Case Study: Michael Novak Capitalism and Corporations

Case Study: Michael Novak Capitalism and Corporations

Introduction

Corporate has been defined as a “specific legal form of organization of persons and material resources, chartered by the state, for the purpose of conducting business (Hinkley, 2002).” This means that all the business activities in relation to the handling of human resources and other resource must be done in accordance to the corporate law that designs and governs the corporations all over the world. The law forms the very basis of corporation and defines the meaning of its existence through designing of all its functions. The boards of directors are supposed to follow those laws in all the activities that are related to the management and functioning of corporations. The laws dictate their attitudes, behavior and decision in relation to the corporation. A good example of corporate law is the one that promotes and guides towards acting in the interest of shareholders while taking any important step of decision in relation to corporations. The law suggests that the officers and directors of the corporation must act and perform their duties with a common interest and benefit of the shareholders and corporation as a whole. This papers aims to investigate some important aspects of Corporation in relation the case study of Michael Novak on Capitalism and Corporation. Important concepts , existence of corporation and difference in different corporate systems will be discussed in detail. Additionally concept of shareholders and social democracy will also be explained in order to develop better understanding of the concept.

Discussion

Existence of Corporation

It has been reported that the concept and ideologies of corporation are as old as that of bible of Aristotle as there have been evidence found in certain parts of bible that talk and explain the concept of capitalism in directly by explaining certain economic issues which is indirectly related to the concept of corporations. Capitalism has been defined as an economic activity which consist of private or capital goods in the free market. Different parables of Jesus and Bible explain how human nature can help in evaluation of reasons for success or failure of any economic activity in the society. It explains in detail about what type of attitude a Christian must maintain towards dealing of wealth and how the finances must be handled so that they do not have any negative effect on the surroundings or society (Towns, 2003). Brown suggest that the concept of corporation was actually introduced in the year 529 AD by formation of Benedictine order of the Catholic Church (Brown, 2003). Apart from religion the actual history of corporation dates back to the era of Queen Elizabeth I came up with the idea of establishing East Indian Trading Company in the year 1601 (Drutman). Additionally, Brown suggests that it was in the late 20th century when concept of Ltd., Corp., AG and SA dominated the free market of business. The initiation and development of economic policies in the Soviet Union and China, almost all the countries have become ...