DOMAEL , JACKIELOU M.

BACHELOR OF SCIENCE IN CIVIL ENGINEERING

JULY 29,2019

REACTION PAPER

INTERLOCKING DIRECTORATES

From the article Interlocking Directorates in the Corporate

Community by William Domhoff it is the linkages among corporations
created by individuals who sit on two or more corporate boards. It
talks about corporate networks which is the linkages among
corporations and social networks which the linkages among people.
In a corporate world, interlocking of directors paved the way to its
success. Although, some changes occur over time one goal is for the
business to grow. In the past, interlock between directors served as a
strategic purpose of tying corporation together for economic
advantage for the owners. Now, it focuses on diversification. They
recruit human resources with variety of skills.

It has been given emphasis that companies of the same

business can’t interlock with each other for the reasons that
interlocks between companies in the same business are illegal. It is
illegal in the sense that it may bring negative effects of interlocking
directorships. Well, all has its good and bad effects though. Yet they
have my respect for I know nothing of the corporate world they are in.

A corporation will become the “centrality” if it has a numerous

interlocks and those interlocks has a great number of interlocks with
other companies, as well. If I may take an example in the words that I
can somehow understand, like in a beauty contest. All contests, there
exist a criteria for judging. One of those is the audience impact. I am a
friend of a contestant and I have so many friends and my friends has a
lot of them too. We go to the contest together to cheer for my friends.
We are so much in number that my friend become the “corporate
centrality” if you may put it in business jargon words. My friend
interlock with me and I have interlocks with my friends’ friends, too.
The more connections you have , the more you become the center of it
all. If I may put it, my friend who enters in the beauty contest is the
“corporate centrality” among others because of her connections to me
and my degree of connections to my friends’ friends.

As what have I stated above that there were changes occur

overtime. Now here’s the reasons why. First, the main board sitters are
not the big owners and big financiers anymore. It’s now the top-level
executives. Second, because of diversification technique as what I
want to call it, corporations were under pressure in terms of adding
women and people of color. In the article it has been stated that the
bank is not the central of all corporation anymore. Maybe because
other companies has directors of people with other colors. For
example , an African – American is a director of that other company.
As a result, that company gain more connections because he is both
an African and an American. Whereas, if the bank has only white
directors the tendency is that he can’t have that much connections
compared to an African – American director. That is why , companies
are under pressure in adding human resources. And also, connections
between corporations were broken by the death or retirement of a
director. Resulting to electing a new director. The connection are not
very often restored. I can take an example from a family that is so
dysfunctional but they are held together by one of the family member.
This one person is the main reason why they are still together but
there comes a time that this person has to go forever. A big possibility
that this family can’t handle the consequences of this sorrowful event.
As a result , the connections between them faded. Just like in
business world, if a director has to go they are going back to
adjustment period and find ways to restore the connection between
the new director. And the new director to the old directors in other
companies.

In conclusion, interlocking directorates gain more benefits than

the opposite. Besides money, it helps the directors to access for more
information and to have an opportunity for career advancement. The
corporate world is indeed a world build not for me. Yet, from the
article Interlocking Directorates in the Corporate Community I got to
know how corporation works and also I learn something about how
boards function.