l. How Sectors are Interrelated and an Overview of Emerging Sectors

How Sectors are Inter-related and an Overview of Emerging Sectors

The diagram below shows the ways in which the various sectors, each of which is pyramidical in form, are inter-related to form the United Kingdom as a nation in the 16th and 21st Centuries. In some cases, a sector has been truncated at the top because it is controlled by the members of another sector. In the 21st Century, the relative status, in the establishment, of the top stratum of each sector differs. For example, the leaders of the trade union movement, although members of the establishment, have a lower status than the monarch. However, by virtue of changes in the influence of each sector, and of trading by its upper stratum, the relative status of the upper strata of each sector constantly changes. Their status at any particular time is debatable, and so, no attempt has been made to show it.

16th Century Sectors

Present Day Sectors

Emerging Sectors

As time progresses and technology advances, some established sectors will lose influence and new ones will emerge. The future influence of these new sectors can be predicted, to a limited extent, by observing the growth of their sector, by understanding the nature of their ability to trade, and by identifying other sectors that they may be able to control. Examples of potentially emerging sectors include the following.

Data Analytics and Influencers. The power of this sector is its ability to influence the population in a similar manner to the media, but in a far more targeted way. It already has great influence over commercial marketing but, more recently, has begun exploring the potential to influence electorates. It has a growing influence over political parties, therefore.

Human Rights and Environmental Groups. Historically, the power of this sector was largely limited to its ability to protest and cause disruption. However, it is now gaining significant influence over electorates and, thus, greater influence within the establishment.

Artificial Intelligence Industry. The power of this sector is its potential to replace manual and intellectual labour in many other sectors, particularly industry and commerce. It is likely, therefore, that it will have great influence in those sectors.

Biotechnology Industry. The power of this sector is clearly its potential for extending life and improving physical wellbeing. It seems likely therefore that, if it remains in private hands, then as its technology progresses its upper strata will become very influential within the establishment.

Space Industry. The potential power of this sector is likely to be its access to mineral resources that are becoming scarce on earth, but that are necessary for established technologies. Other factors may be the advantages of off-planet manufacturing, military activity, and the control of communications. This sector is likely, therefore, to hold great influence over industry and commerce and, by virtue of their potential economic and security impact, with national governments.

j. Sectors


A nation and, increasingly, the global community is a complex of interacting organisations. The greater the resources that an organisation controls, the greater the power of its upper stratum. A collection of similar organisations that co-operate to acquire yet greater power and status forms what is described as a sector. Sectors are also organisations and the same principles apply to them. Sectors are of particular importance as they control or influence the institutions of a nation, and thus, its general culture. When they exist in an influential nation, they can also impact on multinational or global culture and affairs. They are therefore discussed in some detail here.

Sectors differ from nation to nation, and from era to era. The way that nations were organised in the past, are organised in the present, and, to a limited extent, how they will be organised in the future can be explained using the concept of sectors. To do so we need to understand the ways in which sectors interact. Of particular interest is their impact on government, the nation’s controlling sub-system.

All organisations are hierarchical, and all organisations are a part of yet greater ones. Thus, high status in one organisation often confers status in a parent organisation. Within the parent organisation, the high status individuals of a child organisation can negotiate with others for yet higher status. This is done by offering support in return for status. This support often takes the form of wealth and influence. The larger a person’s status base, the more resources he controls, the greater the support he can provide, the greater his trading ability, and the higher the status he is likely to achieve in the parent organisation.

This process is recursive. So, an individual with high status in a business can, by trading the support of that business with others, achieve high status in a sector, and by trading the support of that sector, achieve high status in the national establishment. The national establishment comprises high status members of many sectors including government. Thus, trading can take place between high status representatives of a sector and government. Of particular concern is the ability to influence government decisions. Unfortunately, this influence is often not in the interest of the nation but rather in the interest of the sector, the business, or even the individual representing them.

To acquire status in the establishment members must overtly appear to have something to trade. This explains the very high salaries and often ostentatious lifestyles of the leaders of many organisations. The purpose of such high salaries is not to satisfy the needs of the recipient nor, as some would argue, to attract and reward those with the necessary skills and talents. Rather it is to enable the upper strata to make overt displays to their peers in the establishment and, thus, better enable them to trade for status and influence. Unfortunately, this trade within the establishment requires ever greater displays of status, particularly wealth and power, which in turn leads to ever greater income inequality.

The interplay of sectors, through their representatives in the national establishment, plays a very large part in shaping the governance, culture, and beliefs of a nation. Each sector will carry with it a worldview suited to the needs of its members, or of its upper stratum. Through trading in the establishment, it is possible for the leaders of organisations in one sector to influence the decisions of the leaders of organisations in another. This influence includes not only decisions favouring a particular sector, but also the propagation of the latter’s worldview and the suppression of other, possibly more rational ones. In extreme cases, one sector can usurp the leadership of another, for example the takeover of the industrial commercial sector in the West by the financial sector and the imposition of a “bottom-line” ideology. A sector can also take control of government, as in the case of military dictatorships and theocracies.

i Maintaining Hierarchies and Social Status

Maintaining Hierarchies and Social Status

An organisation is a self-maintaining system. Thus, a large proportion of its inputs can be used to maintain its processes, rather than delivering outputs. This means that an organisation can satisfy not only the needs of people in its environment, but also the needs of its members. So, once an organisation is established, it will maintain and defend itself through the attitudes and actions of its members, and seek to grow.

Maintenance of the supporting hierarchy. For an individual to maintain his social status, the priority must be to maintain his supporting hierarchy. Without it there is no social status. Thus, if an organisation satisfies a member’s needs, he will adopt a conservative attitude towards it, protect it, defend it, and resist any change which might impact on its function as a personal satisfier.

Adaptation. Because an organisation is a self-maintaining system, its continued existence takes priority over its purpose. Like all self-maintaining systems organisations adapt to their environment. The purpose of the organisation can, therefore, be altered by its upper strata if changes in the environment become a threat to its existence.

Sustaining a hierarchy is more important than sustaining its purpose. A hierarchy can grow out of a shared purpose but, once it is established, sustaining the hierarchy becomes more important to its members than pursuing its purpose. Ultimately, the rewards for status become more important than the purpose that underpins it. For example, China and Russia both largely abandoned the communist ideology, but retained its hierarchy.

Falsification or exaggeration of importance. To justify and sustain an organisation’s continued existence, its higher strata can falsify or exaggerate its purpose. For example, to gain popular support, the benefits that an organisation brings to society or the environment can be exaggerated.

Peer Group appointments & nepotism. A peer group is a group of people with similar characteristics, e.g., members of the same family, gender, class, race, religion, educational background, sexual orientation, and so on. Members of the same peer group share a culture and are, therefore, more likely to understand and support one another. When selecting potential supporters in an organisation there is a tendency, therefore, for the leader to choose those from his or her own peer group. However, if taken to excess this can become self-propagating, leading to one peer group dominating an organisation, and a glass ceiling for those who are not members of it.

Norms and values of obedience. Secular organisations often maintain their hierarchy by incorporating norms and values of obedience to authority into their culture. Religious organisations do the same, but the norms and values of obedience can be much stronger. They include, for example, placing a god or gods at the top of the hierarchy, demanding unquestioning faith in his existence, and requiring unquestioning obedience to his will. Of course, the individuals who claim to know the will of this god are the true heads of the hierarchy and benefit the most from it.  In some cases, an organisation may be both secular and religious. In the past, it was common for kings to claim authority by divine right, and today there remain several nations with theocratic governments.

n. The Acquisition of Status

The Acquisition of Status

Those who rise to the top of an organisation are not necessarily those whose skills are associated with its intended function. Rather, they can be those whose skill is the acquisition of status. People who achieve high social status often show some or all of the following characteristics.

Ambition. As well as carrying out a community function, organisations also satisfy the needs of their members. For example, normal employment provides a salary, social interaction, etc. In a voluntary organisation, it provides for more social and psychological needs. To be ambitious one must have a pressing need to satisfy. The more pressing the need, the more vigorously we will pursue its satisfaction, and thus, the more likely we are to succeed.

Negotiating skills. To acquire status, one must trade support for it. Some are more skilled in this than others. We may, for example, have learned these skills during our upbringing or from a role model. Imbalances in trading skills will eventually lead to a situation in which those with greater skills have greater status than others.

Skill in Selecting an Existing Hierarchy to Climb. A point worth noting is that it is far easier to climb an existing hierarchy than to create a new one with oneself at the pinnacle. The latter requires genuine leadership skills and much effort. This is not a universal rule, of course. There are, for example, politicians, press magnates, businessmen, and celebrities who have achieved high status with the help of a silver spoon from their parents.

Displays of Status. Clearly, those who aspire to higher social status must be seen to have something to trade with potential supporters. They must, therefore, overtly display the attributes of leadership and/or power. Irrespective of the role that they fill, the more successful they are in this, the more support they will receive. Conversely, those of lower status must display a willingness and ability to provide support.

Status is displayed through symbols, e.g., material goods such as clothing, cars, houses, etc. They are also displayed through communication, e.g., “name dropping”. A common strategy for acquiring social status, leadership and power is therefore the false display of such symbols and communications. People will create an impression of status by creating an impression of power or influence. Potential supporters will respond accordingly, and thus, status comes to those who appear to have it.

Within a very large hierarchy such as a nation, the various strata may be so large that they form their own distinct culture, for example the social classes in the UK. Displaying the values, norms, symbols, and beliefs of a higher status culture are often necessary to enhance one’s social status. Again, this can be learnt through upbringing or the emulation of a role model. However, it is more difficult to do so if one has been raised in a lower stratum of society. This reinforces the strata in a hierarchy, making movement between them more difficult.

Displays of Competence. Leadership skills will attract followers, thus enhancing social status. However, such skills also need to be overtly displayed.

Displays of Altruism. People who aspire to climb a hierarchy can be altruistic only to the extent necessary for others to support them. A common strategy among those who would lead is to give the impression that it is the needs of the group which are valued most highly whilst, in reality, it may be personal needs. However, the individual will take care that this is not recognised by the group until his or her status is established, or convincingly faked.

Emulation of Role Models. To attract followers, members of the higher strata will display the trappings of their status to those in the lower ones. In many cases they will become a role model to those in the lower strata. Note that people learn both leadership skills and the use of power from role models. There are formal leadership courses but none for managing power.

Cultural Adaptation. If a higher status individual is seen to be behaving in a way contrary to the conscience or self-concept of a lower status one, then the latter may conclude that there is something wrong with their conscience or self-concept and modify it. Even if the behaviour of the higher status individual is believed to be wrong, the lower status one may value membership of the group to such an extent that, rather than risk rejection, they will adopt a strategy for dealing with internal conflicts, such as rationalisation, repression, or denial. Often a rationale will be provided by the organisation, which the lower status individual accepts and adopts.

Expansionism.  The larger a group, the greater the power of those in the highest stratum. Thus, there is a natural tendency for the latter to seek to expand their organisation or part of it. This applies whether the group is a department, business organisation, religion, or nation. Such expansion is not necessarily in the interest of the group as a whole, however, and may be solely in the interest of the highest stratum.

Chance, luck, or fortune. Finally, Imbalances in chance, luck, or fortune will inevitably lead to some individuals achieving greater social status than others.

m. Trading Status for Support and Vice Versa

Trading Status for Support and Vice Versa

In any organisation people advance their position by trading status for support. The process typically involves a higher status, or senior, individual identifying lower status, or junior, individuals who are likely to support their aspirations, whatever those aspirations may be. Many lower status individuals, in turn, signal their willingness to participate in such a process. They may for example, offer vocal support at meetings, act out the culture of their seniors, and so on. If a successful partnership appears to be possible, then the senior will delegate some of his or her status to the junior in return for their support. Thus, promotions within a hierarchy often have more to do with “politics” than aptitude.

Social exchange theory holds that the negotiation is based on a risk/cost/benefit analysis for both parties, as described in a previous article. A relationship will be successful if it provides a net benefit for both parties, but will fail if it provides a net disbenefit for one or the other. The former can even apply when the junior partner is coerced, if the disbenefit of the punishment exceeds that of compliance. The relationship is not based solely on the ability of the senior partner to provide something that the junior partner desires, therefore. Rather it is an aggregate of the rewards and punishments that the former can dispense. The same is true of the junior partner, of course, but the options to mete out disbenefits to a senior are often much reduced and, unless done covertly, may prompt reciprocal action.

This form of trading is so commonplace in human society that it is often carried out unconsciously.

Other forms of trading can take place within an organisation, of course, e.g., bribery, corruption, sexual services, etc. Fortunately, however, some forms of social interaction can be tempered by social norms, i.e., what forms of interaction are acceptable and what are not.

In a stratified organisation, the greater the support an individual can provide to the higher strata, the greater the delegated status they receive in return. The higher an individual is in the hierarchy, the more resources they control, the greater the support they can provide and the greater their ability to trade. Conversely, the higher they are in the hierarchy, the greater the threat they can pose, and the greater the adverse reaction if they do so. Thus, they will be more cautious not to upset the status quo.

Trading tends to take place between people in adjacent strata. Those in the stratum immediately below are the most familiar individuals and have the greatest support to offer to those in the stratum above. Those in the lowest strata tend to be of least consequence to those in the highest, and opportunities for trading between these strata are fewer, therefore.

In practice, a balance is often negotiated between the strata. This results in the lower strata being sufficiently satisfied to support the organisation, even though they are denied its full potential benefits. Conversely, the upper strata are denied the full potential benefit that they might otherwise take, in return for a stability which ensures that their benefits are sustained. Thus, degrees of egalitarianism and stratification within organisations can vary.

k. Why We Follow a Leader

Why We Follow a Leader

Much has been written about leadership, particularly concerning what constitutes a “good” or “effective” leader. However, the topic of why people follow a leader has been relatively neglected. For historical reasons, in the West, there are strong positive connotations associated with being a leader and negative connotations with being a follower. This was brought about by a historical tendency for the powerful, e.g., royalty, the church, the Nazi party, etc., to seize control, and for people who dared to challenge them to suffer. High status individuals have also received, and in many cases continue to receive, a disproportionate reward from society, in the form of prestige and wealth. There is now such a strong cultural assumption that followers are passive subordinates, and less competent than leaders, that many of us are not even aware that it exists. I hope to dispel this assumption because it does not serve us well.

The systems theory explanation for why we follow a leader is as follows. Human organisations are self-maintaining adaptive systems, and subject therefore to the principle of requisite hierarchy. In essence, leaders are a command sub-system that maintains group cohesion and purpose, and that enables us to adapt to a changing environment.

The evolutionary explanation for why we follow a leader is as follows. Tribes which have greater co-ordination, co-operation, and innovative thinking have a greater chance of surviving and prospering than those without these characteristics. The former requires a social structure in the form of leaders and followers. However, human beings are less hierarchical than other primates and tend to shy away from authoritarian leadership. Rather, in a successful tribe, one person with skills, e.g., hunting, or emotional intelligence, that are relevant to the problem to be solved, chooses to lead and the others to follow. This, of course suggests that both leaders and followers have a role in determining what the hierarchy should be. It also suggests that the hierarchy should alter according to circumstances, if the tribe is to be successful. In general systems theory this is known as redundancy of potential command. Providing the interests of both the leader and the followers are aligned, which unfortunately is not always the case, leadership is a process of mutual influence in which leaders and followers work together towards a common goal.

The psychological explanation is as follows. The leader/follower relationship is one of trade and depends on the pressing needs of the two individuals concerned. A follower may follow a leader who provides for his existence, connectedness, or growth needs as a part of the trade. A leader can, for example, offer certainty, which is a growth need. On the other hand, a leader may lack the resources to achieve a particular goal on his own and, thus, may need the support of followers.

In a non-authoritarian regime, there are three types of followers: passive, active, and non-followers. These are not necessarily personality types. People can move from one to another depending on the style of leadership required. Passive followers are content to be obedient; non-followers avoid involvement; but active followers make a constructive contribution to the leadership process. If necessary, the latter can challenge decisions, and work with the leader to devise more effective or appropriate courses of action. Thus, there are feedback loops in which leaders influence followers who, in turn, influence leaders. These loops can be negative, causing behaviours to be extinguished, or positive, causing them to be amplified.

Many people can switch role from follower to leader, and vice versa, but unfortunately, historical beliefs still hamper this. In the past, Western culture has favoured established hierarchies and reward structures. However, society is now so complex that a single individual is incapable of leading in all circumstances. It can be argued that in the modern world, followers are beginning, once more, to select their leaders. Certainly, this is true in democratic politics. However, it is less the case in business.

There are two main ways in which we assess a leader or potential leader:

  1. System-1 is an automatic system that operates quickly, with little or no effort, and in which emotion, beliefs, and past experience have a part to play. This system is informal and leaders tend to emerge naturally. Unfortunately, when selecting or continuing to follow a leader, we tend to attribute outcomes to the leader rather than to complex processes.
  2. System-2 is a more formal reasoned response and requires the time, attention, focus, and effort needed for complex mental activities, e.g., calculations.

The relationship between a leader and a follower is, also, of two types:

  1. distant, such as that between a politician and the electorate, and
  2. close, such as that between a manager and a worker.

The decision whether to follow a close leader is usually a system-2 inference and based on associating the leader’s behaviour and decisions with results. However, the decision on whether to follow a distant leader is a system-1 inference. Distant leaders tend to articulate ideals and visions and to use “symbolism, mysticism, imaging and fantasy”. Distant followers have little knowledge of his or her actual character and performance and relatively few clues as to what it may be. Followers may, for example, be impressed by the leader’s rhetoric or public life story.

In the case of a distant relationship, the type of leader that a follower selects depends on the following.

  1. When people face an existential threat, e.g., war or terrorism, the need for safety comes to the fore. Followers will favour a leader perceived as strong, wise, and competent, i.e., an authoritarian, protective, and often right-wing figure. This tendency is cross-cultural. It is thought to originate from our long childhood, during which most of us relied on our parents for safety.
  2. In circumstances where a non-existential threat is perceived, but the cause is complex and difficult to identify, people from all cultures will become stressed by the situation. They will follow a leader, particularly a charismatic one, who is able to provide an easily understood explanation. Often this explanation is overly simple and incorrect, but it is the need for certainty and the reduction in distress that the follower is seeking. In recent years, such leaders have been described as “populist”.
  3. Finally, during a period of stability, the need for identity and belonging comes to the fore. Followers will seek a leader who gives meaning to their social identity by acting as a symbol of their culture. Unlike the above, this is a culture specific response, and the characteristics of the chosen leader will differ from one culture to the next.

Clearly, from the above, it is possible for individuals to pursue personal objectives by presenting themselves as a leader of the type that followers seek. Particularly in the case of distant leaders, there is little evidence to confirm that the leader’s objectives are truly aligned with those of the follower, and they may, in fact, be personal but disguised. Improving followers’ skills in choosing leaders, and limiting their willingness to follow, would therefore improve the quality of leadership everywhere, but especially in the political, social, and ideological realms.

o. Top-down and Bottom-up representation

Top-down / Bottom-up Representation

The command component of an organisation can be selected by bottom-up or top-down representation, i.e., by subordinate components or by the command component of parent or grandparent organisations.

Ultimately, each organisation is led by a single individual, although that individual may be beholden to the leader of a parent or grandparent organisation. Thus, organisations have a command hierarchy whose size is proportional to the size of the organisation.

Top-down representation permits greater focus on the objectives of the relevant organisation and its stakeholders, but this focus can be redirected in the personal interest of the leader. Bottom-up representation, on the other hand, allows greater flexibility in selecting the appropriate command style for the prevailing circumstances, but can result in a focus on the personal objectives of subordinates. Ideally therefore, those who populate command components should be selected by negotiation between the two interests, and both should monitor the decisions and commands of leaders to ensure that they are aligned with communal interests.

It is notable, however, that top-down hierarchies corrupt bottom-up democracies. In the UK, voluntary organisations tend to be run “democratically” by committees or boards of elected lay members. They also employ staff to support them. Whilst the lay side is democratic, the staff side comprises a hierarchy with a single leader at the top, much like a typical business. Despite the existence of a democratic lay side and claims that these organisations are run by the membership, in practice, the single individual leading the staff side almost always runs the organisation and sets its agenda. Obviously, he or she controls the staff side, and via leader/ follower trading arrangements, they become compliant to his or her wishes. The staff side also develop strategies to persuade lay members to support their leader’s agenda. They learn what a lay member wants, typically, this is position and status, and use their influence in the organisation to provide it in return for support. In this way, lay members obtain leadership positions which are beholden to the top-down structure of the staff side and bottom-up democracy is diluted or lost.

I have personal experience of this process in two entirely different voluntary sector organisations. One is a trade union. Unsurprisingly, most UK unions have now merged into very large, centrally controlled organisations with highly paid, high-profile leaders. This is a far cry from the original, small, local, and genuinely member led organisations that trade unions once were. The other was a medium sized ethical society where the same process was steadily taking place. This problem is scalable to government, where top-down business hierarchies can influence bottom-up government in a similar way. Bottom-up representation cannot survive contact with top-down representation, unless strong controls such as transparency, and a genuinely policed code of ethics are in place.

Message from the Author

From the examples given in this and the preceding articles, there is no doubt that General Systems theory is potentially an extremely powerful tool for understanding human nature and society. It can enable us to discover the root causes of the social and environmental problems we face and can help in identifying solutions. However, the subject is not as well developed in Rational-Understanding’s area of interest as I had hoped. Much work is required before I can make further posts on the topic.

I will, therefore, now move on to the next topic, “How Organisations and Hierarchies Arise”. In parallel, I plan to put in the necessary work on General Systems Theory and will publish pdfs on the website as this progresses. I will, of course, let you know when a pdf has been published and will provide a link. The links will also be added to the website index page.