Technostructure is a term coined by the economist John Kenneth Galbraith in "The New Industrial State" (1967) to describe the group of technicians within an enterprise (or an administrative body) with considerable influence and control on its economy. It usually refers to managerial capitalism where the managers and other company leading administrators, scientists, or lawyers retain more power and influence than the shareholders in the decisional and directional process.

Historical Context

The power struggle between the technostructure and the shareholders was first evoked by Thorstein Veblen in "The Theory of the Leisure Class" (1899), questioning who, among the managers and the shareholders, should control the enterprise. At the time and until the end of the 1980s, the shareholders, unable to effectively regroup and organise themselves, could not exert enough pressure to effectively counter the managerial decision-making process. After the Second World War, the rapid augmentation of shareholders further diluted their collective power. This was perceived, by Galbraith, as a divorce between the property of the capital and the direction of the enterprise.

Goals of the Technostructure

Since the technostructure is composed of an hierarchical system of influential employees inside the enterprise, its primary goal is not to maximize their profits but rather survival, continuous growth and maximal size. While it must maintain acceptable relations with their shareholders, hegemonic growth is more beneficial to the technostructure.

Decline of the Technostructure

The lack of control of the technostructure resulted in managerial abuse notably on its salaries during the economic crisis of the 1970s. It prompted support for new economic ideologies like the School of Chicago under Milton Friedman. Furthermore, the Employee Retirement Income Security Act of 1974 forced a much greater transparency from businesses and possible opposition to their decisions. In the 1980s, the rising and influential neoliberal ideology decried the "divorce" between the capital and the decisions. Based on the belief of a new emerging economy, neoliberal economic theories were introduced at the end of the 1980s forcing managerial capitalism to yield to the shareholders.


The prime objective of the neoliberal economic theories is the maximization of the profits in order to maximize stock value. This, quite evidently, greatly differed from the objectives of the technostructure which caused massive restructuring in the 1990s. In order to maximize profits, enterprises now had to take draconian measures to cut expenses and ensure profits for the shareholders. This greatly encouraged the exportation of manual or simple tasks to foreign countries where labour is much less expensive and caused massive layoffs in developed countries. Likewise, it reduced salaries and caused a decline in income of the working class. Paradoxically, the salaries of the managers increased and the constant demand for profits played an important role in the accounting scandals in 2002.

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  • technostructure — [ tɛknostryktyr ] n. f. • 1968; de techno et structure, d apr. l angl. amér. (Galbraith) ♦ Écon., polit., sociol. Ensemble des technocrates de l administration, des techniciens et spécialistes travaillant dans des commissions, des cadres… …   Encyclopédie Universelle

  • Technostructure — La technostructure est l ensemble des cadres dirigeants ou subalternes, des techniciens et des spécialistes qui participent à la prise de décision en groupe dans les grandes entreprises. La technostructure est une théorie économique de l… …   Wikipédia en Français

  • technostructure — noun Date: 1967 the network of professionally skilled managers (as scientists, engineers, and administrators) that tends to control the economy both within and beyond individual corporate groups …   New Collegiate Dictionary

  • technostructure — /tek noh struk cheuhr/, n. the group or class of technically skilled administrators, scientists, and engineers who manage and influence business, the economy, and government affairs. [1965 70; TECHNO + STRUCTURE] * * * …   Universalium

  • technostructure — noun A corporate structure including technicians or other skilled professionals …   Wiktionary

  • technostructure — See bourgeoisie …   Dictionary of sociology

  • technostructure — tech·no·structure …   English syllables

  • technostructure — tech•no•struc•ture [[t]ˈtɛk noʊˌstrʌk tʃər[/t]] n. soc the group of technically skilled administrators, engineers, and scientists who manage or control business, the economy, or government affairs • Etymology: 1965–70 …   From formal English to slang

  • technostructure — ¦teknōˌ noun Etymology: techno + structure (I) : a large scale corporation or system of corporate enterprises ; also : the network of professionally skilled managers (as scientists, engineers, and administrators) that increasingly tends to… …   Useful english dictionary

  • ТЕХНОСТРУКТУРА — (technostructure) технический и бюрократический класс, который, как оценивает Гэлбрейт (1967), заменяет господствовавший прежде капиталистический класс (частных собственников и предпринимателей) в современных индустриальных обществах. См. также… …   Большой толковый социологический словарь

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