Who Rises to Power in American Business?

Please find summarized here the above-linked Question and Answer with Anthony J. Mayo, co-author of the book

Paths to Power: How Insiders and Outsiders Shaped American Business Leadership

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The book itself, which came out in January 2007, is “the first book in fifty years to exhaustively analyze the demographics of leadership and access in business in the U.S.” An excerpt may be found at the bottom of the page, which mentions many different networking means available to prospective business leaders in the past century, some of which include marriage, scholarly fellowship, joint military service, and political involvement.

One of the conclusions of Mayo et al. is that the success of early 20th Century business leaders was primarily based upon the right connections of religion, family, class status, geographic location, and education. These “insiders” would be comparable to nodes of high clustering coefficients that we saw in our discussions of Network Structure, Weak Ties, and Triadic Closure. On the other hand there did exist “outsiders” (in terms of the criteria above) who managed with some lesser frequency to achieve great success. These individuals may be seen as spanning structural holes through their connections back to the “outsider” community.

Another comment made on the success of young entrepreneurs was the importance of an initial powerful benefactor to grace the start-up with some positive reputation and opportunities. In other words, this benefactor would provide triadic closure between the young entrepreneur and potential customers, as well as adding the assurance accorded by raising the embeddedness of the edge representing the fledgling deal. To quote Mayo on this phenomenon, “In a sense, this personal network or connection helped to facilitate access to others in positions of influence which in turn provided opportunities for advancement.”

Other methods of fostering connections with an aim to achieving business prominence included getting a college education. In fact, up until about the mid-20th century this was seen as the primary function of higher-education. In recent decades, the attainment of an MBA has similarly come to serve as a gatekeeper to other organizations and opportunities in the business world.

In the near future, Mayo predicts that an unbiased, global perspective will be most essential to the formation of competitive networks in the modern business environment. As this progression from local interests to global interests proceeds, we may well expect network closure to accelerate linking the world into a tighter, global structure.