In addition those on the board of directors may have worked at the same accounting or law firms and had business dealings with one another in the past. Even some college professors and ex-high ranking government officials who have conducted studies or have useful connections are board members (Holbrook, 2004). The author further reports that "These people with intertwined relationships with corporate management often sit on multiple boards, causing an even greater conflict of interest (Holbrook, 2004-page 4)."
As was mentioned previously the sources of power for a corporation can differ slightly depending on whether or not the corporation is publicly or privately held. Publicly held organizations are often beholden to shareholders (each of whom owns a percentage of the company) (Winkler, 2004). Publicly held corporations must make financial information about the company available to shareholders (per government regulations).
Shareholders have a significant amount of power because they are a source of capital for the company. If the company is not profitable, the value of the stock decreases and a shareholder might decide to sell the stock and invest in another publicly held corporation. As a result of this power, the reactions and opinions of shareholders as it pertains to the strategies of the company are always taken into consideration.
In addition to shareholders, other stakeholders include customers and employees. Customers or consumers have a great deal of power particularly in certain industries. The power of the consumer is most often seen in the retail sector. Consumers can dictate the types of products that are sold and the price of the products. Corporations have to pay a great deal of attention to the taste and the trends that exist amongst consumers to ensure their products will sell once they enter the market.
Corporations that are privately held are quite often owned by a single family. In many cases it is the family of the original founder of the corporation. Privately held corporations have the same sources of power but the number of owners (or shareholders) in the company are more limited. For instance, a publicly held company may have thousands of shareholders and a privately held company may have fifteen. The owners of the privately held company still have a great deal of power (more power in some cases) but the dynamics are different.
Discussion and Conclusion
When the power sources of public schools and corporations are compared the differences are obvious but so are the similarities. It is apparent that the ultimate goals of the two types of organizations are different. The public school system wants to promote and realize academic achievement in American children, while the corporation wants to realize a profit. In both cases there is a hierarchy that exists as it pertains to the sources of power. Corporations and public schools are required to follow certain rules and regulations determined by the federal government.
Within the public school system superintendents and school boards have a great deal of power at the local level and within the corporate setting CEO's and the board of directors have a great deal of power. This aspect of the hierarchy is actually very similar because the CEOs and superintendents are responsible to formulating the strategies/curricula and the boards of each respective organization are responsible for determining whether or not the strategies/curricula can be implemented and carried out successfully.
In addition each organization has a hierarchy which ensures that the policies established by the superintendent/CEO and improved by their respective boards, are carried out by principals, administrators and managers. The various levels of authority and power also serve the purpose of guaranteeing that the people at every level of the organization understand what is expected and their responsibilities. Another similarity between corporations and public school is that they both have stakeholders. As it pertains to corporations, stakeholders include shareholders, customers and employees. In the context of public schools stakeholders include students, parents and taxpayers. In both instances stakeholders have some power in influencing the strategies that are adapted.
Overall it is apparent that leadership and definitive sources of power are integral to developing organizations that are able to accomplish the goals that are set forth. Without leadership and the various levels of power or authority the goals of the organization cannot be realized.
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