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Corporate behaviour: Difference between revisions

Revision as of 17:27, 8 January 2006

There are rules that companies driven by the profit motive seem to follow. These rules are not cast-iron and some companies break them but they are a useful guide to behaviour.

The proposed rules of corporate behaviour are as follows[1]:

• Profit: Profitability is the ultimate measure of corporate decisions. Companies prefer higher profits to lower profits, at least in the long run. Profitability is not necessarily the same as community well-being, though a profitable company is more likely to, for example, employ more people than an unprofitable company. Conflicts can exist, however, between what's good for a company and what's good for the environment, for example, or its employees or even the good of the state. A company is a complex organism and there has been much debate about what drives it. There is an argument that the divorce of ownership from decision-taking means that profitability isn't the main drive - senior managers may have other imperatives like keeping their jobs and avoiding being taken-over (which might run counter to the interests of share-holders). Companies often like to grow, if only because they fear a bigger competitor having cost advantages. This is not always true, however: there have been cases where companies have been broken up into constituent parts.
• Amorality: Not being human, corporations as such do not have moralsoraltruistic goals. Neither, though, does any other organisation. Companies are, though, run by people who are subject to law and rules of morality. * Hierarchy: Companies are usually hirarchical, though the structure of the hirarchy varies. Some are relatively flat with a wide layer of middle managers answerable to a few indiviudals while others are like a pyramid. A very few companies have a great degree of democracy to them. Ricardo Semmler owns companies in Brazil but allows all his staff to pick managers and decide strategy. He puts himself up for election as a chief executive.

The Characteristics of Non-Capitalist Corporate Behaviour

As non-capitalist corporations such as NGO's or charities are not driven by the fundamentals of profit and economic growth, these do not show many of the characteristics of capitalist corporations. The behaviour of non-capitalist corporations is however often influenced by these characteristics of capitalist corporations, in similar ways to the influence of corporate behaviour on individuals. Due to this influence non-capitalist corporations can sometimes be seen to exhibit the characteristics of hierarchy, competition and ephemerality.

The Influence of Corporate Behaviour on Individuals & Society

Due to the dominance of capitalist corporations in Western societies the behaviour of corporations can be seen to have significant impacts on individuals and society. A person or group of people can have links to a corporation or corporations that range from weak to strong, if a person or group of people exhibit corporate behaviour that does not mean the person or group of people is employed by a corporation or corporations. A person or group of people may show corporate behaviour for different lengths of time, for some people they exhibit this behaviour at their place of work; for others it exhibited at work, home and outside the home. Many people display corporate behaviour but do not agree with actions and outcomes that result from it.

The fact that individuals may not agree with the outcomes of corporate behaviour is central to the concept in itself, the characteristics of capitalist corporations do not reflect the characteristics of any individual or group of individuals but are the characteristics required for the survival of capitalist corporations due to the nature of the system within which corporations operate.

See Also

• Corporation
• Corporate crime
• Corporate law
• Corporate personhood
• Corporate governance
• Business ethics
• Corporate social responsibility
• Stakeholder concept
• Shareholder

References

Mander J (1991). In the Absence of the Sacred: The Failure of Technology and the Survival of the Indian Nations. Sierra Club Books, San Fransisco.