How have Berle and Means' idea of the separation of ownership and control affected ideas about the governance of UK and US companies?
Introduction
Declared in 1932 under the Business History Review, Vol. 83, No. 3, Gardiner Means and Adolf Berle asserted that ownership control and separation was a stepping stone, and that affected corporations’ performance in the United States, based on their characterization (Marks, 1999).
Application of separation
According to Means and Berle, ownership and control separation involves cases whereby the publicly owned businesses and corporations do not give the shareholders much power within the corporations, particularly, in decision making for the corporation (Jeffers, 2010). They, therefore, have minimal control over the corporations. This thesis paper will, therefore, seek to understand how the strategy has been implemented in organizations.
Adoption of the separation in the UK and US companies today
The twenty first century has been characterized and mauled by lots of economic changes and instability, as a result of the inconsistency in the world’s strong currencies in the world market. At the same time, there have been changes in the corporation and organizational setting, especially, bearing in mind the fact that various stakeholders and corporation shareholders have been advocating for more rights, especially in influencing corporation decision making. Has separation of corporations’ ownership and control in any way affected the operations and organization of the UK and US companies? This is due to the fact that the US and UK corporations have been advocating for corporation owners to have equal rights and powers as the stakeholders, as long as there is an equity in the shares that each of the parties hold in the corporation (Cheffins & Banks, 2009).
References
Cheffins, B. & Banks, S. 2009. “Is Berle and Means Really a Myth?.” Social Science Research Network. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1491702 on May 8th 2013.
Jeffers, T. 2010. Separation of ownership and control. New York: McGraw-Hill.
Marks, S., G. 1999. Separation of ownership and control. Boston: Boston University Press. Retrieved from http://encyclo.findlaw.com/5630book.pdf on May 8th 2013.
