Power, and business

By Thane on Fri 11 November 2011

Keltner, Van Kleef, Chen and Kraus wrote a really interesting paper in 2008 on social power entitled A reciprocal influence model of social power, and I think that, against the backdrop of emergence and complexity theory and social influence theory, we're only beginning to scratch the surface as to society's dynamics in business research (an opinion I'm open to having challenged).


The authors had two fundamental assumptions (p 152) regarding social influence that they took from an evolutionary perspective in primate hierarchies, as follows.

  1. Power relations are bi-directional, and are governed according to the extent to which individuals act in ways that advance the interests of the group.
  2. Power is a heuristic solution to the problem of allocating resources in interdependent relations, and as such, should be a basic dimension of social perception and social behaviour.

Interesting. Seems rather plausible and pragmatic to me, I think. I'd like to investigate these assumptions more deeply at some point though - especially the second one. Let's assume for a while that this is how things work right now, because the authors do distil these assumptions into 7 propositions (p 157) that are all proven to a degree by experimental evidence.

So, we, the people, give particular individuals or groups of individuals power if they further our interests (or at least appear to further our interests). Democratic elections would be an example of this. If one candidate or political party keeps shouting about how they are going to address your interests, and the other candidates/parties don't, surely you're going to be more likely to vote for that candidate/party? You're going to give them authority over you to provide the necessary frameworks in which you will live and you'll hope that, working and living within those frameworks, you'll have your particular interests addressed (unemployment, healthcare, education, etc.).

Not only this, but we progressively (heuristically) give power to and take it from the relevant people who will be allocating resources, and we give to and take from them the relevant resources. Money, in my mind, would be one such resource, amongst others such as tangible resources (water, food, machinery, etc.) or even possibly intangible ones (our time, intellectual property, etc.).

Surely then, when theorising about "business", we need to do so against the backdrop of an understanding of the dynamics of social influence? In my brief bit of research so far in the field of entrepreneurship, I haven't seen much talk of this - people mainly seem to focus on innovation, and gathering resources towards addressing an opportunity. The social influence dynamics behind this seem taken for granted (perhaps I haven't read enough yet - I am certainly open to being corrected).

Business and power

The way I see things is as follows: if you create some kind of value (a product, service, experience, etc.) that a particular group of people wants (call them your "target audience"), and they're willing to give you a certain amount of money for your offering, and if once you've paid all of your bills and delivered on your promises you've got some money left over, you've got a business - especially if you can keep this going. But that money that you've got left over: what is it? From one perspective, one could think of it as purchasing power. Useful resources, that afford you freedom and a certain degree of influence (not the only type of influence in society, I might add), have been allocated to you by the group - not necessarily consciously, but perhaps as a built-in mechanism in society (see this other article I wrote on Mead's view of society). Is this perhaps an emergent effect of some simpler, more fundamental things that you and I do on a daily basis? Entirely possible, I think.

What do you then do with those resources? Do you re-invest them in creating more value for society (i.e. that which society at least perceives as being valuable)? If so, it's likely that you'll be able to carry on gaining purchasing power. Do you waste them on things that only further your own interests and nobody else's (even perhaps working against the interests of others)? If so, you'd better hope that nobody finds out, because if the group sees you as wasteful (think: Lehman Brothers, et al.) they will at least try to find ways (consciously or subconsciously) to remove your power from you (think: Occupy Wall Street).

(Just to clarify, from my phrasing above: I don't at all think the Occupy Wall Street movement had anything to do with Lehman Brothers' swift descent, but its emergence after the financial crisis seems to me to be a growing signal of societal discontent with the corporate gestures made by those currently in power, who wield much of humanity's resources. Although it's a very scattered movement filled with discord, to me it's a sign that growing parts of society are not having their interests taken seriously by those who have historically been afforded power, and are looking for new ways of having their needs met, and perhaps new authorities).

Power, and business

So it seems to me as though social influence dynamics (under the two assumptions by Keltner et al.) are at the heart of what drives business. Power is thus a primary construct to understanding the present-day phenomenon which we call "business". "Business", as we currently understand it, is, in language more amenable to complexity theory and emergence, a form of societal patterning.

With this understanding, what other sorts of societal patterning are possible towards creating real value?

The perception of value

As you might have seen, I'm quite careful when talking about the way in which society affords power to those who at least appear to create value for them. I think that it's entirely possible to fool people into thinking that you're creating value (think again: Lehman Brothers, et al.). The problem is, if you're not creating real value, it will eventually surface in some form of deficiency or chasm somewhere. In the most extreme case, it might even surface in societal collapse and extinction of the species.

So far we've been lucky: all of the major collapses and scandals have been relatively small-scale in comparison to total extinction, and the aftermath is quite clearly a removal of power from those who instigated the societal harm.

A question comes to my mind then: what is real value?

Depending on how you look at it, this is either a very easy or very difficult thing to answer, and I think that the answer lies in your fundamental frame of reference. Do you consider long-term survival of humanity, attempting to progressively improve the quality of life of all people, as a worthwhile goal? If so, then I would say that whatever contributes (no matter how small the contribution might seem) towards this dynamic, running goal would constitute real value. What's your definition of real value?

Implications and questions

Surely we need to start thinking more carefully about the ways in which we afford power to others, allowing them to mould and shape us according to their thinking and desires? Going back to symbolic interactionist theory, it seems, to me at least, as though our unwillingness to part with our constructed selves (the "me" phases of self) traps us in being controlled from within by influential people and groups.

What sort of society would be possible if we all allowed ourselves and others to be a bit more spontaneous, living creatively "in the moment"?

And finally, we need to bolster the postmodern movement, which is essentially a sceptical movement, by continually interrogating our own motives and those of others. We need to start crafting and asking the right questions, towards creating real value for each other.