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The Dilemma of Corporate Power

Before you read

Discuss these questions:

1. What is corporate power?

2. Does corporate economic power promote the interests of the general power?

Now read the text

Neither size nor power alone is bad, when it comes to corporate performance. A big company may have definite advantages over a small one. It can command more resources, often produce at a lower cost, plan further into the future, and weather business fluctuations somewhat better. Big companies make tougher competitors against foreign firms. Many communities have benefited from the social initiatives and influence of large firms.

Most questions of corporate power concern how business uses its influence, not whether it should have power in the first place. Most people want to know of business power is being used to affirm the broad public-purpose goals, values, and principles considered to be important to the nation as a whole. If so, then corporate power is considered to be legitimate, and the public accepts large size as just another normal characteristic of modern business. As we have stated earlier, organizations are legitimate to the extent that their activities fit and reflect the goals and values of the society in which they function. The loss of public confidence is destructive to any organization, and legitimacy is perhaps the major element in the long-term survival of all social institutions. Therefore, the crucial questions about corporate power are:

§ Will corporate economic power be used to promote the interests of the general public, including small business competitors and local communities? For example, large-scale computer systems may increase the productivity of big banks, but this development might jeopardize smaller banks. Or, a cost-saving relocation of a plant from a New England town to Southeast Asia may bring severe economic distress to the community that is left behind.

§ Will corporate political power be used wisely to preserve the pluralistic balance of power among a society’s interest groups? Where large corporations have rivaled or surpassed the power of some governments, concern is justified that corporate influence may be abused.

§ Will corporate social power respect the integrity and dignity of individuals, as well as the traditions and needs of the corporation’s host communities? For example, corporate drug-testing programs and sudden plant shutdowns, while considered important for business purposes, may be seen as unacceptable and socially undesirable by those affected.

These three basic questions assume special meaning in Western societies with democratic traditions, representative political institutions, and a strong respect for the individual. In such nations, concentrated power of any kind – whether corporate, governmental, religious, scientific, or military – seems out of place. Reconciling corporate power with an open, free way of life is the crux of the problem. If large corporations can be made to fit into the webbing of an open, pluralistic society, their legitimacy – that is, their public acceptance – will be assured.

Reading tasks

A. Understanding main points. Answer these questions:

1. What dilemma does corporate power present in a democratic society?

2. What are the advantages of a big company?

3. When is corporate power considered to be legitimate?

4. When is corporate influence abused?


B. Understanding details. Mark these statements T (true) or F (false) according to the information in the text:

1. A big company has advantages and disadvantages over a small one.

2. Business is important to the nation as a whole.

3. It is destructive for any organization to lose public confidence.

4. Computer systems might increase the productivity of small banks.

5. Corporate power does not respect traditions of host community.

Vocabulary tasks

A. Collocations

Match the verbs and nouns:

1. use a. productivity
2. affirm b. power
3. increase c. dignity
4. bring d. goals
5. surpass e. influence
6. respect f. distress


B. Linking words. Who, which, that, where:

1. A corporation’s internal social influence is felt by employees __________ spend most of their working hours in the service of their employer.

2. Large business corporations perform essential economic tasks __________ are in many countries undertaken by the state.

3. This is the real character of the large companies __________ constitute a major part of the economic base of the country.

4. _______the real economy companies are unrecognized parts of the government we must consider how such companies are governed.

5. How do such companies relate to the political structure within __________ they move and exercise their enormous capacity.



Here is a list of controversial statements about corporate power, discuss them in groups:

1) The political influence of business tends to increase with the size of the business firm.

2) Sheer size alone does not account for the economic significance of large corporations.

3) A corporation’s social influence is felt in two kinds of ways: one is external and the other is internal.

Unit 10

Date: 2016-04-22; view: 1265

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