The resilience of elite production patterns

In their study of the connective topography of the director and corporate board networks connecting the largest US corporations through interlocks, Davis et al. (2003: 307) raise the issue of the changes of the global network structure as a response to the political, economic and social transformations of the past 20 years. They found that the corporate elite still remains a ‘small world’. In other words, the distance between directors is small and the strength of its ties is a very resilient property of elite networks over the last two decades. It is a finding that tends to confirm one of the major insights of Mills’ study of elite power, according to which the mutually acquainted power elite is produced by a structural tendency toward concentration of institutions, not as the result of a rational and purposeful con- spiracy, but because of the social fabric of common worldviews and standards of action for corporate executives.

At first glance, the connectedness of the corporate elite may be seen as shaky. In reality, Davis et al. (2003) demonstrate that the ‘small world phenomenon’ is still acting as a powerful mechanism of self-perpetuating power structures. Watts (1999: 4) defines the small world phenomenon as the materialization of the sensation of running into a complete stranger while progressively discovering that they know somebody unexpected in common. Short chains can connect many people, as Milgram (1967) puts it. From this perspective, an elite network might keep and sustain very resilient power only through short links, without recourse to institutions facilitating, or any particular ingenuity in, cohesion. Indeed, ‘in spite of the rampant turnover among boards and directors, and nearly complete turnover in ties, distances among the corporate elite remained virtually constant’ (Davis et al. 2003: 321).

The resilience of elite corporate production and the consecutive self-perpetuation of corporate power structures derive from the fabric and resilience of a community of power. It is the social foundation and organization of this community that pro- vide the essential ingredients of its legitimacy. As Arendt noted, the most powerful form of power resides in the organizational sophistication of the few ruling groups, more than in the use of coercion or force. The resilience of elite composition in an ever changing and turbulent business world can be understood through the dis- tance maintained between elites and the institutions they govern. Useem suggests implicitly that the social permanence of corporate elite groups flows from the fact that the organization of the class is largely independent of the organization of the polity constituted by organizations. In other words, social networks produce and reinforce the relative remoteness of elite members from the bodies they shape and govern through their common decisions. A possible contemporary definition of oligarchy production thus emerges from these debates. Michels analyzed the strong interconnections between organizations per se, and oligarchy as a by-product of organization. We could argue that, nowadays, because of the unknowability and rapidity with which the future encounters the present and the impermanence of contemporary organizational settings in consequence, oligarchy is produced by its social disconnection from organization, while reinforcing the inter-organizational social foundations of the elite class.

There is a further question: whether there is or there is not an intentional political design. Davis et al. (2003) suggest it is not necessary that there should be such a design, as the social construction of shared values and interests proves to be the ‘obligatory’ consequence of networks that frequently interact face to face. Intimate interactants may share common values as easily as a contagion might pass readily between the members. The network approach adds fuel to the elitist perspective, where elites are viewed as a set of interlocking centers of power, in which a few power holders master crucial decisions. The autonomy of elite organization does not, however, suppress any idea of pluralism, but it is a monitored pluralism, one where elite members themselves determine the distribution of power, and where the crucial organizational foundation is the purposeful fragmentation of elite strata. Eventually, strategic business decisions might largely be influenced by social ingre- dients, such as the sharing of values and the sort of ‘neocorporatist’ interests that emerge from a whole bunch of strongly interconnected individuals. Mimetic and normative isomorphism is of considerable value in explaining the emergence of surprisingly similar views amongst elites. At one level, it is almost a matter of good manners. One would not want to break ranks publicly, unless some element of either deep crisis or extraordinary opportunity presented itself. Interlocks not only provide a cohesive basis for the elite community; they also facilitate some decisions because bounded decision makers are provided with thick intelligence about what other competitors have done. Corporate governance is partly shaped by criss-cross observations at a distance; thus, power structures and consecutive political forms are likely to be increasingly similar, creating a dynamic circle of political resilience. We can find comparable insights in many other studies. For instance, the stud- ies by Brezis and Crouzet (2002), Temin (1999) or Baverez (1998) suggest the remarkable resilience of the origins of business elites both in France and in the US, countries characterized by very different institutional influences and values. Baverez researched the origins of the leaders of the companies whose shares are quoted on the Paris Stock Exchange (known in France as the CAC 40 firms, a sort of French Dow Jones). He shows the amazing stability of the origins and social foundations of the French corporate elite over the last two decades: from 1981 to 1997 the proportion of leaders that made their path to the top via a business career went from 20 to 25 percent; the proportion of members of founders/owners’ families decreased from 43 to 20 percent; while civil servants represented 55 percent of the corporate elite in 1997 compared with 37 percent in 1981. The proportion of civil servants demonstrates, if needed, the resilience of the peculiar French struc- ture of corporate power, marked by the ascendancy of a ‘state nobility’ (Bourdieu 1996) over the corporate world.

The interpenetration of state and civic power elites could be related, in part, to the emergence of the ‘political manager’ depicted by Useem (1984). The broadening of the managerial scope to encompass societal and political issues might indeed reinforce the tendency to educate and produce politically oriented leaders whose personal connections to the state might prove particularly efficient and necessary. In the US there is a remarkable ambivalence in elite culture, deriving from what Tocqueville suggested was the paradox of democracy, where the fantastic power of local institutions and the parallel power of the state and of the central constitution exist alongside the power of masters in a country marked by the unbelievable persistence of slavery and by a striking culture of initiative and freedom.

Notions of social mobility are central to US culture. Recall the highly popular biographies of figureheads of social mobility such as Andrew Carnegie or John Rockefeller, books whose main message to each single person in the country was that one could become part of the uppermost and wealthiest elite through hard work, ingenuity and innovation. Sorokin (1925), in his study of millionaires in the US, found that society was becoming less and less meritocratic and that the pathways to the top were increasingly imposing impediments to individuals without the basic upper-class capitals of wealth, access, culture, connections and kin. In a shrewd compromise, Joslyn and Taussig (1932) pointed out that elite production mostly rested on the fact that upper-class people were more able and competent than the sons (rarely the occasional daughter) of the lower social strata. They had received both a great deal more training and everyday practice in elite management and disposition. The debate still rages between those who argue that exogenous social backgrounds are the most influential ingredients of elite generation, and those who counter that corporate careers can largely account for access to the top business ranks.3 From the persistence of this debate, we draw the notion that the elite landscape is not that simple and, particularly, that the road to the top of the biggest corporations might have significantly evolved over the last two decades. Let us examine this latter hypothesis before concluding with a consideration of the political and theoretical implications of ruling elites for the study of power in organizations.

Source: Clegg Stewart, Courpasson David, Phillips Nelson X. (2006), Power and Organizations, SAGE Publications Ltd; 1st edition.

Leave a Reply

Your email address will not be published. Required fields are marked *