It has been said that, "over a great and unified society, the business man has never ruled. In the main his influence has remind indirect, and has been exerted through politicians, courtiers, or dictators, and in compromise with the desires of other groups: military, agrarian, democratic, aristocratic." (35, p.59). At most it appears that the businessman has ruled commercial cities.
Whether or not businessmen have ruled cities or nations as recognized heads of government seems beside the point in the present discussion of power. In the modern world the vast flow of trade, the moving of goods and services that as dependent upon power decisions would indicate that the businessman is a force of great magnitude and although he may influence "indirectly," yet influence he does and top business influentials are the most important elite figures in many areas of the world. Public policy and social direction of energy resources are part of their stock in trade.
BUSINESS ELITE ANALYSIS
XXII-1. General influence. One need only look at the great industrial and commercial cities of the world to know that those who control the movements of men within them are persons of great power. The cities represent the accumulation of vast arrays of organizational skills. Construction, ships in harbors, rail car movements, traffic lines, trucks and buses, smelting and forging operations, chemical plants and many other activities, suggest vast powers of organization and direction.
Within the centers of movement the businessman’s powers are interwoven into a complex arrangement of indirect as well as direct influences. He sits, moreover, in the center of the network of influence and his power extend radically to state capitals, national cities and to other great cities of the world - directly or indirectly.
Below the industrial, large-scale financial, legal and merchant prince group, stands a commercial group. This includes the men of small-scale commercial enterprises, small scale industries that manufacture and distribute to local markets primarily, and, in general, the "main street crowd." On the same level with this group are communications personnel, public relations firms and other service organizations, trade associations, and industrial research and planning groups.
These groups, the first and second echelon influence groups, are underpinned by the large mass of white collar workers and laboring people who are often organized into civic, professional, and fraternal organizations, but who are relatively powerless in the short-run decision-making process.
XXII-2. Functional significance a sign of power. The basis of power of a businessman is generally proportional to the size or functional significance of the business of which he is part. As pointed out before, business enterprises represent apexes of power. Those persons at the top of individual power pyramids represent top influence both within and outside of such arrangements.
In the business community there is general recognition of gradations of influence in business matters. The top elite of the business community are usually found in occupations contained within heavy industry, steel, oil, machine tools, auto manufacturer, chemicals; import-export activities for the world market; large scale banking; corporate legal service organizations; large scale storage and distribution operations, mail order and regional merchandising establishments, and the larger real estate management enterprises. This list is partial and intended only to be suggestive.
XXII-3. Internal corporate power ranking. The men within the industries and operations mentioned defer to one another on the basis of corporate ranking and hierarchical positions. The ordinary corporate rankings are: chairman of the board (sometime a figurehead), chairman of the executive committee (often a position of great influence and power), president, vice presidents (often 20,30 or more; usually fewer), treasurer, comptroller (And any other officers of the Board), and finally operations personnel, such as general manger, assistants to various board officers, production chiefs, accountants, personal public relations, and labor supervision.
Within a specific corporation the formal lines of authority between the various offices mentioned are well known to all who must use them. The whole chain of command represents a "pecking order," i.e., the top man can tap all and make them move for him, the second man in control can tap all but the one man above him, and so on down the scale.
Informal lines of authority and communication are not unknown in large scale corporate bureaucracies and those who know the system of informal channels can often expedite work and advance personally by such knowledge. E.g., an assistant purchasing agent may know that the vice president in charge of production advises the purchasing officer on specific requirements for machine tools and likes to talk personally to certain salesmen. The assistant sends those persons of intimate acquaintance directly to the vice president instead of routing him "through channels." Generally, however, lines of authority are rather strictly followed in bureaucratic organizations and deference traditions are observed.
XXII-4. Inter-corporate cliques. Within the business community at large, there is an understanding of "who is who" in other corporate groupings, and chairman of boards have dealings in the main with other persons of like, rank, authority, and prestige of organizations outside their own. The inner circle of top organization personnel is thus formed. The men on this level interact frequently, come to know one another intimately, and trust each other’s judgments, or as the case may be, learn to avoid one another. Clique arrangements arise from like-minded people working together with some regularity, and the inner workings of the various cliques become well-known in the top circles.
XXII- 5. Representation of larger scope. Within a given community the larger corporate interests will have representatives in most of the major civic, political and institutional groupings. The fact that large industries are heavy taxpayers and generous donors to local government and civic endeavor makes the voices of such representative potent. The representation follows the status scale of the business organizations, that is, the large scale public and quasi-public endeavors will attract top corporate talent, while the smaller enterprises of civic import or political relevance will be delegated to second and third string men. Only a minority of men related to basic industries or businesses are politically active, of course. Those who "tend to their own business" and let others do the "politicking" are dependent upon the latter and indirectly support them.
XXII - 6. Cosmopolites. Those who are polemists may be divided into "cosmopolitans" and "locals". The cosmopolitan business man is a power in his own business, and draws his basic community power from this fact, but he also translates some of his power to the larger issues and policy considerations that confront the general business community and the civic community at large. Some of these men go a step further and act on a state, national, or international level of affairs.
Some of the cosmopolitan leaders on a national and international level resemble "shuttlecocks." They travel extensively, are interested and generally informed on policy developments over a wide geographical and political area. They act as intermediaries for many diverse interests and are bearers of news, gossip, and technical information. They may hold no elective or appointive office, and they may not be members of official or unofficial committees. They may travel on behalf of their businesses primarily, but act as informal couriers of policy information. They visit acquaintances enroute, stop at clubs, make formal and informal talks and are universally accepted as national and international leaders. The man "just in" from Japan or London who has vital trade news or political intelligence finds a ready audience in the major centers of trade and commerce.
XXII - 7. Localists. Most businessmen are stay-at-home leaders. By sitting in one spot and wielding power and influence locally they indirectly influence the decisions of the state and nation. "What Detroit, Milan, Santiago will do or not do" in relation to any given policy may be ultimately dependent upon the attitudes and decisions of the local leaders of these areas. The combination of the locals and cosmopolitans makes the whole system operative. One could not do without the other, yet the functions of each are relatively distinct.
XXII - 8. Owners and managers. In the patterning of elite power in the business community the owner group has the advantage of often being a hereditary elite with the margin of influence that such position gives. On the other hand, many of the business leaders are self-made men, persons who have "beat their way to the top," and from the perspectives of power may be extremely influential while being socially self-contained or even inferior socially to those who can claim aristocratic lineage.
There are still areas in the world in which those in business are considered to be a cut below the landed aristocracy or other gentry of the cloth or cultural centers of the arts and learning. Latin Americans and Europeans are prone to claim this to be true. Yet many businessmen from many diverse nationalities are being integrated into the cultures there and their business success does them no harm in the process. History affords many parallels. There is a vitality in trade and commerce and its fruits that is hard to deny. Even managers of foreign corporations are culturally advantaged by rates of exchange, higher pay, and the prestige of their parent companies and nations and in time find themselves taken into the policy strata of national affairs of the nation in which they do business.
Managerial personnel both locally and abroad are in strategic positions in relation to policy development. They are usually "organization men." They may not be at the top of the power pyramid in policy formulation, but through their active contact with conditions of work within their businesses plus the fact that research and other organized blocks of knowledge are available to them makes them persons upon whom the top policy makers depend. The whole network of national trade organizations with their ability to influence policy is usually open to these men or to some of their immediate subordinates. As a class they fit into a middle strata - a strata that is noted for its activity and group mindedness. It is the class from which the elite recruits its members, as has been pointed out, and many of the managerial persons are out to make good - to secure the place held out to them as a social reward.
The managerial person is, then, a middle man in the processes of policy development. He works with many of the active people, his peers, on the projects and problems of great importance to his company. He is in touch, actively, with the policy makers of company affairs. He has at his command a large body of supervisors and workers to whom he can turn for execution of any general community or state project. He reports successes and failures of policy execution and makes suggestion for changes in policy alignments in accord with political reality. He thus becomes a key figure in elite operations and a part of the circle, although he may not be at the center of power direction.
Managerial personnel may be politically active at the committee level of political affairs. Their business operations may require considerable contact with public officials. For example, when a Texas pipe line company has to lay a pipe from Texas to New England and in the process cross dozens of state boundaries and countless local political sub-divisions, it is necessary for the company manager to know the workings of local politics on a very practical level. The same condition applies to a lesser extent in any purely local situation. The manager may not hold political office and he may not contact local officials directly, but someone within the company depends upon it and politicians who favor the activities of the company are in turn favored directly or indirectly. There is no mystery to all of this nor necessarily political chicanery. The facts of activity demand working relationships between business and industry.
XXII-9. Integration of an industrial society. In an integrated industrial society the larger metropolitan centers are star clusters of influence. The smaller communities are satellite to them. In turn, the rural populations are dependent upon the services of both the small and large communities to provide basic goods and materials for day to day, week to week operation Few communities are so isolated from the industrial and commercial centers of the world that they are not dependent in some measure on the things brought to them from the outside. This is subject to the measure of degree, of course, but the modern world is closely bound together by ties of trade and commerce. The dependency of the large units upon the smaller is also obvious and the interchange between them is likewise apparent. Between them all there are ties of human relations and the businessman has played no small part in strengthening and extending these ties.
The visible signs of commercial integration can be seen on any main street that advertises products from various parts of the world. Sale outlets in local merchandising markets display the face, for all the world to see, that they are a part of a larger system. From local outlets, ties to district wholesalers, regional jobbers, manufacturers’ agents to the original producer are apparent upon reflection. It is also apparent that a whole network of communications, loose indeed in many cases, exists to tie the national and international business community into a complex action system. The value system of the industrial revolution and its manifold outgrowths, including socialized and state managed systems of production, underlies the whole pattern of development, and provides a working stock of ideas for the individual entrepreneurs. The development of an elite group in the whole process was inevitable and, in terms of the system, functional.