Skip to main content Accessibility help
×
Home
  • Get access
    Check if you have access via personal or institutional login
  • Cited by 1
  • Print publication year: 2017
  • Online publication date: March 2017

9 - The Corporation in Management Studies

from PART I - DISCIPLINARY OVERVIEWS

Summary

Introduction

‘Management’ – as practised in modern corporations as well as the social position ascribed to its exponents – is today comparatively well established and institutionalized. For Berle and Means (1968 [1932]: 196), ‘“[m]anagement” may be defined as that body of men who, in law, have formally assumed the duties of exercising domination over the corporate business and assets’. ‘Management’ has not, however, always been so taken for granted (Pollard, 1968; Storey, 1983); and, as we shall show, its theory and practice remain a product of struggles between parties, including legislators and owners as well as executives, who seek to press their distinctive claims upon the purpose and scope of management. At the centre of these struggles is this question: what benefits does ‘management’ bring, and to whom?

Historically, as we will show, modern management is directly related to the emergence of the modern corporate form, providing a changing ‘figure’ located within the shifting ‘ground’ of the corporate form that has been recast within different phases of capitalist development. In Section 1 of this chapter, we show how, during the nineteenth century, the public limited liability company as a legal entity emerged, in the US and the UK, as a new organizational form that stood over and against the partnership. The transfer of ‘ownership’ of corporate assets from shareholders to this separate legal entity simultaneously bestowed considerable privileges and protections upon shareholders – such as perpetuity, limited liability and liquid share trading – as part of a legal quid pro quo. The quid pro quo also opened up a legal space that enabled shareholders to relinquish the taxing and restrictive demands of direct oversight and control. Recasting shareholders as well-protected investors in coupons, or owners of ‘tokens’ as Berle and Means (1968 [1932]) call them, vacated the terrain of control previously occupied and organized by partner-shareholders. This shift also enabled salaried managers to enter a space in which they have come to exercise discretion in determining and implementing corporate strategy. As we will show, the purpose and scope of that discretion has been a matter of contestation, especially with regard to the interpretation of their fiduciary duties toward ‘the corporation’.

Accounting Standards Steering Committee (1975) The corporate report: a discussion paper published for comment by the Accounting Standards Steering Committee (London: Institute of Chartered Accountants in England and Wales).
Aglietta, Michel, and Rebérioux, Antoine (2005) Corporate Governance Adrift: A Critique of Shareholder Value (Cheltehnham: Edward Elgar Publishing).
Allen, W. T. (2011) ‘Engaging corporate boards: the limits of liability rules in modern corporate governance’, in Williams, C. A. and Zumbansen, P. (eds.) The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism (Cambridge: Cambridge University Press), 82–103.
Arrighi, Giovanni (2010) The Long Twentieth Century: Money, Power, and the Origins of Our Times (London: Verso).
Berle, Adolf A. (1954) The 20th Century Capitalist Revolution (New York: Harcourt, Brace).
Berle, Adolf A. (1959) Power without Property: A New Development in American Political Economy (New York: Harcourt, Brace and World).
Berle, Adolf A., and Means, Gardiner C. (1968 [1932]) The Modern Corporation and Private Property, rev. edn. (New York: Harcourt, Brace & World).
Biondi, Y., Canziani, A., and Kirat, T. (eds.) (2007) The Firm as an Entity: Implications for Economics, Accounting and the Law (London: Routledge).
Bratton, W. W. Jr (1989) ‘The new economic theory of the firm: critical perspectives from history’, Stanford Law Review 41(6): 1471–1527.
Burnham, James (1962 [1941]) The Managerial Revolution (Bloomington: Indiana University Press).
Carroll, Archie B., Lipartito, Kenneth J., Post, James E., Werhane, Patricia H., and Goodpaster, Kenneth E. (2012) ‘Corporate Responsibility: The American Experience’ (Cambridge: Cambridge University Press).
Chandler, A. D. (2002 [1977]) The Visible Hand: The Managerial Revolution in American business (Cambridge, MA: Harvard University Press).
Chorev, N., and Babb, S. (2009) ‘The crisis of neoliberalism and the future of international institutions: a comparison of the IMF and the WTO’, 38(5): Theory and Society 459–84.
Ciepley, David (2013) ‘Beyond public and private: toward a political theory of the corporation’, American Political Science Review 107(1): 1–20.
Davies, William (2010) ‘Economics and the “nonsense” of law: the case of the Chicago antitrust revolutionEconomy and Society, 39(1): 64–83.
Davis, G. F. (2009) Managed by the Markets: How Finance Re-Shaped America (Oxford: Oxford University Press).
Deakin, Simon (2011) ‘Corporate governance and financial crisis in the long run’, in Williams, C. A. and Zumbansen, P. (eds.), The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism (Cambridge: Cambridge University Press) 15–41.
Diamond, Stephen F. (2011) ‘Beyond the Berle and Means paradigm: private equity and the new capitalist order’, in Williams, C. A. and Zumbansen, P. (eds.), The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism (Cambridge: Cambridge University Press), 151–176.
Djelic, Marie-Laure (2013) ‘When limited liability was (still) an issue: mobilization and politics of signification in 19th-century England’, Organization Studies 34(5–6): 595–621.
Dore, Ronald (2008) ‘Financialization of the global economy’, Industrial and Corporate Change 17(6): 1097–1112.
Duménil, G., and Lévy, D. (2001) ‘Costs and benefits of neoliberalism. a class analysis’, Review of International Political Economy 8(4): 578–607.
Edwards, Richard (1979) Contested Terrain: The Transformation of the Workplace in the Twentieth Century (London: Heinemann).
Fourcade, Marion, and Khurana, Rakesh (2013) ‘From social control to financial economics: the linked ecologies of economics and business in twentieth century AmericaTheory and Society, 42(2): 121–159.
Froud, J., Johal, S., and Williams, K. (2002) ‘Financialisation and the coupon pool’, Capital and Class 26(3): 119–151.
Ghoshal, Sumantra (2005) ‘Bad management theories are destroying good management practices’, Academy of Management Learning and Education 4(1): 75–91.
Glynos, Jason, Klimecki, Robin, and Willmott, Hugh (2015) ‘Logics in policy and practice: a critical nodal analysis of the UK banking reform process’, Critical Policy Studies 9(4): 1–23.
Gospel, Howard, and Pendleton, Andrew (2003) ‘Finance, corporate governance and the management of labour: a conceptual and comparative analysis’, British Journal of Industrial Relations 41(3): 557–582.
Gourevitch, Peter, and Shinn, James (2005) Political Power and Corporate Control: The New Global Politics of Corporate Governance (Princeton, NJ, and Oxford: Princeton University Press).
Guinnane, T., Harris, R., Lamoreaux, N. R., and Rosenthal, J. L. (2007) ‘Putting the corporation in its placeEnterprise and Society 8(3): 687–729.
Hannah, Leslie (2010 [1976]) The Rise of the Corporate Economy (Oxford: Routledge).
Hansmann, H., and Kraakman, R. (2001) ‘The end of history for corporate law’, Georgetown Law Journal 89: 439.
Harris, Ron (2015) ‘The history of team production theory’, Seattle University Law Review 38: 537–650.
Horn, Laura (2012) ‘Corporate governance in crisis? The politics of EU corporate governance regulation’, European Law Journal 18(1): 83–107.
Ireland, Paddy (1999) ‘Company law and the myth of shareholder ownership’, Modern Law Review 62(1): 32–57.
Ireland, Paddy (2005) ‘Shareholder primacy and the distribution of wealth’, Modern Law Review 68(1): 49–81.
Ireland, Paddy (2010) ‘Limited liability, shareholder rights and the problem of corporate irresponsibility’, Cambridge Journal of Economics 34(5): 837–856.
Jacoby, Sanford M. (2011) ‘Labor and finance in the United States’, in Williams, C. A. and Zumbansen, P. (eds.), The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism (Cambridge: Cambridge University Press) 277–317.
Kaysen, Carl (1957) ‘The social significance of the modern corporation’ (papers and proceedings of the sixty-eighth annual meeting of the American Economic Association), American Economic Review 47(2): 311–319.
Khurana, R. (2007) From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession (Princeton, NJ: Princeton University Press).
Lamoreaux, N. R. (1998) ‘Partnerships, corporations, and the theory of the firm’, American Economic Review 88(2): 66–71.
Lazonick, W. (1992) ‘Controlling the market for corporate control: the historical significance of managerial capitalism’, Industrial and Corporate Change 1(3): 445–488.
Lazonick, W., and O'Sullivan, M. (2000) ‘Maximizing shareholder value: a new ideology for corporate governance’, Economy and Society 29(1): 13–35.
Locke, Robert R., and Spender, J. C. (2011) Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance (London: Zed Books).
Mansell, Samuel F. (2013) Capitalism, Corporations and The Social Contract: A Critique of Stakeholder Theory (Cambridge: Cambridge University Press).
McLean, J. (2004) ‘The transnational corporation in history: lessons for today’, Indiana Law Journal 79(2): 363–377.
Mirowski, P., and Plehwe, D. (2009) The Road From Mont Pèlerin: The Making of the Neoliberal Thought Collective (Cambridge, MA: Harvard University Press).
Mizruchi, Mark S., and Bey, D. M. (2005) ‘Corporate control, interfirm relations, and corporate power’, in Janoski, T., Alford, R. R., Hicks, A. M. and Schwartz, M. A. (eds.), The Handbook of Political Sociology: States, Civil Societies, and Globalization (Cambridge: Cambridge University Press), 310–331.
Moore, M., and Rebérioux, Antoine (2007) ‘The corporate governance of the firm as an entity, old issues for the new debate’, in Biondi, Y., Canziani, A.. and Kirat, T. (eds.), The Firm as an Entity: Implications for Economics, Accounting and the Law (London: Routledge) 348–74.
Nichols, T. (1969) Ownership, Control and Ideology: An Enquiry into Certain Aspects of Modern Business Ideology (London: Allen & Unwin).
Parkinson, John (2003) ‘Models of the company and the employment relationship’, British Journal of Industrial Relations 41(3): 481–509.
Perrow, Charles (2002) Organizing America: Wealth, Power, and the Origins of Corporate Capitalism (Princeton, NJ: Princeton University Press).
Piketty, Thomas (2014) Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press).
Pollard, Sidney (1968) The Genesis of Modern Management: A Study of the Industrial Revolution in Great Britain (Harmondsworth: Penguin).
Pye, Annie (2001) ‘Corporate boards, investors and their relationships: accounts of accountability and corporate governing in action’, Corporate Governance: An International Review 9(3): 186–195.
Pye, Annie (2002) ‘The changing power of “explanations”: directors, academics and their sensemaking from 1989 to 2000’, Journal of Management Studies 39(7): 907–925.
Robé, J. P. (2011) ‘The legal structure of the firm’, Accounting, Economics, and Law 1(1): 1–86.
Roy, W. G. (1999) Socializing Capital: The Rise of the Large Industrial Corporation in America (Princeton, NJ: Princeton University Press).
Smith, Adam (1998) An Inquiry into the Nature and Causes of the Wealth of Nations (Oxford: Oxford University Press).
Storey, John (1983) Managerial Prerogative and the Question of Control (Routledge Revivals) (London: Routledge).
Tricker, Robert I. (2015) Corporate Governance: Principles, Policies, and Practices (New York: Oxford University Press).
Tsuk, Dalia (2003) ‘Corporations without labor: the politics of progressive corporate law’, University of Pennsylvania Law Review 151(6): 1861–1912.
Tsuk Mitchell, Dalia (2011) ‘Legitimating power: the changing status of the board of directors’, in Williams, C. A. and Zumbansen, P. (eds.), The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism (Cambridge: Cambridge University Press), 60–81.
Van Horn, R (2009) ‘Reinventing monopoly and the role of corporations: the roots of Chicago law and economics’, in Mirowski, P. and Plehwe, D. (eds.), The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective (Cambridge, MA: Harvard University Press) 204–37.
Veldman, Jeroen (2010) The Corporate Condition (Leicester: University of Leicester).
Veldman, Jeroen, and Willmott, Hugh (2013) ‘What is the corporation and why does it matter?’, Management 16(5): 605–620.
Veldman, Jeroen, and Willmott, Hugh (2016) ‘Limits of reflexive governance: whose reflexivity in corporate governance codes?’ Human Relations.
Wilson, John F., and Thomson, Andrew (2009) The Making of Modern Management: British Management in Historical Perspective (Oxford: Oxford University Press).
Zeitlin, Maurice (1989) The Large Corporation and Contemporary Classes (New Brunswick, NJ: Rutgers University Press).