Arguments Against Corporate Power in Joel Bakans The Corporation - Book Report/Review Example

al Affiliation: Arguments against Corporate power in Joel Bakan’s book The Corporation Introduction The book “The Corporation: The Pathological Pursuit of Profit and Power) by Joel Bakan, is about the Corporate World an institution but portrayed as a person who oppresses and gets away with it as the law protects ‘him’. Professor Joel Bakan argues that a corporation would be a psychopath in the current society. The book takes the reader through the origin of the corporation in the formation process and its legal status in the society. He then reveals an account of issues revealing that the corporation for a range of misconceptions committed on this society. The Bakan’s book tends to take issue with many aspects of the modern corporation, which is evolving in the modern society. However, the book fails to give the main purpose of the corporation. This paper looks critically though positively at the corporate power opposing the ideas of the author. This by disagreeing with the idea of Prof. Bakan that corporations are irresponsible, manipulative, reckless, superficial and grandiose. Key Concepts / terms in the topic The book is an argued account of the corporations pathological pursuit of power and profit. As a law professor as well as a legal theorist, Bakan opposes that the law creates a corporation which is supposed to function like a psychopathic personality with destructive behaviour, and in the event that it is left unchecked it could lead to ruin. He supports his premise with the following:- Governments have abdicated much of their control over the corporation, despite its blemished nature, by escaping it from legal restrictions through deregulation and by granting it ever greater power over society through privatization. The Corporation’s mandate is to achieve its own self-interests despite any consequences it may cause to others. Nobel Prize winner Milton Friedman endorsed this concept. If the Corporations self-interests are uncontrolled, it may victimize individuals or society, or shareholders, which can cause it to self-destruct. A corporation Social Responsibility is supposed to help the society; however, it can be used wrongly to hide the true character of the corporation. Therefore, i strongly oppose the idea of the book that a corporation has become a vehicle in which loyal women and men cause danger to the community because of the process of the corporation is formed and protected by the law. Main Issues in the Topic In the first Chapter, Prof. Bakan analyses the Corporation’s rise to dominance. Prof Bakan uses the illustration of the growth of the railway industry .He draws an imagination about the power of the modern corporation in the society. This is evident when he points out that the previous need for capital at that time to financial manage the railways in the United Kingdom and the United States which led to the creation of limited liability corporations all across the Atlantic. He argues that it eventually became an opportunity for people to harm the society as the law protects it. Prof. Bakan argues that the corporation steals lies and kills without remorse or hesitation. It only obeys the law when the cost of crime is higher than the profits. The activities associated with Corporate Social Responsibility are insincere. Bakan points out that corporation’s main objective are pursuit of profit and power .I strongly disagree with the first chapter whereby i tend to think that corporations help the society. This is through the creation of employment and utilising the stagnant resources available in the society. Furthermore, corporations are beneficial to a state or a country ,this was evident when states such as New Jersey and Delaware attracted corporations by passing lenient statutes that did not restrict their conduct.This seems to be a wrong move towards Prof.Bakan but looking at the move at an economic part of view it seems that the states wanted to speed up the rate of industrialisation in the states. The two main characteristics of a corporation are firstly limited liability and secondly the corporation is viewed a separate entity that operates separately from the shareholders. Even if unlimited liability may have been more appealing to creditors, it came with huge foreseen or unforeseen costs on the shareholders, this meant that only the wealthy or those able to lobby for especially charter from the state would invest in any enterprise. Allowing limited liability means that investors can buy shares in companies without worrying about losing their savings. Therefore, the average person could share the wealth. In fact, many companies encouraged their employees to contribute in the wealth by giving pension plans that were invested in the company’s shares. Ultimately, the issue is not that the corporation is an avenue of harm that Bakan claims. Rather, Bakan’s concern is against capitalism and the pursuit and search for profit by anyone. The corporation is seen to allow the pursuit of profit to be more efficient and be carried out on a large scale, however abolishing the corporate form would not do much in diminishing the search of power as since ancient times, limited liability vehicles have been carrying out business If corporations start working for public interest only through democratic controls then they cannot be regarded corporations in the capitalist sense because corporations are profit-making enterprises, self-interest of the companies is essential part of its nature, and it requires liberty. This paper provides insight on Bakan’s unsuccessful attempt to address the main objective and the rise of the corporation. Different perspectives on the topic, and argument against those perspectives Critical analysis the corporate power as tyrannical. The author views the Corporation as a legal entity, which is exercising power in the first chapter of his book. (Bakan, 2004) This is an unclear perspective by the author as corporations are not legal entities; they do not make or enforce laws. Corporations are entities that follow and abide the law of the land whereby they are under close supervision of the national government. This is in order to avoid the act of the corporations mistreating the society. The author is criticizing the corporate structure, when dealing with aberration and conflicts the whole systems need to be changed because legal laws are generated by corporate power, which is tyrannical. I will identify systems that may require a change which are affecting the society. An analysis will be provided showing that Corporations are influencing and urging national and international Law to protect human rights in the corporate setting, which are regarding, health protection, equal employee opportunities and corporate governance. Arguments against, Bakan using the term, “Corporation as a “psychopathic” and a “person” which is exercising corporate power in Chapter 2, “Business as Usual” It is the role of the country or state to provide a means to remove barriers and entities that have the responsibility to manage corporations. However, the author feels that the corporations only has self-interest and does regard anyone else. Unfortunately, this paper tends to oppose the point by saying that many corporations have social responsibilities among it strategies. I do not think that all corporations are awful. This is especially for some of the corporations where I think that their social responsibility is ingenuous, most often this is the case when social responsibility happens to also be of good quality for the bottom line. A critical examination of corporations and political bodies through research will provideinsight on how large corporations and Labour Unions working with political bodies tend to work very closely and political bodies may in return provide protection to them creating triangle relationship emerge where there are players, lobbyist, corporations, and congressional committees. The modern state is far more accountable for its actions, and their behaviour is conceived far more dangerous than the Barkan’s “Corporation.” Corporations are built to externalize their own costs. These externalities are basically those costs, which harm the environment and standard of living in the third Chapter , “The Externalizing Machine,” To provide justifications about these externalities. As they can be a form to distribute wealth. Identify the concept of externalities in the book, and the terms of externalities. (Production, transportation that may be used to increase profits, or used in retailing, use or disposal from class to the other.) To exam, these classes and comparisons need to be carried out showing corporation how these externalities may be useful. Arguments against Bakan’s concept of Corporate Power over society. Corporations through their power initially protected society in the sixth chapter, “Reckoning”, it is seen that the law may be able to provide protection to the people and the environment if there are social forces, which are acting on their part like Labour and Trade Unions. The Bakan’s concept of liberalization and globalization will be examined where he has the view that corporations have a negative role, they have no set of rules, which governs or regulates the business activities. Most corporations may accept responsibilities of their actions due to media coverage and pressures from political bodies. The emergence of public enterprises and NGOs the public pressure on the corporations is raising, due to which they are answerable to societies. “Corporations” are working carefully as their reputation is at stake. Examples of such enterprises will be quoted showing how corporations may work pro-actively so that there is a minimum impact on sales, market share, and staff turnover etc. Against the concept of democratic controls as analysed in chapter four and six of his book, Bakan defines an enterprise as a corporation exhibiting power without distinguishing it as a public or private sector, whether it is big or small, national or global entity, which is very vague. To provide examples of corporations, which signify their existence, and they should be regarded corporations in a capitalist sense. The author’s point: corporations are non-economic However, corporations are economic role; the corporation must be an effective economic institution, or it can be nothing at all. I tend to disagree with the author due to the idea that he says that every corporation should have their own environment.This will enable the corporation to have total control of the corporation.This idea seems to be invalid because the corporations will tend to misuse the resources given to them.This will lead to the destruction of the corporation in the business market.The destruction will lead to unemployment and misuse of resources which could have been used by other corporations which seemed to be serious in their line of business.For a standard corporation, it is supposed to take good care of their assets this is due to the factor that the corporation knows it can resell as opposed to assets that have one time uses only. This type of corporation always abolishes their services The act of abolishing the corporation is termed to be a way of solving the problems faced by the so called normal corporation.According to me this is a wrong move whereby in case of abolishing the corporation it would lead to the satisfying of greed shareholders in the corporation who tend to wait for such situations.Furthermore, it should be advisable for corporations not to lobby governments in order to in order to receive minimum supervision to their regulatory standards. The Profesor tends to explain that the evolution of corporate law from the law of partnerships and trusts meant that certain concepts that were operative in the law of partnerships would carry over to the law of corporations. According to Prof Bakan the law mandates the administrators of a corporation to increase its profits for anything less would be referred to as akin towards the citizen’s wasting the citizen’s assets.In a normal sense, this seems to be wrongly misunderstood by Prof Bakan. Conclusion The Corporation is a challenging book that should be read by all; for there are mutual concerns that Bakan emerges with the nature of our society is being administered. The main theme of the book is the claim that the modern corporation has caused its harm, because this is the first time limited liability has effectively existed in the present society. The question is about the reader must ask is whether dismantling the corporation and the achieving of annual profit is the solution, or whether more government intervention is the also solution. The corporation has being termed to be a model in which good men and women cause mischief to society because of the way the corporation is managed,created and protected by the law. Bakan’s book analyses corporate history, which makes it clear that the corporate leaders are bound to make profits, and not necessarily to act ethically. Their actions are controlled by the “interest of the corporation”.The book brings to light many issues that are argumentative. The main issues have been written by other authors such as Salamon, Siegfried, Banerjee and United Nations all of who have separate views on Corporate Power and the role of the corporate to the society. A qualitative research can be carried on the book in order to identify its flaws. It is also noted that corporations have influenced political leaders to have a good working relationship with other countries as well as their role in influencing capital-labour relations, democracy and during capitalist crises, which provides a different approach to “corporate power”. Corporations start working for public interest only through democratic controls then they cannot be regarded corporations in a capitalist sense because corporations are profit-making enterprises and self-interest of the companies is essential part of it is the corporation’s nature, and it requires liberty. Moreover, the sole responsibility of the officers of the corporation is to provide the ambitions of the stakeholders, and most often, the stakeholders objectives is to enlarge their and profit. References Bradshaw, T. F., & Vogel, D. (1981).Corporations and their critics: issues and answers to the problems of corporate social responsibility. New York: McGraw-Hill Banerjee, S. B. (2009). Corporate Social Responsibility: The Good, the Bad and the Ugly. Northampton: Edward Elgar Publishing. Kevin, F. (2004). Corporate Power and Social Policy in a Global Economy: British Welfare Under the Influence. Bristol: The Policy Press. Ronald W, C. (2012). Corporate Power and Globalization in US Foreign Policy. New York: Routledge. Salamon, L. M., & Siegfried, J. J. (1977). Economic Power and Political Influence: The impact of Industry Structure on Public Policy. The American Political Science Review , 71 (3), 1026-1043. United Nations. (2004). Disclosure of Impact of Corporations on Society. New York: United Nations. Read More