ABSTRACT
This chapter discusses the practical and theoretical consequences of the three forms of corporate embeddedness—legal, normative, and regulatory. It explores the practical implication of lower degrees of connectedness between the finance industry, and more specifically the banks that traditionally have served as the hubs in corporate elite networks, and nonfinancial industry. The chapter examines the broader theoretical implications of an institutional theory view of the corporation that includes legal, normative, and regulatory mechanisms. The institutional theory model of the corporation is considerably more complex in its outline and content, yet it mirrors and apprehends the variety of mechanisms and operations that define the corporate entity with greater precision and detail. Mark S. Mizruchi argues that one of the key institutional changes occurring in the United States during the last few decades is that the traditional business elites, seated in the banking sector, have been displaced by a new finance industry–oriented economic elites.
