The paper 'Maximizing of Shareholder Value for Corporations" is a great example of business coursework. A corporation is a formal business publicly registered and having its own privileges and liabilities different from its members. It is an organization that has a lot of operations and structures laid down for it to function in the field it operates in. This form of the organization usually has an organizational structure that is set in a manner that allows it to achieve its organizational goals in the best and cheapest way possible. It has management that co-ordinates all the other functions within the organization and allows it to function as expected.
Usually, corporations are owned by the government, the public or even by groups of investors (Burns 2001) In most cases, the ownership of corporations is limited to the initial initiators or investors. This leads to a few people being involved in the overall ownership and running of the organization. This situation has forced most of the corporations to remain stagnant and not to thrive well in their field of trade especially since they lose their competitive advantage to the private sector which thrives very well.
This is usually the case since the corporations experience a lot of problems that force them into a situation that is very disadvantageous since their costs of running increase even as their financial stability and the economic base remain weak. There is, therefore, a need for there to be established laws and incentives that allow shareholders to be a part of the ownership of the corporations and the aim should be the maximization of the shareholders so as to allow the organizations to have a stronger financial base as well as increased sources of funding.
This may result in the betterment of the corporations leading to an increased competitive advantage which leads to an increase in market share and consequently increased returns for the organization. This not only benefits the organization and its shareholders but also has very many benefits to the whole society (Penrose 1959). Corporations are more complex than other firms or businesses because they incur more costs through administration fees, taxes, and legal requirements. So generally they are for larger companies with very many employees.
This is one disadvantage of corporations. Also, corporations must be formed under the law in which they are registered to make it hard and difficult to start a corporation. The process of starting the operations of a corporation starts with establishing a business name, then selecting a corporate type, determining company directors and their positions which have to be written within the articles of incorporation and bylaws and obtaining a certificate of incorporation from the local state which moreover has to be completed by a lawyer and finally filling it with a registered agent.
This whole process does take time and a lot of resources (Alvarez & Busenitz 2001). However, there are many different forms of corporations in which most of them are used in transacting or doing business, where the business is referred to as a legally recognized organization designed to offer goods or services to consumers in exchange for money.
Alvarez, S & Busenitz, L 2001, ‘The Entrepreneurship of Resource-Based Theory’, Journal of Management, vol. 27, no.6, pp. 755-775.
Bosch, O, Huse, M & Senneseth, K 1999, Resource configuration, competitive strategies, and corporate entrepreneurship, An Empirical examination of small firms. Entrepreneurship Theory and Practice, Fall.
Burns, P 2001, Entrepreneurship and Small Business, Palgrave Macmillan. , New York.
Covin, JG & Slevin, DP 1989, ‘Strategic management of small firms in hostile and benign environments’, Strategic Management Journal, vol. 10, no. 1, pp. 75-87.
Penrose, E 1959, The theory of the growth of the firm, Willey, NY.