For the first time, the concept of "corporate organization" gained its significance at the beginning of the last century. In developed countries, companies and firms began to merge into a single system. Today, there is such a thing as "corporate culture", which implies the existence of certain rules and norms. What is it? Corporate organization is a complex and structural mechanism, which we will discuss in the article.
The first associations arose in ancient Rome. The creation of a corporate organization is not easy, since in those days such unions could only be founded 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 created alliances with artisans. The main goal of these organizations was to form general production and increase revenue.
One of the oldest corporations is considered to be Stora Kopparberget. Its main activity was in the field of copper mining in Sweden. Similar formations were in India. For example, the East India Company. King Magnus Ericsson 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 mid-20th century, there were up to 7,000 such enterprises.
A corporation is a union of various enterprises that carry out joint activities according to their interests and specialization. It is important for the company to find bona fide business partners who would be mutually beneficial. For example, attracting foreign investors, increasing profits, carrying out any kind of activity. An important goal of a corporate organization is to increase competitiveness in the international market. It contributes to increased demand for products.
Characteristics of corporate organizations
Individuals owning packages of securities are united 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. Management and control of the 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 coherent and structured system.
In the world, corporate unions are divided into three main types:
- Public. Such associations are open. Their main goal is to attract foreign investors and increase capital.
- Integrated is a union of industrial enterprises. They conclude an agreement between themselves, according to which the parent company manages the corporate organization.
- Affiliate is a collaboration of several companies.
In the United States, there are several more species:
- Organizations that are directly related to the business.
- Non-profit ones 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.
The structure of the corporate organization, features are not difficult to understand. This union has a number of characteristics:
- Firstly, a joint-stock company implies ownership of securities, property.
- Secondly, all management is carried out by managers who are members of the board of directors.
- Thirdly, 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 orientation in further work.
Principles of Corporate Organization
All monetary relations of the corporation must be subject to certain rules and regulations. There are several principles that help coordinate financial relationships.
- 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 development strategy for the enterprise, as well as increase the demand for products and services in the market.
- Self-financing. The company controls its revenues and expenses. The main goal is to increase profits and expand their capital, attract investors. The organization fully coordinates 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 necessary in case of crisis or other unforeseen circumstances.
The management of the corporation is the Board of Directors. Their main task is to develop a strategy to increase income and assets. In addition, they are required to monitor 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 the committees:
- On remuneration.
- According to the audit.
These formations consist of qualified specialists who improve the performance of the entire corporate organization. The CEO is a representative of this association. His responsibilities include monitoring the work of the Board of Directors and committees, solving some problems and issues.
In the management and control of the association there are also norms that must be followed:
- The board of directors is obliged to make and weigh all decisions, taking into account the verified information on the work of the joint-stock company.
- Management should take into account the needs of all members of the organization.
- Above all, it is necessary to put interests that guarantee further progress in the activities of the corporation.
- Protecting the rights of shareholders and receiving dividends from them.
By the end of last year, the famous Forbes magazine about rich people presented the world with a list of the most influential and expensive organizations at the beginning of 2019
- The first place is taken by Apple. The corporation produces mobile equipment, computers, tablets, laptops, televisions, watches, and headphones. Its products are considered very high quality and expensive in the world. Apple was created in 1976 by Steve Jobs. In 2018, the company earned $ 183 billion.
- The 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.
- One cannot but mention the Walmart Internet Association. The founder of the company is Sam Walton. It was created in early 1962. The organization is engaged in the wholesale and retail sale of various products. Its profit is approximately 125 billion.
- In fourth place is Microsoft. 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 operate to this day. In 2018, her income amounted to 110 billion dollars.
- In fifth place is Amazon. The organization is engaged in retail trade, as well as the supply of products through its site on the Internet. The corporation was born in 1994 thanks to Jeff Bezoson. Amazon’s total capital totaled $ 71 billion.
Today in Russia there are also several prestigious corporate organizations. 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 significant corporation in the Russian Federation. The organization specializes in the production of pure oil and natural gas. Profit varies up to 6 trillion rubles.
- Joint Stock Company "Surgutneftegas" was founded in 1977. The company takes 496 place in the list of top 500 Fortune Global.
- Lukoil is the second corporate organization in Russia after Gazprom in terms of revenue. The main direction of the company is oil.
Establishment of a corporation
Formation of a corporate organization is a consistent and difficult process. The corporation is a legal entity that is able to create its own bank accounts, be the owner of property, set taxes. There are several steps that must be considered when creating such a union:
- First of all, you should choose a name for the future organization. It should be loud and memorable. You can use the following notations in it: Corp., Inc. etc. 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 the governing bodies of the corporation, namely the Board of Directors. They will carry out the selection of employees, monitor all the work of the company, look for new shareholders and investors, deal with financial issues.
- After that, you should acquire all the necessary licenses and permits that allow the formation and work 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 should be paid when applying for registration of the organization.
- Then it is necessary to draw up rules by which all the work of the company will proceed.
- After that, it is worthwhile to convene the Board of Directors and solve 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 the two. What does it consist of:
- Holding is a combination of companies into a single system. Small firms transfer all their shares to the parent. The parent company exercises control and management over subsidiaries. In addition, she creates general rules and norms for all structures, solves the problems and issues of her ward firms.
- A corporation is a union of auctioneers. Commercial companies unite in order to carry out activities in one direction. A board of directors is being created, which oversees the entire organization. Each company in the union has legal status and independence.
The main difference is that the holding has a main company that manages the entire mechanism. Members of the corporation can independently manage their finances, as well as carry out activities.