The Nature of Corporations

People and entities in search of a soul

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Corporations must remain flexible and capable of reacting to any opportunity that falls within its own strategic positioning. A Shamrock style of corporation with categories of staff ranging from casual, regular and contract staff assists in this flexibility.[1] One can immediately see the same need within individuals, but we are constrained somewhat since we cannot hire additional units of ourselves. However, we can additional external units of assistance to deal with other issues that are preventing us from achieving our personal goals. Having someone cutting the grass or cleaning the house can open up the necessary time to refocus our own priorities.

Does one really want to emulate a company? Can we look at their successes to determine whether we should consider this approach? From a number of criteria, companies have become the major factor in global economic development. There may be a time that companies exceed nations in overall impact on society and economics. It may be hard to believe that any corporation will ever approach the U.S. in overall GDP and cultural impact. But if you look at the top grossing corporations and countries, of the top 50, there are 13 corporations. The largest corporation earns more that either Finland or Denmark, and that really makes it a world player. Certainly nation states, with the U.S. leading the way, will probably always be the major economic force in the world, but not in the same way as global corporations, which have far greater autonomy and much narrower objectives than nations.

Some are concerned that the rise of the modern corporation has overwhelmed the citizen in civil society and in political action. The corporation is especially advantaged against the citizen in the determination of foreign policy. Putting these two advantages together accounts for the peculiarly dehumanized values which are frequently manifest in U.S. foreign policy and international economic relations. A major issue today is how should moral guidance be provided to social entities such as the corporation? One does not have to look farther than the Enron example to see the depth and breadth of the problems that today’s corporations face.

But why should moral guidance apply to corporations? Why do corporations exist but to facilitate commerce and provide a return on capital for those that have provided the funds? Why should the investors have to pay for some social enterprise when they are mostly interested in getting the best return on their investment? Anything else would be unethical as that is simply diverting money that the company is in a way holding in trust for the shareholders. It would be a breach of fiduciary duty to do something with the corporate resources which didn’t maximize profits.

In applying the corporate model to life, we have to clearly differentiate the profit model of a traditional business to more of a non-profit model for life. The business model as it applies to an individual would be more along the lines of a charitable non-profit model. Charities must achieve some sort of positive revenue flow, so non-profit does not mean no profit. It merely refers to the fact that charities have greater objectives in mind. Their mission and vision could be the relief of poverty, the education of children, or the protection of the environment. All of these require money of course, but in their revenue generating activities, excess revenues over expenses goes back into the business instead of dividends to shareholders.

Is there is more to life than just money?

Although that may sound a bit heretical to some/most people, there are more things in life than simply money. Another criteria that we are trying to avoid when using the corporate model of life is the accumulation of power. This appears to the be the driving force for a number of individuals in business, and sometimes politics in thinking that you can get the most out of life through power. Either by creating it, or having other people give it to you. And, in a lot of situations, that is what it mainly boils down to; other people have to accept in giving power over themselves to you.

[1] Handy, Charles.

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