• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Discuss the relationship between ownership and control in the modern corporation.

Extracts from this document...


Discuss the relationship between ownership and control in the modern corporation. Owners and managers no longer run large firms in modern society. Nowadays numerous shareholders own and often control firms. Large decisions are left in their hand, although primarily and predominantly, the decisions are in the hands of management in the corporation. Many firms are often employee owned. A company such as John Lewis PLC operates upon the basis of employees owning and controlling the business. Shareholders own other firms such as British Telecom - a private company, and strive to maximise profit and control the business as well as own it. This is similar to John Lewis PLC because employees are trying to own as well as control the business. There are many scenarios involving ownership and control. Shareholders aim to maximise profits. They want their money invested to bring back a profitable return. Managers on the other hand are quite different, they too want to maximise profits but can have other reasons too. ...read more.


This means decisions often need to be made quickly and there is very little time for all stakeholders to partake in the decision - making. The traditional approach of who controls a corporation is to view the shares. Using this empirical data, it is seen that if shareholders own 51% of the shares then they can control the management. If they control less than 50% then they do not control the management and effectively the corporation, they still have a degree of influence over the running of the business but do not dominate. Although described as being separate, ownership and control are often linked together because they are similar. They are similar in the sense that they are both affecting the business and that they are positions of great importance to the corporation. Whether it be shareholders of directors in control and owning the corporation, there is a similarity in terms of how close both parties are to the corporation and thus, the risks they both face. ...read more.


The relationship between ownership and control is that it is an ever - changing relationship, it depends on many conditions such as external influences including competitive forces and the economy as well as government. A famous case of the government intervening is the splitting of software company Microsoft. This resulted in a major change in ownership and control. Owner Bill Gates lost some ownership and control whereas shareholders gained some ownership and control. Modern corporations are nowadays experiencing a combination of ownership and control from stakeholders such as owners, top management such as directors and managers and shareholders. With the number of firms in markets and increasingly competitive nature in the economy, along with increasing globalisation and the ever - developing world economy, competition is more fierce and competitive forces can more easily gain control within a corporation in the bid to survive and maximise profit. Ownership and control are paradigms used to show the way in which a corporation is managed and organised and those who are in command of it. 1Allen and Unwin, (1975), 'An Introduction to Industrial Economics', page 106 EQ2342 Raxit Vanmali ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Marked by a teacher

    ASDA's Ownership

    4 star(s)

    These are also known as enterprises, as they were run by a franchisee and were given permission by a franchisor (an organisation) who owns their products and services that are being provided. Usually, the franchisee will gain benefits from the franchisor's enterprise as the franchisor supplies goods/stock and displays for the shop and general advice.

  2. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    This meant they worked hard to provide their customers with the quality and ethos they wanted. This also affected their suppliers as they may have had to change a lot of their suppliers to more ethical ones. In 2001 M&S stopped selling eggs from caged hens, they now only sell

  1. Introduction to J Sainsbury plc

    This could be the case because there might not be many intelligent employees, who have the required skills and qualities that enable them to make independent decisions on behalf of Sainsbury's. However, Sainsbury's are achieving the objective of being a good employer, according to the following quotation: "10,000 jobs created to improve customer service".

  2. Investigation into Cadbury's Plc.

    in Britain. In Britain there are 17 Cadbury and Schweppes sites. Small- This type of size makes under 2.8 million turnovers per year, has a balance sheet for under 1.4 million and has under 50 employees working for them. Medium- This type of size makes between 2.8 to 11 million

  1. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    it is used to set prices to their products in which they need to sell at a price in which they can make a profit. Place is a factor that is taken into account because Tesco?s will need to sell their products/ services at place where it can be available

  2. Comparison of stakeholders interest and influence. Apple vs. Mercedes Benz

    He is responsible for Apple progression; with help of the other directors, managers, developers, researchers and other employees. Tim Cook was set CEO because Steve Jobs passed away last autumn. Since Steve Jobs died, the progression of the company?s sales has risen in 25%.

  1. Comparing Examples of Business Ownership and Objectives.

    Capital can be raised quickly as the banks know the businesses assets could likely pay off the loans. Private limited - Private limited companies are smaller than public limited companies and have at least two shareholders.

  2. Applied Business. Investigating a business Preston Manor High School

    Rigby, who knows about the schools financial position. The schools financial position is pretty good with up to approximately £7.15m year budget and they can afford to provide enough facilities and modern technology; but Preston manor does control how much they provide and not purchase any useless things that are not even going to benefit the school in

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work