Essay about Corporate Issues Of Public Companies

1234 Words Oct 29th, 2015 null Page
Public companies do have a difficult time, assaulted by scandals, tangled up by regulations and confronted by alternative corporate forms. They have been the locomotive of capitalism since they were invented in the mid 19th century. In the 1990s public companies looked as if they would spread world-wide, avoiding older forms of corporate organization such as partnerships, and newer rivals such as state-owned enterprises. Goldman Sachs went public as the decade came to an end. Public companies were successful because they provided three things that make for durable success, limited liability, which encourages the public to invest, professional management, which boosts productivity, and corporate personhood, which means businesses can survive the removal of a founder. American companies reached an all-time high of 7,888 in 1997 and even now American companies are as profitable as they have been for 60 years. In 2001 and 2002 some of America’s most prominent public companies imploded. Some of these companies were Enron, Tyco, WorldCom and Global Crossing. Six years later Lehman Brothers collapsed and Citigroup and General Motors turned to the government for rescue. SOEs were growing in emerging markets, challenging the idea that public companies are the biggest fish in the sea. In the West private equity firms flourished, also challenging the idea that public companies are the best managed. Asian economies, with their legions of family owned conglomerates, challenged the idea…

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