Managing the Managers
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Abstract
■ in all societies of any size and complexity, there must be persons who perform the managerial function. In earlier eras, this function was performed by those who by virtue of heredity, property rights, military prowess or priestly skill held positions of power. In contemporary times the development of managerial groups has gone beyond anything achieved by previous societies in relative numbers, power and privilege, and the degree of autonomy with respect to other social groups and classes. A more important development is a shift in the oasis of managerial power. The divorce of control, or power, from ownership has been due in large part to the growth of public corporations. So long as a single person, family or comparatively small group held a substantial portion of the common shares of a corporation, the legal "owners" could control its affairs. Even if they no longer actually conducted he business, the operating managers were functioning as their accountable agents. But when the enterprise became more vast in scope and, at the same time, the stock certificates became spread in small bundles among thousands of persons, the managers were gradually released from subordination to the nominal owners. De facto control passed, for the most part, to nonowning management. This structural shift was not