CHAPTER 1 DISCUSSION QUESTIONS1) Who were jobbers?2) In 1720, what did the English Parliament do in response to corporate high jinks?3) What was the South Sea Company?4) What did the Bubble Act make a criminal offense?5) What is the genius of the corporation as a business form and its reason for its remarkable rise?6) What does "limited liability" mean?7) How did NJ & Delaware seek to attract valuable incorporation business to their jurisdictions?8) Between 1898 & 1904, America went from having 1,800 corporations to having how many?9) By the end of the 19th century, courts had fully transformed the corporation into a what?10) In 1886 the Supreme Court decided that corporations should be protected by what Amendment?11) In 1908, AT&T launched an advertising campaign, the first of its kind, that aimed at doing what?12) What term is used to describe the trend of corporations crafting softened images of themselves withpromises of good corporate citizenship & practices of better wages & working conditions?13) What package of regulatory reforms designed to restore economic health by, among other things, curbingthe powers & freedoms of corporations, did President Roosevelt create in 1934?14) What was formed in 1973 which operated in cartel-like fashion to control the worlds oil supply?15) What was introduced in 1948 that enabled corporations to take advantage of their newfound mobility withoutsuffering punishing financial penalties?16) The deregulatory logic of economic globalization was deepened in 1993 with the creation of what?17) Fill in the blank: Corporations now ______________ society, perhaps more than governments themselves do.18) What do corporations use today to create unique & attractive personalities for themselves?
WHAT COMES TO MIND WHEN YOU HEAR/READ THE WORD“CORPORATION”CORPORATION VS BUSINESS
CLIP 1: WHAT IS A CORPORATION?WHAT IS A CORPORATION?
-CORPORATION: A GROUP OF INDIVIDUALS WORKING TOGETHER TO SERVE AVARIETY OF OBJECTIVES.-“CORPUS”: LATIN “BODY OF PEOPLE.”-THE MAIN OBJECTIVE:-TO EARN LARGE, GROWING, SUSTAINED, LEGAL RETURNS ($$$) FOR THEPEOPLE WHO OWN THE BUSINESS.-FORMS:-BUSINESS-GOVERNMENT-POLITICAL-RELIGIOUS-CHARITABLE (NON-PROFIT)
ADVANTAGES/DISADVANTAGESADVANTAGES:1) LIMITED LIABILITY-A PERSON’S FINANCIAL LIABILITY IS LIMITED TO THEVALUE OF A PERSON’S INVESTMENT2) PERPETUAL SUCCESSION-THE CONTINUATION OF A CORPORATION’S EXISTENCEDESPITE THE DEATH, BANKRUPTCY, EXIT FROM THEBUSINESS, ETC. OF ANY OWNER/MEMBERDISADVANTAGES:1) COST & TIME TO ESTABLISH & MAINTAIN2) LEGAL REQUIREMENTS & REGULATORY RED TAPE
THE CORPORATION HAS BECOME THE WORLD’S DOMINANT ECONOMICINSTITUTIONWE ARE INESCAPABLY SURROUNDED BY THEIR CULTURE, ICONOGRAPHY, &IDEAOLOGYCORPORATIONS:GOVERN OUR LIVESDETERMINE WHAT WE EATWHAT WE WATCHWHAT WE WEARWHERE WE WORKWHAT WE DO
“THE CORPORATION’S DRAMATIC RISE TODOMINANCE IS ONE OF THE REMARKABLEEVENTS OF MODERN HISTORY, NOT LEASTBECAUSE OF THE INSTITUTION’S INAUSPICIOUSBEGINNINGS.”HISTORYCLIP 2: BIRTH & EVOLUTION
THE RISE OF THE CORPORATION IN EUROPE•EARLY ON, THE CORPORATION WAS ENGULFED IN CORRUPTION & FRAUD.•JOBBERSSTOCKBROKERS WHO PROWLED LONDON’S COFFEE SHOPS IN SEARCH OF INVESTORS TO SELL SHARES INBOGUS COMPANIES.•SOUTH SEA COMPANY:CORPORATION FORMED TO CARRY ON EXCLUSIVE TRADE (MONOLOPY) WITH SPANISH COLONIES OF SOUTHAMERICA. IN EXCHANGE, IT ASSUMED THE NATIONAL DEBT ENGLAND INCURRED DURING THE WAR OF SPANISHSUCCESSION.•SOUTH SEA BUBBLE:TO WIN OVER POLITICIANS, THE COMPANY GAVE STOCKS IN THEIR BUSINESS. THE POLITICIANS THEN SOLDTHEM BACK TO THE COMPANY FOR PROFIT.•BUBBLE ACT:CRIMINAL OFFENSE TO CREATE A COMPANY PRESUMING TO BE A CORPORATE BODY & TO ISSUE TRANSFERABLESTOCKS WITHOUT LEGAL AUTHORITY.•1720: ENGLISH PARLIAMENT OUTLAWED THE CORPORATION.
THE RISE OF THE CORPORATION IN AMERICAGREW OUT OF THE INDUSTRIAL REVOLUTION(MID 1700‘S - MID 1800’S)-INDUSTRIALIZATION IN AMERICA INVOLVED 3 IMPORTANTDEVELOPMENTS:1) TRANSPORTATION2) ELECTRICITY3) TECHNOLOGY
FIRST TRANSCONTINENTAL RAILROADFINISHED: MAY 10, 1860 AT PROMONTORY SUMMIT, UTAH
THE 2 FEDERALLY CHARTERED ENTERPRISES THAT BUILT THERAILROAD:1)UNION PACIFIC RAILROAD CORPORATION2)CENTRAL PACIFIC RAILROAD COMPANY
THE RAILROAD & COPORATE AMERICA-AS THE RAILROAD INDUSTRY GREW, SO DID THE NUMBER OFCORPORATIONS TO RUN IT-US LAID MORE THAN 100,000 MILES OF TRACK BETWEEN 1865-1885-BY MIDDLE OF 19THCENTURY, MIDDLE-CLASS PEOPLE BEGAN TOINVEST IN CORPORATE SHARES OF RAILROAD CORPORATIONS-LIMITIED LIABILITY BORN-LIABILITY OF SHAREHOLDERS LIMITIED TO THE AMOUNTSTHEY INVESTED IN A COMPANY
ECONOMIC PARADIGM CHANGE: AGRARIAN TO MANUFACTURING-AS INDUSTRIES & FACTORIES AROSE, PEOPLE MOVED FROM FARM TOWNSTO CITIES.-BY 1900 3 AMERICAN CITIES HAD A POPULATION OVER 1 MILLION:NEW YORK: 3.5 MILLIONCHICAGO: 1.7 MILLIONPHILADELPHIA: 1.3 MILLION
REVOLUTIONARY TRANSFORMATION-NEW JERSEY & DELAWARE: SOUGHT TO ATTRACT CORPORATIONS BYGETTING RID OF UNPOPULAR GOVERNMENT RESTRICTIONSDEREGULATION:-THE REMOVAL OR REDUCTION OF GOVERNMENT CONTROL ON HOWBUSINESS IS DONE.
14THAMENDMENTPASSED AT END OF CIVIL WAR TO GIVE EQUAL RIGHTS TOAFRICAN-AMERICANS.“ NO STATE CAN DEPRIVE A PERSON OF LIFE, LIBERTY,OR PROPERTY WITHOUT DUE PROCESS.”CORPORATIONS ARGUED THAT THEY ARE A “PERSON” &IN 1886 THE SUPREME COURT AGREED.
THE CORPORATION AS A “PERSON”-THE SUPREME COURT DECISION RECONCEIVED THE CORPORATION AS AFREE & INDEPENDENT BEING-THE CORPORATION ENJOYS MANY OF THE RIGHTS OF CITIZENS SUCH ASTHE ABILITY TO:-OWN PROPERTY-SIGN BINDING CONTRACTS-PAY TAXES-HAVE CERTAIN CONSTITUTIONAL RIGHTS-PARTICIPATE IN SOCIETY-CORPORATIONS ALSO HAVE RIGHTS NOT GRANTED TO INDIVIDUAL CITIZENS-THE RIGHT TO SIGN TREATIES
AS THE CORPORATION’S SIZE & POWER GREW, SO DID THE NEED TODISSUADE PEOPLE’S FEARS OF IT.EARLY 1900’S: AMERICANS VIEWED CORPORATIONS AS THREATENING TOTHEIR SOCIAL INSTITUTIONS & GOVERNMENTS.CORPORATIONS HAVE HAD TO DEVELOP WAYS TO SOFTEN THEIR IMAGEWITH THE PUBLIC.
CORPORATE SOCIAL RESPONSIBILITY (CSR)-The deliberate inclusion of public interest into corporate decision-making.-CSR honors the 3 P’s:-People, Planet, Profit-Shareholders vs StakeholdersShareholder:-An individual, group, or organization that legally owns shares ofstock in a company.*Has a financial stake in the company.Stakeholder:-A person, group, or organization that affects or can be affected byan organizations actions.*Has an interest in the company.
FOR CLASS PURPOSES:1) EMPLOYEES2) CUSTOMERS3) SOCIETY: COMMUNITY/ENVIRONMENT