In: Administrative science quarterly: ASQ ; dedicated to advancing the understanding of administration through empirical investigation and theoretical analysis, Band 46, Heft 1, S. 161-163
Intro -- Contents -- Illustrations -- Series Foreword -- Preface -- Chronology -- 1. Development of the Corporation -- 2. Transformation of the Corporation -- 3. The Postmodern Corporation -- 4. Benefits of the Corporation -- 5. Establishment of a Corporation -- 6. Operating a Corporation -- 7. Corporations in Other Countries -- 8. Multinational Corporations -- 9. Corporate Governance -- 10. The Future of the Corporation -- Glossary -- Selected Bibliography -- Index.
Abstract Historically, a corporation was regarded as an artificial creation of law possessing only what rights and powers its constituting charter confers upon it. This "concession" or "grant" theory has been eclipsed, especially in the United States, by the view that the corporation is a mere association of natural persons, and that its rights are those of its "members" and "owners," the shareholders, who, as persons and citizens, bring even constitutional rights to the corporation. This associational view rests on a triple confusion. First, it confuses the corporation (the rights-bearing corporate entity) with the corporate firm, which is associational, leaving the impression that the corporation can be reduced to natural persons. This underwrites the second confusion, that the business corporation is a member corporation, with the shareholders as members, when in fact it is a property corporation without members. The histories of the Dutch and English East India Companies are drawn on to explain the origins of this second confusion. Third, it confuses the member corporation with a partnership, when it imagines that the rights of the corporation are simply those of its individual shareholders. Instead, as maintained by the grant theory, a corporation should only receive such rights as are conferred on it by charter or statute on the basis of policy considerations.
Recent Supreme Court cases have entrenched a new image of corporate civic identity, assigning to the corporate person rights and abilities based upon the cultural characteristics, social ties, civic commitments, and internal lives of the human beings involved in it. This vision of the corporation is exemplified in recent cases implicating a corporate right to engage in political speech (Citizens United v. Federal Election Commission) and a right of corporations to be free of government interference regarding religious convictions (Burwell v. Hobby Lobby Stores, Inc.). Although much is being written about the soundness of the results in these cases and potential inconsistencies of the legal analysis that led to these results, this Article uses these cases to introduce a normatively potent theoretical perspective on corporate law that has for too long been exiled to the periphery of legal theorizing. When persons, whether corporate or human, interact within a social system, social theories of culture—not just microeconomic theories of individual incentives or ethical theories of individual duty—are required to fully understand the rights, norms, behaviors, and duties of such persons. The law has transformed the corporation into a unique civic person capable of holding and expressing opinions and beliefs to other members of its social community. This development urgently demands that corporate law scholars take cultural theory seriously if they are to fully understand the rights, norms, behaviors, and duties of modern corporations. This Article makes the case for the increased centrality of cultural theory within corporate law and lays out some of the major challenges and implications that lie ahead as this development takes hold.
Examines different views of the relationship between corporations, shareholders, and society; argues that the capitalist philosophy of the 1990s precludes a socially responsible role for corporations.