Capitalism and the Corporation: The Contemporary Business

Capitalism and the Corporation:

The contemporary business corporation is an initial creation of the United States imagination that was originally designed to expand local markets. The initial design soon became an essential means to develop a national market. As a result, the American industrialization and capitalism were critically dependent on the corporate form of organization. However, the corporation was not an intangible original initiative since it spread in reaction to tangible economic challenges. Moreover, the corporation had first to become a legal technique before it developed into anything else. Therefore, corporate law is not a division of higher mathematics whose cogency needs a series of more elementary operations since external forces like economic pressures helped to create the corporation. The problem under investigation is the history of the corporation in light of its origin and development. The other issues examined in the article include the different definitions of stakeholder, differences in management philosophies, and views of stakeholders.

Existence of Corporations:

According to capitalism, a corporation is described as a group of people organized in a particular legitimate form similar to the way a society is primarily a combination of individuals organized in a specific form ("Corporation," n.d.). Furthermore, capitalism denotes that corporations are products of a particular contractual legal framework offered by the government and dependent on the principle of rights of individuals. Therefore, the existence of corporations is dependent on individual rights and governments to safeguard these individual rights.

Novak states that corporations have existed for a long period of time i.e. forever since they started in the middle ages as burial societies. The existence of these corporations then proceeded to monasteries, towns, and universities. While the existence of corporations cannot be referred to a certain date and time, they have existed for several centuries (Shah, 2002). Actually, survival in the corporate world can be traced back to the founding generations of fishermen and farmers, land owners, and churchmen (Jennings, 2012, p.105).

Corporation in the United States vs. Britain and Europe:

Corporations in the United States have some fundamental differences with those in Britain and Europe thought the differences are not easy to identify (Hassan, 2012). The main difference in corporations between the two regions is attributed to the rate with which the corporations developed within the two jurisdictions. As compared to Britain and Europe, the United States experienced a rapid growth of corporations between the eighteenth and nineteenth centuries. In contrast, Britain and the whole European continent experienced a slow rate of growth in terms of corporations. As the United States started a new era of a sovereign nation, it had more corporations than Britain and European continent combined. One of the major reasons for the rapid growth of corporations in the United States is the freedom and liberty enjoyed by American citizens that contributed to creativity and growth of corporation.

Definitions of Stakeholders:

Corporations have stakeholders who are described as individuals and/or groups that benefit from and are hurt by corporate actions (Jennings, 2009, p.82). The likelihood of corporate stakeholders to benefit or suffer from corporate actions is dependent on the ability of the corporation to respect or violate their rights respectively. There are two major definitions of stakeholders i.e. The narrow definition and the wide definition. Under the narrow definition, stakeholders are individuals and groups who are significant to the corporation's survival and success. On the contrary, in the wide definition, stakeholders are regarded as any individual or group with the ability of affecting or being affected by the corporation.

Effects of Social Democracy:

Based on the second or wide definition of the term stakeholder, every citizen of the country has a stake in the vitality and success of the United States' corporations. Social democracy is the concept with which this second definition of the term stakeholder is derived from. Therefore, social democracy has significant varying consequences to corporations and other sectors. Social democracy originates from the intrinsic desire of power entrenched in the state or monarch for several centuries. This desire has existed even before innovation and progress were discovered. One of the major effects of social democracy is that it has contributed to the development of economic and political systems. The systems in turn affect the profitability of businesses and how much money it can earn. Secondly, social democracy enables the state to gain control over an individual's exertions and efforts through the payment of taxes. The danger of perpetual demand without responsibility is that it develops an uncomfortable work environment that weakens productivity spirits and ongoing development. As a result of demand without responsibility, populations used to receiving and demanding instead of producing are created.

Meaning of "Not a Cold Meteor Fallen from the Sky":

According to Jennings (2012), a corporation is not a cold meteor fallen from the sky (p.89). The phrase implies that a corporation is not the neither the cause of social problems nor the cure of such problems (Hassan, 2012). Therefore, people operating corporations are the means for change either in the positive or negative. The impact of corporations or businesses on the society is dependent on the individuals behind these corporations and the kind of business activities they adopt. Therefore, the role and impact of a business on the society is not dependent on the inorganic shell of business referred to as a corporation.