Corporation as a Social Entity

[sureshkb]

Suresh Balabisegan,
(www.sureshbalabisegan.org )
sure...@sureshbalabisegan.org

A short rewind to history….
The last 100+ years, the corporations have become an increasingly
dominant part of economic life. But what about the times before? Human
is in existence for 1000s of years and no matter what the local
situation was there were always developments and corrections in the
social/economic systems. Most of these times it was always the
traders, self employed and home based businesses which contributed to
the economy of a country (or state). Exchange of commodities and food
items were predominant even well before money (coins) were invented as
proxy exchange of value. In the 17th century Adam Smith created a
revolution through his economic theories especially on the “Division
Of Labor”. This slowly opened doors for people with various skills
getting organized under one-roof which produced products/services and
started selling to the market. The income was shared among the skilled
works and profit was shared among the investors.
Definition of Corporation….
According to Merriam Webster dictionary, a corporation is
“a body formed and authorized by law to act as a single person
although constituted by one or more persons and legally endowed with
various rights and duties including the capacity of succession”
Corporations exist as a product of corporate law, and their rules
balance the interests of its stakeholders: the management who operate
the corporation; creditors who loan it goods, services or money;
shareholders who invest their capital; the employees who contribute
their labor; and the clients they serve.
Corporation as Social Entity and the responsibility and rights of
individuals...
As explained above, it is clear that corporation as the general
misconception is not asset or commodity or wealth owned by an
individual like CEO, Chairman or President. In general employees tend
to see corporation is owned by these people. This is completely wrong
attitude/thinking. Corporation is definitely as social entity, a
person by itself according to the corporate/administrative laws of the
country where it operated from. The head of the corporation whether
president or chairman or CEO is taking the responsibility of running
it on behalf of the beneficiaries like employees, investors, customers
and suppliers. Although there is a general perception as if the
company is owned by the head, the reality is the profit share that he/
she gets out of the corporation is what they own(through shares) they
don’t own the corporation itself and no one as a matter legally can
own a corporation. Probably government can claim they own it. Each of
the stake holders like employees, consultants, suppliers, customers,
shareholders have certain roles and responsibilities to play. Their
risks and stakes are limited to the role they play.
Taking part and contributing to the organization’s growth….
It should be carefully noted that Employees and consultants are the
ones who get paid form the revenue of the corporation not from the
profit. So, they are the highest and primary beneficiary or the
corporation. Their risk is also limited to their role played. So, one
should be clear that the more they contribute to the corporation’s
growth, being the first beneficiary they will be growing much faster
in their career. Employee or Consultant who tries to get most benefit
or engage in unreasonable negotiations are creating injustice to the
other employees and consultants first and then to the customers,
suppliers and share holders. So, a responsible employee/consultant
should engage in positive dialogue with the corporations’ managers
(who are also employees); show their commitment to the growth of the
corporation and then ask for the benefits. Basically remember 4Rs
 Responsibilities
 Restrictions
 Rights
 Rewards
I.e. perform your responsibilities within the restrictions of the role
and exercise your rights, you will be automatically rewarded well.
Pie Making….
There are two kinds of people one who makes pie and the other one who
eats it. If the size of the pie is small, then you should think of
cooking more pie and take your share out of it instead of fighting for
the small pie which is not enough for everyone to eat. If a
stakeholder (employee, consultant, shareholder, supplier, client etc)
understands this well, they will be clearly engaging in making more
pie (i.e. contribute to increase revenue and profit of the
organization) and then ask for their share out of it.
Since a corporation is a system by itself, the output depends on
better Inputs and the process within itself. Every system grows itself
over a period of time by correcting the mistakes/errors and improves
itself. So, everyone should contribute to the better inputs and
improved business processes to increase the revenue and then profit.
Automatically rewards will be on their way!
Suresh Balabisegan

[harinder singh]

Cheers Suresh. The pie example is brilliant. I like pie like everyone
dose but will always rember about cooking more pie!

On May 6, 2:42 pm, sureshkb <suresh.balabise...@gmail.com> wrote:
> Suresh Balabisegan,
> (www.sureshbalabisegan.org)
> sures...@sureshbalabisegan.org