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date: 22 October 2020

Abstract and Keywords

This article argues that Michels's core arguments about the nature of oligarchies in organizations, and research generated in response to his work, are not only relevant to understanding the dynamics of political organizations but can be extended as a useful framework for thinking about important aspects of contemporary economic corporations as well. In making this argument, the article highlights the parallels between Berle and Means's analysis of modern, publicly held corporations and that of Michels. Both analyses address the general organizational problem of ensuring representation of members' interests. In political organizations, it is the rank-and-file members' interests that leaders are charged with representing; in publicly held organizations, leaders are primarily responsible for representing the interests of stockholders, as the nominal ‘owners’ of the firm. In this context, the article considers evidence and research on problematic corporate behavior to show how Michels's work provides a useful framework for understanding these problems and for formulating ways of addressing them.

Keywords: oligarchies, political organizations, economic corporations, organizational problems, rank-and-file, stockholders

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