William Roy and Contemporary Corporation
William Roy's conception of the contemporary corporation focuses on the merger wave of the 1890's during which which many large firms turned to public capital markets to facilitate mergers. The change that occurred in corporations was when they went from a public sphere to a private sphere. Two sectors, manufacturing and financial, came together at this time. In this book Roy criticizes the efficiency theory and relies heavily on the power theory. He felt that with the efficiency theory, anything that was done was done to maximize profits at that given time in history. The power theory looks back on history and relies heavily upon it. The main transformation that has occurred in corporate America has been the transformation of the ownership. Now corporations are owned by many people, (socialized capital) instead of an individual. "Corporations were developed to undertake jobs that were not rational or not appropriate from the perspective of the individual businessman." (Roy, 41) This is where the transformation of public too private took place. The corporation that exists today has been contingent and developed from pre-existing forms. It evolved from the public corporation. The emergence of the railroad, the pow
The power theory rejects some of the ideas the efficiency theory proposes. The efficiency theory attempts to explain why groups of individuals were motivated to form new corporations and not why they were able to. When corporations were formed, large amounts of resources were distributed unevenly. The efficiency theory treats uneven distribution as a flaw. The power theory treats the distribution of resources as important to the development of corporations. Also, if an industrialist is faced with the grim possibility of bankruptcy or a hope to merger, then they will most likely merger. The events that led to this decision involve power. People choose their own actions and make others act in a similar way with regards to their actions. Roy believes that size matters when controlling for other things. Labor productivity is lower in incorporated industries, so it must not be that incorporation makes firms more efficient. He believes that power is best explained in which the behavior of one person is explained in terms of the behavior of another. He believes that structural power gives an employer "that hires sociology majors rather than economics majors structures the consequences of choosing a major and is exercising power over students deciding on a major." (Roy, 14) This idea of power, supercedes the efficiency theory. er of anti-monopoly, anti-state method of Jacksonian anti-corporation privatized and democratized the corporation. Although the corporate retained many of its privileges, it also made these privileges available to the general public through incorporation laws. Thus, the corporation lost its hold on its public accountability. Roy examines socialized capital in three states, New Jersey, Pennsylvania, and Ohio. In this section of the book, he examines the evolution of the corporation from a tool used by states to encourage economic development and raise revenues to its emergence as a private agent. This makes the corporation available to all through general incorporation statutes with no public responsibility or accountability. New Jersey had the most limited experience with public
Some common words found in the essay are:
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Approximate Word count = 1438
Approximate Pages = 6 (250 words per page double spaced)
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