About

Edward J. Zajac is the James F. Bere Professor of Management & Organizations at the Kellogg School of Management, Northwestern University. He joined Kellogg after completing his Ph.D. in organization and strategy at the Wharton School, University of Pennsylvania. His research, teaching, and consulting focus on strategy, alliances, and corporate governance. His award-winning research has been published widely in major academic journals, and he is recognized as one of the most highly cited researchers worldwide, with over 40,000 citations over his Kellogg career. Zajac has received numerous awards from the Academy of Management, including the Distinguished Scholar Award, the Outstanding Educator Award, and the Distinguished Service Award, and he served as Co-Editor of the Strategic Management Journal. His academic positions include Professor of Management & Organizations and Professor of Sociology (by Courtesy) at Northwestern University, and he has held roles in health enterprise management. His research interests include strategic management issues, particularly the integration of economic and behavioral perspectives on strategic alliances, corporate governance, and organizational adaptation to environmental change. He has developed courses on strategic alliances, corporate governance, and strategy formulation and implementation, and is active in executive education and consulting across North America, Europe, Asia, and Latin America.

Research topics

• Psychology
• Business
• Social psychology
• Political Science
• Finance
• Management
• Economics
• Public relations
• Accounting
• Law
• Marketing
• International trade
• Industrial organization

Selected publications

• We Got the Beat: The Role of Music in Management & Organization Theory

  Academy of Management Proceedings · 2025-07-01

  article

  Thirty years ago, the 1995 Academy of Management meeting in Vancouver featured the groundbreaking symposium “Jazz as a Metaphor for Organizing in the 21st Century,” igniting a tradition of exploring music’s relevance to organizational studies. Since then, music has emerged as a compelling context, metaphor, and theoretical lens, offering insights into organizational dynamics, creativity, strategy, and value creation. Yet, skepticism about its utility persists, rooted in outdated views of organization research as purely practical and emotionless. This panel symposium revisits and expands the dialogue between music and management and organization studies, exploring their mutual contributions. Drawing on research into orchestras, the recorded music industry, and music theory, we will highlight how music as a context has illuminated issues like organizational resilience, innovation, and stakeholder dynamics. Further, we will demonstrate how music theory enriches organization theory, addressing concepts such as timing, rhythm, and dissonance to explain competitive anticipation, temporal decision-making, and value alignment. Bringing together scholars from diverse divisions, this symposium seeks to inspire interdisciplinary research that bridges music and organization studies. By challenging traditional boundaries, we aim to advance innovative perspectives on organizing, strategizing, and creating, while emphasizing the unique insights music brings to the complexities of organizations and industries.

  PublisherDOI

• Disambiguating the Effects of Shareholder Activism on Corporate Director Careers

  Journal of Management · 2025-12-16

  articleSenior author

  This study examines shareholder activism and its consequences for corporate directors’ career trajectories. We begin by highlighting that the inherent ambiguity surrounding activist interventions implies variation in director careers beyond an overall negative effect. Specifically, we posit and test the notion that the director labor market will differentiate between financially based versus socially based shareholder unrest, with the latter having a stronger negative effect based on (1) its greater information value above and beyond what is already knowable about the firm, and (2) heightened recognition of the need for directors to balance financial performance pressures with responsiveness to evolving environmental, social, and governance concerns. Empirically, we analyze U.S. shareholder activism events between 2014 and 2018, and using Coarsened Exact Matching combined with a Difference-in-Differences approach, we find evidence consistent with our disambiguation perspective on shareholder activism. Our theoretical and empirical analyses also further disambiguate whether director exits reflect market or/and director preferences, and we find evidence for both. We conclude by discussing how our theoretical perspective and empirical findings contribute to research on shareholder activism, director labor markets, and corporate governance.

  PublisherDOI

• Different Owners, Different Behavior? How Private Equity and Activist Funds Impact Firms and Workers

  Academy of Management Proceedings · 2025-07-01

  article

  Unlike what we find in standard models of the firm, corporate owners are not uniform. The explosion of new ownership forms and the rising rate of ownership transitions over the past few decades testifies to this claim. Differences in consumption, competence, and other characteristics like time horizon translate to distinct approaches to managing companies. This can impact firm value, but also organizational survival and industry dynamics, employee compensation and well-being, and the achievement of sustainability goals. This symposium features five papers on the strategic, organizational, and human resource implications of corporate ownership, that build on this claim. Four empirical papers propose new ways of thinking about how private equity and activist investors like hedge funds reshape company behavior. A fifth paper by a leading scholar elaborates a new framework for explaining how corporate ownership shapes management, incorporating while moving beyond agency theory. This symposium will advance knowledge on how corporate owners influence company action, inaction, and capabilities. We believe it will be of special interest to scholars of corporate strategy, organizational theory, and human resources.

  PublisherDOI

• How Outside Opportunities Affect CEO Compensation: Fact or Friction?

  Academy of Management Proceedings · 2025-07-01

  articleSenior author

  We investigate the impact of outside employment opportunities on CEO compensation by integrating market-based and barrier-based perspectives. The former perspective posits that when such opportunities arise, retention concerns elevate CEO compensation, while the latter emphasizes how cognitive, normative, and legal mobility barriers will likely exert a countervailing effect. We test our hypotheses in the quasi-experimental context of sudden CEO deaths, which create immediate demand for peer CEOs within the same industries as firms that have unexpectedly lost their CEOs face an immediate need to fill leadership vacancies. Using a comprehensive dataset of sudden CEO deaths among U.S. public firms from 1997 to 2020, we apply a combined methodology of coarsened exact matching and difference-in-differences to analyze compensation changes for peer CEOs. Our findings reveal that while peer CEOs receive higher compensation after the events of sudden CEO deaths, this effect is significantly diminished for CEOs with longer organizational tenure, those in industries characterized by less frequent executive mobility, and those operating in states with stronger enforcement of non-compete agreements. By showing how and why market forces within the CEO labor market are affected by nuanced organizational and institutional contexts, we seek to advance current understanding of CEO compensation dynamics and the functioning of CEO labor markets.

  PublisherDOI

• When Opportunity Knocks, What’s the Response? How Exogeneous Change Affects CEO Compensation

  Academy of Management Proceedings · 2024-07-09

  articleSenior author

  This study addresses ongoing debates on CEO labor market efficiency by analyzing how exogenously emerging opportunities affect a focal CEO’s compensation. More specifically, we consider whether and how a focal firm’s CEO compensation is sensitive to new demand and retention concerns, even in the face of presumed CEO labor market frictions (e.g., legal barriers and skill transferability). We also theoretically and empirically analyze potential moderators (e.g., CEO origin and education) to provide a deeper understanding of the mechanisms driving the relationship between new outside opportunities and a focal CEO’s compensation. We test our hypotheses in the context of sudden deaths of CEOs among US firms between 1997 and 2020, conceptualizing them as potential outside opportunities for industry peer CEOs. We conclude with a discussion of how our theoretical perspective and supportive findings contribute to current understanding of the determinants of CEO compensation, CEO labor market dynamics, and spillover effects.

  PublisherDOI

• From Personal Finance to Corporate Finance: How CEOS' Personal Financial Risk Appetite Affects that of Their Firms

  SSRN Electronic Journal · 2024-01-01

  articleOpen access
  PublisherDOI

• How Music Theory Can Inform Competitive Dynamics: Anticipatory Awareness and Successful Preemption

  Academy of Management Review · 2024-09-16 · 3 citations

  articleSenior author

  Competitive dynamics (CD) research has long relied on the awareness-motivation-capability (AMC) framework to analyze competitive actions and responses. Rooted in the stimulus-response model from social cognition research, the AMC framework unsurprisingly emphasizes a focal firm’s ex post (i.e., emergent) awareness of a rival’s attack as the requisite stimulus for a focal firm’s competitive response. We extend both the AMC model and the CD literature by considering the competitive relevance of an alternative stimulus: a focal firm’s anticipatory awareness of rivals’ intentions. To elaborate the process by which anticipatory awareness can manifest itself, we advance a novel conceptual framework rooted in music theory (tonal harmony and rhythm perspectives) to explain how a listener, by recognizing consonance and dissonance in musical notes and patterns in timing, can anticipate what will come next. We apply our framework to discuss ways in which a focal firm can develop anticipatory awareness vis-à-vis competitor intentions, and we link this alternative stimulus to an under-researched but managerially important response that is also anticipatory: successful preemption. We conclude with a discussion of the multiple uses and extensions of our theoretical framework for research and practice on anticipated interactions between firms and their rivalrous (and non-rivalrous) counterparts.

  PublisherDOI

• When the Principal Is the Firm’s Problem: Principal Costs and Their Corporate Governance Implications

  Academy of Management Review · 2024-07-08 · 15 citations

  article1st authorCorresponding

  While agency theory has long dominated corporate governance research, we suggest that the common transplanting of the dyadic principal–agent problem into the corporate context has blurred key differences between principals and the firm as an entity. We redress this imbalance by advancing a conceptual framework of principal costs vis-à-vis the firm. We first show how principal costs can exist even in the single-principal corporate context, based on owner consumption and competence characteristics, which allows us to also distinguish principal costs from both agency costs and principal–principal expropriation costs. We then extend our principal costs theory to the multi-principal context, in which we highlight how principal costs, including private benefits of influence, can exist even in corporations with no controlling shareholder enjoying private benefits of control. In this latter context, we redirect the agency theoretic lens of incentive and informational concerns toward active minority shareholders whose actions generate principal costs vis-à-vis the firm, as well as passive shareholders who fail to constrain such principal costs. We conclude with a discussion of the broader implications of our theory for current and future corporate governance research, practice, and public policy.

  PublisherDOI

• The Other Invisible Hand: How Markets—as Institutions—Propagate Conformity and Valuation Errors

  Strategy Science · 2023-03-15 · 4 citations

  articleSenior author

  The institutionalized status of markets is undoubtedly due to their presumed ability to aggregate individual bids into a single unbiased estimate of value. While not denying this emergent property of market processes, we propose and test an alternative perspective that explains how market processes can also generate the propagation of individual valuation errors that aggregate into price bubbles. Theoretically, we advance a microinstitutional perspective that draws from social and evolutionary psychology linking market processes to a more general process of institutionalization, whereby individuals seeking the adaptive benefits of conformity may—due to bounded and socially biased rationality—instead generate maladaptive individual and collective outcomes. Empirically, we craft an efficient experimental market and find three sets of evidence consistent with our microinstitutionalization perspective. We first show—at the individual level—that market participants exhibit a social bias toward conformity with the market’s collective valuation, even when the emergent market valuation is demonstrably incorrect. We then show—at the market level—that the range of valuations over time also decreases in a conforming direction, again independent of valuation accuracy. Last, we provide the first experimental test of the long-assumed effect of social ambiguity on institutionalization, finding that market participants’ over-attention to the collective valuation is indeed sensitive to variation in social ambiguity. We conclude by highlighting the relevance of our theoretical perspective, method, and findings for future research on institutions and institutionalization processes, as well as future studies on social influence and conformity-based errors. Funding: S. S. Levine acknowledges research grants from Singapore Management University; the University of Texas at Dallas; and the European Research Council (agreement 695256). Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2022.0173 .

  PublisherDOI

• The Other Invisible Hand: How Markets - As Institutions - Propagate Conformity and Valuation Errors

  SSRN Electronic Journal · 2023-01-01 · 1 citations

  articleOpen accessSenior author
  PublisherDOI

Frequent coauthors

• James D. Westphal

  University of Michigan–Ann Arbor

  32 shared

• Igor Filatotchev

  25 shared

• G. Tyge Payne

  Louisiana State University

  25 shared

• Curt B. Moore

  Oklahoma State University

  25 shared

• Ivana Naumovska

  INSEAD

  14 shared

• Peer C. Fiss

  University of Southern California

  13 shared

• Sheen S. Levine

  9 shared

• Razvan Lungeanu

  8 shared

Labs

• Management & OrganizationsPI

Awards & honors

• James F. Bere Chair
• Sidney J. Levy Teaching Award
• Fulbright Scholar at the University of Cologne
• Fellow of the Academy of Management
• Fellow of the Strategic Management Society