THE 2 FACES OF GOVERNANCE - RESPONSES TO LEGAL UNCERTAINTY IN US FIRMS, 1955 TO 1985

Recent neoinstitutional analyses have associated the rapid diffusion o f due-process governance mechanisms in the American, workplace with go vernment pressure far equal employment opportunity and affirmative act ion. We carry the argument forward in three ways. First, we focus on g rievance procedures and employment-at-will clauses to show that the le galization process produces both rights-enhancing and rights-negating rules. Second, we focus on the private for-profit economic sector to t est more effectively the efficiency and labor-control theories that ha ve fared poorly in previous neoinstitutional studies. Third, we explor e the interactions among personnel professionals, lawyers, and the sta te in the adoption of legalistic governance mechanisms. Results sustai n the neoinstitutional argument, but also offer new support for effici ency and labor-control hypotheses.