A corporate organization is The concept, structure and leadership of a corporation

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

For the first time the concept of "corporate organization" received its significance at the beginning of the last century. In developed countries, companies and firms began to unite into a single system. To date, such a concept as "corporate culture" has appeared, which implies the existence of certain rules and norms. What is it? Corporate organization is a complex and structural mechanism, which we will talk about in the article.

A Brief History

The first associations arose in ancient Rome. The creation of a corporate organization is not easy, since in those days such unions could be founded only with the consent of the highest authority - the senate. After the fall of the Roman Empire, corporations lost their importance. However, in the XII century, people began to unite in groups according to their skills and interests. For example, merchants formed alliances with artisans. The main goal of these organizations was to form a common production and increase income.

Stora Kopparberget is considered to be one of the oldest corporations. Its main activity was in the field of copper mining in the open spaces of Sweden. There were similar formations in India. For example, the East India Company. King Magnus Eriksson is a key figure in the development of corporate alliances. In the XIV century, he issued a decree on the right to carry out business activities. In the middle of the 20th century, there were up to 7,000 such enterprises.

Definition

Corporation is a union of various enterprises that perform joint activities according to their interests and specialization. It is important for the company to find conscientious business partners who would bring mutual benefit. For example, attracting foreign investors, increasing profits, carrying out some kind of activity. An important goal of a corporate organization is the growth of competitiveness in the international market. It contributes to an increase in demand for products.

Characteristics of corporate organizations

Individuals holding blocks of securities unite in order to coordinate each other in the economic sphere. A corporate organization is a joint-stock company. Each member of this union has an independent legal status. The management and control of the activities of a corporate organization is carried out by specially trained people - managers. The structure of the association includes managerial, commercial and financial parties. An enterprise can work both in one direction and in completely different directions. A corporation is a well-coordinated and structured system.

Views

There are three main types of corporate unions in the world:

• Public. Such associations are open. Their main goal is to attract foreign investors and raise capital.
• Integrated is a union of industrial and economic enterprises. They enter into an agreement between themselves, according to which the parent company manages the corporate organization.
• Affiliate is a collaboration of several companies.

There are several other species in the United States of America:

• Organizations that are directly related to the business.
• Non-profits are schools, universities, charitable foundations and so on.

In addition, they are divided into public and private. The first includes all municipal and government facilities, and the second includes entrepreneurial corporations.

Features

The structure of the corporate organization, the features are not difficult to understand. This alliance has a number of characteristics:

• Firstly, a joint-stock company implies the ownership of securities, property.
• Secondly, all management is carried out by managers who are members of the board of directors.
• Third, each company that is a member of the corporation has complete independence from external economic influences, and also has legal rights.
• The interests of shareholders may differ from the management of the organization. However, their rights and obligations must be spelled out in the contract.
• Basically, this union implies a commercial focusin further work.

Principles of corporate organization

All monetary transactions of a corporation must be subject to certain rules and regulations. There are several principles that help coordinate financial ties.

• Economic or industrial independence. This principle implies that all firms have the right to independently control their activities in order to increase capital. The main task is to establish a further strategy for the development of the enterprise, as well as increasing demand for products and services in the market.
• Self-financing. The company controls its income and expenses. The main goal is to increase profits and expand your capital, attract investors. The organization is fully coordinating its investments in order to increase the level of competitiveness in the international market.
• Another important factor is the creation of additional financial reserves. They are needed in case of a crisis or other unforeseen circumstances.

Management

The board of directors is in charge of the corporation. Their main task is to develop a strategy to increase income and assets. In addition, they are obliged to exercise control over the activities of firms, protect the rights of shareholders, and support their interests. Important bodies that also participate in the management of the union are committees:

• Investment.
• Compensated.
• Audit.

These formations are made up of qualifiedprofessionals who improve the performance of the entire corporate organization. The CEO is the representative of this association. His responsibilities include monitoring the work of the Board of Directors and committees, solving some problems and issues.

Guidance Principles

There are also rules in the management and control of the association that must be followed:

• The Board of Directors is obliged to make and weigh all decisions, taking into account verified information about the work of the joint-stock company.
• Leadership must take into account the needs of all members of the organization.
• The interests that guarantee further progress in the activities of the corporation should be put above all else.
• Protect the rights of shareholders and receive dividends from them.

Powerful corporations

By the end of last year, the well-known magazine about rich people "Forbes" presented the world with a list of the most influential and expensive organizations at the beginning of 2019. Rating:

• First place goes to the Apple organization. The corporation produces mobile equipment, computers, tablets, laptops, TVs, watches, headphones. Its products are considered very high quality and expensive in the world. Apple was founded in 1976 by Steve Jobs. In 2018, the company earned $183 billion.
• Second place was earned by the Chinese oil corporation Sinopec. The company is engaged in the supply of oil and gas, as well as chemical products.
• It is impossible not to mention the Walmart Internet Association. The founder of the company is Sam W alton. It was established at the beginning of 1962. The organization is engaged in wholesale and retail sale of various products. Her profit is approximately 125 billion.
• Microsoft is in fourth place. The company was formed in 1975 by one of the billionaires - Bill Gates. This organization invented the first computer software in the world. Microsoft continues to function to this day. In 2018, her income was $110 billion.
• Amazon is in fifth place. The organization is engaged in retail trade, as well as the supply of products through its platform on the Internet. The corporation was born in 1994 thanks to Jeff Bezoson. Amazon has an all-time capital of $71 billion.

Russian corporations

Today, there are also several prestigious corporate organizations in Russia. These include:

• Gazprom was formed back in 1989. The company is engaged in the extraction of natural gas in the bowels of the Russian soil, as well as its supply. The organization's income for 2018 amounted to 5 trillion rubles.
• Rosneft is the second largest corporation in the Russian Federation. The organization specializes in the production of clean oil and natural gas. Profit varies up to 6 trillion rubles.
• Joint-stock company "Surgutneftegaz" was founded in 1977. The company is ranked 496 in the Fortune Global Top 500.
• "Lukoil" is the second corporate organization in Russia after "Gazprom" in terms of revenue. The main direction of the company is oil.

Create a corporation

Forming a corporate organization is a gradual and complex process. A corporation is a legal entity that is able to create its own bank accounts, own property, and set taxes. There are several steps to take into account when creating such an alliance:

• First of all, you should choose a name for the future organization. It should be loud and memorable. It can use the following designations: Corp., Inc. and so on. However, the name should not be associated with the state.
• Next, you need to register the name with government agencies.
• After that, it is necessary to start creating corporate governance bodies, namely the Board of Directors. They will select employees, control all the work of the company, look for new shareholders and investors, deal with financial issues.
• Afterwards, it is worth acquiring all the necessary licenses and permits that allow the formation and operation of a corporate organization.
• In addition, you need to draw up the main document of the company - this is the charter, which will contain all the important information. For example, the address of the association, the contact details of the Board of Directors, and so on.
• All taxes must be paid when applying to register an organization.
• Thenit is necessary to draw up rules according to which all the work of the company will proceed.
• After, it is worthwhile to convene the Board of Directors and resolve all important issues related to the selection of employees and the functioning of the corporation.
• Next, you should draw up contracts with auctioneers.

What is the difference between a holding company and a corporation?

Some believe that these two concepts mean the same thing. However, there is a significant difference between them. What is it:

• Holding is the association of companies into a single system. Small firms transfer all their shares to the parent company. The parent company exercises control and management over subsidiaries. In addition, she creates common rules and norms for all structures, solves the problems and issues of the firms under her charge.
• Corporation is a union of auctioneers. Commercial companies unite in order to carry out activities in one direction. A board of directors is set up to oversee the entire organization. Each firm in the union has legal status and independence.

The main difference is that the holding has a main company that manages the entire mechanism. Corporation members can independently manage their finances, as well as carry out activities.