1. CHAPTER 1 DISCUSSION QUESTIONS
1) How did the corporation become so powerful (history & evolution)?
2) What were "jobbers?"
3) How is a corporation a "person?"
4) What is "corporate social responsibility?"
5) What is the history of corporate social responsibility?
6) Why was the South Sea Company a scam from the very start?
7) What did the Bubble Act make a criminal offense?
8) What would allow those of moderate means to take shares in
investments with their richer neighbors?
9) What 2 states sought to attract valuable incorporation business to their
jurisdictions by jettisoning unpopular restrictions from their corporate
laws?
10) What is "new capitalism?"
11) Today, what do corporations use to create unique & attractive
personalities for themselves?
2. WHAT COMES TO MIND WHEN YOU HEAR/READ THE WORD
“CORPORATION”
CORPORATION VS BUSINESS
4. DEFINITION & HISTORY
•CORPORATION:
-“CORPUS”: LATIN “BODY OF PEOPLE.”
-A GROUP OF INDIVIDUALS WORKING TOGETHER TO SERVE A VARIETY OF
OBJECTIVES.
-THE MAIN OBJECTIVE IS TO EARN LARGE, GROWING, SUSTAINED, LEGAL RETURNS
($$$) FOR THE PEOPLE WHO OWN THE BUSINESS.
•FORMS:
-BUSINESS
-GOVERNMENT
-POLITICAL
-RELIGIOUS
-CHARITABLE (NON-PROFIT)
6. THE RISE OF THE CORPORATION IN EUROPE
•EARLY ON, THE CORPORATION WAS ENGULFED IN CORRUPTION & FRAUD.
•JOBBERS
STOCKBROKERS WHO PROWLED LONDON’S COFFEE SHOPS IN SEARCH OF INVESTORS TO SELL SHARES IN
BOGUS COMPANIES.
•SOUTH SEA COMPANY:
CORPORATION FORMED TO CARRY ON EXCLUSIVE TRADE (MONOLOPY) WITH SPANISH COLONIES OF SOUTH
AMERICA. IN EXCHANGE, IT ASSUMED THE NATIONAL DEBT ENGLAND INCURRED DURING THE WAR OF SPANISH
SUCCESSION.
•SOUTH SEA BUBBLE:
TO WIN OVER POLITICIANS, THE COMPANY GAVE STOCKS IN THEIR BUSINESS. THE POLITICIANS THEN SOLD
THEM BACK TO THE COMPANY FOR PROFIT.
•BUBBLE ACT:
CRIMINAL OFFENSE TO CREATE A COMPANY PRESUMING TO BE A CORPORATE BODY & TO ISSUE TRANSFERABLE
STOCKS WITHOUT LEGAL AUTHORITY.
•1720: ENGLISH PARLIAMENT OUTLAWED THE CORPORATION.
8. THE RISE OF THE CORPORATION IN AMERICA
GREW OUT OF THE INDUSTRIAL AGE
(LATE 1700’S, EARLY 1800’S)
-INDUSTRIALIZATION IN AMERICA INVOLVED 3 IMPORTANT
DEVELOPMENTS:
1) TRANSPORTATION
2) ELECTRICITY
3) TECHNOLOGY
14. PARADIGM CHANGE: AGRARIAN TO MANUFACTURING
-AS INDUSTRIES & FACTORIES AROSE, PEOPLE MOVED
FROM FARM TOWNS TO CITIES.
-BY 1900 3 AMERICAN CITIES HAD A POPULATION OVER 1
MILLION:
NEW YORK: 3.5 MILLION
CHICAGO: 1.7 MILLION
PHILADELPHIA: 1.3 MILLION
15. REVOLUTIONARY TRANSFORMATION
•NJ & Delaware sought to attract corporations to their jurisdictions by getting rid
of unpopular restrictions.
DEREGULATION:
-THE REMOVAL OR REDUCTION OF GOVERNMENT CONTROL ON HOW
BUSINESS IS DONE.
16. 14TH AMENDMENT
PASSED AT END OF CIVIL WAR TO GIVE EQUAL RIGHTS TO
AFRICAN-AMERICANS.
“ NO STATE CAN DEPRIVE A PERSON OF LIFE, LIBERTY,
OR PROPERTY WITHOUT DUE PROCESS.”
CORPORATIONS ARGUED THAT THEY ARE A “PERSON” &
THE SUPREME COURT AGREED.
18. THE CORPORATION AS A “PERSON”
•The law typically views a corporation as a fictional person, a
legal person, or a moral person.
•Under such a doctrine, a corporation enjoys many of the
rights and obligations of individual persons such as:
-The ability to own property
-The ability to sign binding contracts
-The ability to pay taxes
-The ability to have certain constitutional rights
-The ability to participate in society
•Corporations often have rights not granted to individuals:
-Treaty rights
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
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 Stakeholders
Shareholder:
-An individual, group, or organization that legally owns shares of
stock in a company.
*Has a financial stake in the company.
Stakeholder:
-A person, group, or organization that affects or can be affected by
an organization's actions.
*Has an interest in the company.
22. CSR
-AS CORPORATIONS SIZE & POWER GREW, SO DID
PEOPLE’S FEARS OF THEM.
-EARLY 1900’S: AMERICANS VIEWED CORPORATIONS AS
THREATENING TO THEIR SOCIAL INSTITUTIONS &
GOVERNMENTS.
-“FRANKENSTEIN MONSTERS”
-ENTER “NEW CAPITALISM”
23. CAPITALISM
BEFORE WE DISCUSS “NEW” CAPITALISM WE MUST FIRST UNDERSTAND
REGULAR CAPITALISM
-AN ECONOMIC SYSTEM BASED ON FREE ENTERPRISE.
1) LITTLE GOVERNMENT INTERVENTION (DEREGULATION).
2) OPEN COMPETITION (FREE MARKET)
24. NEW CAPITALISM
-THE TREND OF SOFTENING A CORPORATION’S IMAGE
WITH PROMISES OF GOOD CORPORATE CITIZENSHIP &
PRACTICES OF BETTER WAGES & WORKING CONDITIONS
WITHOUT THE PUSH OF GOVERNMENTS & UNIONS.
-CORPORATIONS NEED TO TAKE CARE OF THEIR
EMPLOYEES.
-BELIEVED CAPITALISM WOULD NOT SURVIVE UNLESS
EQUALITY & COOPERATION EXISTED BETWEEN WORKERS
& CAPITALISTS.
25. SUSTAINABLE DEVELOPMENT
-ARGUES THAT CORPORATIONS SHOULD MAKE
DECISIONS BASED NOT ONLY ON SHORT-TERM FINANCIAL
FACTORS SUCH AS PROFITS OR DIVIDENDS, BUT ALSO
BASED ON THE LONG-TERM SOCIAL & ENVIRONMENTAL
CONSEQUENCES OF THEIR ACTIVITIES.
-CORPORATIONS NEED TO TAKE CARE OF THE
ENVIRONMENT.
26. BRANDING
-SIMILAR TO BRANDING ON THE RANCH.
-USED TO DIFFERENTIATE YOUR COMPANY (COW) FROM ALL OTHER
COMPANIES (CATTLE).
-USED BY CORPORATIONS TO CREATE UNIQUE & ATTRACTIVE
PERSONALITIES FOR THEMSLEVES.
-CORPORATIONS’ BRAND IDENTITIES ARE PERSONIFICATIONS OF
WHO THEY ARE & WHERE THEY’VE COME FROM.
-ENABLES THEM TO CREATE INTELLECTUAL & EMOTIONAL BONDS
WITH THE GROUPS THAT THEY DEPEND ON:
-CONSUMERS & EMPLOYEES
30. CAN/SHOULD A SUCCESSFUL BRAND APPEAL TO EVERYBODY?
-SHOULD A ROLEX WATCH COST $50?
-WHAT WOULD HAPPEN TO SALES SHORT-TERM?
-WHAT WOULD HAPPEN TO THE BRAND LONG-TERM?
-NO. CREATE THE PERCEPTION THAT THERE IS NO OTHER
COMPANY/PRODUCT ON THE MARKET LIKE YOURS.
31. “CORPORATIONS, AS BRANDS, HAVE SOULS.”
BRANDING = PERSONALITY
-CORPORATION: COLD, IMPERSONAL, & SUBJECT TO
MISUNDERSTANDING & DISTRUST.
-FAMILY: PERSONAL, HUMAN, FRIENDLY.
“FRIEND & NEIGHBIOR”
“FAMILY”
