Management and Governance 4 (1):69-92.
O'Regan, Katherine, and Oster Sharon. 2002. Does Government Funding Alter Nonprofit
Governance? Evidence from New York City Nonprofit Contractors. Journal of
Policy Analysis and Management 21 (3):359-379.
O'Reilly, Charles A., David F. Caldwell, and William P. Barnett. 1989. Work Group
Demography, Social Integration, and Turnover. Administrative Science Quarterly
34 (1):21-37.
182
O'Reilly, Charles A., Brian G. Main, and Graef S. Crystal. 1988. CEO Compensation as
Tournament and Social Comparison: A Tale of Two Theories. Administrative
Science Quarterly 33 (2):257-274.
O'Reilly, P. 1988. Methodological issues in social support and social network research.
Social Science and Medicine 26:863-873.
Oliver, Christine. 1991. Strategic responses to institutional processes. Academy of
Management Review 16 (1):145-179.
———. 1992. The Antecedents of Deinstitutionalization. Organization Studies 13
(4):563-588.
Osbourne, David, and Ted Gaebler. 1992. Reinventing Government: How The
Entrepreneurial Spirit Is Transforming The Public Sector. 1st ed: Basic Books.
Ostrower, Francie, and Melissa M. Stone. 2010. Moving Governance Research Forward:
A Contingency-Based Framework and Data Application. Nonprofit and Voluntary
Sector Quarterly 39 (5):901-924.
Overeem, Patrick. 2008. Beyond Heterodoxy: Dwight Waldo and the Politics–
Administration Dichotomy. Public Administration Review 68 (1):36-45.
Palmer, Donald A., and Nicole Woolsey Biggart. 2007. Chapter 11. Organizational
institutions. In The Blackwell Companion to Organizations, edited by J. A. C.
Baum. Malden, MA: Blackwell Publishing.
Palmer, Donald, and Brad M. Barber. 2001. Challengers, Elites, and Owning Families: A
Social Class Theory of Corporate Acquisitions in the 1960s. Administrative
Science Quarterly 46 (1):87-120.
Park, Chong-Min. 1991. Authoritarian Rule in South Korea: Political Support and
Governmental Performance. Asian Survey 31 (8):743-761.
Parsons, Talcott. 1951. The Social Systems. New York: Free Press.
183
Patton, Michael Quinn. 2002. Qualitative Research & Evaluation Methods. 3rd ed: Sage
Publications.
Payne, G. Tyge, Curt B. Moore, Stanley E. Griffis, and Chad W. Autry. 2011. Multilevel
Challenges and Opportunities in Social Capital Research. Journal of Management
37 (2):491-520.
Payne, Teresa, and Chris Skelcher. 1997. Explaining Less Accountability: the Growth of
Local Quangos. Public Administration 75 (2):207-225.
Pfeffer, Jeffrey. 1972. Size and Composition of Corporate Boards of Directors: The
Organization and its Environment. Administrative Science Quarterly 17 (2):218-
228.
Pfeffer, Jeffrey, and Gerald R. Salancik. 1978. The External Control of Organizations: A
Resource Dependence Perspective. Stanford, CA: Stanford University Press.
Podolny, Joel M., and James N. Baron. 1997. Resources and relationships: Social
networks and mobility in the workplace. American Sociological Review 62:673-
693.
Pollitt, Christopher, and Colin Talbot. 2004. Unbundle Government: a Critical Analysis
of the Global Trend to Agencies, Quangos and Contractualisation: Routledge.
Pollitt, Christopher, Colin Talbot, Janice Caulfield, and Amanda Smullen. 2004.
Agencies: How Governments Do Things Through Semi-Autonomous
Organizations: Palgrave Macmillan.
Powell, Walter W., and Paul J. DiMaggio. 1991. The New Institutionalism in
Organizational Analysis. Chicago: The University of Chicago Press.
Raab, J 철 rg, and H. Brinton Milward. 2003. Dark Networks as Problems. Journal of
Public Administration Research and Theory 13 (4):413-439.
184
Randel, Amy E., and Kimberly S. Jaussi. 2003. Functional Background Identity,
Diversity, and Individual Performance in Cross-Functional Teams. The Academy
of Management Journal 46 (6):763-774.
Reichertz, Jo. 2007. Abduction: The Logic of Discovery of Grounded Theory. In The
Sage Handbook of Grounded Theory edited by A. Bryant and K. Charmaz.
Thousand Oaks, CA: The Sage Publications.
Rethemeyer, R. Karl. 2007. Policymaking in the Age of Internet: Is the Internet Tending
to Make Policy Networks More or Less Inclusive? Journal of Public
Administration Research and Theory 17 (2):259-284.
Rethemeyer, R. Karl., and Deneen M. Hatmaker. 2008. Network Management
Reconsidered: An Inquiry into Management of Network Structures in Public
Sector Service Provision. Journal of Public Administration Research and Theory
18 (4):617-646.
Rich, Michael J. 1989. Distributive Politics and the Allocation of Federal Grants. The
American Political Science Review 83 (1):193-213.
Robertson, Roland. 1992. Globalization : social theory and global culture, Theory,
culture & society. London: Sage.
Rogers, Everett M., and Dilip K. Bhowmik. 1970. Homophily-Heterophily: Relational
Concepts for Communication Research. The Public Opinion Quarterly 34
(4):523-538.
Romzek, Barbara S. 2000. Dynamics of Public Sector Accountability in an Era of
Reform. International Review of Administrative Sciences 66 (1):21-44.
Romzek, Barbara S., and Melvin J. Dubnick. 1987. Accountability in the Public Sector:
Lessons from the Challenger Tragedy. Public Administration Review 47 (3):227-
238.
Rosenstein, Stuart, and Jeffrey G. Wyatt. 1990. Outside directors, board independence,
and shareholder wealth. Journal of Financial Economics 26 (2):175-191.
185
Rowley, Timothy J. 1997. Moving beyond Dyadic Ties: A Network Theory of
Stakeholder Influences. The Academy of Management Review 22 (4):887-910.
Roy, William G. 1997. Socializing Capital: The Rise of the Large Industrial Corporation
in America. Princeton, NJ: Princeton Unversity Press.
Ryan Jr, Harley E., and Roy A. Wiggins III. 2004. Who is in whose pocket? Director
compensation, board independence, and barriers to effective monitoring. Journal
of Financial Economics 73 (3):497-524.
Santerre, Rexford E., and Stephen P. Neun. 1986. Stock Dispersion and Executive
Compensation. The Review of Economics and Statistics 68 (4):685-687.
Sarkissian, Sergei, and Michael J. Schill. 2004. The Overseas Listing Decision: New
Evidence of Proximity Preference. The Review of Financial Studies 17 (3):769-
809.
Sash, Sonali K., and Kevin G. Corley. 2006. Building Better Theory by Bridging the
Quantitative-Qualitative Divide. Journal of Management Studies 43 (8):1821-
1835.
Sassen, Saskia. 1996. Losing control? : sovereignty in an age of globalization, University
seminars/Leonard Hastings Schoff memorial lectures. New York: Columbia
University Press.
Schalk, Jelmer, Rene Torenvlied, and Jim Allen. 2011. Network Embeddedness and
Public Agency Performance: The Strength of Strong Ties in Dutch Higher
Education. Journal of Public Administration Research and Theory 20 (3):629-
653.
Schillemans, Thomas. 2011. Does Horizontal Accountability Work? Administration &
Society 43 (4):387-416.
Scott, John. 2000. Handling Relational Data. In Social network analysis : a handbook,
edited by J. Scott. London ; Thousands Oaks, Calif.: SAGE Publications.
186
———. 2000. Networks and Relations. In Social network analysis : a handbook, edited
by J. Scott. London ; Thousands Oaks, Calif.: SAGE Publications.
———. 2000. Social Network Analysis: a Handbook. Thousand Oaks, CA: SAGE
Publications, Inc.
Scott, W. Richard. 2001. Institutions and Organizations. Thousand Oaks, CA: Sage.
———. 2008. Institutions and Organizations: Ideas and Interests -3rd ed. Thousand
Oaks: Sage Publications, Inc.
Scott, W. Richard , and Robert R. Alford. 1991. The Organization of Soceital Sectors:
Propositions and Early Evidence. In The New institutionalism in organizational
analysis, edited by W. W. Powell and P. J. DiMaggio. Chicago: University of
Chicago Press.
Sewell, William H., Jr. 1997. Geertz, Cultural Systems, and History: From Synchrony to
Transformation. Representations 59:35-55.
Shen, Wei. 2003. The Dynamics of the CEO-Board Relationship: An Evolutionary
Perspective. The Academy of Management Review 28 (3):466-476.
Siggelkow, Nicolaj. 2002. Misperceiving interactions among complements and
substitutes: Organizational consequences. Management Science 48 (7):900-916.
Singh, Jitendra V. , David J. Tucker, and Agnes G. Meinhard. 1991. Institutional Change
and Ecological Dynamics. In The New institutionalism in organizational analysis,
edited by W. W. Powell and P. J. DiMaggio. Chicago: University of Chicago
Press.
Six, Frédérique. 2007. Building interpersonal trust within organizations: a relational
signalling perspective. Journal of Management and Governance 11 (3):285-309.
Smith, Eliot R., Julie Murphy, and Susan Coats. 1999. Attachment to Groups: Theory and
Measurement. Journal of Personality and Social Psychology 77 (1):94-110.
187
Somers, Mark John. 1995. Organizational commitment, turnover and absenteeism: An
examination of direct and interaction effects. Journal of Organizational Behavior
16:49-58.
Stanton, Thomas H. 2009. Government-Sponsored Enterprises: Reality Catches Up to
Public Administration Theory. Public Administration Review 69 (4):632-639.
Stein, Robert M. 1981. The Allocation of Federal Aid Monies: The Synthesis of Demand-
Side and Supply-Side Explanations. The American Political Science Review 75
(2):334-343.
Stern, Robert N., and Stephen R. Barley. 1996. Organizations and Social Systems:
Organization Theory's Neglected Mandate. Administrative Science Quarterly 41
(1):146-162.
Stinchcombe, Arthur L. 1965. Social structure and organizations. In Handbook of
Organizations, edited by J. G. March. Chicago, IL: Rand McNally & Company.
Stone, Melissa M., and Francie Ostrower. 2007. Acting in the Public Interest? Another
Look at Research on Nonprofit Governance. Nonprofit and Voluntary Sector
Quarterly 36 (3):416-438.
Strauss, A., and J. Corbin. 1990. Basics of Qualitative Research: Grounded Theory
Procedures and Techniques. 1st ed. Newbury Park, CA: Sage Publications.
Suchman, Mark C. 1995. Managing Legitimacy: Strategic and Institutional Approaches.
The Academy of Management Review 20 (3):571-610.
Sutton, R. I. 1987. The process of organizational death: Disbonding and reconnections.
Administrative Science Quarterly 32:542-569.
Svara, James H. 2001. The Myth of the Dichotomy: Complementarity of Politics and
Administration in the Past and Future of Public Administration. Public
Administration Review 61 (2):176-183.
188
Szanton, Peter L. 1991. The Remarkable "Quango": Knowledge, Politics, and Welfare
Reform. Journal of Policy Analysis and Management 10 (4):590-602.
Taylor, Charles. 1994. Multiculturalism: Examining the Politics of Recognition:
Princeton University Press.
Thompson, J. D. 1967. Organizations in Action. New York: McGraw-Hill.
Thornton, Patricia H., and William Ocasio. 1999. Institutional logics and the historical
contingency of power in organizations: Executive succession in the higher
education publishing industry, 1958 - 1990. American Journal of Sociology 105
(3):801-843.
Tschirhart, Mary, Kira Kristal Reed, Sarah J. Freeman, and Alison Louie Anker. 2009.
Who Serves? Predicting Placement of Management Graduates on Nonprofit,
Government, and Business Boards. Nonprofit and Voluntary Sector
Quarterly:0899764008327244.
Tullock, Gordon. 1959. Problems of Majority Voting. Journal of Political Economy 67
(6):571-579.
Tuma, Nancy Brandon, and Michael T. Hannan. 1984. Why Dynamic Analysis. In Social
dynamics : models and methods, Quantitative studies in social relations, edited by
N. B. Tuma and M. T. Hannan. Orlando: Academic Press.
Turner, J. C., and P. J. Oakes. 1986. The significance of the social identity concept for
social psychology with reference to individualism, interactionism, and social
influence. British Journal of Social Psychology 25:237-252.
Useem, Bert. 1984. Center-Periphery Conflict: Elite and Popular Involvement in the
Boston Anti-Busing Movement. Research in Social Movements, Conflicts and
Change 6:271-291.
Useem, Michael. 1978. The Inner Group of the American Capitalist Class. Social
Problems 25 (3):225-240.
189
———. 1979. The Social Organization of the American Business Elite and Participation
of Corporation Directors in the Governance of American Institutions. American
Sociological Review 44 (4):553-572.
———. 1982. Classwide Rationality in the Politics of Managers and Directors of Large
Corporations in the United States and Great Britain. Administrative Science
Quarterly 27 (2):199-226.
———. 1984. The Inner Circle. Oxford: Oxford University Press.
———. 1985. The rise of the political manager. Sloan Management Review 27 (1):15-26.
———. 1988. Market and institutional factors in corporate contributions. California
Management Review 30 (2):77-88.
Useem, Michael, and Jerome Karabel. 1986. Pathways to Top Corporate Management.
American Sociological Review 51 (2):184-200.
Uzzi, Brian. 1996. The Sources and Consequences of Embeddedness for the Economic
Performance of Organizations: The Network Effect. American Sociological
Review 61 (4):674-698.
Van Gramberg, B. 2002. Liberation versus Market Driven Management in Victorian
Local Government. In Working Paper Series, 11/2002: Victoria University
School of Management.
Van Thiel, Sandra. 2000. Quangocratization: Trends, Causes and Consequences. Thela
Thesis.
———. 2004. Trends in the Public Sector. Journal of Theoretical Politics 16 (2):175-
201.
———. 2006. Styles of Reform: Differences in quango creation between policy sectors
in the Netherlands. Journal of Public Policy 26 (02):115-139.
190
Villadsen, Anders R. 2011. Structural Embeddedness of Political Top Executives as
Explanation of Policy Isomorphism. Journal of Public Administration Research
and Theory 21 (4):573-599.
Wade, James, Charles A. O'Reilly, III, and Ike Chandratat. 1990. Golden Parachutes:
CEOs and the Exercise of Social Influence. Administrative Science Quarterly 35
(4):587-603.
Waldo, Dwight. 1948. The Administrative State: A Study of the Political Theory of
Amercian Public Administration. New York: Ronald Press.
Weber, Max. 1978. Economy and Society. Berkeley: University of California Press.
Westphal, James D. 1998. Board Games: How CEOs Adapt to Increases in Structural
Board Independence from Management. Administrative Science Quarterly 43
(3):511-537.
———. 1999. Collaboration in the Boardroom: Behavioral and Performance
Consequences of CEO-Board Social Ties. The Academy of Management Journal
42 (1):7-24.
Westphal, James D., Steven Boivie, and Daniel Han Ming Chng. 2006. The strategic
impetus for social network ties: reconstituting broken ceo friendship ties.
Strategic Management Journal 27:425-445.
Westphal, James D., and Ithai Stern. 2006. The Other Pathway to the Boardroom:
Interpersonal Influence Behavior as a Substitute for Elite Credentials and
Majority Status in Obtaining Board Appointments. Administrative Science
Quarterly 51 (2):169-204.
Westphal, James D., and Edward J. Zajac. 1995. Who Shall Govern? CEO/Board Power,
Demographic Similarity, and New Director Selection. Administrative Science
Quarterly 40 (1):60-83.
———. 1997. Defections from the Inner Circle: Social Exchange, Reciprocity, and the
Diffusion of Board Independence in U.S. Corporations. Administrative Science
Quarterly 42 (1):161-183.
191
Widmer, Candace. 1993. Role Conflict, Role Ambiguity, and Role Overload on Boards
of Directors of Nonprofit Human Service Organizations. Nonprofit and Voluntary
Sector Quarterly 22 (4):339-356.
Wilks, Stephen. 2007. Boardization and Corporate Governance in the UK as a Response
to Depoliticization and Failing Accountability. Public Policy and Administration
22 (4):443-460.
Willoughby, W. F. 1927. Principles of Public Administration. Washington, DC:
Brookings Institute.
Wilson, David. 1995. Quangos in the Skeletal State. Parliamentary Affairs 48 (2):181-
191.
Wilson, Woodrow. 1887. The Study of Administration. Political Science Quarterly 2
(2):197-222.
Yangmin, Kim, and Albert A. Cannella Jr. 2008. Toward a Social Capital Theory of
Director Selection. Corporate Governance: An International Review 16 (4):282-
293.
Yesilkagit, Kutsal, and Sandra van Thiel. 2012. Autonomous Agencies and Perceptions
of Stakeholder Influence in Parliamentary Democracies. Journal of Public
Administration Research & Theory 22 (1):101-119.
Yin, R. K. 1984. Case Study Research: Design and Methods. 1st ed. Newbury Park, CA:
Sage Publications.
Yum, June Ock. 1988. The impact of Confucianism on interpersonal relationships and
communication patterns in east Asia. Communication Monographs 55 (4):374-
388.
Zajac, Edward J., and James D. Westphal. 1998. Toward a Behavioural Theory of the
CEO-board Relationship. In Navigating Change: How CEOs, Top Teams, and
Boards Steer Transformation, edited by D. C. Hambrick, D. A. Nadler and M. L.
Tushman. Boston, MA: HBS Press.
192
Zald, Mayer N., and Michael Lounsbury. 2010. The Wizards of Oz: Towards an
Institutional Approach to Elites, Expertise and Command Posts. Organization
Studies 31 (7):963-996.
Zucker, Lynne G. 1989. Combining institutional theory and population ecology: No
legitimacy, no history. American Sociological Review 54 (4):542-545.
193
APPENDIX A. TEMPLATE OF SEMI-STRUCTURED
INTERVIEW QUESTIONS
Questions of Scheduled-Structured Interview
z Investigator: Hyang-Won Kwon
z Interviewee: _______________
Dear Informants,
You are no doubt aware that your devotion to interview is deeply appreciated, and
your inputs will contribute to theoretical advancement on your field. It should be
also clarified that your identity will be protected according to the codes of IRB,
and your statements will be used only for academic purposes. (Anticipated
Duration: 1 – 2 hours)
Category 1: Critical issues of Quangos caused by inner group politics and biases
What sort of critical problems do quangos have as a result of inner group politics of
political elites? (Possible probes: Do quangos have hidden costs or agency problems
in what areas?)
Category 2: Key players in power networks
What sorts of people may constitute elite power networks in the public sector?
(Possible probes: Do you any positions or any individuals who constitute powerful
networks?)
194
Category 3: Forms, types, and mechanisms of network formation
What affiliations or social groups do you think can be identified as power networks at
the top?
(Possible probes: What characteristics of quango CEOs do you think may influence
power standing in the sector?)
Category 4: Data Source
What sources do you suggest are most helpful if I need to garner information as to
quango CEOs, public sector leaders, and politicians?
What sources do you suggest are most helpful if I need to collect data as to quango
management?
(Possible probes: “This question is contingent on problems raised in Category 1.)
Category 5: Validity of Research
Do you personally think that this research might provide valuable perspectives on
quango management? If you don’t think it is, would please give me some advice
regarding directionality and problems?
195
APPENDIX B. TYPEOF SOUTH KOREAN QUANGOS (AS OF
YEAR 2011)
Government
Enterprises
Government Agencies Other Type
MA SMA FGE CGE OTR
Parental Ministries
Planning and Finance 1 2
Education and Science 14 33
Foreign Affairs and Trade 3
Unification 2
Justice 3
National Defense 3
Public Administration 1 2 1
Culture, Sports, Tourism 2 4 2 25
Agriculture & Food 1 6 3
Knowledge & Economics 10 2 2 18 28
Health & Welfare 1 5 10
Environment 3 1
Employment & Labor 1 4 5
Gender Equality 2
Land, Transport, & Marine
Affairs
4 8 7 13
Parental Commissions
Prime Minister Office 24
Broadcasting and
Telecommunication
11
Science and Technology 1
Nuclear Energy and Safety 1 1
Finance and Banking 5 2 3
Fair Trade 1
Patriots and Veteran Affairs 2 1
National Defense 2
Cultural Heritage 1
Forest 1
Agriculture 1
Small and Middle
Enterprises
12 5
Patent 4
Food Safety 1
Police 1
National Emergency
Management Agency
1
196
Appendix C. Initial Coding using Atlas.ti
197
APPENDIX D. QS WORLD UNIVERSITY RANKING (2010-
2011)
Rank School Name Country Size Area Focus Score
1 University of Cambridge United Kingdom L VH FC 100
2 Harvard University United States L VH FC 99.2
3 Yale University United States M VH FC 98.7
4 UCL (University College London) United Kingdom L VH FC 98.5
5 Massachusetts Institute of Technology (MIT) United States M VH CO 98.2
6 University of Oxford United Kingdom L VH FC 98.2
7 Imperial College London United Kingdom L VH FC 97.8
8 University of Chicago United States M VH FC 97.5
9 California Institute of Technology (Caltech) United States S VH CO 96.5
10 Princeton University United States M VH CO 96
11 Columbia University United States L VH FC 96
12 University of Pennsylvania United States L VH FC 96
13 Stanford University United States L VH FC 93.6
14 Duke University United States L VH FC 92.3
15 University of Michigan United States XL VH FC 92.2
16 Cornell University United States L VH FC 90.4
17 Johns Hopkins University United States L VH FC 89.7
18 ETH Zurich Switzerland L VH FO 89.3
19 McGill University Canada L VH FC 89.3
20 Australian National University Australia M VH CO 88.6
21 King's College London (University of London) United Kingdom L VH FC 88.5
22 University of Edinburgh United Kingdom L VH FC 88
23 University of Hong Kong Hong Kong L VH FC 87.3
24 The University of Tokyo Japan L VH FC 86.7
25 Kyoto University Japan L VH FC 85.9
26 Northwestern University United States L VH FC 85.4
27 University of Bristol United Kingdom L VH FC 85.2
28 University of California, Berkeley (UCB) United States XL VH FC 85.2
29 University of Toronto Canada XL VH FC 84.3
30 The University of Manchester United Kingdom XL VH FC 83.3
31 National University of Singapore (NUS) Singapore XL VH FC 82.8
32 EcolePolytechniqueFédérale de Lausanne Switzerland M VH FO 82.3
33 ÉcoleNormaleSupérieure, Paris France S VH SP 82.1
34 Carnegie Mellon University United States M VH FC 81.8
35 University of California, Los Angeles (UCLA) United States XL VH FC 81.5
36 ÉcolePolytechnique France S VH CO 81.3
37 The University of Sydney Australia XL VH FC 81.3
38 The University of Melbourne Australia XL VH FC 80.6
39 Brown University United States M VH FC 80.5
40
The Hong Kong University of Science and
Technology Hong Kong M VH CO 78.7
198
41 New York University (NYU) United States XL VH FC 78.4
42 The Chinese University of Hong Kong Hong Kong L VH FC 77.9
43 The University of Queensland Australia XL VH FC 77.6
44 University of British Columbia Canada XL VH FC 77.4
45 University of Copenhagen Denmark L VH FC 76.7
46 The University of New South Wales Australia XL VH FC 76.7
47 Peking University China L VH FC 76.4
48 University of Wisconsin‐Madison United States XL VH FC 76.3
49 Osaka University Japan L VH FC 76.2
50 Seoul National University Korea, South L VH FC 76.1
51 Ruprecht‐Karls‐Universität Heidelberg Germany L VH FC 75.9
52 Trinity College Dublin Ireland L HI FC 75
53 The University of Warwick United Kingdom L HI FC 74.3
54 Tsinghua University China L VH FC 74.2
55 University of Washington United States XL VH FC 73.8
56 University of Amsterdam Netherlands XL VH FC 73.5
57 University of North Carolina, Chapel Hill United States L VH FC 73.2
58 TechnischeUniversitätMünchen Germany L VH FO 73
59 University of Birmingham United Kingdom L VH FC 72.7
60 Tokyo Institute of Technology Japan M VH FO 72.6
61 Monash University Australia XL VH FC 72.5
62 Uppsala University Sweden L VH FC 72.2
63 University of Illinois at Urbana‐Champaign United States XL VH FC 71.8
64 Boston University United States L VH FC 71.7
65 University of California, San Diego (UCSD) United States L VH FC 71.6
66 Ludwig‐Maximilians‐UniversitätMünchen Germany XL VH FC 71.3
67 University of Texas at Austin United States XL VH FC 71.2
68 The University of Auckland New Zealand L VH FC 71.1
69 The University of Sheffield United Kingdom L VH FC 70.8
70 FreieUniversität Berlin Germany XL VH FC 70.6
71 University of Geneva Switzerland L VH FC 70.5
72 Lund University Sweden L VH FC 70.4
73 The University of Nottingham United Kingdom L VH FC 70
74 Nanyang Technological University (NTU) Singapore L VH CO 69.8
75 Washington University in St. Louis United States L VH FC 69.6
76 University of Helsinki Finland L VH CO 69.6
77 University of Glasgow United Kingdom L VH FC 69.5
78 University of Alberta Canada XL VH FC 69.3
79
KAIST ‐ Korea Advanced Institute of Science &
Technology Korea, South M VH CO 69.1
80
London School of Economics and Political
Science (LSE) United Kingdom M VH SP 68.9
81 University of Southampton United Kingdom L VH FC 68.9
82 Leiden University Netherlands L VH FC 68.8
83 Utrecht University Netherlands L VH FC 68.8
84 Aarhus University Denmark L VH FC 68.6
199
85 University of Leeds United Kingdom L VH FC 68.1
86 KatholiekeUniversiteit Leuven Belgium XL VH FC 67.6
87 Purdue University United States XL VH FC 67.5
88 University of York United Kingdom M VH FC 67.4
89 The University of Western Australia Australia L VH FC 67
90 Dartmouth College United States M VH FC 66.9
91 Nagoya University Japan L VH FC 66.4
92 Durham University United Kingdom L HI FC 66.3
93 Lomonosov Moscow State University Russia XL VH FC 66.1
94 National Taiwan University (NTU) Taiwan XL VH FC 66
95 University of St Andrews United Kingdom M VH FC 65.7
96 University of Minnesota United States XL VH FC 65.6
97 Universität Freiburg Germany L VH FC 65.1
98 Pennsylvania State University United States XL VH FC 64.9
99 Erasmus University Rotterdam Netherlands L VH FO 64.5
100 University of Oslo Norway L VH FC 64.2
101 University of Zurich Switzerland L VH FC 64
102 Tohoku University Japan L VH FC 64
103 The University of Adelaide Australia L VH FC 63.9
104 University of Maryland, College Park United States XL VH FC 63.7
105 Fudan University China L VH FC 63.4
106 Georgia Institute of Technology United States L VH CO 63.3
107 Emory University United States L VH FC 63.2
108 Delft University of Technology Netherlands L VH FO 63.1
109 Hebrew University of Jerusalem Israel L VH FC 63.1
110 University of California, Davis United States L VH FC 62.9
111 Maastricht University Netherlands L VH FO 62.8
112
Pohang University of Science And Technology
(POSTECH) Korea, South S VH FO 62.8
113 University of Southern California United States XL VH FC 62.7
114 University College Dublin Ireland L HI FC 62.4
115 Rice University United States M VH FC 61.5
116 University of California, Santa Barbara (UCSB) United States L VH CO 61.4
117 University of Aberdeen United Kingdom L HI FC 61.3
118 Université Pierre et Marie Curie (UPMC) France XL VH FO 60.5
119 University of Pittsburgh United States L VH FC 60.4
120 University of Groningen Netherlands L VH FC 60.3
121 University of Liverpool United Kingdom L VH FC 59.5
122 Cardiff University United Kingdom L VH FC 59.5
123 Humboldt‐Universitätzu Berlin Germany L HI FC 59.3
124 UniversitéCatholique de Louvain (UCL) Belgium L HI FC 59.1
125 Ohio State University United States XL VH FC 59.1
126 Eindhoven University of Technology Netherlands M VH FO 58.5
127 University of Rochester United States M VH FC 58.4
128 Case Western Reserve University United States M VH FC 58.4
129 City University of Hong Kong Hong Kong M VH CO 58.4
200
130 University of Virginia United States L VH FC 58.3
131 EberhardKarlsUniversitätTübingen Germany L VH FC 58.2
132 Queen's University Canada L VH FC 58.2
133 University of Bergen Norway M VH FC 57.9
134 Vanderbilt University United States M VH FC 57.2
135 University of Otago New Zealand L VH FC 57.1
136 Universite de Montreal Canada XL VH FC 56.9
137 University of Basel Switzerland M VH FC 56.7
138 Tel Aviv University Israel L VH FC 56.4
139 ÉcoleNormaleSupérieure de Lyon France S VH CO 56.2
140 Newcastle University United Kingdom L VH FC 56.1
141 Technical University of Denmark Denmark M VH FO 55.6
142 Yonsei University Korea, South XL VH FC 55.5
143 University of Vienna Austria XL HI FC 55.3
144 University of Bath United Kingdom L VH CO 55.3
145 University of Waterloo Canada L VH CO 54.7
146 University of California, Irvine United States L VH FC 54.7
147 Queen Mary, University of London (QMUL) United Kingdom L HI FC 54.5
148 University of Barcelona Spain XL VH FC 54.3
149 Radboud University Nijmegen Netherlands L VH FC 54.2
150 KTH, Royal Institute of Technology Sweden L VH CO 53.7
151 Shanghai Jiao Tong University China L VH FC 53.7
152 University of Lausanne Switzerland M VH FO 53.4
153 Kyushu University Japan L VH FC 53.3
154 University of Science and Technology of China China L VH CO 53.3
155 Georgetown University United States L HI FC 53.1
156 University of Sussex United Kingdom M VH FC 53.1
157 Tufts University United States M VH FC 52.7
158
Rheinisch‐WestfälischeTechnischeHochschule
Aachen Germany XL HI FC 52.6
159 Technion ‐ Israel Institute of Technology Israel M VH FC 52.4
160 University of Arizona United States XL VH FC 52.4
161 University of Cape Town South Africa L HI FC 52
162 University of Bern Switzerland L VH FO 51.9
163 McMaster University Canada L VH FC 51.9
164 The University of Western Ontario Canada L VH FC 51.8
165 University of Calgary Canada L VH FC 51.7
166 The Hong Kong Polytechnic University Hong Kong L VH CO 51.7
167 Universität Karlsruhe Germany L VH CO 51.7
168 Stockholm University Sweden L VH CO 51.5
169 University of Leicester United Kingdom L HI FC 51.5
170 University of Colorado at Boulder United States L VH CO 51.5
171 VU University Amsterdam Netherlands L VH FC 51.4
172 University of Tsukuba Japan L VH FC 51.4
173 UniversitatAutònoma de Barcelona Spain L VH FC 51.3
174 Georg‐August‐UniversitätGöttingen Germany L VH FC 51.2
201
175 Hokkaido University Japan L VH FC 51.1
176 University of Bologna Italy XL VH FC 50.9
177 Nanjing University China L VH FC 50.6
178 Wageningen University Netherlands M VH FO 50.4
179 University of Antwerp Belgium M VH FC 50.3
180 Chulalongkorn University Thailand XL HI FC 50.2
181 Lancaster University United Kingdom M VH FC 50.2
182 Waseda University Japan XL VH CO 50.1
183 University of Gothenburg Sweden L VH FC 50.1
184 University College Cork Ireland L HI FC 50.1
185 University of Reading United Kingdom L VH CO 50
186 Université Paris Sorbonne, Paris IV France L VH SP 49
187 Indian Institute of Technology Bombay (IITB) India M VH CO 48.8
188 University of Iowa United States L VH FC 48.7
189 University of Canterbury New Zealand L VH CO 48.5
190 Sapienza University of Rome Italy XL VH FC 48.4
191 Korea University Korea, South XL VH FC 48.4
192 University of Ghent Belgium L VH FC 48.4
193 University of Florida United States XL VH FC 48.3
194 Stony Brook University United States L VH FC 48.2
195 Universität Frankfurt am Main Germany XL VH FC 48.2
196 National TsingHua University Taiwan M VH CO 47.9
197 Queen's University of Belfast United Kingdom L HI FC 47.9
198 Texas A&M University United States XL VH FC 47.9
199 University of Twente Netherlands M VH FO 47.7
200
Rheinische Friedrich‐Wilhelms‐Universität
Bonn Germany L VH FC 47.5
201 University of Dundee United Kingdom M VH FC 47.5
202 Indian Institute of Technology Delhi (IITD) India M VH CO 47.4
203 Sciences Po Paris France M VH SP 47.4
204 Chalmers University of Technology Sweden M VH CO 47.3
205 Universität Stuttgart Germany L VH CO 47.2
206 Keio University Japan XL VH FC 47.2
207 Universiti Malaya (UM) Malaysia L HI FC 47.1
208 Michigan State University United States XL VH FC 47.1
209 UniversiteLibre de Bruxelles (ULB) Belgium L HI FC 46.7
210 Saint‐Petersburg State University Russia L HI FC 46.7
211 University of Turku Finland M VH FC 46.4
212 Dalhousie University Canada L VH FC 46.4
213 Universidad Autónoma de Madrid Spain L VH FC 46.1
214 Simon Fraser University Canada L VH CO 45.9
215 Julius‐Maximilians‐UniversitätWürzburg Germany M VH FC 45.9
216
Rutgers, The State University of New Jersey,
New Brunswick United States XL VH CO 45.6
217 TechnischeUniversität Berlin Germany L VH CO 45.5
218 Zhejiang University China XL VH FC 45.5
202
219 University of Notre Dame United States M VH CO 45
220 Macquarie University Australia L HI FC 45
221 King Saud University Saudi Arabia XL LO FC 44.9
222
Universidad NacionalAutónoma de México
(UNAM) Mexico XL VH FC 44.9
223 Rensselaer Polytechnic Institute United States M VH CO 44.8
224 RMIT University Australia XL VH CO 44.8
225 Victoria University of Wellington New Zealand L VH CO 44.4
226 Université Paris‐Sud 11 France L VH FO 44.2
227 Indiana University Bloomington United States XL VH FC 44.1
228 Mahidol University Thailand L HI FC 43.7
229 Université Paris 1, Panthéon‐Sorbonne France XL VH FO 43.7
230 University of Massachusetts, Amherst United States L VH CO 43.6
231 University of Ottawa Canada XL VH FC 43.5
232 National University of Ireland, Galway Ireland M HI FC 43.5
233 Wake Forest University United States M VH FC 43.2
234 Kobe University Japan L VH FC 43
235 University of Miami United States L VH FC 43
236 University of Indonesia Indonesia XL LO FC 42.9
237
Norwegian University of Science And
Technology Norway L VH FC 42.8
238 VrijeUniversiteitBrussel (VUB) Belgium M VH FC 42.8
239 Tulane University United States M VH FC 42.7
240 Vienna University of Technology Austria M VH FO 42.7
241 University of Victoria Canada L VH CO 42.6
242 Universität Hamburg Germany XL HI FC 42.6
243 University of Surrey United Kingdom M VH CO 42.4
244 Universität Mannheim Germany M VH FO 42.4
245 Universität Köln Germany XL HI FC 42.3
246 Université de Strasbourg France XL MD FC 42.1
247 Universität Ulm Germany M VH FO 42.1
248 University of Liege Belgium L VH FC 42
249 Indian Institute of Technology Kanpur (IITK) India S VH CO 42
250 Aalto University Finland L VH SP 41.9
251 Flinders University Australia L MD FC 41.9
252 University of Illinois, Chicago (UIC) United States L VH FC 41.9
253 Universidade de São Paulo Brazil XL VH FC 41.7
254 Hiroshima University Japan L VH FC 41.7
255 King Fahd University of Petroleum & Minerals Saudi Arabia M VH FO 41.5
256 University of Newcastle Australia L HI FC 41.5
257 University of Technology, Sydney Australia L VH CO 41.4
258
SOAS ‐ School of Oriental and African Studies,
University of London United Kingdom S VH SP 41.3
259 University of Exeter United Kingdom L HI FC 41.1
260 Universität Erlangen‐Nürnberg Germany L VH FC 41
261 University of Padua Italy XL VH FC 40.9
262 Indian Institute of Technology Madras (IITM) India S VH CO 40.9
203
263 UniversitiKebangsaan Malaysia (UKM) Malaysia L MD FC 40.8
264 George Washington University United States L HI FC 40.8
265 University of Strathclyde United Kingdom L VH CO 40.7
266 TechnischeUniversität Darmstadt Germany L VH FO 40.7
267 Charles University Czech Republic XL VH FC 40.7
268 University of Wollongong Australia L HI FC 40.7
269 University Complutense Madrid Spain XL HI FC 40.6
270 Loughborough University United Kingdom L VH FO 40.3
271 Laval University Canada L VH FC 39.8
272 North Carolina State University United States L VH CO 39.5
273 Université Grenoble, Joseph Fourier France L VH FO 39.2
274 Curtin University of Technology Australia L VH CO 39.2
275 Iowa State University United States L VH CO 39.1
276 University of Cincinnati United States L VH FC 39.1
277 University of Hawaii at Manoa United States L VH FC 39.1
278 Universität Innsbruck Austria L MD FC 39
279 École des Ponts, ParisTech France S VH FO 38.8
280 Brandeis University United States M VH CO 38.8
281 University of South Australia Australia L VH CO 38.8
282 Université Paris Diderot ‐ Paris 7 France L HI FC 38.5
283 National Cheng Kung University Taiwan L VH FC 38.5
284 University of California, Santa Cruz United States L VH CO 38.5
285 University of California, Riverside United States L HI FC 38.4
286 University of Athens Greece XL VH FC 38.3
287 La Trobe University Australia L VH CO 38.3
288
Université Montpellier 2, Sciences et
Techniques France M VH FO 38.2
289 Queensland University of Technology Australia L VH CO 38.1
290 National Yang Ming University Taiwan S VH FC 38
291 Royal Holloway University of London United Kingdom M VH CO 38
292
UniversidadeEstadual de Campinas
(Unicamp) Brazil L VH FC 37.9
293 University of Tromso Norway S VH FC 37.8
294 Universität Leipzig Germany L VH FC 37.8
295 Politecnico di Milano Italy L VH SP 37.7
296 Aston University United Kingdom M VH CO 37.7
297 Umeå University Sweden L HI FC 37.5
298 University of Southern Denmark Denmark M VH FO 37.4
299 University of East Anglia (UEA) United Kingdom L HI FC 37.3
300 Tokyo Medical and Dental University Japan S VH FO 37.2
Abstract (if available)
Abstract
ABSTRACTS OF CHAPTERS: Chapter 1: Setting the (1) Scenes, (2) Problems, and (3) Directions -- (1) Administrative reforms, since the 80s, toward the infusion of business logics and practices into public sector entail two elements: Quangocratization and Boardization. Quangocratization means a trend of transferring of certain governmental functions and authority into arm’s length semi-autonomous non-governmental organizations or quangos, while boardization prompts adopting corporate-style governing boards in those organizations. (2) Despite the popularity, the business-inspired reforms are subject to informal influences or ‘hidden actions’ from party politics, which will likely gravitate the management toward merely ‘defensive strategies’ to hedge political bias and concomitant costs from public eyes. (3) Drawing on network perspectives, this study views elite networks and inner politics as substantial source of political influences over quango management with particular regard to staffing and financing. South Korean case was considered as viable research subject in that its administrative culture and ethos are largely collectivist and relational, and also that its quango reforms have been thought to having incompatibility issue in terms of politicization. ❧ Chapter 2: (1) Concept of Quango and (2) Case Selection -- (1) Quango is a denominator term to tag a cluster of hybrid non-state or semi-state entities that fulfill a public function as policy instruments with a degree of independence and autonomy from governments by sitting at arm’s length distance. The central rationale of creating quangos involves the separation of administration from politics, and the implementation of business-style practices for the sake of continuity, specialty, and responsiveness. Nevertheless, a ‘rhetoric-reality gap’ commonly exists in relation to ‘the depoliticization design’ and needs to be appreciated critically because the theory of depoliticization and managerialism are often questionable. Arguably, quangos may not completely be immune from political influences. (2) This issue was dealt critically in the case of South Korean quangos. Two characteristics are salient. First, the reforms were externally forced, and second, they were government-centric and top-down. Given its administrative culture is relational and collectivist, incompatibility problems between implanted treatment and cultural contexts are anticipated, which makes the case interesting and worth looking into. ❧ Chapter 3: Theory - Informal Networks and Hidden Politics in Quangos -- Quango rationality states that the domain should be insulated from special interest of a partisan because party politics is oriented toward a motivation of vote maximization rather than of public welfare at large. In reality, the management is nevertheless intertwined with politics as bureaucratic decisions with regard to resource allocations of governmental grants and personnel appointments of senior executives are largely political. It makes ex ante design of quangos to be operationally closed mythical. Quango rationality may be impaired when the management is exploited to the interest of a limited segment of dominant and consolidated social members. When this happens, quango rationality will be translated into a disguised class-wide rationality. At negative tone, a verdict was typically made on informal networks and inner group politics which may lead to hidden action problems such as collusion. Three families of theoretical mechanisms are thought, in this study, to best explain the phenomenon, including homophily, proximity, and social support. Together with social network analysis techniques, the theories account for in-group bias of social influence effects. ❧ Chapter 4: Design and Method -- The overall research design takes a form of the sequential mixed methods design that consists of two sequential phases: (a) preceding qualitative inquiry, and (b) following quantitative inference. The first phase aims to explore less known issues of quango management with regard to (a) the causes and consequences of hidden action problems, and (b) the elements constituting informal networks, including key players and contents of ties. The results of interviews were thematically analyzed to develop a theoretical model as to the link between informal ties and outcomes. The initial findings suggested two primary outcomes, such as (a) impaired independence of boards, and (b) loose implementation of expenditure, as a function of inner group politics by (a) politicized CEOs, and (b) collusive boards in quangos. Based on the two outcomes, two subset models were established and then tested against a larger sample for generality and relevance. ❧ Chapter 5: Sub-model 1 – Board Structural Independence -- The installment and implementation of corporate-style boards in quangos are not necessarily linked to rigid board controls unless boards are materially independent from both external political influences and internal management. Given that quango CEOs are commonly appointed politically, the boards are a significant locus to maintain quango rationality. The archetype of board independence points to the role of non-executive outside directors who are more socially distanced from senior executives. As it has often been challenged by an iron triangle of president, minister, and quango CEOs, it was tested if social cohesion amid the agents leads to a more aspiration for inner group politics and therefore to reduce board structural independence of outsiders to neutralize internal pressure for controls. Defining board structural independence as an overall functional proximity between CEOs and outside directors, social proximity between the actors was regressed against the defendant variable. Overall, the results showed the hypothesized relations among the variables. ❧ Chapter 6: Sub-model 2 – Firm-level Expenditure -- Being a steward of public money, quangos have a degree of autonomy and independence in making fiscal decisions. When the decisions are not well linked to public interest at large, but to opportunism and agency costs, the rationale for the autonomy and independence will be compromised. Since quangos as arm’s length apparatus of governments are less visible or noticed from public eyes, it was reasoned that the propensity of being hidden costs or shadow domains to conceal costs of the governments from public scrutiny will likely be large. Albeit there are structural designs to thwart the propensity such as (a) regulatory review by parental ministries or cabinets, and (b) oversights by internal governing boards, inner group politics may bias the fiscal decisions toward self-serving purposes. Popular press has pointed out that the oligarchic triangle resulted in excessively benevolent monetary benefits, other than compensation, to quangos in a form of non-fixed discretionary expenditure. The expenditure was regressed against cohesiveness of the triangle and network centrality of CEOs to see if social cohesion and network-conferred power actually led to empathetic monitoring and increased agency costs. Overall, the results confirmed the hypothesized links between the variables. ❧ Chapter 7: Discussion and Conclusion -- Overall, the findings suggested that there is the rhetoric-reality gap in the apolitical mode of quangos in South Korea. This would make the reforms a part of defensive practice for the party governments either to hedge their costs or to expand political influence through staffing. It implies that the theory of public administration needs to extend toward the aspect of interpersonal informality and social relations as it tended to focus exclusively on macro level analysis of structural treatments or inter-organizational networks. Social aspects and their outcomes have been largely neglected. Some originalities and values are found. First, as a sort of crossover research, this dissertation brings in conventional subject (‘corporate governance’) of business research into public administration research. Second, it broadens network research in public administration into networks among the top to explain organizational outcomes. Third, the classic debate as to the dichotomy of administration-politics is touched on by raising a critical point that the orientation is guiding in macro-design (‘ex ante’) while it needs constant appreciation in operation (‘ex post’). Some limitations and future research agenda were offered.
Linked assets
University of Southern California Dissertations and Theses
Conceptually similar
PDF
Governance networks: internal governance structure, boundary setting and effectiveness
PDF
China's environmental reform: ecological modernization, regulatory compliance, and institutional change
PDF
Collaboration: is it worth it? The Magnolia Community Initiative from the perspective of initiative partner participants
PDF
County governance reform in California: introduction of the council‐executive model and the elected county‐executive
PDF
The formation and influence of online health social networks on social support, self-tracking behavior and weight loss outcomes
PDF
A view from below: the development and role of organizational social capital in neighborhood regeneration in Los Angeles
PDF
Social network norms and HIV risk behaviors among homeless youth in Los Angeles, California
PDF
Collaborative social networks in student affairs: an exploration of the outcomes and strategies associated with cross‐institutional collaboration
PDF
Mapping out the transition toward information societies: social nature, growth, and policies
PDF
The institutionalization of nonprofit management: emergence, development, and legitimization
PDF
Contagious: social norms about health in work group networks
PDF
Essays on fiscal outcomes of cities in California
PDF
Social selection and influence of alcohol & marijuana implicit cognitions and behaviors: a longitudinal investigation of peer social network dynamics
PDF
The effects of interlocal collaboration on local economic performance: investigation of Korean cases
PDF
A study of Chinese environmental NGOs: policy advocacy, managerial networking, and leadership succession
PDF
The functions of the middleman: how intermediary nonprofit organizations support the sector and society
PDF
Social network influences on depressive symptoms among Chinese adolescents
PDF
Urban universities' campus expansion projects in the 21st century: a case study of the University of Southern Calfornia's "Village at USC" project and its potential economic and social impacts on...
PDF
How can metrics matter: performance management reforms in the City of Los Angeles
PDF
Does collaborative R&D policy work? The effect of collaborative R&D policy on innovative activities of firms in Korea
Asset Metadata
Creator
Kwon, Hyang Won (author)
Core Title
Quango reforms and challenges in South Korea: social relations, informal networks, and hidden actions
Contributor
Electronically uploaded by the author
(provenance)
School
School of Policy, Planning and Development
Degree
Doctor of Philosophy
Degree Program
Policy, Planning, and Development
Publication Date
11/28/2012
Defense Date
10/09/2012
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
hidden actions,informal networks,OAI-PMH Harvest,QUANGO,social relations,South Korea
Language
English
Advisor
Robertson, Peter John (
committee chair
), Fiss, Peer C. (
committee member
), Suarez, David (
committee member
)
Creator Email
99blackmonday@hanmail.net,hyangwon.kwon@usc.edu
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-c3-122476
Unique identifier
UC11291331
Identifier
usctheses-c3-122476 (legacy record id)
Legacy Identifier
etd-KwonHyangW-1360.pdf
Dmrecord
122476
Document Type
Dissertation
Rights
Kwon, Hyang Won
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Access Conditions
The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the a...
Repository Name
University of Southern California Digital Library
Repository Location
USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA
Tags
hidden actions
informal networks
QUANGO
social relations