CAREER AND PERSONAL CHARACTERISTICS OF THE MANAGERIAL TECHNOSTRUCTURE IN CANADIAN BUSINESS

CAREER AND PERSONAL CHARACTERISTICS OF THE MANAGERIAL TECHNOSTRUCTURE IN CANADIAN BUSINESS

D.E. DIMICK I York University

V.V. MURRAY I York University

Cette etude est basee sur un sondage de 483 directeurs du rang le plus eleve dans 17 compagnies canadiennes de taille grande et moyenne. L’etude, qui fait parti d’un ouvrage plus grand avec des objets differents, avait recherche des renseignments sur plusiers charactkristiques de fond de ces membres de la “technostructure,” et aussi sur le dkveloppement recent de leurs carritres. Les resultats ont indique qu’en general les directeurs canadiens sur les echelons les plus eleves sont pour la plupart masculins, et britanniques en nombres disproportionnes. Leur ige varie beaucoup. Leur scolarite varie en fonction de la taille des compagnies. Leur taux de mobilite sont plus bas que durant les annees 60 et le debut des annees 70 et leur carritres se situent surtout dans les fonctions de ligne d’affaires dans les compagnies de taille moyenne. Les deviations de ces resultats etaient reliees a plusieurs variables economiques et technologiques. Les implications de ces resultats sur la mobilite future aux rangs superieurs de la gestion sont discutkes.

This study is based on a survey of 483 upper level managers in 17 large and middle sized Canadian companies. The survey, made as a part of a larger study with different objectives, sought information on several background characteristics of these members of the “technostructure” as well as a history of their recent career development. Results indicated that in general Canadian upper managers are predominantly male, disproportionately British, widely varying in age and differentiated on the basis of company size as to their education. Their mobility rate is slowing down compared to the 1960s and early 1970s and their careers have been primarily in the main line functions of business especially in middle-sized companies. Variations in these general results were also found to be related to several economic and technological variables. The implications of these results for future mobility into upper management ranks are discussed.

It has become increasingly clear that there exists in Canada a relatively well-defined and limited aggregate of people which can be labelled the “corporate elite.” This elite has been identified primarily by Porter (1965) and Clement (1975). but also by Smith and Tepperman (1974), McKie (1974), Daly (1972), and others. The elite are characterized by their position(s) a t the top of the largest and most influential industrial, financial, and commercial organizations in the country. In particular, they hold the positions of chief executive officer andlor director of one or more of these corporate organizations.

The research to date into the corporate elite

has centred on two issues: (a) personal characteristics of these individuals, particularly the relative homogeneity of their backgrounds and how that is maintained, and (b) the interlocking nature of the positions they hold on boards of directors (e.g., Watkins et al., 1968; Newman, 1975; Clement, 1975; Ornstein, 1976).

There is still considerable mystery as to the exact nature and extent of the power of the elite. While it is possible to show that the members of the elite may know and interact with those in government (Presthus, 1973), no one has been able to demonstrate the way in which they exert

Rev. canad. SOC. & Anth./Canad. Rev. SOC. & Anth. 15(3) 1978

The managerial technostructure in Canadian business I 373

a concerted influence on public and private affairs or even, on an issue by issue basis, to pin down the role of elite members (Ornstein, 1976; Warwick and Craig, 1975).

It would be satisfying to indicate that the research to be reported here sheds light on this critical unanswered question, but it does not. However, the extent and nature of the power held by the corporate elite is directly related to the issues to be raised here. The near-omni- potence attributed to this elite may be a considerable overestimate of their actual power. It seems reasonable to suggest, along with J . K . Galbraith (1967), that at least some of the power may rest nor at the level of presidents and boards of directors but rather a t lower levels in the “technostructure” of business. The range and complexity of decisions in large organizations involves many beyond the elite in both formulation and execution of alternatives. One implication of this suggestion is that the technostructure is also worthy of study along similar lines to that of the elites.

The “technostructure” as Clement has pointed out, is a particularly fuzzy concept in Galbraith’s writing, being first defined loosely as “all who bring specialized knowledge, talent or experience to group decision-making” (1 967) and, later, more explicitly as “corporation executives, lawyers, scientists, engineers, economists, controllers, advertising and marketing men” (1973).

It has been Galbraith’s argument that it is the technostructure in business, not the board of directors, that has the “real” power in corporate decision-making. In a sense the chief executive officer and board members are thought to be almost helpless without the specialized, tech- nical information which is selectively prepared and presented by the technocrats so as to guar- antee decisions that most benefit their interests.

Of course, Galbraith’s argument has suffered considerable critical attack, the claim being that the technostructure members have the values of the elite, and that in any case they influence issues of only secondary and operational importance but not the major issues of economic and social policy set by government. This can quickly lead to a debate over what issues are important and what secondary. Federal monetary and taxation policies are no doubt of high importance while, at the other extreme, the choice of data processing procedures, the decision between various advertising campaigns, or the

choice between production techniques may seem to be simply “operational” matters. Even operational decisions, however, in so far as they represent major technological change can seriously effect the work lives of employees. Of more obvious importance are decisions on plant location, employee salary policy, new product introduction, capital funding, or the investment of capital. These are matters that strongly influence whether the company grows or shrinks, its locale, the number and type of jobs it offers, and its contribution to the social and economic characteristics of the country. The decisions on them are usually made by the peak officials of the organization but also certainly depend con- siderably on important inputs of information from subordinates one, two, and even more levels below the top. Again the research into the relative influence and power of the various members of the peak management and lower level technostructure on key policy issues in Canadian business is practically non-existent beyond the anecdotal and journalistic level (e.g., Stanowicz and Murphy, 1972).

At the very least, therefore, it seemed to be a worthwhile endeavour to explore the personal characteristics and backgrounds of a sample of a part of the technostructure; that part closest to the top. In particular we obtained data in mid-1976 on 483 managers from 17 different organizations who either held the position of president, or were at one of the two levels of management immediately subordinate to the president.

The data were gathered as part of ,a research project designed primarily for other purposes. Access to the organizations was based on their acceptance of the major focus of the study. Hence, they were not receptive to a detailed study of executive backgrounds. The limited number of variables measured for each executive is the result of constraints of available resources and the willingness of participating organizations to provide information. In spite of these limitations, the results are of considerable interest.

A broad cross-section of Canadian business was included in the 17 responding firms: primary industries (oil, mining, 4 firms), transportation (2 firms), manufacturing (6 firms), banking and insurance (3 firms), and retailing (2 firms). Roughly half of the companies had more than 6000 employees while the remainder had between 500 and 5500

374 / D.E. Dimick and V . V . Murray

employees. ’ Two types of data about the upper level

managers in these firms were obtained from a short questionnaire distributed with a suitable explanatory note by a contact person in the firm (usually the personnel director). The first type dealt with the manager’s personal background including such things as age, sex, and education. The second dealt with career patterns: the nature and duration of the manager’s three most recent positions in addition to his current responsibilities.

PERSONAL CHARACTERISTICS OF TOP MANAGEMENT

The data pertaining to the personal characteristics of top management show several marked patterns. The first of these is theproportion of men in these top positions. It is not surprising that there is a substantial male majority in the sample. However, the extent of male dominance is arresting. Only five women were found in the top management ranks out of the nearly five hundred individuals included in this sample. With a single exception (a vice-president in a retailing organization), these five women were at the lowest of the three levels included in our top management sample. Given the fairly wide cross-section of industrial sectors included in the sample, this result is strong documentation of a situation which is about as far from parity as is conceptually possible. This (top) part of the technostructure is virtually devoid of women.

The population of Canada has been strongly influenced by immigration patterns. While France and Great Britain were the source of most early immigrants, recent patterns have brought significant numbers from other parts of Europe, Asia, and many other areas. The ethnic derivation of top management personnel is an indication of which group@), if any, dominate the larger organizations in the private sector. Before commenting on this however, a methodological issue should be noted. There were no direct questions posed about the ethnic origins of the individuals in the questionnaire

sample because of the sensitivities encountered. An attempt was made to identify the general pattern of ethnicity by having multiple independent voters classify surnames as to apparent na- tional origin. Such a technique is vulnerable to numerous problems, including the accuracy of those inferring ethnicity, intermarriage patterns which mix backgrounds, and the alteration of surnames by immigrants (to make them appear less “foreign”). Thus the statistics presented in Table I are best interpreted with considerable caution - as orders of magnitude rather than as point estimates.

The data indicate that individuals of apparent British extraction (English, Scottish, Welsh, and Irish) are by far the majority group among top management. While the estimate attri- butable to this group is 85 per cent, that figure in itself does not indicate that this group is “over-represented” in the ranks of top management.z However, such a n inference is more plausible when one compares this distribution to the composition of the population, as a whole (see Table I) . The Census of Population for 1971 indicates that people of British background constituted 44 per cent of Canada’s population, while those of French origin formed 29 per cent, of northern and eastern European origin 14 per cent and other origins 13 per cent. Applying a “goodness of fit test” to the data contrasted with the “expected values” of census proportions, an X1 value was obtained in excess of that necessary to establish significance at the .01 level.

Some of the difference between “expected” and observed values can be explained by methodological factors. For example, the under-representation of French surnames may be partially attributed to the fact that only 23 per cent of our sample had substantial operations in Quebec. Thus, to expect 29 per cent of the top management to be of French derivation is inappropriate. However, this sample characteristic alone cannot explain why only 4 per cent of this sample had such a background. This figure suggests that being of French extraction makes being in top management very unlikely.

1 Because of the primary purpose of the study, which was comparing personnel policies in large and middle size firms, the sample was not representative of the proportion of firms in each industrial category. The large firms all represented major Canadian corporations. They were paired with middle sized firms in the same industry. For a full discussion of the sample, see Murray and Dimick (1978). 2 Clement’s (1975) elite was 86 per cent Anglo-Saxon in origin, a remarkably similar result.


TABLE 1

PERSONAL CHARACTERISTICS OF TOP MANAGEMENT PERSONNEL

Entire Top 2 rnt. 3rd Inr. sample levels Size Large level Size

Sex: Percentage male

Ethnic Canada derivation * 19717 British 44 @lo French 29 Northern and

Eastern Europe 14 Other 13

Age: Mean Standard deviation

Secondary education: Public Private

Post-secondary education: None Some, but no degree Certificate BA or higher degree

Graduate education: None Masters or

Doctoral professional

99 99

85 89 4 3

7 3 4 3

48.9 50.8 9.2 9.5

84 81 16 19

18 15 7 5

11 10 64 70

81 82

16 15 3 3

100

80 5

9 5

49.6 10.2

79 21

28 9

15 47

87

11 2

99 99

97 82 1 5

1 8 5 -

52.1 47.9 8.7 8.9

85 85 15 15

4 19 1 8 6 12

89 61

79 80

18 17 3 3

99

84 7

7 2

47.6 9.9

87 13

42 7

17 34

94

6 -

Large

99

81 4

8 7

48.0 8.3

83 17

7 9

10 74

73

22 5

* See text for an explanation of measurement procedures. t Census of Canada, 1974. Population Catalogue 92-774 (SP-4), Statistics Canada

The “northern European” surnames (Ger- man, Dutch, Scandinavian, etc.) do not appear to be significantly under-represented but the “other” category is, especially when one considers that the 13 per cent figure for 1971 is probably an underestimate of 1976 patterns. Thus the 4 per cent figure for southern Euro- pean and non-European surnames is probably not a chance deviation.

Part of the reason for the smaller proportion of top managers from certain backgrounds may be the relatively recent arrival in Canada of various ethnic groups. As will be pointed out in a subsequent section, organizations seem to place an emphasis on education and experience within the organization in their choice of top management personnel. Recent immigrants are obviously less likely to have these qualifications than those persons who joined the organization as young people 15 to 25 years ago and “worked

their way up.” The considerable “over-representation” of

British backgrounds in top management groups adds support and shape to the concept of the corporate “elite.” Some of the “British” (as well as other groups) probably are not Canadian citizens. Using the location of secondary schooling to approximate the nationality (citizenship) of the managers, the non- Canadians were removed from the sample to determine the effect of the presence of non- Canadians. The proportion of British backgrounds was even higher when this was done (91 per cent) than when “non-Canadian” executives were included in the sample.

While previous examinations of elites have focused on directors of corporations, this survey suggests that the top operational management, as well, is non-random in so far as ethnic derivation is concerned.

376 / D.E. Dimick and V.V. Murray

This suggestion is amplified when one considers the breakdown of the sample by corporate size and management level. The top two levels (presidents and their immediate subordinates) in the “very large” companies are almost exclusively (72 of 74 or 97 per cent) British. The third level of top management in these firms is much more heterogeneous (i.e., only 81 per cent British), which suggests that the present pattern may be in the process of changing as the current top management passes from the scene.’ The 1976 cross-section thus suggests that being of non-British ethnicity has been almost as much of an impediment to reaching the top levels of management in very large organizations as being female.

The average age of the executives in this sample was nearly 49 years. There was very little difference between large and intermediate sized companies. The difference between the top two levels and the third level executives was small (2.9 years), but it was statistically significant (p < .01). The more interesting fact about the ages of the top executives in this study was that there was a fairly wide range of ages represented in all subgroups included in the study. The standard deviations range from 8.3 to 10.2 years. Thus, the age of top managers is anything but uniform. The entire range from late thirties to early sixties is found, and without particular cor- respondence to organizational size or executive level. Whatever criteria are being used to identify and select top managers, it certainly seems not to be length of experience alone, or even primarily.

Various data were collected pertaining to several aspects of the executives’ formal education (see Table I). While the majority (84 per cent) had attended public secondary schools, a sizeable minority (16 per cent) had private school backgrounds. The company presidents and their immediate subordinates had a slightly greater incidence of private school backgrounds (19 per cent) than did the third level (15 per cent).

The greatest frequency of private school education is among the top two management levels of medium sized companies where approxi- mately 20 per cent had such a background. Large companies revealed a fairly consistent 15 to 17 per cent of all levels of top management having attended private secondary schools. Only 13 per cent of third level executives from

middle sized companies had attended private schools.

The members of the upper technostructure are not as frequently educated in private schools as are the elite. Clement (1975) found that 40 per cent of the elite had been educated in private schools. Thus, while the ethnic composition of the elite and the technostructure seem to be very similar, the extent of private education distin- guishes the two aggregates from each other.

Turning to post-secondary education, there are some major differences among the various subgroups of the sample. The executives were classified as having “no formal post-secondary education,” “some post-secondary education, but no degree,” “a professional designation other than a university degree (CA, RIA, etc.),” or “a university degree.” Less than one executive in five (18 per cent) had no post-secondary education. Another 7 per cent had some while 11 per cent had a professional designation and nearly two-thirds (64 per cent) had university degrees. These patterns were not uniform across executive levels or organizations of different sizes.

The use of chi-square analysis of the distributions revealed significant differences (p < .001) between the post-secondary education of executives of very large companies and executives in intermediate sized companies. This was true for the combined group and for comparisons of the subgroups, as well. Roughly two in five (39 per cent) of the intermediate sized company executives had university degrees. The corresponding figure for large companies was almost four in five (79 per cent). Thirty-seven per cent of the intermediate company executives had no post- secondary education while that was true for only 6 per cent of large company executives.

Contrasts in post-secondary education between management levels were less clear-cut. While the figures (Table 1) indicate higher education a t higher organization levels as a consistent pattern, the differences in the distributions were statistically significant only for the combined (large plus intermediate) sample (p < . 005 ) .

Thus, the exten’t of post-secondary education among executives is strongly associated with organization size and associated, but not as markedly, with position level within an organization. The technostructure of large

3 A chi-square statistic was computed to test the significance of the difference between the proportions among the top two levels and the third level. The value obtained, 12.53, was significant at the .01 level.

The managerial technostructure in Canadian business / 377

~~

TABLE I I

PERSONAL CHARACTERISTICS, A COMPARISON WITH CLEMENT’S “ELITE”

(in percentages)

This sample Clement’s (“fechnostructure”) “Elite”

SEX Male 99 99

ETHNlClTY British 85 86 French 4 8 Other 1 1 5

ORIGIN* Canada 83 71 Outside Canada 17 29

HIGH SCHOOL Public 84 60 Private 16 40

LEVELOF High school 25 16 EDUCATION Bachelor’s degree 56 80

Graduate degree 19 4

REGIONAL West 31 23 ORIGIN* Central 63 68

East 6 9

* To infer country and region of origin this study used location of high school as a proxy. Clement had direct information on place of birth.

organizations appears to make such education a necessary, if not a sufficient, condition for membership.

Graduate education followed a pattern consistent with the differences established in undergraduate education. That is, there was a greater percentage (statistically significant, p <- .001) of the executive group which had graduate degrees in the very large corporations than there was in the intermediate corporations. While there was some difference in the proportion of graduate degree holders a t the presidential and second level (13 per cent in the intermediate sized companies compared with 21 per cent in the large companies), it was not statistically significant. The more marked difference (p <- .001) is with the third level executives. Only 6 per cent of the intermediate company managers at this level had graduate training; while in the large companies this group of managers com- prised 27 per cent who had graduate-school training.

It is difficult to speculate on the possible cause-and-effect relationships behind such data. It could be argued that larger corporations need more people with formal training to manage the more specialized and complexly related portions of their organization than is the case with smaller companies. They also may be able to better afford the costs associated with certain

kinds of specialized skills. Another possibility is that “like attracts like” in the sense that once a few persons with degrees reach positions of authority there will be a propensity for them to believe that new recruits into management should also possess degrees; thus university training becomes a “qualification” for most jobs above a certain level. Whatever the mechanism, high levels of formal education and membership in the technostructure of large companies appear to go hand in hand.

Reviewing the personal characteristics of top management in aggregate, it is reasonable to state that they may be described as being virtually all male, and disproportionately British in ethnic origin. They are a widely varied age group with only a slight age difference associated with hierarchical level.

A preponderance of them obtained their secondary education in Canada (83 per cent) and in public schools (84 per cent). Significant differences in post-secondary education were associated with organizational size, and to a lesser degree with hierarchical level.

It is instructive to examine the similarities between the corporate elite described by Cle- ment (see Table 11) and the data in this study. Clement focused on directors of corporations, so that his group and the one in this study may have some slight overlap. (Company presidents

378 / D.E. Dimick and V.V. Murray

and some other executives may be directors of their companies, as well. However, they represent a small minority of the sample in this study.)

The gender and ethnic origin distributions of the two groups are remarkably similar. Both are male and “British” to about the same extent. Clements’ elite is differentiated from the executives in this sample by virtue of more frequent foreign birth (29 per cent vs. 19 per cent) and greater frequency of private secondary education (40 per cent vs. 16 per cent). In those areas, the executives in the present study are less like the stereotyped “elite” than are the directors in Clement’s work. There also appears to be a greater variation in level of educational attainment and region of origin among the executives. Regional origin data should be interpreted cautiously because the data in this study are from 17 firms whose distribution only roughly approximates Canada’s geographic distribution of employees and employment.

There is no defensible way to infer the motivations or mechanisms which have led to these similarities. The one conclusion which does seem fair is that the patterns are not a coin- cidence of unrelated social processes. The nature of the corporate elite and the top ranks of the technostructure are implicitly part of the same social system.

CAREER PATTERNS OF TOP MANAGERS

Three aspects of the careers of top management personnel were investigated. Specifically, the frequency of job changes, whether previous positions were with the present employer, and the functional areas represented in previous jobs were analysed. The data collected on each executive dealt with his three most recent prior positions (with his current employer andlor other employers).

Employers represented in this sample place an apparent emphasis on promotion from within as a way of filling top management jobs. Not only had close to 90 per cent of the executives been moved to their present job from other jobs within the organization, but nearly three- quarters (73 per cent) of the sample had worked for their present employer in all three previous positions asked about. This was not quite so frequently the case with the top two levels of the intermediate sized companies, where only 64 per cent of the sample had been with their current employer for the three positions previous to the

one currently held. This slightly higher incidence of the use of external candidates for top management jobs in middle sized firms is consistent with the speculation advanced in the preceding section about the impact of the lower levels of executives’ education in these (smaller) companies. Specifically, the talent needed may be such that it is sought externally because of its absence in internal candidates.

The executives in our sample have been in their present jobs an average of 3.6 years. This statistic is higher for the top two levels as op- posed to the third level (3.9 years vs. 3.4 years). The typical length of time they had spent on each of their previous jobs was 3.8 years (4.0 in the case of company presidents and their immediate subordinates and 3.7 in the case of third level executives). One could thus infer that the executive mobility in these companies has diminished recently. Unless this study caught many of these managers near the end of their tenure in their present jobs (improbable, given a rather large random cross-section), the period of vigorous economic expansion (1960s and early 1970s) resulted in much faster career movement than the past few years. Thus, it seems that the average rate of movement from that earlier period of roughly once every four years may in fact have more recently become an average of once every six or seven years. Cer- tainly, there is a greater deal of variability behind these averages, as is reflected in the widely varying ages of top management personnel. But the overall pattern is one of con- siderably less movement if this sample is representative.

The current and three previous positions of each of the managers in our sample were classified as to the functional area of the organization which they represented. The results of this classification are presented in Table 111. Most of the functional areas listed there are self- explanatory. General management positions include those positions which involve the management of an integrated unit such as a plant or other operating facilities. Staff positions are defined narrowly and consist primarily of personnel, planning, engineering, and EDP functions. A rather significant category is one which has been labelled “cross-functional administration.” The positions in this category are those which involve the management or coordination of the interface between functional areas. While the positions are somewhat varied, the common denominator is that they


TABLE 111

CAREER CHARACTERISTICS OF TOP MANAGEMENT PERSONNEL

Entire Top2 3rd sample levels Int. Lrg. Level Int. Lrg.

Years in present position

Years in previous position Most recent 2nd most recent 3rd most recent

Percentage whosepast 4 jobs are all with present employer

Functional backgrounds of top management: percentage of 3 previous positions in following areas:

Production/ operations Finance laccounting Marketing Isales General management* Staff* Cross-functional administration

Other

3.6

3.8 3.8 3.6

13

32 17 13

3 18

12 5

3.9 4.0

3.9 4.3 4.2 4.1 3.9 4.0

69 64

21 32 14 14 12 11 7 4

14 14

20 13 6 6

3.1 3.4

3.4 4.3 3.9 3.6 3.9 3.4

1 3 14

22 35 14 19 7 13

12 1 13 19

21 8 5 5

3.5 3.4

4.1 4.1 3.6 3.1 3.5 3.4

13 14

43 33 16 21 11 1 1 2 1 8 22

6 3 6

1 1

* See text for further description of these categories.

involve explicit responsibility in more than one functional area. They differ from general management jobs in that general management jobs cover an entire location or operation while administrative jobs deal with a focused subset of these organizational units.

There is an apparent overall pattern. Specifically, the intermediate sized companies put more emphasis on the productionIopera- tions (32 vs 22 per cent) and marketingIsales (17 vs. 7 per cent) areas as preparation for people who would occupy the first and second levels of the executive ranks. The large companies, while also drawing on these backgrounds, also emphasized previous experience in the cross- functional areas we have labelled “administration” (27 vs. 13 per cent). The third level management positions reflect a n even stronger emphasis by the intermediate sized companies on the productionIoperations (43 vs 33 per cent), accountingIfinancia1 (21 vs. 16 per cent), and marketingIsales (17 vs. 11 per cent) positions. While these positions were more important at the third level to the large companies than they had been at the top levels, the large companies still had a wider range of occupa-

tional backgrounds represented in this level of management than did their smaller counter- parts.

An overall picture of the more recent parts of the career paths of the top executives can be inferred from this pattern of functional backgrounds. Clearly the main line of advancement to top management is through the traditional line functions of production and operations management. This is the most important category overall, representing 32 per cent of the preceding three jobs for the executives in this sample. This figure is nearly double that of any of the others identified. The other functional mainstream areas were financeIaccounting (17 per cent) and marketingIsales (13 per cent). These three made up slightly more than 60 per cent of all the previous functions present in the data.

Many factors may be contributing to this pattern. The organization’s size may have an influence: larger organizations are more complex, leading to a need for more varied areas of com- petence. Larger organizations may be more “forward-looking,” more inclined to anticipate their future executive requirements by bringing

380 I D.E. Dimick and V . V . Murray

in more varied backgrounds through staffing strategies or providing tailored career paths to develop “breadth.”

Whatever the factors involved, it is too nar- row an approach to view organizational size as the only plausible influence on the composition of top management. The following section ex- plores the influence of other organizational factors on the personal and career characteristics on this sample.

ORGANIZATIONAL INFLUENCES ON TOP MANAGEMENT CHARACTERISTICS

This report has focused to this point on a general profile of the top managers in a number of medium sized and large corporations. Some characteristics are so pervasive that there simply is no meaningful variation possible within sub- sets of the sample. A good example of this is the sex of these managers - 99 per cent male.

Other characteristics vary within the sample: age, functional backgrounds, and formal education are such characteristics. Education varies strongly with company size: the functional backgrounds of top executives also differ when large and medium sized organizations are compared. Age varied, but showed only a modest relationship to the level of the hierarchy in which the person worked.

It was indicated above that these data were collected in the context of a larger study. ln- formation about the organizations was used to assist in the interpretation of the data on the top management? The question posed was this: are there organizational factors which help “explain” the variations in personal characteristics of top management. The results of this explora- tory investigation are reported below.

The organizations in the study could be classified in a number of different ways. The following were selected: (1) service (banks, retailing, air transportation) vs. primary and manufacturing industries, (2) age of the company, (3) the number of major products produced or service lines provided, (4) general education level of the work force, ( 5 ) the ratio of managers to non- managers, (6) the proportion of blue-collar workers among non-managerial employees, and (7) an assessment of the rate of technological change. Each of these has plausible links with the kinds of requirements an organization may attempt to satisfy in selecting their top management group. The “technologies” of service organizations differ from others; older companies may have institutionalized criteria which

differ from younger organizations; the nature of the work force “mix” may require different types of top management personnel and to some extent may provide a different pool from which to draw.

These indicators were used to subdivide the sample to identify the patterns which may exist in career background, ethnic profile, and educational attainment. The indicators were also used to determine whether there was any significant correlation between them and the age of the managers in the sample.

The analysis of the ethnic profile revealed no significant relationship between the proportion of British, French, and other backgrounds and any of the organizational variables enumerated above. The proportion of British backgrounds in the sample did not vary more than minimally (from 82 to 88 per cent) with any of the several organizational variables examined.

Quite different results were obtained in the analysis of educational and functional backgrounds. Table IV summarizes the relationship between post-secondary education attainment and several organizational variables. Post- secondary education varied widely with organizational variables. Proportionally more executives in primary and secondary manufacturing had university degrees than did executives in the service sector. This was true both for undergraduate degrees and for graduate training. This becomes more understandable when the rate of technological change and range of product lines are considered. The investigators made an overall assessment of the rate of technological change after visiting the companies and reviewing considerable documentation. The companies were characterized as low, medium, or high in their rate of technological change. There were so few high change companies that the medium and high change companies were combined for this analysis.

Companies with relatively few product lines and with slow rates of change had low levels of formal education in their executive group (see Table IV). These tended to be the same companies as those in the service industry: retailers, insurance companies, banks, and transportation companies. Thus it appears that education requirements of top management are in a sense a response to technological change and complexity. Where those factors were less important, university education was apparently somewhat less emphasized in a hiring or promotion decision.

There are, however, other factors related to


Organizational factor

TABLE I V

POST-SECONDARY EDUCATION OF TOP MANAGEMENT? ORGANIZATIONAL FACTORS -

-

No degree Bachelor’s Graduate degree degree X’

Technology: Manufacturing- Service Primary

Age of company: Prior to 1900

1930 - present

Number of product lines: 1-4 5 +

Percentage of work force completed high school: Up to 80 80-100

Rate of tech. change: Low Mod. high

1900 - 1930

82 ( + 2 3 ) 57 (- 15) 25 (- 8) 27.53,~<.001 59 (- 23) 113 ( + 1 5 ) 54 (+ 8)

91 ( + 1 5 ) 82 (- 11) 39 (- 3) 25 (- 7 ) 50 ( + 1 1 ) 14 (- 4) 16.67,~<.005 25 (- 7 ) 38 (- 1 ) 26 (+ 8)

106 ( + 3 8 ) 71 (- 24) 32 (- 14) 72 .06 ,~<.001 I 5 ( - 3 9 ) 9 9 ( + 2 4 ) 47 ( + 1 4 )

37 (- 1 5 ) 7 3 ( + 1 2 ) 33 (- 3) 10.17,~<.001 104 (+ 1 5 ) 97 (- 12) 43 (+ 3 )

104 ( + 3 2 ) 70 (- 18) 26 (- 14) 46.61,~<.001 37 (- 32) 100 (+ 18) 53 ( + 1 4 )

* Number tabled indicated the total number of people with various levels of educational attainment. The number in parentheses ( ) indicates how far this number deviates from the “expected” value (i.e., assuming that educational level is statistically independent of the organization factor listed on the left).

the educational levels of top executives. The age of the company was negatively related to the level of executive education. Companies found- ed more recently have top management with significantly higher levels of education.

The other interesting finding was that there is an inverse relationship between the educational level of the general work force and the education level of the top management group. Those companies which had the highest levels of high school completion among their work forces had executive groups with relatively little post- secondary education, and vice versa. It seems reasonable to suggest that this is also the result of the technology of the organizations in question. Banks, insurance companies, and so forth require high school completion of virtually all applicants. Many manufacturing and resource companies require high school completion for only a small fraction of their entry level jobs. Jobs in the finance and retailing sector seem to require language and computation skills of a more demanding nature than d o jobs involving more physical processes.

On the other hand, rapidly changing production technologies put higher educational

demands on the management group; they are the ones from which the academically derived skills are especially required.

The functional backgrounds of the top levels of the technostructure were examined in the same manner as were the personal characteristics. Five functional clusters were formed by combining general management and division heads with production and operations management. The several areas previously combined to form the “staff” category are combined the same way again. Table V presents the results of the analysis.

Five of the seven organizational characteristics examined were significantly related to the functional history profile of the management group. The age of the company and the ratio of managers to non-managers were not related to functional backgrounds.

It is interesting to review the results, one functional area at a time. Production and operations backgrounds are especially prevalent where there is a preponderance of blue-collar employees, where the educational level of the work force is low, and where there is a moderate to high rate of technological change.

382 I D.E.DimickandV.V.Murray

TABLE V

FUNCTIONAL EXPERIENCE OFTOP MANAGEMENT DURING THREE PREVIOUS JOBS: BY SELECTED ORGANIZATIONAL CHARACTERISTICS*

Technology: Service sector Primary, secondary Number ofproduct lines: 0 - 4 5 +

Percentage of work force completing high school: 0 - 80

80 - 100

Production/ operations

Finance/ Marketing/ Staff Administrative accounting sales

X’ (p<.OI in all cases)

150 (- 4) 252( + 4)

288 (+ 8) 189 (- 8)

100(+26) 50 ( + 1 ) 92(- 26) 89 (- 1)

125 (+ 14) 93 (+ 9) 69 (- 14) 47 (- 9)

69 (- 18) 165 ( + 18)

122 (- 16) 114(+16)

50 (- 5) 8 6 ( + 5)

69(- 15) 67 ( + 15)

21.20

18.63

180(+24) 5 1 ( - 2 4 ) 45 (- 4) 9 2 ( + 3) 5 2 ( + 1 ) 18.80 222 (- 24) 143 (+24) 94 (+ 4) 144 (- 3) 85 (- 1)

Blue-collar emplo.vees as percentage of all non- managerial employees: 0 - 50 97 (- 46)

50 - 100 305 (+46)

Rate of technological change:

Mod. high 238 (+ 25) Slow 163 (- 25)

95 (+26) 54 ( + 4) 97 (- 26) 85 (- 4)

102(+ 8) 89 (+24) 90 (- 8) 50 (- 24)

91 (+ 7) 145 (- 7)

113 (- 2) 123 (+ 2)

5 4 ( + 9) 72 (- 9)

60(- 5) 7 4 ( + 5)

42.45

26.41

* Numbers tabled indicate the total number of positions held (over three previous positions) in various functions. The number in parentheses ( ) indicates the difference between the observed number of people and the number who would have been “expected” to be in that cell if the organizational factors and functional experience were statistically independent.

Finance and accounting backgrounds occur disproportionately often in service sector companies where (not surprisingly) there are fewer blue-collar employees and a higher education level in the work force.

Marketing and sales are represented fairly evenly except when it comes to technological change where there is an inverse relationship with such change: slow technological change brings marketing backgrounds to the fore while more rapid change inhibits them (to the apparent “advantage” of production and operations backgrounds).

Staff backgrounds do not depart widely from expected levels in any of the analyses. A slight emphasis seems to occur in primary and secondary sectors and in companies with wider ranges of product lines. Administrative positions, also, are not greatly over- or underrepresented in the analysis summarized in Table V .

The measures of organizational characteristics seem to reveal a consistent pattern. Top management groups do have much in common, even in the least productionloperations oriented subgroup (small percentage of blue-collar backgrounds) in all five analyses.

Yet there are substantial differences in emphasis. These differences in emphasis seem to be clearly related to underlying technology, as reflected by work force characteristics, the sector of the economy in which the organization operates, and rate of technological change. The evidence suggests support for the influence of technology, even if not to the point of sug- gesting a technological imperative.

Managers in this sample varied widely in age. The correlation coefficients between the age of executives and company characteristics were significant (p < .01) in only two of seven cases (see Table VI).

The managerial technostructure in Canadian business / 383

TABLE V1

RELATIONSHIP B E T W E t N hlANACERlAL A G t AND ORGANIZATIONAL CHARACTtRISTICS. CORRELATION

ANALYSIS

Age of manager

Number of product lines -.23 Rate of technological change -.16

The number of product lines was negatively associated with managerial age, that is, when the number of product lines carried by a company was greater, the age of the executives tended to be lower. Similarly, the rate of technological change also bore a negative relationship to managerial age. The more rapid the change, the younger the executives. The correlation coefficients are statistically significant and also have a degree of practical import. There clearly are many factors related to the age of executives in large companies, these two being among them. Such results suggest that the flexi- bility (and more recent exposure to formal training) found in younger executives is an ele- ment used in selecting people who will be able to deal effectively with the more dynamic nature of organizational issues faced where there is greater change and diversity.

SUMMARY A N D I M P L I C A T I O N S

The suggestion was made at the beginning of this paper that identity and careers of top management personnel in large (and intermediate sized) companies can reveal quite a bit about who is eligible and what is considered important as prerequisites for positions of authority. These people have been demon- strated to be predominantly male, disproportionately British (in ethnic derivation), widely ranging in age, and differentiated on the basis of company size as to their education. Most have advanced from within the organizations with which they are presently employed, and have experienced (on the average) slower career mobility in the past few years than they did during the 1960s and early 1970s. Their recent careers have been spent predominently in the main line functions of production/operations, marketing/ sales, and finance/ accounting; this career pattern is more true in the intermediate sized companies than in the large ones. The

large companies differed most from the intermediate companies by stressing preparation in what has been categorized here as “cross- functional” administrative positions.

It should not be inferred from this analysis that the patterns reflected here will necessarily be the ones found in 10 or 20 years’ time. The emphasis on education and (especially) certain types of experience internal to the organization may have the effect of excluding members of some groups today (women and individuals from recent immigrant groups) who will meet these organizational criteria in increasing numbers as time goes on. But the data d o not strongly foreshadow such changes when the top two levels are contrasted with the third level of management. The sex and ethnic derivation profile of the third level of management is only moderately different from that of the top two levels.

The results also offer a strong contrast of intermediate sized and large companies. The intermediate companies tend to have manage- ments with “narrower” backgrounds than do large companies, when one considers the functional areas in which they have developed their managerial skills. In addition, the marked difference in the level of formal education between these two management groups is likely to com- pound any limitations which result from the less varied functional backgrounds in the intermediate companies’ top management. As these companies attempt to grow, two events are plausible. First, the companies may encounter some difficulties because of the educational limitations in the top management group. Sec- ond, as they attempt to rectify the problems encountered by bringing in new people from the outside (and there was some indirect indication that this may be happening), internal candidates who have expected to move up may find this opportunity to have disappeared.

Top management, the upper echelon of the technostructure, may be subject to two kinds of criteria in their selection: “traditional” criteria and “rational” criteria.

The traditional criteria are those of ethnic derivation and gender. The percentage of males in the sample was overwhelming. The proportion of British backgrounds did not vary significantly across many different subdivisions of the sample. These criteria may be a reflection of many other values in the broader society rather than unique to the corporate sector. But their

384 / D.E. Dimick and V . V . Murray

systematic sameness suggests that they are not rooted in the particulars of individual companies.

The rational criteria are those which apparently operate in the area of education and experience required of the top managers. Both of these varied significantly with company size and other characteristics of the organization. For the most part, the patterns were consistent with the plausible demands of the technology and the nature of the businesses.

Whether the traditional or the rational criteria are dominant is not discernable in this cross-section. It is clear that thinking of these levels as being part of a technostructure is reasonable. Their backgrounds reflect and are built on educational and experiential criteria of a technological nature.

The demographic similarity between these top echelon technostructure members and the corporate elite suggests that this group occupies a n important linking function in the social system. They deserve increased attention as the exercise of influence in the corporate sector is explored.

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Documents

CAREER AND PERSONAL CHARACTERISTICS OF THE MANAGERIAL TECHNOSTRUCTURE IN CANADIAN BUSINESS