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The Organizational Reproduction of Inequality r Academy of Management Annals 2020, Vol. 14, No. 1, 1–36. https://doi.org/10.5465/annals.2017.0033 THE ORGANIZATIONAL REPRODUCTION OF INEQUALITY JOHN M. AMIS1 University of Edinburgh JOHANNA MAIR Hertie School of Governance and Stanford University KAMAL A. MUNIR University of Cambridge With societal inequalities continuing to increase and organizations providing the vast majority of people with their income, we wanted to assess the ways in which organi- zational practices are implicated in the burgeoning of social and economic inequality. Following an integrative review of the literature drawn from across the social sciences, we found that the multiple ways in which five major organizational practices—hiring, role allocation, promotion, compensation, and structuring—are enacted emerged as being central to the reproduction of inequality. We also uncovered how the persistence of these practices, and the inequality they induce, can be largely attributed to a con- stellation of three highly institutionalized myths, efficiency, meritocracy, and positive globalization. Our analysis further reveals how, as scholars, we bear a corresponding responsibility to reconsider how we engage in research on and teaching about organi- zations. The implications of this for our future work are discussed. “For the great enemy of truth is very often not the remain largely invisible; when organizations are con- lie—deliberate, contrived and dishonest—but the sidered, they are mostly viewed as rational entities myth—persistent, persuasive and unrealistic.” (John comprising neutral structures and practices. This is F. Kennedy, 1962) particularly problematic when considering inequality Over the last three decades, economic inequality because organizations not only play a central role in all of has emerged as one of society’s most pressing chal- our lives but also demarcate employment and other lenges (e.g., Atkinson, 2015; Dorling, 2011; Oxfam, opportunities that in turn define social and economic 2019; Piketty, 2014; Wilkinson & Pickett, 2010). Much status for the vast majority of people (Atkinson, Piketty, & research has attributed inequality to the rise of free Saez, 2011). market capitalism. Indeed, the ideological shift of the Our purpose in this article is to reassess the re- 1980s and the emergence of a new paradigm in which lationship between organizations and inequality. We free markets held a central position (Burgin, 2012) ac- recognize that organizations, far from being neutral companiedbyanincreasingcontrol of policy agendas entities, constitute bounded, rationalized, and for- by the private sector (Barley, 2007; Bonica, McCarty, malized spaces in which economic opportunities Poole, & Rosenthal, 2013; Stiglitz, 2013) have been intersect with structures of exclusion and disad- causally linked to what Atkinson (2015: 3) has termed vantage. Consequently, understanding how people the “inequality turn.” However, in the macro-level gain employment, are promoted and compensated, narratives that have been spawned by these views, and what enables and hinders upward mobility organizations, and the people who work within them, within organizations is critical to understanding the production and reproduction of inequality. With this backdrop, we approach this article with three ques- The authors gratefully acknowledge the astute guidance of Associate Editor Matthew Cronin. tions in mind. First, what are the organizational John M. Amis, Johanna Mair, and Kamal A. Munir con- practices that reinforce inequality? Second, how do tributed equally to this work. these practices reproduce inequality? Third, why are 1 Corresponding author. these dynamics of reproduction so persistent and 1 Copyright of the Academy of Management, all rights reserved. Contents may not be copied, emailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express written permission. Users may print, download, or email articles for individual use only. 2 Academy of Management Annals January prevalent across different organizations and do- objective, to understand why these practices of dis- mains of activity? advantage have become so prevalent and persistent As we reviewed the literature guided by these over time. In this respect, our analysis of the litera- three questions, it became apparent that although ture revealed three institutional myths (March, there is significant work across the social sciences 2010; Meyer & Rowan, 1977)—widely but not nec- that has revealed the presence of various social in- essarily consciously held ideals that are collectively equalities in organizations, this work has typically rationalized and largely unchallenged—that work been siled according to the type of inequality, prac- together to bind the practices into a taken-for- tice, or organization. Thus, although we have a good granted framework of established ways of operat- understanding of who suffers from bias and disad- ing. These myths—efficiency, meritocracy, and vantage in organizations, we have much less appre- positive globalization—are pervasive in their in- ciation of the mechanisms that allow inequality to fluence and allow the enactment of practices in a persist. To address this, we used an institutional lens way that reproduces inequality in organizations. to develop an integrative and potentially reorienting The first myth we uncovered, then, was an un- review of the literature. This allowed us to probe the wavering belief in the notion that organizations are beliefs and assumptions that underpin organiza- essentially driven by a concern for greater efficiency. tional life, thereby addressing the aforementioned This belief stems from the deeply entrenched and three questions. First, we were able to develop a widely propagated assumption that markets are effi- holistic understanding of what practices become the cient, and, therefore, to survive, organizations must carriers for reproduction of inequalities in organiza- also be efficient. Although this belief has been con- tions. We accomplished this by integrating insights sistently challenged (e.g., Barley, 2007; Stiglitz, 2013), drawn from 232 articles and 76 books published in it remains widely used as justification for the imple- management, organization studies, sociology, social mentation of practices in ways that increase levels of psychology, economics, epidemiology, gender studies, inequality. For example, the conviction that com- cultural studies, race studies, and geography along with pensation at all organizational levels are determined a further 14 reports from government policy units and by a neutral and efficient labor market is often used to think tanks. We show how understanding of the ways in justify the vast differences between the pay packages which people are employed, promoted, allocated roles, of top managers and ordinary workers. In particular, compensated, and conditioned by organization struc- the belief that there exists a global market for high tures is critical if we are to grasp the role organizations performing chief executive officers is used to justify play in producing and reproducing inequality. their lucrative compensation packages when in fact Second, we were able to show how these practices the market is not efficient with the number of those worked to create a system of institutionalized in- actually moving very small (Hargreaves, 2019). equality. In particular, our integrative approach Second, much of what goes on in organizations is revealed that these practices do not work in isolation enabled by the institutionalization of a belief that but tend to have a cumulative effect. For example, organizations are essentially meritocratic in their hiring practices are important as they determine who working. The concept of meritocracy implies a social gets access to which positions; these people are then system in which individual advancement and the subject to various promotion practices that enable allocation of rewards in organizations and society and constrain upward mobility; associated role al- more broadly are based on an individual’s capabil- locations, both before and after potential promotions, ities and performance rather than on family con- often have the effect of defining people with identities nections, seniority, race, gender, or class (Bellow, that are shaped by social categories; these are also 2003). Despite the institutionalization of merit-based linked to compensatory practices that essentially practices, our review clearly shows that, regardless prohibit the equality of outcomes as pay is the major of claims to the contrary, entry, advancement, and determinant of economic resources for most people; reward in organizations, including the attainment and finally, organizational structures can impose a of highly prized leadership positions, often remain rigidity of norms and routines that can reinforce this systematically nonmeritocratic. For example, a pro- system by advantaging some groups over others. fessional service firm may emphasize the high grades Although this emergent understanding is re- attained at an elite university as a reason for hiring velatory for our appreciation of what organizational one individual over another. However, the cultural practices reproduce inequality and how they do it, it and social capital that led to gaining acceptance does not provide sufficient insight into our third in that university, provided access to advantageous 2020 Amis, Mair, and Munir 3 internship opportunities and allowed the candi- of it through academic
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