Casting call: The expanding nature of actorhood in U.S. firms, 1960–2010

Organizational scholars today routinely refer to firms as “actors.” In contemporary uses, the term conveys identity, sovereignty and the capacity for purposive action. Understood in this way, the conceptualization of the firm as an actor is significant in that it diverges from descriptions of the firm as, for example, a “legal fiction” that is the aggregation of individual interests via a web of contracts or merely a vehicle for powerful owners to achieve their goals. In this paper, we draw on a content analysis of 300 annual reports from a sample of 80 large U.S. public firms to examine changes in the extent and nature of actorhood portrayals among businesses between 1960 and 2010. Our examination of how firms presented themselves in their annual reports indicates that society's view of firms as actors both expanded and qualitatively changed during this timeframe. We find that firms increasingly depict themselves as entities with values, agency and responsibility on a growing range of social and economic issues, all of which are consistent with modern notions of actorhood. This transformation corresponds to broader cultural shifts, such as the trend towards managerialism and the explosion of hard and soft law. Overall, we show that institutional pressures do more than provide a set of institutional constraints for “embedded agency”: More fundamentally, cultural shifts constitute firms as actors.