Conceptualizing the business corporation: insights from history

Abstract

The purpose of this symposium is to shed light on the genealogy of the idea of a business corporation, an economic institution which has long been regarded with a mixture of awe and apprehension. Each of the four original contributions addresses the history of some of its key features. In the process, each contributor reveals some of the insights that history has to teach us regarding the central concepts that inform contemporary debates about the nature of the corporation, the contours of the corporation's purpose, the sources of corporate power, the functions of corporate law, the duties of directors, the status of shareholders, and the legitimacy of corporate rights.

Hybrids: where are we?

“…As pointed out by Hodgson (2015, chaps. 4 and 8) and Gindis (2020), legal considerations are central to capture the essence of organizations understood as institutional arrangements. Second, there is also the need to better identify and understand the transmission mechanisms operating through the 'meso-institutions' that link the general rules of the game, defined at the macro-institutional level, and the actual modalities of organizing transactions at the micro-institutional level (which includes hybrids).…”

“…the English East India Company). Their evolution toward the status of unified entities ('firms') with a legal personality of their own is discussed in Gindis (2020) and Ciepley (2020). In this essay, we understand property rights as the legal control by a party over a specific set of assets and their returns, while decision rights are about the capacity to orient the allocation of resources, whether the person/entity in capacity holds property rights or not.…”

Economic Policies for Innovative Enterprises: Implementing Multi-Stakeholder Corporate Governance

“…The theory of the innovative enterprise proposes the necessary elements of innovation, which is collective, cumulative, and uncertain, as requiring conditions inside the corporation for strategic decision making, organizational capabilities, and financial commitment (Lazonick 2018). This institutional theory is related to a century-long history of scholarship on the corporation as a “real entity,” as opposed to an aggregate or fictional entity (Gindis 2020; Gindis, Veldman, and Willmott 2020). Though legal stakeholder theory, grounded in progressive corporate law, lacks a theory of the economics of production, it provides useful elements for policy development to balance power among stakeholders in the process of allocating rewards from value-creation (as opposed to the “stakeholder theory” that flows from business and management scholarship) (O’Sullivan 2000a).…”