Ideological integration and variation within the private business elite

1
Ideological integration and variation within the private business elite
in Norway
Trygve Gulbrandsen
Forthcoming in European Sociological Review (2005)
Abstract
Within elite theory and research there has been much discussion whether particular national or
sector-specific elites are integrated, alternatively more or less fragmented. In this article the
focus is on the private business elite of Norway, and whether this elite group can be
characterized as ideologically and politically integrated. The empirical analyses presented
indicate the private business elite of Norway is largely ideologically integrated. Its members
oppose core elements of the Norwegian welfare state model and vote for the non-socialist
parties. Previous research has discussed whether the top leaders’ ideological orientations and
political preferences are affected by the roles or positions which business leaders occupy. One
position emerged as significant for the business leaders’ opinions: owners of large private
business firms who at the same time are CEOs or chairmen of the board are both ideologically
and politically more conservative than their fellow employed leaders.
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Introduction
A core question within elite theory and elite research is whether national elites or particular
sector elites are cohesive and integrated, or alternatively that they are fragmented (Mills 1959;
Hoffman-Lange 1985; Higley et al. 1991; Kadushin 1995; Bürklin and Rebenstorf 1997).
Integration has been measured in terms of similarity – of class background, education
or political beliefs, or in terms of how strongly the members of the elite are related to each
other through kinship, friendship or through belonging to the same business, political or social
network, or a combination of these.
This article focuses upon one particular sector, the private business elite of Norway
defined as the top leaders of the largest private enterprises. Studies of the private business
elite in western European countries have demonstrated that top leaders in private business
constitute a rather homogeneous group in respect of class background (Ruostetsaari 1993
(Finland); Hoffmann-Lange 1992 (Germany); Bürklin and Rebenstorf et al. 1997 (Germany);
Hartmann 2000 (France and Germany); Christiansen et al. 2002 (Denmark); Gulbrandsen et
al. 2002 (Norway); Mastekaasa 2004 (Norway). A majority is recruited from the upper or
middle classes. To what extent are the members of this elite group also homogeneous in their
ideological outlook? Do they share the same political ideology and the same political
preferences, or are there variations among them? And what may explain any such differences?
In order to answer these questions Norwegian business leaders’ views will be studied
in two ways. Firstly, I will register their opinions about an issue that has been prominent in
Norwegian political history and still is today. This issue concerns the size and responsibilities
of the state, that is the extent and content of what may be termed the Norwegian welfare state
model. This issue, which is commonly described as the public–private cleavage, has had a
significant effect upon voting patterns as well as the party structure of Norwegian politics.
The business elite has traditionally been in favour of limiting the role and responsibilities of
the state, advocating more privatisation, and has strongly opposed government intervention in
the affairs of private business and economic redistribution through taxes. Secondly, I will
survey how the members of the private business elite voted in the 1997 parliamentary
election.
There may be many personal and social reasons why a member of the elite comes to
hold a particular ideological position or sympathise with a particular political party. In this
article, however, an examination is made of the extent to which any variations in ideological
or political beliefs can be traced back to the roles and positions occupied by members of the
private business elite, and experiences accompanying these positions.
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Based upon suggestions in previous literature three such roles will be discussed: (i)
active participation on the part of the business leaders in the corporatist system of political
decision-making which may foster understanding and respect for the opinions of political
opponents; (ii) roles or positions inciting a feeling of responsibility for the collective interests
of private business, particularly membership in the ‘inner circle’ of private business; and (iii)
ownership, which exploits the feeling of self-interest as a motivation for managing and taking
care of private property.
The hypotheses developed in this discussion will be subsequently analysed empirically
with the aid of data relating to the top leaders of the largest private enterprises in Norway.
These data were collected through a large and unique survey study of a ‘sample’ of
Norwegian economic, political and social elites, the Norwegian Leadership Study, which was
carried out in the year 2000. This study is an important part of the Power and Democracy
Project, a five year project commissioned by the Norwegian parliament. The Leadership
Study was conducted by Institute for Social Research in collaboration with Central Bureau of
Statistics of Norway.
Inspired by more recent elite theory (Presthus 1973; Putnam 1976; Higley and Burton
1989), elites in the Leadership study were defined as the holders of top positions in central
institutions and organizations within significant sectors of the Norwegian society, for instance
the political system, the economy and cultural life.
In general there are few empirical studies of the ideological beliefs and political
preferences of the private business elite. To my knowledge, still fewer have attempted to
systematically relate the political beliefs and preferences of the members of this elite group to
their roles and experiences in the manner adopted in this article.
The Norwegian case: Capitalism with strong state involvement
Private business in Norway has a dual structure. On the one hand there is a large number of
small, unlisted and geographically dispersed firms, the majority of them owned by the
founders or their families. On the other hand there is a limited number of large, listed
enterprises with a more dispersed ownership. In 2002 the value of the companies listed on the
Oslo stock exchange amounted to 31 per cent of the nation’s GDP. A unique feature of
Norwegian economy is that the State has traditionally been an active participant in the
economy and remains a large owner at the present time. In 2003 the State owned 40 per cent
of the total stock listed at the Oslo stock exchange.
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This dual structure with the State as a ‘senior partner’ to private business can be traced
back to the beginning of the industrialization in the second half of the 19th century. At that
time Norway had a weak bourgeoisie, and private companies were small with limited
financial capacity. In spite of a liberal orientation the State had to step in to safeguard the
emerging industries, investing heavily in the infrastructure and assisting the establishment of a
national banking system. The State had thus compensated for the absence of an ‘organized
capitalism’, i.e. large enterprises and owners actively developing new production and new
industries. This model has been described by leading historians as the ‘Norwegian system’
(Seip 1959) or as the Norwegian sonderweg (Sejersted 1993) to modernization. The model
matured through the large industrial projects which took place during the first decades of the
20th century and was further strengthened during the economic crises of the 1920s and 1930s.
It was finally consolidated as the social democratic governance model after the Second World
War when the State shouldered a strong responsibility for post-war industrial development,
initiating and establishing several new enterprises. The entrepreneurial State also manifested
itself when the Government put itself at the head of the development of the oil industry in the
1970s.
Since then the State’s involvement in business has changed character: the government
has removed regulations in several areas, including the housing, power and credit markets;
several public enterprises have been privatized, and the State has become a much more
passive owner, first and foremost preoccupied with earnings and shareholder value one the
hand, and with guaranteeing national ownership in a few selected industries on the other.
These particular features of Norwegian capitalism make Norway an interesting case
concerning integration within the private business elite. The relatively few large enterprises
concentrated in a few cities provide favourable structural conditions for interaction within the
private business elite and for the development of similar political attitudes. Given that there is
a tendency among private business leaders to unite in their ideological beliefs, ideological
integration should then be prevalent within the Norwegian private business elite. Secondly,
because of the long tradition of public involvement in business, private business leaders may
have learned to accept the reality of a strong State. In that case it might be expected that the
private business elite holds a relatively moderate ideological orientation.
Theory and hypotheses
Participation in the corporatist system of political decision-making
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In Norwegian society, interpersonal relations between representatives of different elite groups
gravitate around the political system. A particular characteristic of this system is that interest
groups are represented in public committees and boards which are delegated the responsibility
to prepare or to carry out political decisions. To a large extent the interest groups are formally
consulted and given the opportunity to have their voice heard before important decisions are
made. In addition to this corporatist system of political decision-making there are extensive
lobbying activities from the interest groups directed towards members of parliament and the
cabinet and towards senior officials in the state bureaucracy (Christiansen and Rommetvedt
1999).
Several scholars have maintained that corporatist arrangements may contribute to a
national consensus between groups with opposing interests (Katzenstein 1985; Siaroff 1999;
Öberg 2002). Some have even described (neo)corporatism as a strategy for consensusbuilding (Woldendorp 1995). These viewpoints seem to imply that participation in the various
channels and networks in a corporatist system may influence participants to moderate their
ideological attitudes. The participation has a ‘civilising’ effect.
Similatrly, elite researchers have claimed that participation in national elite networks
is conducive to a greater appreciation of the interests and attitudes of adverse groups, which in
the next round may pave the way for political compromise or consensus. In a study of national
elite networks Higley, Hoffmann-Lange, Kadushin and Moore (1991) found that the elite
persons located in the centre of the national elite network of USA were more inclined to forge
a political compromise than leaders located in the periphery. Studying business leaders in
USA, Barton (1985) found that leaders who were active in national organisations for political
discussions were more liberal in economic policy than other leaders. In line with this literature
I expect private business leaders in Norway who actively participate in the corporatist system
of decision-making to be more moderate in their attitudes towards the role and responsibilities
of the public sector than leaders who participate less actively. A business leader can
participate actively in this system through being member of a public committee or board or
through having informal contact with significant decision-makers in the parliament, the
cabinet, the public administration and the trade unions. Accordingly, I expect that business
leaders who hold public posts or who have frequent contact with one of these groups of
decisions-makers are ideologically more moderate than business leaders without such posts
and contacts. Similarly, I expect that these active business leaders also vote for one of the
socialist parties more frequently than non-participating top leaders.
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Positions representing the collective interests of private business
According to Useem (1984) there is an ‘inner circle’ within private business. This ‘inner
circle’ consists of business leaders who hold multiple posts in the boards of other enterprises
and who are members of central business organisations and round-tables. These leaders have
sights beyond the immediate interests of their own enterprise and have an eye for the
collective interests of private business. They have become representatives of ‘class-wide’
interests on behalf of the whole business class or community. They actively lobby political
authorities in order to ensure that political decisions pay heed to the interests of private
business.
Useem (1984) demonstrates that the inner circle emerged as a response to the
perception among prominent business leaders during the 1960s and early 1970s that general
political conditions for private business had become very unfavourable. The ensuing political
mobilisation of the business community in both the USA and Great Britain during the 1970s
forced public policy in a more conservative direction. In spite of this Useem (1984) claims
that business leaders of the inner circle basically accept political compromise and are less
concerned about an intransigent defence of the interests of private business than ‘ordinary’
leaders.
Recent empirical studies in USA (Burris 1991, 2001) have, however, called Useem’s
claims into question. In a study of campaign contributions in connection with the presidential
election in 1980 Burris (2001) found that the corporate elite contributed fairly heavily to both
Republicans and New Right candidates, and were strong early supporters of Reagan.
The Swedish historian Niklas Stenlås (2001) has maintained that in the Scandinavian
countries (Denmark, Norway and Sweden) inner circle orders also existed for the promotion
of general business interests. These institutions and their members organised political
activism and coordinated coherent political strategies among a host of various organisations
and enterprises. It is, however, uncertain whether such inner circle orders or networks still are
present among the Norwegian business community today.
Given that there is an inner circle of private business leaders in Norway, what is the
ideological outlook and the political preferences of its members? In Norway, as in several
western countries, market liberalism during the last two decades has become progressively
more entrenched. The market is increasingly seen as a legitimate and effective mechanism for
governing and regulating private as well as public activities. In the public sector, for instance,
several previously state-owned enterprises have been more or less privatized, or they have
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been more exposed to market competition. In this new ideological environment many
members of the corporate elite act as eager proponents of the market ideology. If there is any
‘inner circle’ within the private business community of Norway, in line with Burris’ US-based
research (1991, 2001), I expect that this ‘elite of the elite’ harbours more negative attitudes
towards the welfare state than the ordinary business leaders. Moreover, I expect the members
of this inner circle to vote for non-socialist parties more frequently than the other business
leaders.
According to Useem (1984), a defining characteristic of inner circle members is that
they hold at least three posts in boards of other enterprises. This criterion is not satisfactory in
a Norwegian context. CEOs in large enterprises are commonly members of the boards of
several subsidiaries, and the chairmen of the boards usually hold posts in the boards of several
other enterprises. I will therefore instead use ten or more posts as a board member as the
criterion to identify top leaders who may belong to the inner circle of the Norwegian business
elite.
Secondly, there are other positions which are regarded by the private business elite
itself as holding more power or as more important when the collective interest of private
business is formulated. In private conversations top leaders frequently mention being a
member of the election committee of a large company and being a member of the board of a
national business and employer organization as powerful positions within private business.
Accordingly, I will use holding such positions as alternative indicators of affiliation to the
inner circle of the Norwegian business elite.
The importance of ownership
According to classical theory of managerial capitalism (Galbraith, 1967; Marris, 1964)
owners are interested in maximizing the market value of the shares of the firm, while
managers’ interests are in maximizing utility where in turn utility is a function of power,
security, status, and income. Agency-theory (Jensen and Meckling, 1976; Eisenhardt, 1989)
has similarly focussed upon the risk of opportunistic behaviour on the part of professional
managers when their interests are not aligned with the interests of the owners and their
relationship with the owners is characterised by asymmetrical information. The divergence of
interests may be expected to provide owners with a stronger economic incentive to manage
the production resources in an effective way compared to professional managers.
To what extent do owners also differ from professional managers in their political
attitudes? A scrutiny of the international literature indicates that this is an area which has not
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been considered hitherto. The Norwegian historian Francis Sejersted (2001) has maintained
that the managerial-capitalists (in contrast to the owner-capitalists) who headed the large and
often state-dependent enterprises in Norway which dominated after the second word war, took
into consideration short-term profit as well as long term growth and survival of the
enterprises. These manager-capitalists thus mediated between capital and labour in a way that
was acceptable to most interest groups and which tended to reduce tension in society.
Sejersted (2001), thereby seems to suggest that owners and professional CEOs differ in their
political behaviour and outlook. His analysis seems to particularly imply that the hired top
leaders (the managerial-capitalists) have been (and are) ideologically more pragmatic and
consequently probably more moderate than owner-capitalists.
The owners, on their part, having preferences for effective management and
maximisation of shareholder value may be expected to oppose public policies which raise
costs and reduce the profitability of their firms.
In the following I will focus upon owners with a dominant ownership position in the
enterprise. CEOs or chairmen of the board with at least 33 per cent of the shares or
representing a family with such an ownership position are defined as dominant owners.1 In
accordance with the preceding ideas, I expect these owners to be more negative towards the
Norwegian welfare state model than professional managers because of the tax burdens which
this model is perceived to place on private business. They will also probably prefer political
parties which advocate a reduction of public expenditure and taxes, i.e. the essence of nonsocialist policies.
Previous research has demonstrated that many family owners, particularly
entrepreneurs and owner-managers, also prefer to maintain personal control of their business
(Schein, 1995). I expect such a preference for control will induce owners to oppose policies
which they feel can undermine their control and autonomy. The Norwegian state intervenes in
many ways in the affairs of private business, for instance through environmental regulations,
labour protection, taxes, and so forth. To many owners these interventions are looked upon as
interference in their prerogatives as owners of private property. Against this background also,
it may be expected that owners would counter an active welfare state and vote for nonsocialist parties to a larger extent than employed managers.
Control variables
As control variables I will use the gender, age and education of the top leaders. Both the level
and type of education2 may have impact upon the formation of political beliefs. Variables
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representing both these aspects of education will be included. It is well known from electoral
studies that social background may influence the formation of individuals’ political attitudes
and voting behaviour. I will therefore also control for the class status of the fathers of the
business leaders.3 Firm size may be a proxy for the prominence of the leaders within the
private business community and will also be included in the models.
Data and method
The purpose of the Norwegian Leadership Study was to examine the social background and
careers of top leaders, their network and relationship to each other, their attitudes towards
important political issues, their lobby activities, and so forth. The sample originally included
1969 persons. It was carried out by means of personal interviews based on a questionnaire
with 1710 of the leaders, a response rate of 87.3 per cent.
The sample of top leaders in the Leadership study has been put together based on the
so-called ‘position’ method. We selected those persons filling the most important positions
within twelve sectors of the Norwegian society.4
Among the 1710 leaders who were interviewed, 297 were CEOs, presidents, vicepresidents and chairmen of the boards of the largest private enterprises in Norway. We
included the CEO (or president) and the chairman of the board in all firms with more than 400
employees and also the vice-presidents in enterprises with more than 4000 employees. The
response rate among the private business leaders was 74.8 per cent. 9 per cent of business
leaders in our sample are owners, 24 per cent are professional chairmen of the board, and 67
per cent are employed CEOs.
In order to investigate the business leaders’ attitudes towards the ‘Norwegian welfare
state’, i.e. the public–private cleavage, they were asked to express their opinions regarding the
following four statements: (1) ‘It is more important to extend public services than to reduce
taxes’; (2) ‘In Norway one should put stronger emphasis upon privatisation and a smaller
public sector’; (3) ‘State influence on private business should be reduced’; (4) ‘In Norway we
have gone far enough in the reduction of income inequalities’. The leaders were given four
response alternatives: (1) Strongly agree, (2) agree somewhat, (3) disagree somewhat, (4)
strongly disagree.5 The answers were coded similarly. The index is based upon the mean of
the leaders’ evaluation of the four statements and has values from 1 to 4. The value 1
indicates that the leaders fully back the public sector and policies for levelling of incomes.
The value 4 indicates that the leaders favour a smaller public sector, more privatisation and a
curtailing of the state power over private business. Cronbach’s alpha for the index is 0.83.
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Given the nature of the response alternatives, it is fair to say that the midpoint value 2.5 on the
index represents a natural distinction between predominantly positive and negative attitudes
towards the Norwegian welfare state model.
This index (with the same or similar questions) has been used in electoral studies in
Norway during nearly thirty years (Aardal 2003). It has proved to capture the left-right
dimension in Norwegian politics in a very satisfactory manner. Moreover, it has turned out to
be very stable. Berglund (2004) has recently validated the index using a number of different
statistical techniques.
A factor analysis of the top leaders’ responses to a series of questions about various
issues in the political discussion in Norway showed that the public–private cleavage is also
manifest among the Norwegian elites. Moreover this dimension was best captured by the four
questions presented above.
The leaders were asked if they were willing to state which political party they voted
for in the parliamentary election in 1997 (the last election prior to the survey).6 Only 8 per
cent declined to provide this information; 5 per cent had not voted at all, and 3 per cent could
not remember which political party they had supported. In the following analyses these three
groups – a total of 16 per cent of the respondents – are treated as ‘missing data’. The variables
are described along with summary statistics in Annex 1.
In order to compare the attitudes of the private business elite towards the Norwegian
welfare state model with the beliefs of the other national elite groups Figure 1 presents the
mean score of each elite group on the public–private index. Interpreting the pattern of the
business leaders’ voting necessitates information about how the political parties in Norway
are located in the ideological landscape. Figure 2 therefore shows how members of parliament
score on the public–private index according to which political party they belong.
The frequency distributions of the business leaders on the public–private index (Figure
3) and of their voting (Table 1) provide information about the degree of ideological
integration among the private business elite.
In order to test the hypotheses about factors inducing individual variation in
ideological and political opinions two regression analyses have been carried out. First, I have
examined the statistical relations between the business leaders’ attitudes towards the
Norwegian welfare state and the various independent and control variables. As the dependent
variable I used the index reported above and which is used as a continuous variable. The
results of the analysis are presented in Table 2.
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Secondly, I have carried out a statistical analysis (logistic regression) relating the
voting of the leaders in the latest parliamentary election prior to the survey to the various
explanatory variables. In this analysis political voting was constructed as a binary variable,
distinguishing between voting for socialist (1) and non-socialist parties (0) respectively. The
results of this analysis are presented in Table 3.
Findings
As one of the Scandinavian welfare societies, Norway has been characterized by a large
public sector producing a whole range of welfare benefits to the population and by a long
tradition of strong state involvement in business. Figure 1 demonstrates that private business
leaders distinguish themselves from the other national leaders by being opposed to this model.
They are located to the one end of the index, indicating that they are strongly in favour of
more privatisation and a halt to public welfare expenditure. The majority of the other elite
groups are clustered around the midpoint value, moderately supporting or opposing the
welfare state.
Figure 1 (about here)
The politicians as a group are located at the other end of the public–private dimension.
Among them opinions are, however, quite divergent, following the stance of the individual
political parties, cf. Figure 2 The figure shows that members of the Storting stand much more
apart in their evaluation of the role of the State and the size of the public sector than the
national elite groups. While parliamentary members who belong to the Socialist Left Party
(SV), The Centre Party (Sp) and the Labour Party (Ap) are strongly in favour of the present
State model, members of the Conservative Party (Høyre) and the (right wing) Progress Party
(FrP) are strongly opposed to state intervention.
Figure 2 (about here)
Previous research has demonstrated that top leaders in private business constitute a
socially cohesive elite group. Figure 3 indicates whether the private business elite also are
integrated ideologically. The figure also illustrates where the members of the business elite
are located on the index representing the public–private cleavage and where 2.5 is the
midpoint value. The figure shows that the distribution of the business leaders on the index for
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ideological orientation is skew. Most of the leaders are placed on the right side of the scale,
indicating opposition to the present welfare state model and advocacy for increased
privatization of public responsibility. The two peaks on the curve seem to indicate that there is
a distinction between one group of business leaders who strongly oppose the state model
(‘business conservatives’) and another with more moderate attitudes (‘business moderates’).
However, also the ‘moderates’ have expressed opposition to the welfare state. They have only
chosen response alternatives which formulate this opposition in a more moderate way.
Moreover, when we compare Figures 1 and 3, we see that the business moderates are still
somewhat to the right of the majority of the other elite groups – on par with the group of
leaders who are ideologically closest to the private business elite, the top leaders in the state
enterprises. In general, Figure 3 indicates that the private business elite of Norway is
ideologically quite well integrated.
Figure 3 (about here)
Figure 3 shows that even if most business leaders have negative opinions about the
state model, a small minority still have moderate or positive attitudes towards this model: 12
per cent of the leaders score 2.5 or less on the index. The factors behind these expressions of
ideological moderation will be explored below.
Table 1 (about here)
Table 1 shows how the business leaders voted in the 1997 parliamentary election. Not
surprisingly, a strong majority (79 per cent) of the private business elite voted for a nonsocialist party. Most of the non-socialist voters supported the Conservative Party. A minority
(21 per cent) of the business leaders, however, voted for a socialist party, nearly all of them
preferring the Labour Party. Almost none voted for the Socialist Left Party. More business
leaders then voted for the Labour Party than expressed sympathy for the interventionist
welfare state. The correlation between the two variables is relatively strong (Pearsons r is
0.36), indicating that many of those leaders who are positive towards the welfare state also
prefer the Labour Party. Compared to Figure 3, Table 1 indicates somewhat more divergence
within the private business elite as to political preferences. Nonetheless, the table suggests
that there is fairly high degree of political integration among the private business leaders.
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Table 2 (about here)
Table 2 presents the results of the multivariate analysis of the business leaders’ view
of the Norwegian welfare state model. The table demonstrates firstly that the business leaders’
ideological attitude towards the state model is not significantly related to their having been a
member of a public committee, neither with the frequency of contact with politicians, senior
public officials and union leaders. Contrary to expectations, participation in the corporatist
system of decision-making and interpersonal relations with representatives of other elite
groups does not induce business leaders to adopt a more positive attitude towards the welfare
state model. Accordingly, there is no support for the idea as suggested by some scholars that
such interpersonal relations may have a ‘civilising’ effect upon the elite persons’ ideological
attitudes.
Secondly, no statistically significant relation is seen to exist between the leaders’
political stand on the public–private issue and belonging to the inner circle of private
business. Business leaders who are members of ten or more boards of other enterprises are not
more positive towards the Norwegian welfare state model than leaders with fewer such posts.
Using three board posts as the criterion for inner circle membership does not change this
result. Neither are there any significant effects of having been member of the election
committee of a private enterprise or having been member of the board of a national employer
or industry association. If there is an inner circle within the Norwegian business elite,
membership in this inner circle does not seem to influence their ideological orientation
towards the state model. As expected, however, owners, whether they are a CEO or a
chairman of the board of their own firms, are less favourably inclined towards the state model
than employed business leaders. There is no difference between employed CEOs and
chairmen of the boards of the enterprises.
In addition to these findings, Table 2 indicates that older business leaders are
ideologically more moderate than younger leaders.
In spite of the relatively crude categories of educational subject areas used in the
analysis, it appears in Table 2 that the kind of education leaders have acquired affects their
ideological orientation. Business leaders with an education within the ‘other’ category
(including humanities, education, health care, service and primary industries) are frequently
significantly more positive towards the Norwegian welfare state model than leaders educated
as administrators, economists, lawyers or social scientists (the reference category). Their more
moderate attitudes may be a result of socialization during their education, or a result of self-
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selection, i.e. they were ideologically moderate before they entered the educational
institutions concerned.
Neither firm size, educational level nor class background have any significant effect
upon how the business leaders’ relate themselves to the private/public issue.
The regression model in Table 2 explains relatively little of the total variation in the
dependent variable, just 7 per cent. This may be due to the fact that the skewed distribution of
the respondents on the public–private index implies a reduction of total variation. In other
words, there is less variation to explain. Among the independent variables type of education
(subject area) alone explains 5 per cent, and type of business leader (owners vs. non-owners)
explains 2 per cent of the variation.
Table 3 (about here)
Table 3 presents the results of the analysis of the statistical relationships between the leaders’
voting behaviour and the various explanatory and control variables. Only one of the
explanatory variables emerges with a significant effect upon the leaders’ voting. It turns out
that both owners and professional board chairmen voted for a non-socialist party significantly
more frequently than employed CEOs. This result supports the hypothesis which was derived
from the theoretical ideas about ownership and corporate governance. However, it was
contrary to expectations that the chairmen of boards of large enterprises also prefer nonsocialist parties more frequently than the CEOs.
Among the control variables only gender is significantly related to political preference.
Table 3 demonstrates that male top leaders vote for non-socialist parties more frequently than
female top leaders.
Discussion
The interests of private business are probably best served and their power best mobilized
when the top leaders coordinate their political actions and act collectively. Collective action
necessitates that the leaders identify common interests and formulate the kind of public
policies and concrete strategies best suited to accomplish these interests. Nonetheless, several
scholars have observed that it may be difficult to achieve collective collaboration between
private firms (Streeck 1987; Bowman 1989; Tolliday and Zeitlin 1991). It is maintained that
the difficulties are brought about by the different challenges facing the firms within their
respective labour and product markets. Whatever structural impediments there are to
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collective action, it is nevertheless reasonable to believe that ideological integration among
the private business elite may facilitate the identification of common interests and strategies.
Above, I suggested that the small scale of Norwegian capitalism should provide a
fertile ground for the development of elite integration among the top leaders within private
business. I also suggested that the tradition of state involvement in business might have
tempered their ideological evaluation of the Norwegian welfare state. The preceding analyses
have demonstrated that members of the private business elite in Norway in fact are largely
ideologically integrated. Contrary to expectations, as a group they are not ideologically
moderate. There seems to be a general agreement among them about the desirability to reduce
taxes, downsize the public sector and curtail state influence upon private business. Most of the
leaders also seem to agree that the redistribution of income in Norwegian society has been
taken far enough, and that it is time to reconsider the incomes policy. With this ideological
stance the private business elite clearly stand out from the rest of the elite groups in
Norwegian society. But the integration is not complete. Some business leaders still embrace a
more positive, or at least a more moderate, view of the Norwegian welfare state model.
When examining the voting behaviour of top leaders in the 1997 parliamentary
election, the strong consensus about the desirability of dismantling the present welfare state
model no longer prevailed. As expected, most business leaders voted for non-socialist parties.
Nonetheless, a minority of them voted socialist, for the Labour Party. When facing the choice
of concrete political alternatives, some of them then desert their ideological colours in favour
of a socialist government.
During the last decade the Labour Party has admittedly supported several political
initiatives to privatize public enterprises or activities. But as Figure 2 demonstrates,
ideologically it is still an articulate defender of the traditional welfare state. Accordingly, a
socialist vote does not seem entirely compatible with an ideological outlook, emphasizing
increasing privatization and a halt to the production of public welfare services. What, then, is
the reason that the voting behaviour of some private business leaders is not consistent with
their declared ideological beliefs?
One possible explanation is that the two variables reflect a difference between
attitudes and actions. Holding particular ideological views does not imply any obligation to
follow them up. Voting, however, is an act with direct consequences, even if casting one’s
vote has only a minute impact upon the overall result of an election. The outcome of the
election may have consequences for an individual business leader’s own personal interests,
for his company and for the country as a whole. These consequences are not necessarily
16
aligned. What is best for the individual business leader himself is not necessarily for the good
of his company. When considering what political party to vote for, an individual leader will
include different and possibly conflicting concerns into his deliberations.
Moreover, concerns related to the public–private issue probably do not exhaust the
political issues which are important to the individual business leader. The conflicts between
centre and periphery and between economic growth and environmental protection, and the
role of religion in the Norwegian society are other issues which continue to influence the
political opinions and voting of even the national elites (Gulbrandsen et al. 2002). Business
leaders who voted for the Labour Party in spite of their opposition to the welfare state model,
may have been more concerned about these other issues and considered the Labour Party to
be better equipped to take care of their interests related to these issues.
A clue to another interpretation of the somewhat different findings in Figure 1 and
Table 1 is presented in a study of political campaign contributions (Burris 2001). Burris found
that contributions from individual capitalists followed a logic which is different to that of
corporate political action committees (PACs). When giving contributions to the political
parties through their PACs, corporations seem to be generally more interested in buying
influence with incumbents, whether they are Democrats or Republicans. When the top leaders
contribute financially as individual capitalists, they seem to be more concerned with
bolstering the election prospects of favoured candidates, mostly from the Republican party.
This finding implies that top leaders of private businesses behave differently when they act
politically on their own compared with when they act on behalf of the company.
In line with this finding there is the possibility that during 1997 parliamentary election
some Norwegian business leaders primarily paid heed to the interests of their enterprises,
believing these to be best served by a socialist government. When however, in our survey in
2002 they were asked to appraise the Norwegian welfare state model, they expressed their
personal opinions.
But why did these top leaders regard the Labour Party as best suited to take care of the
interests of the businesses they represented? In the years preceding the 1997 election the
nation had been governed by the Labour Party. Many business leaders credited the Labour
government for having created stable macroeconomic conditions during this period, a policy
outcome which was valued higher than any preferential treatment of particular industries or
enterprises. It is reasonable to believe that business leaders who voted for the Labour Party in
1997 preferred a continuation of this stability rather than the uncertainty represented by the
competing non-socialist parties. Moreover, the prime minister during most of those years, Gro
17
Harlem Brundtland (later president of the World Health Organization), personally enjoyed
extensive respect, even among the ranks of the private business elite.
In the above the traditionally strong state involvement in private business was
mentioned. Another reason for some business leaders’ preferring the Labour Party in the 1997
election may have been that their enterprises benefited specifically from this involvement. For
example, their enterprises were dependent upon the provision of particular public goods or
enjoyed a certain amount of state guaranteed market protection. In both cases these top
leaders may have perceived that the continuation of these benefits rested with the Labour
Party in power. In order to check the relevance of this explanation I carried out a separate
statistical analysis where I examined whether the business leaders’ voting behaviour varied
according to the industrial classification (two digit level) of their firms. This analysis singled
out one industry: Top leaders working within the transport and communications industry
voted significantly more frequently for the Labour Party than leaders of other industries. This
industry includes airlines, ferry companies, coastal carriers and large bus companies – all of
them more or less regulated or protected by the public authorities. This finding may indicate
that for some private business leaders, being under the protective wings of the State motivated
them to support the Labour Party. Transport and communications firms have also been shown
to be more moderate or pragmatic supporters of the Democratic Party in the U.S. research on
campaign contributions (Clawson and Neustadtl 1989; Burris 1991, 2001).
In previous research it has been suggested that the ideological outlook of the private
business leaders is affected by their particular positions or roles in the business community
and the experiences accompanying these roles. Above, I discussed three theories or sets of
ideas about the significance of the business leaders’ positions. The empirical analyses
supported only one of them.
Theories within the ‘corporate governance’ field have claimed that it makes a
difference – for productivity and profitability – whether an enterprise is governed or
controlled by its owners or by professional, employed managers. In this article, I have argued
in favour of ownership as a factor which even may influence the political attitudes of business
leaders. The analyses presented in Tables 2 and 3 corroborate this hypothesis. Owners are, in
fact, more negative in their evaluation of the welfare state model, and they vote significantly
more frequently for the non-socialist parties than employed CEOs. As suggested above, these
reactions may be explained by their status as ‘residual claimants’ in the enterprises. The size
of the residual which the owners may claim, i.e. the profits, is related to the costs incurred by
public regulations and taxes. From their point of view, their own private economic well-being
18
is largely determined by the government. This perception leads them to adopt a negative
attitude towards the welfare state.
Both within the literature on corporatism and within elite research it has been
suggested that the sheer participation in corporatist institutions or in national elite networks
may induce elite persons to moderate their ideological orientation. In the empirical analysis
presented above I have attempted to test the validity of this idea, but as demonstrated, no
support was found.
One reason for this result may be that with the exception of the owners, the elite
persons in our study are ‘authorised’ leaders. They are leaders in institutions and
organisations whose members, owners or principals have authorised them as agents to
undertake certain tasks on their behalf. It is quite possible that these principals see that the
persons recruited to the positions of delegated authority share their own political ideas. When
the incumbents of these positions represent their institutions or organisations in the corporatist
system of decision-making they consequently act out of loyalty to the interests of their
principals. This loyalty may also be stimulated by economic incentives, or be the result of
socialisation or self-selection, i.e. the leaders have chosen to enter the particular institutions or
organisations because of sympathy with its basic values and goals.
Another explanation may be that the principals’ tolerance for moderate ideological
attitudes among their leaders varies with the quality of the issues. In core issues there is
probably less leeway for the leaders to develop an ideological moderation. In Norway,
limiting the powers and responsibilities of the state and reducing the taxes are typical core
issues for private business, and seen to be of central importance to the economic wellbeing of
private enterprises.
The theories about corporatism, elite network and inner circles all imply that
moderating effects of personal contacts between representatives from adverse interest groups
may pave the way for political compromise. But when there are no such moderating effects,
as demonstrated above, are the opportunities for compromise then curtailed? Lack of
ideological moderation on the part of inner circle members, for instance, does not necessarily
exclude the possibility that under specific circumstances these leaders may be willing to reach
a compromise with political opponents. It is possible that the strategic calculations of costs
and benefits upon which any compromise is dependent do not necessitate ideological
moderation on the part of the business leaders. Compromise based upon strategic balances of
costs and benefits may, however, become unstable. The reason is that a strategic approach
may spur the parties to continually assess whether the situation makes it worthwhile reviving
19
the conflict or the opposition. Any compromise is probably more stable when it springs out of
moderation on both sides, and when through the establishment of various supportive
institutions this develops into some form of consensus.
Another reason not to preclude any willingness to compromise on the part of members
of inner circles or national elite groups is that our study only registers expressed attitudes and
voting behaviour, not concrete choices of action related to the public sector. Modern
Norwegian history is full of examples of business leaders who, on the one hand have
ideologically and politically combated state intervention, but on the other have actively
lobbied for public subsidies or regulations giving themselves favourable market conditions or
protection. Business leaders basically seem to be characterised by a ‘both-and’ orientation.
They want the best out of the State. At the same time they advocate for more elements from a
liberal market model of political governance.
The analyses indicated that older business leaders are ideologically more moderate
than younger leaders. This finding may, however, be a cohort effect rather than an age effect.
In the above I described how the state has left its previous role as an active entrepreneur and
instead has become a large, but passive owner. This change implies that the older business
leaders started their careers and were operative during a political regime where the large
enterprises could rely on the state for favourable treatment. It is possible that their experiences
under this regime have tuned these business leaders to more sympathy with the state. Younger
leaders have, on their part, acquired their positions in an ideologically more liberalist climate
which may have fostered more negative attitudes towards the traditional welfare state.
I found that female business leaders more frequently vote socialist than male leaders.
Electoral studies have demonstrated that in general environmental and welfare issues matter
more for female voters than for males. It is likely that female business leaders have similar
priorities. Since the Labour Party traditionally has been looked upon as a ‘welfare party’, it
has probably been a preferred alternative among female business leaders.
Conclusion
Within elite theory and research it has been much discussed whether particular national or
sector-specific elites are integrated, or more or less fragmented. In this article I have focussed
upon the private business elite of Norway and attempted to find out whether this elite group
can be characterized as ideologically and politically integrated. Ideological cohesion within
the private business elite may facilitate the identification of common interests and the
20
mobilization of power, both of which may strengthen the group’s capacity for influencing
political decisions or the behaviour of other elite groups.
The empirical analyses presented above indicate that to a large extent the private
business elite of Norway is ideologically integrated in its opposition to certain core elements
of the Norwegian welfare state model. The private business leaders are however, somewhat
more divided in their views about which political party is best suited to govern Norway. In the
1997 parliamentary election a minority of top leaders in private business voted for the Labour
Party. Some of these business leaders worked in industries which due to public regulations
have enjoyed considerable protection from market competition. These leaders probably saw
the Labour Party as the best guarantor of continuing these regulations. Other business leaders
were probably impressed by the Labour government’s ability to secure stable economic
conditions for the private sector.
I have also discussed whether variations in the top leaders’ ideological orientations
and political preferences can be traced back to the roles or positions which business leaders
occupy. One role or position emerged as significant for the business leaders’ opinions: owners
of large private business firms who at the same time are CEOs or chairmen of the board
appeared as both ideologically and politically more conservative than their fellow employed
leaders. They are significantly more negative towards the welfare state model and they vote
significantly more frequently for a non-socialist party than, for instance, employed CEO’s. In
addition, the analyses demonstrated that the business leaders’ age, education and gender also
influence their ideological and political views. Older business leaders are more ‘centrist’ in
their ideological orientation than younger leaders. Top leaders with an education within the
humanities and education seem to be ideologically more moderate than the other business
leaders. Moreover, female business leaders voted more frequently for a socialist party than
male leaders.
In the history of Norwegian capitalism until recently the state has been an active and
beneficial senior partner to private business. This situation does not seem, however, to have
instilled any ideological moderation into the private business elite. The business leaders’
general ideological opposition to the Norwegian welfare state has nonetheless gone well
together with requests for more state expenditures or particular benefits for specific sectors of
the economy.
21
Notes
1. In the Leadership Study ownership of business leaders was recorded with the assistance of a well-informed
observer of private business and based upon his extensive knowledge of the enterprises included in the sample.
In cases of doubt we consulted the information about ownership structure presented in the annual reports of the
enterprises.
2. The top leaders were asked about the general field of their education based on the 9 categories used in the
standard classification of educational subject areas by Statistics Norway. I have recoded the answers –where the
variable ‘type of education’ contains three categories, cf. Annex 1.
3. The class variable is constructed on the basis of information about the father’s occupation, or the mother’s
occupation where there is no information about the father. The class variable has originally 10 values or
categories. In the analyses reported in this article a simpler version with three categories is used. The
construction of this variable is described in more detail in Gulbrandsen et al. (2002).
4. (1) The church, (2) the state administration, (3) culture, (4) mass media, (5) private business, (6) the
cooperative sector, (7) public business enterprises, (8) organizations, (9) universities and research institutes, (10)
the police and the judicial system, (11) the military services, and (12) politicians, i.e. members of the Storting,
the leaders of the political parties, members of the Cabinet and their political secretaries, and the mayors of a
selection of large municipalities.
5. While 95 and 92 per cent respectively agreed upon the necessity of more privatization and upon reducing the
stat influence upon business, 78 per cent expressed support for reduced taxes and a halt in economic
redistribution.
6. At the time of the election in 1997 there were two socialist and five non-socialist parties of relevance (Heidar
2001). The socialist parties include: (1) The Labour Party (Arbeiderpartiet) which today is a mildly ‘left of
centre’ party and which has been the largest political party in Norway since 1927. (2) The Socialist Left Party
(Sosialistisk Venstreparti) which has proclaimed itself to be a ‘third-way’ party, i.e. neither communist nor social
democratic. During recent decades the party has made environmental protection part of its platform.
On the non-socialist side we find: (1) The Conservative Party (Høyre) which, in terms of their voters’
social profile, has been and still is the party of the well-off. Ideologically, it currently advocates a liberal market
philosophy, individual responsibility, and limited state interference. (2) The Liberal Party (Venstre), which
originally propagated a ‘social-liberal’ ideology, but which today represents a liberal ideology close to that of the
Conservative Party. (3) The Christian People’s Party (Kristelig Folkeparti) is a Christian-democratic type party,
like the centre-right parties on the European mainland, possible more to the centre than to the right. (4) The
Centre Party (Senterpartiet) was originally a party of farmers, but during during recent decades has become a
party in defence of general rural interests. (5) The Progress Party (Fremskrittspartiet) is a populist party which
entered Norwegian politics in 1973 on a low-tax, anti-state-involvement platform. It has recently supplemented
its traditional platform with a strong advocacy for using more ‘oil money’ to the benefit of the sick and elderly.
Acknowledgements
The author wishes to thank Rune Karlsen, Jo Saglie and three anonymous referees of ESR for
valuable comments to earlier drafts of this article.
22
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25
Table 1: The business leaders’ voting in the 1997 parliamentary election. Per cent.
Socialist parties
Non-socialist parties
Socialist
Labour
Centre
Christian
Left
Party
Party
Democratic Party
Party
0,4
Liberal
Conservative Progress
Other
Party
political
Party
Party
20.6
2.8
3.2
parties
4.9
62.3
4.4
1.2
26
Table 2: Private business leaders’ ideological orientation. The public/private index. OLSregression
Intercept
Member of a public
committee
Contact with members of
Parliament
Contact with members of
Cabinet
Contact with senior public
officials
Contact with union leaders
Member of the ‘inner circle’
(member of ten or more
boards)
Member of the election
committee of another firm
Member of the board of a
national employer or business
organization
Ownership (compared to
employed CEOs):
Owner
Chairman of the board
Class background (compared
to upper class and upper
middle class)
Middle class
Labour class
No. of employees of the
enterprise
Age
Gender (1=man)
Educational level
Educational subject area
(compared to administration,
economics, social sciences
and law)
Industry, natural sciences
and engineering
Rest category (education,
humanities, health care,
service)
N
R-square adjusted
* Significant at level 0,05
** Significant at level 0,01
Parameter
estimate
3.850
-0.088
Standard error
0.390
0.091
-0.039
0.065
0.087
0.073
0.004
-0.020
0.027
0.059
0.043
0.074
0.032
0.091
0.066
0.071
0.299*
-0.037
0.125
0.092
0.002
-0.078
0.000006
0.072
0.097
0.000004
-0.011*
0.160
-0.026
0.0047
0.164
0.042
0.089
0.081
-0.446**
0.133
293
0.07
27
Table 3: Private business leaders’ voting in the 1997 parliamentary election. Estimating the
probability of having voted for a Socialist party. Logistic regression
Intercept
Member of a public
committee
Contact with members of
Parliament
Contact with members of
Cabinet
Contact with senior public
officials
Contact with union leaders
Member of the ‘inner circle’
(member of ten or more
boards)
Member of the election
committee of another firm
Member of the board of a
national employer or industry
organization
Ownership (compared to
employed CEOs):
Owner
Chairman of the board
Class background (compared
to upper class and upper
middle class)
Middle class
Labour class
No. of employees of the
enterprise
Age
Gender (1=man)
Educational level
Educational subject area
(compared to administration,
economics, social sciences
and law)
Industry, natural sciences
and engineering
Rest category (education,
humanities, health care,
service)
N
-2 Log L
* Significant at level 0,05
** Significant at level 0,01
Parameter
estimate
0.152
0.283
Standard error
1.983
0.455
-0.287
0.360
0.0068
0.378
0.473
0.026
-0.024
0.331
0.239
0.422
-0.196
0.518
0.324
0.386
-2.213*
-1.477*
1.109
0.606
-0.185
0.608
-5.62E-6
0.401
0.471
0.000028
0,014
-1.511*
-0.183
0.025
0.690
0.222
0.134
0.439
0.925
0.662
245
221.028
28
Annex 1: Description of the variables
Average
Ideological orientation
(index for attitudes towards the
Norwegian welfare state model)
Size of the enterprise
Age
St.dev.
Max
Min
3.36
0,6
4
1
4225
8254
56400
400
51
8
76
32
0.8
8
3
Level of education
6.5
Weekly
Monthly
Less
frequent
Never
Contact with members of Parliament
(per cent)
3
16
58
23
Contact with members of Cabinet
(per cent)
1
6
53
40
Contact senior public officials
(per cent)
2
23
57
19
Contact with union leaders
(per cent)
8
29
43
19
Yes (per cent)
Member of a public board or committee
18
Member of the inner circle:
(a) Member of three or more boards in
other enterprises
79
(b) Member of ten or more boards
30
(c) Member of the election committee of a
private firm.
18
(d) Member of the board of a national business
or employer organization
19
Type of business leader:
(1) Owner
(2) Professional chairman of the board
(3) Employed CEO
9
24
67
100 per cent
29
Class background:
Upper or upper middle class
Middle class
Labour class
47
37
16
Education: subject areas
(1) Administration, economics, social sciences and law
(2) Industry, crafts, natural sciences and engineering
(3) Rest category: Humanities, education, transport
health care, primary industries, and service
Gender
70
23
Men: 96 per cent
7
Women: 4 per cent
30
Figure 1 Norwegian elite groups located
along the public-private index
Private business
State enterprises
Military services
Mass media
Cooperative sector
Organizations
Police and courts of justice
The State bureaucracy
Universities and research
Church leaders
Culture
Politicians
1
1,5
2
2,5
3
3,5
4
Figure 2 Ideological orientation among the
members of the private business elite
50
40
30
Per cent
20
10
0
1
1,5
2
2,5
Public/private
3
3,5
4
31
Figure 3 Support for the Norwegian welfare
state among members of parliament
(”Stortinget”)
4
3,5
3
2,5
2
1,5
1
SV
SP
AP
KrF
Venstre
Høyre
FrP
32
Notes on the Contributor
Trygve Gulbrandsen
Trygve Gulbrandsen is senior researcher at Institute for Social Research, Oslo. His main areas
of research interest are national elites, trust, ownership, and family businesses.