American Business Corporation Research Articles

Of Bodies Politic and Pecuniary: A Brief History of Corporate Purpose

American corporate law has long drawn a bright line between for-profit and non-profit corporations. In recent years, hybrid or social enterprises have increasingly put this bright-line distinction to the test. This Article asks what we can learn about the purpose of the American business corporation by examining its history and development in the United States in its formative period from roughly 1780-1860. This brief history of corporate purpose suggests that the duty to maximize profits in the for-profit corporation is a relatively recent development. Historically, the American business corporation grew out of an earlier form of corporation that was neither for-profit nor nonprofit in today’s parlance but rather, served a multitude of municipal, religious, charitable, educational, and eventually business purposes in early nineteenth-century New England. The purposes of early American business corporations—rather than maximization of profit to private shareholders— were often overtly public, involving development of local transportation, finance, and other much-needed economic infrastructure. With the rise of factory-based manufacturing, railroads, and other capital-intensive industries in the middle decades of the nineteenth century and the advent of general incorporation statutes, the purpose of the American business corporation shifted fundamentally from public to private. By 1860, the stage was set for the modern firm. This Article concludes that the corporation has no intrinsic purpose. The corporation’s defining features are separate legal personality and the ability to aggregate capital toward any otherwise lawful end, whether for-profit or nonprofit. Social enterprises today more closely resemble the early American business corporation than the profit-maximizing modern firm. Social enterprise should be seen less as a legally uncertain novelty than a return to the business corporation’s nineteenth-century American roots. Finally, this Article suggests potential limitations for social enterprise.

Directors’ Versus Shareholders’ Primacy in U.S. Corporations Through the Eyes of History: Is Directors’ Power “Inherent”?

In the debate about the internal governance of public firms some authors justify the current pyramidal organizational structure of American corporations (shareholders at the base, directors in the middle and officers at the peak) using the historical argument, the so called “inherence thesis,” thereby rejecting the “erosion doctrine” affirmed by Bearle and Means. The argument was originally brought by Werner and recently used by Bainbridge: the current governance allocating the primacy to directors and officers is a natural characteristic of big American firms; legal norms have remained constant and unchanged since the first business corporations; therefore this is the inherent nature of public corporate governance structure and there is no reason to change the pyramid, no reason to strengthen the role of shareholders or to require a different legal legitimacy for this structure of power. However, historically, the “inherence thesis” contains a few inaccuracies. Tracing the origins of the first business corporations, the article will show that from mid-eighteenth century until the beginning of the twentieth century, the practice in the United States was quite varied: some charters granted the shareholders the power to appoint both the directors and the officers, as well as other managerial powers; other charters, instead, granted shareholders only the power to appoint the directors, and the directors would then select the officers. Moreover, commentators and case law until the beginning of the twentieth century uniformly and clearly argued the supremacy of the shareholders’ meeting over the board and the managers, and directors used to be qualified as “executive agents” of the shareholders subject to the latter’s will. Indeed, widening the horizon to Europe, the same concept of shareholders’ primacy within public corporations was shared simultaneously in the United States and Europe. The argument in this article is that the internal governance of public corporations has common roots in Europe and the United States. Hence, the American business corporation did not begin with its current pyramidal structure or with directors’ primacy. The latter seems to have been a legal development starting in Europe and then in the United States, at the beginning of the twentieth century, but only subsequently taking a more marked pyramidal form in the United States.

Putting Africa's House in Order to Deal with Developmental Challenges

However proud Africans must be to have a person of African descent in the White House, they should have no illusions as to how much President Barack Hussein Obama can do for Africa. Africans must put their own house in order for purposes of dealing successfully with the major challenges facing the continent, the most important of which is that of democratic and developmental governance. Obama's priorities are not necessarily those of Africans. They have to do with the role of the United States as a superpower in a global system in which the American military and business corporations play a hegemonic role. In this context, Africa is relevant to American and Obama's global priorities when its resources are needed to strengthen this role, on the one hand, or its humanitarian crises are likely to affect them in an adverse manner, on the other.What are these global priorities, and how are they likely to affect Africa during Obama's tenure? Following is a brief examination of four major priorities. The first is limiting the spread of nuclear weapons. Operating on the premise that nuclear weapons should be limited to the few countries now possessing them (U.S., Russia, Britain, France, China, Israel, India, and Pakistan), the U.S. government has led an international campaign against the acquisition of nuclear weapons technology by other countries, particularly those deemed hostile to Western interests, such as Iran and North Korea. Since South Africa destroyed the nuclear arsenal of the former apartheid state and Libya gave up its nuclear ambitions, the only relevant issue with respect to Africa's role in the spread of nuclear weapons is the question of who has access to Africa's abundant supply of uranium. Denying access to African uranium to “rogue states” and terrorist organizations is an important foreign policy objective of any American government, including the Obama administration.

The Effect of Economic Integration with China on the Future of American Corporate Law

China's development into a world economic power and its continuing integration with the United States economy raise the question whether China's own history and the socialist context of its domestic corporate law may affect the meaning of business terms in use both internationally and in American domestic corporate law. Of particular interest is the question whether China's entry and impact may blunt the late-twentieth century effort in the United States to change the legal sense of the purpose of an American business corporation.

Corporate Law and the Sovereignty of States

This article explores the origins of a social form with lasting and profound sociological implications: the corporation. Though corporations date back as far as the Roman Republic, the early United States fostered a significant transformation in corporate law. Shortly after the American Revolution, several states pioneered a system whereby corporate charters became available to almost anyone (at a price), leading (eventually) to a proliferation of corporate charters unlike anything ever seen before in world history. This proliferation of corporate charters first occurred in colonies that were originally chartered as corporations: Massachusetts, Connecticut, and Rhode Island, all of which used the corporate organizational form for a wide array of social pursuits. These colonies also experienced repeated conflict with the Crown over the rights and privileges of corporations. As American “states,” they built on these experiences to liberalize access to the means of incorporation and to elucidate the rights and freedoms of corporations. Other studies aptly document the diffusion of the corporate organizational form after 1800; this article takes up the antecedents to the use and popularity of the modern corporate organizational form. These observations do not supersede scholarly work regarding the economic origins of the American business corporation, but they do shed valuable light on the interdependence of states and markets, as well as the nature of institutional-legal transformation more generally.

Workplace Democracy: Why Bother?

North American business corporations are currently facing competitive challenges as well as rising public demand for more participative and accountable forms of governance. While they have responded to the competitive challenge by implementing new lean and .exible organizational processes to improve productivity, they have made few changes in governance, and employees continue to have little input into decisions that fundamentally affect them. This article outlines the conventional arguments for workplace democracy and proposes a new, health-based argument. The grounds for an emerging employee rights movement are then presented. The article concludes that while the evidence backing up the conventional arguments for workplace democracy may be equivocal, there are still compelling reasons, both economic and non-economic, to democratize workplaces.

Reporting practices: potential lessons from Cendant Corporation

A case analysis of Cendant, the American business and consumer services corporation, generates guidelines for enhancing managers' evaluation of risk. Specific hints of problem areas that can be addressed through future control design are detailed. Of particular import to managers are risk exposures associated with non-recurring `opportunities' for mis-statement and the use of outsourcing within the accounting and reporting process.

POWER IN THE AMERICAN ECONOMY: A REVIEW AND COMMENTARY

Summary The two books I have been reviewing have made a number of points about the nature of power in the American economy. Our economic society is dominated by large institutional actors. Supporting this reality are layers of traditional reasons, some of which are myth-like. These institutions are not necessarily as efficient or as innovative as these traditional beliefs inform us, and they coalesce to form an interconnected whole that operates to serve institutional interests first. In the process, large business corporations come to see natural persons as roles. This perception at once increases the individual's mobility and her irrelevance. Many of us are leading meaningless lives as we serve the objectives of others in our work. Overall, the large American business corporation has brought a new form of social organization that substantially truncates us as natural, whole persons. In the process, these organizations are challenging the family as a dominant form of organization in our society. Rights in our society accrue to the actor with productive capacity. Through the use of political power, market research, and advertising, we can discern a type of power that subtly conditions us to believe that this reorganization of our environment is proper and right. As we pursue our own “free will,” therefore, we actually submit to the objectives of the large business corporation. Generally speaking, Adams, Brock, and Coleman agree on this fundamental point: the dignity of individual purpose and meaning that we share and that define us as human beings is thwarted by a set of institutional arrangements that have fundamentally reoriented our society to serve the institutions' own objectives of profit and growth. Why is this important? It seems that in social systems, like mechanical systems, something is lost when mass is increased. As our important institutions become larger, what is lost is a kind of knowledge about our own environment and how it works. In the place of this first-hand knowledge, we come to rely on second-hand knowledge provided by social-science experts. Without this first-hand knowledge, we lose the confidence that we have the ability to see for ourselves what has meaning and to bring about desired changes in our lives. With the loss of confidence, we lose power, a form of power that each of us is told from childhood that we, by nature, should have. Our individual wills and perceptions atrophy without use. We come to believe that our place in the social order is inevitable and natural. In short, the individual, the source of both knowledge and political rights, has become secondary to the will and strength of large private and public institutions. How can natural, individual actors regain–or perhaps realize for the first time –power in their own lives? In reaching for an answer to this question, I believe Adams, Brock, and Coleman have overlooked some essential features of our modern political economy.

The Origins of the American Business Corporation, 1784-1855; Broadening the Concept of Public Service during Industrialization

The Origins of the American Business Corporation, 1784-1855; Broadening the Concept of Public Service during Industrialization

The Origins of the American Business Corporation, 1784-1855: Broadening the Concept of Public Service during Industrialization

Journal Article The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service during Industrialization. By Ronald E. Seavoy. (Westport: Greenwood, 1982. xii + 314 pp. Tables, appendixes, notes, bibliography, and index. $29.95.) Get access Hendrik Hartog Hendrik Hartog University of Wisconsin Law School Search for other works by this author on: Oxford Academic Google Scholar Journal of American History, Volume 71, Issue 2, September 1984, Pages 385–386, https://doi.org/10.2307/1901778 Published: 01 September 1984

The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service During Industralization. By Ronald E. Seavoy. Westport, Connecticut: Greenwood Press, 1982. Pp. xii, 314. $29.95.

The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service During Industralization. By Ronald E. Seavoy. Westport, Connecticut: Greenwood Press, 1982. Pp. xii, 314. $29.95.

The Origins of the American Business Corporation, 1784-1855: Broadening the Concept of Public Service during Industrialization

The Origins of the American Business Corporation, 1784-1855: Broadening the Concept of Public Service during Industrialization

Ronald E. Seavoy. <italic>The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service during Industrialization</italic>. (Contributions in Legal Studies, number 19.) Westport, Conn.: Greenwood Press. 1982. Pp. xii, 314. $29.95

Journal Article Ronald E. Seavoy. The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service during Industrialization. (Contributions in Legal Studies, number 19.) Westport, Conn.: Greenwood Press. 1982. Pp. xii, 314. $29.95 Get access Seavoy Ronald E.. The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service during Industrialization. (Contributions in Legal Studies, number 19.) Westport, Conn.: Greenwood Press. 1982. Pp. xii, 314. $29.95. Elisha P. Douglass Elisha P. Douglass University of North Carolina, Chapel Hill Search for other works by this author on: Oxford Academic Google Scholar The American Historical Review, Volume 88, Issue 1, February 1983, Pages 180–181, https://doi.org/10.1086/ahr/88.1.180 Published: 01 February 1983

The Origins of the American Business Corporation, 1784-1855: Broadening the Concept of Public Service during Industrialization

The Origins of the American Business Corporation, 1784-1855: Broadening the Concept of Public Service during Industrialization

The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service during Industrialization. By Ronald E. Seavoy. Westport, Conn., Greenwood Press, 1982. Pp. xii + 314. $29.95.

The Origins of the American Business Corporation, 1784–1855: Broadening the Concept of Public Service during Industrialization. By Ronald E. Seavoy. Westport, Conn., Greenwood Press, 1982. Pp. xii + 314. $29.95. - Volume 56 Issue 4

The Public Service Origins of the American Business Corporation

The corporate charter, so restricted in its use in England, found a constantly broadening range of applications in America from the colonial period onward. The test of importance to the general welfare, originally confined to municipal, benevolent, or at most public-utility enterprises, was being applied to manufacturing ventures by the second decade of the nineteenth century.

The Assignment of American Executives Abroad: Systematic, Haphazard or Chaotic?

As American business corporations have expanded their operations into overseas locations, the demands for qualified executive personnel have risen sharply. The focus of the article is upon the procedures for staffing overseas positions used by American firms and the frequently disorganized staffing programs being used by some of the corporate giants of American industry.

American Business Corporations Until 1860: with Special Reference to Massachusetts. By <italic>Edwin Merrick Dodd</italic>, Late Fessenden Professor of Law, Harvard University. (Cambridge: Harvard University Press. 1954. Pp. xix, 524. $7.50.)

American Business Corporations Until 1860: with Special Reference to Massachusetts. By Edwin Merrick Dodd, Late Fessenden Professor of Law, Harvard University. (Cambridge: Harvard University Press. 1954. Pp. xix, 524. $7.50.) Get access American Business Corporations Until 1860: with Special Reference to Massachusetts. By Dodd Edwin Merrick, Late Fessenden Professor of Law, Harvard University. (Cambridge: Harvard University Press. 1954. Pp. xix, 524. $7.50.) Edward Dumbauld Edward Dumbauld Uniontown, Pennsylvania Search for other works by this author on: Oxford Academic Google Scholar The American Historical Review, Volume 60, Issue 3, April 1955, Pages 620–621, https://doi.org/10.1086/ahr/60.3.620 Published: 01 April 1955

American Business Corporations Until 1860: With Special Reference to Massachusetts

American Business Corporations Until 1860: With Special Reference to Massachusetts

American Business Corporations until 1860: With Special Reference to Massachusetts, by Edwin Merrick Dodd

American Business Corporations until 1860: With Special Reference to Massachusetts, <i>by Edwin Merrick Dodd</i>