Of late words like corporatism, corporate responsibility, etc are being talked about in different forums of the civil society wherein specialists, business leaders and academicians are participating. In most cases, the dominant tone of these deliberations is one of expectation coupled with impatience. The expectation is that the existing business houses should go corporate as soon as possible and that they should also practise corporate social responsibility in their day-today functions.
Dominance of our business by such individuals as are only proprietors or partners, as opposed to a board of directors, is certainly a mark of
backwardness of not only of the business but also of other spheres of life such as politics, culture and, you name it. Look at our politics. Is it not also a very deciding area of life, which is being dominated by families and individuals, (again, not the kind of individualistic individuals in the Western sense, who, if they choose their career in politics they do it as a profession and earn their distinctions the hard way, that is, on their own, by dint of their hard labour and merit, and not by inheritance or by jumping the queue aided by sheer force of terror or black money as is our case) who should not have belonged to where they now do so? Our politicians, many intellectuals as well as members of the civil society keep mum when it comes to the issue of the prevalence of family and continuation and prolongation of this institution in all the important areas of society. And what student of politics, economics or sociology does not know that business, economics and politics are part of the same integrated whole society, and that the parts that make society can nowhere develop separately? That, in other words, means politics cannot afford to remain in the pre-industrial feudal state while the business skips its necessary historical phase and is catapulted into the future epoch of advanced industrialism.
As our financial, trading and industrial houses are yet to incorporate the practice of corporate business culture in their system of operation, one who is impatient about seeing the instant growth of corporatism in the local business may be piqued at such lack of development. Accepting the fact that our business houses, both big and small or the people who run them, lack corporate culture or the mindset that should go with it, should one be greatly surprised at that? How can they have the necessary mindset when the precondition for the growth of such state of mind is absent in society in the first place? What is then a corporate culture that we must have and are so forlorn now that we do not have it at the moment? Let us see what the dictionary says about the word that we have been so fussing over.
The Oxford Advanced Learner's Dictionary of Current English(Sixth edition) has the following against the main entry word, 'Corporate' connected with a corporation. The related phrase 'corporate identity,' on the other hand, has been explained thus:--'the image of a company, that all its members share.' The word 'corporation' (abbr. corp.) has been elucidated in the following way, (1) A large business Company, (2) An organisation or a group of organisations that is recognised by law as a single unit, (3) A group of people elected to govern a large town or city and provide public services.
Now do we have any corporation in the real sense of the term, that is, as defined in the Oxford Dictionary, as 'a large business company?' How large should a business have to be before it may grow its corporate characteristics? Let us see how the phenomenon called corporation came into being in one of the most advanced industrialised societies on earth.
"Even as late as the American Revolution, according to business historian Arthur Dewing, " no one could have concluded," that the corporation---rather than the partnership or individual proprietorship---would become the main organisational form. As recently as 1800 there were only 335 corporations in the United States, most of them devoted to such quasi-public activities as building canals or running turnpikes." ---Alvin Toffler (Third Wave) Business historian Arthur Dewing as quoted by Alvin Toffler is referring here to that kind of corporation as is defined by way of the third sense of the word 'corporation' as 'a group of people elected to govern a large town or city and provide public services'. So that is still not a full-blown corporate business structure as dominates trade and industry not only in the USA but in all other advanced industrialised countries of the world.
But when did that actually happen that all business and industry begun to be dictated by this new concept? Let us again go to the prophet of futurism Alvin Toffler who narrates in the same place how the first real corporate house, worthy of its name grew up in USA?
"By 1901 the world's first billion-dollar corporationUnited States Steel--- appeared on the scene, a concentration of assets unimaginable in any earlier period. By 1919 there were half a dozen such behemoths. Indeed, large corporations became an in-built feature of economic life in all the industrial nations, including socialist and communist societies, where the forms varied but the substance (in terms of organisation) remained very much the same." (ibid) So how did all that happen? Very large quantities of capital will have first to be accumulated in the same industry or business before the necessary mechanism for its operation, the corporate modus operandi, may be brought to bear on an economic enterprise. Did the corporate way of running trade and industry come as a matter of mental choice on the part of those who introduced in the first place? Far from that. It was not a matter of free choice that one fine morning the businessmen of America or Europe thought that they might well go corporate from then on. On the contrary, it was economic necessity of the time that forced them to make the choice, not the other way around.
They could not operate such billion-dollar industrial giants in the old way of private ownership or partnership even if they willed so. Mindset of a people, if at all it has any role to play in making such historical choices, was never a causal force behind such choice. In fact the particular mindset that is characteristic of the corporate culture came later when this new way of running business and industry became the order of the day and people accepted it because it was useful. For even in the USA, the home of the oldest and the biggest corporate houses in the world, the new idea was not very welcome. Even courts in America treated a corporation as an 'immortal being' as it had the uncanny quality of perpetuating itself even after the particular investor or investors had died. Gradually investors as well as other stakeholders in business and industry began to get used to this new and effective method of managing huge financial ventures.
Acceptance by society of this new norm of organising finance and business gave birth to that particular mindset in favour of corporate culture. Has our business or economy, for that matter, attained that level of development for its operators to demonstrate that particular frame of mind that comes with very large industrial houses in the advanced industrial nations? What is the size of our industry? Without going into the debate of the size of the industrial sector let us have a look at the composition of the GDP in terms of industry, service and agriculture, which is more often not tailor-made. The size of the labour force employed in the agriculture, the service and the industry can give us an idea about what our real situation is. Agriculture (63 per cent) and service (26 per cent) together still occupy 89 per cent of our entire employed labour force. The remaining 11 per cent are in the industry. Most of our business and industrial houses are owned by first generation entrepreneurs and the size of their business, too, is not very big even compared to what it was in the USA a century ago. So one would hardly be surprised if our entrepreneurs have not yet developed that particular frame of mind to go the corporate way.
What then should be done? There is no use complaining about our psychological makeup for its deficiency in a particular ingredient, that is its corporate part! What we can do at best is to accelerate the pace of growth of our business and industry by infusing more capital and resources and more amount of good and dynamic leadership. But things will not help if we quarrel with our tools as the proverbial bad workman does.