Corporate News Organizations, the Managerial Revolution and
By David Pearce Demers, Visiting Professor
School of Journalism and Mass Communication
University of Minnesota
Minneapolis, Minnesota 55455
612/626-1514 / E-mail: [log in to unmask]
This research was supported in part by Grants #1493-9-93 and
#1450-5-94 from the UW-RF Institutional Studies, Research and
Committee. The author wishes to thank Tami Jech and Emily Rollings
their assistance in this project. This paper was prepared for
at the annual meeting of the Association for Education in
Mass Communication (Anaheim, August 1996).
Corporate News Organizations, the Managerial Revolution and
Corporate news organizations are often accused of placing more
emphasis on profits than on information diversity and other
considered crucial for creating or maintaining a political
accusations contradict the managerial revolution hypothesis, which
that as power shifts from the owners to the professional managers
technocrats, a corporate organization should place less emphasis on
and more emphasis on nonprofit goals. This study reviews the
the managerial revolution hypothesis and discusses the theoretical
implications for the marketplace of ideas and democratic
major conclusion is that increasing corporatization of media does
necessarily mean a reduction in information diversity; in fact,
data strongly suggest that media become more, not less, critical of
and dominant values as they become more corporatized.
Corporate News Organizations, the Managerial Revolution and
Since the turn of the century, a number of scholars have
argued that control of corporate organizations in modern societies
shifting from the owners, or capitalists, to professional managers
highly skilled technocrats (Bell, 1976; Berle & Means, 1932;
Dahrendorf, 1959; Demers, 1994a, 1994d, 1996a; Galbraith, 1971,
Parsons, 1953). This proposition, also known as the managerial
hypothesis, occupies a prominent place in post-industrial theories
society, which contend that theoretical knowledge, rather than
becoming the key source of power or the axial principle of society
Bell, 1976). According to these theories, the managerial
being fueled by at least four key factors or trends: (1) the death
entrepreneurial capitalists or stockholders, whose concentrated
power is dispersed over time as it is divided among heirs; (2)
organizational growth, which forces companies to draw capital from
more sources, diluting the proportion of ownership of any single
increasing complexity in the division of labor and market
forces owners to rely more and more on the expertise of highly
professional managers and technical experts to manage day-to-day
of the organization; and (4) the growth of pension, insurance,
trust funds, which invest heavily in corporate stocks and are
professional investors, not the owners. Over time, these factors
are expected to promote the growth of a professional-technical
will replace existing capitalists as the new ruling class.
The notion that power may be shifting in corporate
organizations has significant consequences for media managers,
public policy makers. Corporate newspapers are often accused of
more emphasis on profits than on quality journalism, restricting
journalists' autonomy, alienating employees, destroying community
solidarity, supporting the interests of big business over those of
public, and, perhaps most serious of all, failing to provide a
ideas crucial for creating or maintaining a political democracy
1987; Baker, 1994; Herman, 1985; Herman & Chomsky, 1988; Kellner,
Kreig, 1987; Kwitney, 1990; Underwood, 1993). But if power in the
corporate news organization is shifting from the owners to the
the technocrats (e.g., editors), then these criticisms may be
since economic and social theory strongly suggests that managers
technocrats place greater emphasis than owners on nonprofit goals,
maximizing growth of the organization, product quality, autonomy
the interests and needs of the employees (Bell, 1976; Berle &
Demers, 1996a; Galbraith, 1978; Schumpeter, 1949).
Although research generally supports the idea that owners of
the means of production play a relatively limited role in
operations at large corporations, social scientists disagree on the
of whether power is really shifting in the system. Studies by some
economists (Larner, 1970; Monsen, Chiu, & Cooley, 1968) and mass
communication researchers (Demers, 1991, 1993, 1994a, 1994b, 1994c,
1996a) suggest that large-scale organizations, including corporate
newspapers, place less emphasis on profits and serve the interests
managers and professionals before the owners. However, many
remain skeptical (Fligstein & Brantley, 1992; James & Soref, 1981;
1974, 1976). For example, Abercrombie, Hill and Turner (1988, p.
that post-industrial theories
can be criticized for greatly exaggerating the power and
importance of new professional and technical occupations;
there is no
evidence that these constitute a discrete social class, that
effectively control business corporations, or that they
political power. While it is true that theoretical knowledge
steadily more significant as a force of production throughout
this implies no change in the locus of power in the economy
Does the empirical evidence fail to support the managerial
revolution hypothesis, as the critics contend? Will news
place increasing emphasis on profits and less emphasis on
diversity as they become more corporatized? Or will the rise of
professional and technical occupations diminish the power of the
and promote the growth of information diversity in media
primary purpose of this study is to answer these questions through
of the theoretical and empirical literature on the managerial
A Brief History of the Managerial Revolution Thesis
The origins of the managerial revolution proposition are not
fully known. Ironically, though, some of the seeds appear to have
planted by Adam Smith and Karl Marx, neither of whom likely would
received it with much favor.
Smith (1952) originated the idea that manager-controlled firms
place less emphasis on maximizing profits than owner-controlled
proposition that occupies a prominent position in contemporary
programs. He believed the heart of capitalism lay mainly in sole
proprietorships and partnerships, i.e., businesses that typically
and managed by the same people. Owner-managers could be expected
to keep an
eye on the bottom line because their pocket-book was directly
This could not be expected for joint-stock companies, however,
often were controlled by non-owning managers. Smith conceded that
joint-stock companies could be useful in funding and constructing
public works projects (e.g., canals, water supply), where large
money were required to accomplish the tasks. But the directors of
joint-stock companies, "being the managers ... of other people's
of their own ... cannot ... be expected ... (to) watch over it with
anxious vigilance with which the partners in a private copartnery
watch over their own. ... Negligence and profusion, therefore, must
prevail, more or less, in the management of the affairs of such a
(Smith, 1952, p. 324).
Marx is partly responsible for the idea that as businesses
grow and capital becomes more concentrated, ownership becomes more,
less, dispersed. He defined concentration of ownership as growth
capital, or an increase in the size of companies. Capitalists must
continually reinvest profits in order to remain competitive. Most
reinvestment goes to production and development of new machines and
for reducing labor costs. This increases the size and scope of
production and the ratio of capital to the labor process. However,
concentration of capital leads to an increase, not decrease, in the
of owners, because, over time, capital is divided among family
often through inheritance, and earmarked for new ventures (Marx,
582-6). Although ownership tends to become diffused and
decentralized as a
firm grows, Marx countered that this process is slow and is more
by centralization of capital, which he defined as the combining of
already formed, i.e., a reduction in the number of competitive
firms in a
particular sector of industry through merger, bankruptcy or
(Marx, 1987, p. 588).
Despite Smith's and Marx's observations, the idea that power
could shift from capitalists to managers probably did not emerge
end of the 19th century. One proponent was Social Democratic
Eduard Bernstein, who argued that the corporate form of
organization led to
the splitting up of property into "armies of shareholders" who
new "power." The shareholder, he argued, expropriates the
(Bernstein, 1961, p. 54), transforming it "from a proprietor to a
administrator." Max Weber's writings at the turn of the century
also may be
interpreted as anticipating more formal arguments of later writers,
though he personally disagreed with the idea that managers were
power over capitalists (Weber, 1947). The appropriation of
functions from the owners, he argued, does not mean the separation
control from ownership; rather, it means the separation of the
function from ownership (pp. 248-249). Nevertheless, Weber's
somewhat ambiguous. Elsewhere, he observed that bureaucrats, or
technical experts of government, often attempt to control the flow
information to both policy makers and the public.
The question is always who controls the existing
bureaucratic machinery. And such control is possible only in
a very limited
degree to persons who are not technical specialists.
the trained permanent official is more likely to get his way
in the long run
than his nominal superior, the Cabinet minister, who is not a
Despite these observations, the first comprehensive analysis
of the notion that the proprietors or owners of the means of
losing power did not appear until the early 1930s. In The Modern
Corporation and Private Property, Berle and Means (1932) argued
"ownership of wealth without appreciable control and control of
without appreciable ownership appear to be the logical outcome of
development" (p. 69). They defined control as the "actual power to
the board of directors (or its majority)" (p. 69). The trend
separation of ownership from management, they argued, occurs
capital required to operate and own large corporations is often
resources of any single individual or company. As companies grow,
to draw upon more and more sources of capital, which over time
the percentage of shares owned by any single individual or entity.
and Means viewed this change as largely having positive outcomes
society: Managers, unlike the owners, would be guided by a broader
conscience and professional values, rather than a selfish profit
In the early 1940s, sociologists James Burnham (1941) took
Berle and Means' argument one step farther. He argued that the
separation of management from ownership was leading to the rise of
class that would replace the capitalists. Growth of business means
than just increasing scale; it also means increasing technical
and this in turn means that the owners must depend more and more on
and highly skilled managers to run the new means of production.
Organizational skills and technical knowledge are the bases of
power. Burnham predicted that the "revolution" would be completed
1970 (p. 71). However, in contrast to Berle and Means, Burnham was
optimistic about the consequences of the transition of power. He
managers would act in their own self-interest, not necessarily in
During the 1940s, Schumpeter (1949) made similar arguments.
He contended that highly skilled managers and technical
specialists, not the
capitalists, were the creative force behind the innovative process
capitalism. In early capitalism, the capitalist was the
innovator. Capitalists are driven by profits. But as
this role became more specialized and routinized and is delegated
educated and trained specialists. Since entrepreneurs in modern
izations are not usually the direct beneficiaries of profit,
Schumpeter, they are driven not by profits but by social status.
First, there is the dream and the will to found a private
kingdom, usually, although not necessarily, also a dynasty.
... Then there
is the will to conquer: the impulse to fight, to prove
oneself superior to
others, to success for the sake, not of the fruits of success,
success itself. ... Finally, there is the joy of creating,
things done, or simply of exercising one's energy and
By the 1950s many theorists treated the managerial revolution
as an empirical fact rather than a hypothesis or theory (Zeitlin,
Parsons (1953) and Dahrendorf (1959) both believed that class
being replaced by an occupational system based on individual
which status was determined by functional importance. "The basic
seems to have been the shift in control of enterprise from property
interests of founding families to managerial and technical
personnel who as
such have not had a comparable vested interest in ownership,"
pp. 122-3) wrote. According to Dahrendorf (1959, pp. 275-6), the
source of social conflict in a modern capitalist nation is no
capital and labor, because "in post-capitalist society the ruling
subjected classes of industry and of the political society are no
identical; ... there are, in other words ... two independent
fronts. ... This holds increasingly as within industry the
ownership and control increases and as the more universal
replaced by managers."
During the 1960s and 1970s, Galbraith (1971, 1978) and Bell
(1976) continued this line of thinking, incorporating the
revolution hypothesis into larger, more comprehensive theories of
change. Galbraith argues that the "decisive power in modern
society is exercised not by capital but by organization, not by the
capitalist but by the industrial bureaucrat" (Galbraith, 1971, p.
consequence of the shift in power, he says, is less emphasis on
maximization as an organizational goal. Profit maximizing becomes
important because professional managers receive most of their
a fixed salary, not from the profits; hence, it would be irrational
that those in control (i.e., managers) will maximize profits for
(i.e., stockholders). More important to managers than
maximizing profits is
prevention of loss, since low earnings or losses make a company
to outside influence or control. Galbraith believes all businesses
earn a minimum level of profit, but professional managers place
emphasis on organizational growth, planning, knowledge, autonomy,
expertise, because these factors are recognized as the basis of
power in the
organization and are essential for long-term survival of the
These ideas are reinforced and extended in Bell's The Coming
of the Post-Industrial Society (Bell, 1976), which contends that
knowledge, rather than capital or practical knowledge, is the
of innovation and social organization in a post-industrial society.
economy, this change is reflected in the decline of manufacturing
and the rise of service industries, especially health, education,
welfare services and professional/technical services (research,
computers, systems analysis). Universities play a central role in
production of knowledge and technology. A post-modern society is
information society. Education rather than heritage or social
the key means of advancement, and rewards are based less on
property than on education and skill (i.e., a meritocracy). Bell
that these structural changes foster a new class structure D one
the supremacy of professional, managerial, scientific and technical
occupations (the knowledge or intellectual class) D that gradually
the bourgeoisie as the ruling class. Many European sociologists
made similar arguments about other Western countries (see, e.g.,
Since the late 1960s, much of the scholarship has focused on
empirically testing the managerial revolution thesis. But before
those studies, one important conceptual change should be
emphasized. In the
early part of the 20th century, the power struggle was framed as
capitalists and top-level managers. As this brief historical
shown, today the debate has widened to include professionals,
technocrats in the noncapitalist group D i.e., individuals who are
in the systematic production of theoretical knowledge. As such,
author's view, the "managerial revolution" is a term that no longer
appropriate to describing the alleged changes. "Technocratic
(or even better yet, "technocratic reformation") is probably more
since it can incorporate both managers and nonmanagerial technical
Nevertheless, in deference to custom and usage, the term
revolution" will be used throughout the remainder of this paper,
proviso that it encompasses professional, technical and
occupations as well.
Empirical Research on the Managerial Revolution Thesis
A number of criticisms have been directed at the managerial
revolution hypothesis, but the single most important one is the
that there is little or no empirical evidence to support it. In
Zeitlin (1974) argued that predictions of the demise of the
were grossly premature and that there was relatively little
evidence to support such claims. "I believe that the 'separation
ownership and control' may well be one of those rather critical,
accepted, pseudofacts with which all sciences occasionally have
themselves burdened and bedeviled." More recently, Jary and Jary
375) write that Daniel "Bell's concept (post-industrial society)
been widely criticized as failing to demonstrate that the undoubted
in the importance of knowledge in modern societies actually does
lead to a
shift of economic power to a new class, especially to a new
class." Other reviewers have made similar arguments (Abercrombie,
Turner, 1988, p. 191; Scott, 1994, pp. 353-5).
Although the empirical research fails to provide unqualified
support for the managerial revolution thesis, claims by some
there is no support for it are exaggerated. The empirical research
divided into two major categories or approaches. One attempts to
question: Is ownership becoming more diversified as organizations
economic system have grown? The research here is primarily
focuses on how much stock is controlled by families or individuals
extent to which they are involved in top management. Research
owners or capitalists play less and less role in the day-to-day
and decision-making as a corporation grows. Many decisions must be
delegated to managers and lower-level technocrats, which suggests
managers have more potential for control.
The second line of research attempts to answer the question:
Even if ownership is becoming more diversified as organizations
become more structurally complex, are those organizations still
interests of the owners above managers or other groups? Research
question involves explanatory analysis and examines the
organizational structure and organizational outcomes (i.e., profit
maximization, job loss, product quality). The results here are
The debate of continuing interest here is whether managers and
are incorporated into the ownership class (either by cooptation or
or whether they pursue policies and practices that serve their
before those of the owners.
Is ownership becoming more diversified? Research on this
question strongly suggests that owners play less and less role in
day-to-day operations as organizations grow, that the proportion of
manager-controlled firms has increased, and that most large
manager- rather than owner-controlled. These studies usually use
percent stock ownership, membership on the board of directors or in
management, or a combination of both to determine whether
owner-controlled. But regardless of the different definitions
support the notion that ownership becomes more diversified as an
organization grows. This finding should not be taken to mean that
are displacing capitalists as the key decision-makers, since
managers may be
incorporated or coopted into the ideology of the capitalist class
coerced to follow its orders. But it does imply that owners are
involved in decision-making at lower levels, and thus do not have
level of involvement as owner-managers.
Berle and Means (1932) apparently conducted the first
quantitative empirical analysis. Using data compiled from
Corporation Records, Moody's manuals, The New York Times and The
Journal, they concluded that families or groups of business
more than half of the outstanding voting stock in only 11 percent
of the top
200 largest nonfinancial corporations. Using 10 percent stock
the minimum criterion for family control, they classified 44
percent of the
top 200 largest nonfinancial corporations as management controlled.
1937, the Securities and Exchange Commission, using more reliable
comprehensive data, reported that minority ownership control
existed in the
vast majority of the nation's largest corporations (U.S. Temporary
Economic Committee, 1940, p. 104). However, R. A. Gordon
government study, pointing to a number of shortcomings and
probably fewer than a third of the companies were controlled by
small group of individuals (Gordon, 1961). A study by Fortune
the 1960s also concluded that 71 percent of the 500 largest
corporations were controlled by management (Sheehan, 1966), but the
and data have been attacked by some scholars (Burch, 1971).
Using a methodology similar to Berle and Means, Larner (1970)
concluded that only 3 percent of the largest 200 nonfinancial
were controlled by families in 1963. At the same time, 84 percent
companies were controlled by managers, nearly double what Berle and
had found. The remaining 13 percent were partially controlled.
argued that the managerial revolution was nearly complete,
Burnham's prediction (ahead of time). "A corporation may reach a
great that, with a few exceptions, its control is beyond the
of any individual or interest" (p. 20).
However, a year later Burch (1971) challenged Larner's and
Berle and Mean's findings, arguing that they had used a too
definition of control. Burch argues that control should include
some measure of stock ownership but also membership in top
management or on
the board of directors. Using this broader definition, he found
36 percent of the top 300 public and private industrial
probably family controlled in 1965. However, Burch also found that
proportion of family-controlled firms had declined about 3 to 5
year since 1938, when they controlled about 50 percent of all large
companies. These data support Larner's and Berle and Mean's
family or individual control declines as a company grows.
Do Managers Serve Themselves or Owners? The second line of
research has focused to a large extent on Smith's 200-year-old
which posited that managers are less likely to serve the interests
owners than themselves. Often this has involved examining whether
managerial-controlled firms or large corporations are less
place less emphasis on profits. Noneconomic researchers have also
the impact on organizational goals and practices, with the
managers will place greater value on organizational growth, product
and innovation. Findings are mixed.
Several studies are interpreted as supporting the managerial
revolution thesis. Monsen, Chiu and Cooley (1968) examined the
ownership structure on the level of profitability for the 500
industrial firms. A firm was considered to be owner-controlled if
(individual, family, family holding company, etc.) is represented
board of directors and owned 10 percent or more of the voting
stock, or if
one party owns more than 20 percent of the voting stock.
firms were defined as those in which no single owner held more than
percent of the voting stock and there is no evidence of recent
control. Using these definitions and government data, the
able to track 36 firms of each type over a 12-year period. The
net income to net worth ratio (return on owner's equity) for
owner-controlled firms was 12.8 percent, compared with 7.3 percent
Palmer (1973) also found that manager-controlled firms
operating in markets with a high degree of monopoly power report
significantly lower profit rates than owner-controlled firms, but
differences emerged between firms in moderate or low monopoly
reasoning here is that managers can pursue goals other than maximum
only in the absence of competition, which acts as a constraint on
of organizational structure. Larner (1970) found that
firms have slightly lower profit rates.
In contrast, other studies have found no differences or that
manager-controlled firms are more profitable. Fligstein and
(1992), for example, found that manager-controlled firms actually
outperformed family- or bank-controlled firms in terms of profits.
they argue that ownership overall has little effect on the economic
undertaken by large firms; rather, the key determinants are
relations within the firm, the concept of control that dominates
actions, and the action of competitors. Several other studies
1968; Hindley, 1970) also have found that management control exerts
important influence on profit rates. James and Soref (1981)
relationship between dismissal of corporate chiefs and five
managerial/owner control, with the expectation under the managerial
revolution thesis that corporate chiefs at managerial-controlled
more job security. However, they found that corporate heads are
fired on the basis of profit performance, not ownership structure.
Breaking with previous theorists, at least one researcher has
argued that a positive correlation between managerial-control and
profit rates is compatible with the managerial revolution thesis.
mass communication researcher, argues that the corporate form of
organization D which he basically defines as a complex bureaucracy
a high degree of managerial control D is structurally organized
profits, but places less emphasis on profits as an organizational
Using national probability samples of daily newspapers in the
Demers has found that large, complex corporate newspapers are more
profitable than smaller, less "corporatized" ones. Corporate
more profitable because they benefit from economies of scale and
management and human resources. However, corporate newspapers also
less emphasis on profits as an organizational goal and more
other, nonprofit goals D such as product quality, maximizing growth
organization, using the latest technology, worker autonomy, and
innovative D because they are controlled by professional managers
technocrats, not the owners (Demers, 1991, 1993, 1994a, 1994b,
also reports that journalists at corporate newspapers are more
with their jobs because they have more autonomy, status and
journalists at noncorporate or entrepreneurial newspapers (Demers,
1994d). And, more importantly, he found that as organizations
corporatized, editorials and letters to the editor published in
more, not less, critical of mainstream groups and ideas (Demers,
established news sources (mayors and police chiefs) in communities
corporate newspapers also believe that those newspapers are more
their policies and city hall (Demers, 1996b). These latter
contradict many neo-Marxist theories which hold that media become
hegemonic as they become more corporatized (e.g., Tuchman, 1988).
(1994c, 1996a) traces the growth and development of the corporate
to the economic and social division of labor in society (i.e.,
pluralism) and argues that the corporate form of organization helps
explain many of the social changes that have taken place,
especially in the
While findings that corporate newspapers place less emphasis
on profits as an organizational goal and increased emphasis on
goals and editorial autonomy support the managerial revolution
fundamental question is whether these changes can be generalized to
industries as well. The newspaper industry is widely believed to
markets where there is little direct competition (Demers, 1994c),
not characteristic of most markets. Thus, these findings may not
representative of businesses as a whole. At the same time,
empirical research by economists and sociologists also cannot be
to the entire population of businesses, because virtually all of it
on national data for only the largest corporations D populations of
have rarely been studied. The major problem with these studies is
truncate variance on both the dependent and independent variables,
increasing the risk of Type II measurement errors.
But at least one study has attempted to circumvent these
problems. Demers (1996a) tested the managerial revolution
examining changes in source attributions in news stories over time.
assumption underlying this approach is that media content reflects
crude way the power structure of a society. A large body of
in fact, that mass media are highly responsive to political and
centers of power and promote values generally consistent with
ideals and elite interests (see, e.g., Bennett, 1988; Ewen, 1976;
1980; Gans, 1979; Gitlin, 1980; Molotch & Lester, 1975; Paletz &
1981; Tichenor, Donohue, & Olien, 1980; Tuchman, 1978, 1988). This
on bureaucratic, especially governmental, institutions for the news
that media eschew alternative, unorthodox points of view (Cirino,
Cohen & Young, 1981; Gitlin, 1980; Molotch & Lester, 1975;
Donohue, & Olien, 1980; Tuchman, 1978; Tunstall, 1971). As a
the construction of social problems usually is framed from the
those in power (McCarthy & Zald, 1977). Challenging groups also
seek to use
media to reach their goals, but they are often marginalized by
powers and, thus, are perceived by the media to be less credible
newsworthy (Fishman, 1980; Herman, 1985; Gitlin, 1980; Olien,
Tichenor, 1984; Paletz & Entman, 1981). As a rule of thumb, the
power of a group or organization, the greater its ability to
command the att
ention of the media.
If this power-reflection proposition is correct, then one
could postulate that changes in the power structure should be
the sources that journalists use to report on the news. More
under the managerial revolution thesis, Demers expected that during
century attributions of capitalists declined, while attributions of
scientists, technicians, researchers and others who roles involve
production of theoretical knowledge increased. A content analysis
attributions on the front page of the New York Times over a 90-
during the 20th century supported for Demers' hypothesis.
capitalists declined from 8.8 percent in 1903 to 4 percent in 1993.
contrast, attributions of technocrats increased, going from 2.7
10.5 percent (Demers, 1996a, see Chapter 10).
Summary and Discussion
The notion that control of corporate organizations in modern
societies is shifting from the capitalists to professional managers
highly skilled technocrats dates back to the turn of the century.
contemporary social scientists have argued that there is little
support for the managerial revolution hypothesis. This is an
This paper's review of the literature showed that owners play less
day-to-day operations as organizations grow, that the proportion of
manager-controlled firms has increased, and that most large
manager-controlled rather than owner-controlled. Results are mixed
of studies that examine the relationship between organizational
and outcomes (profits maximization, organizational goals), but
there is just
as much evidence supporting the managerial revolution thesis as
One of the problems with much of the research in this area is that
based on data from very large corporations and has a limited time
both of which increase the risk of Type II measurement errors.
More recent research on newspapers also supports the
managerial revolution hypothesis. As newspapers become more
(i.e., bureaucratic), they place less emphasis on profits and more
on product quality and other nonprofit goals. Newspapers that
characteristics of the corporate form of organization also publish
editorials and letters to the editor that are critical of
and values, and this criticism is perceived by public officials in
communities. A content analysis of the New York Times over a
showed that attributions for capitalists and their representatives
more than 50 percent, while attributions for technocrats increased
four-fold. These findings should be interpreted cautiously, since
sources are a crude measure of power, and only the front pages of
newspaper were analyzed. However, at a minimum, the social
literature suggests that arguments which dismiss outright the
managerial and technocratic occupations are gaining power relative
capitalists are premature. At a maximum, the literature suggests
major transition of power is taking place in society. The latter
has at least two major implications for media managers, scholars
First, if a transition of power is occurring, then the growth
of the corporate form of organization in mass media industries will
necessarily lead to greater emphasis on profits at the expense of
quality or a diversity of ideas. Indeed, social and economic
strongly suggests that professional managers and editors would
emphasis on information diversity, product quality and other
goals, since power and prestige among professional groups are
to skills and knowledge. Second, if a transition of power is
then corporate media would be expected to have a greater capacity
social change. This does not mean that hegemonic models are wrong.
they often overstate the social control consequences of the mass
understate the media's capacity to promote social change. In fact,
growth of corporate media may help to explain many of the social
that have occurred during the last century or so (e.g., increasing
for consumers, women and minorities). To the extent that media
technocrats control the news production process, one might also
these groups will have an increasing impact on public policy.
research should focus more closely on the impact that media
structure has on organizational goals and behaviors, as well as the
dependence on technocrats has on audiences and policy makers.
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 Corporate control is usually defined as "the power to
determine the broad policies guiding the corporation, although it
necessarily imply active leadership or specific influence on the
operations of the enterprise" (Larner, 1970, p. 2). For a similar
definition, see Fligstein and Brantley (1992, p. 282).
 Centralization occurs in one of two ways. The first is
when larger, more successful companies purchase the assets of
competitive and innovative firms. Economies of scale are primarily
responsible for this. The second method of centralization occurs
the formation of joint-stock companies, which, he argued, often
amounts of capital together for the purpose of gaining greater
a particular market. The credit and banking system plays an
in funding such ventures (Marx, 1987, p. 588).
 Galbraith calls the belief that professional managers
are more profit-maximizing the "approved contradiction."
 Although some top-level managers may also be classified
as technocrats, in most large corporations the roles are usually
 The use of the term "revolution" also is probably
misplaced. More accurately, it should be called a reformation,
change occurs over a long period of time.
 Scholars have argued that even if managers run the
day-to-day operations, this does not mean they control the
since top management is accountable to the board of directors.
Aldrich (1979) argues that even though there is no direct evidence
owners exert direct control of corporate organizations, they retain
potential for control. Zeitlin (1974, 1976) and others also have
that corporate leadership, even if it does not have sole ownership
company, nevertheless makes its decisions on the basis of continued
acquisition of power and wealth. And Pennings (1980) has attempted
that interlocks among boards of directors of corporations ensures
relatively small number of capitalists hold power.
 For another analysis of the studies reviewed in this
section, see Allen (1976).
 Corporate newspaper structure can be defined as an
organization that has (1) a clear- cut division of labor, (2) a
authority, (3) rules and regulations, (4) formalistic
employment based on technical qualifications, (6) rationality, or a
degree of efficiency, and (7) a complex ownership structure (e.g.,
ownership, public corporation). For heuristic purposes, the
newspaper may be contrasted with the entrepreneurial newspaper, an
type that is structurally simple and is owned and managed by the
individual or family. However, ideally corporate newspaper
be conceptualized and operationalized as a continuous variable.