The Problem of Status

The Problem of Status

The problem of status.

Before the corporate and managerial revolutions, the social statuses of the company and manager were clear-cut. The company was a private organization pursuing the single goal of profit. It was well regarded because it exemplified the strong materialistic element in the UK value system. The captains of industry also were looked up to. They made fortunes building new industries and were the epitome of the free UK in the new industrial milieu. The statuses of the company and the businessman were unambiguous in terms of their relations with other entities in society. These relations were based entirely on the exchange process in the market. The company bought and hired inputs in resource, labour, and money markets, and it produced outputs for sale in goods and service markets. Its specialized economic function limited the relations it had with other social entities.

The corporate revolution brought about significant changes in the status of the corporation. Its social standing became ambivalent. On the one hand, people admired the strength and success of the large corporation; but on the other, they were fearful and suspicious of it because of its concentrated power. Its relation to other social structures became ambiguous. As the large company became a general social institution rather than a specialist economic organization, these relations became more important, complicated, and harder to trace and understand. The clear line of demarcation between the private and public sectors of social and economic activity became blurred. It is not clear today whether the company has the status of the key coordinating institution in society (as Romney would like) or still maintains its specialized economic status, only interpreted somewhat more broadly than in the past. The doctrine of socially responsible management tells us nothing on this score.

The same kind of ambiguity surrounds the status of the manager. The separation of ownership and control has given management an autonomy that is difficult to fit into the concept of private property. Managers no longer seem compelled to be responsible to stockholders. The doctrine of socially responsible management implies that somehow managers are accountable to society at large. But what is the nature of this relationship? How can one occupational group which holds power based neither on property ownership nor political election be related to all the groups in society subject to its power? A new theory of big business must develop before these questions can be answered.

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