Making corporations more human again
A corporation is the most common form of business. It is a group of people, but it is an entity separate from these people. It has the same rights and responsibilities as an individual, but it is different from the individual owners. The owners derive profits from the corporation, but they are not liable for the debts of the corporation. Tricky? “Limited liability” is the best corporate invention, aside from compound interest.
400-year history
The first corporation, the British East India Company was born in 1600. Between that time and the post-subprime world of 2011, the corporation “was born, matured, over-extended, reined-in, refined, patched, updated, over-extended again.” Soon, it might be obsolete as it declines gracefully into a possibly well-behaved early retirement.
The corporation has achieved so much. Through the corporation (EIC), Britain ruled India. The corporations made possible the circumnavigation of the world in hours, cure to deadly diseases, global warming, climate change, and access to weapons that could possibly annihilate the whole human race. After the EIC’s birth in 1600, history witnessed the apogee of corporate power (the East India Bubble in 1782), the start of the Industrial Age in early 1800s, the corporate Renaissance (American Gilded Age in 1870s to 1910s), and the apogee of Reach or maximum employment in the 1980s. By the 1990s, the corporation’s terminal decline started.
In 1780 in America, only 20% of the population had corporate paychecks. By 1980, roughly 80% of Americans were employed by corporations. A decade later, the advent of Free Agency (individual and small contractors) started to change the employment picture. The rest of the world slowly followed.
Angus Maddison, in his “The World Economy”, noticed that through the corporation, Britain and the Western Europe “stole” China’s and India’s gross domestic product (GDP). In the 1600s, China had 29% of the world economy, while India had 23%, Western Europe 20% and Britain 1.8%. Using the corporation as vehicle, Britain increased its share of global GDP to 9.1%, Western Europe to 33.61%, while China reduced its share to 17.23% and India to 12.25%.
Maddison disclosed that between 1350 and 1950, “GDP per capita remained roughly constant in India ($550) and China ($600), while Western European GDP per capita went from $662 to $4,594, a 594 percent increase.”
Business and technology
Maddison continues, “The human world, like physics, can be reduced to four fundamental forces: culture, politics, war and business.”
Technology gave the corporation unprecedented power. Just look at the monstrosity of corporations like Facebook, Google, Uber, Apple or Microsoft. Maddison said of technology, “Culture is suspicious of technology. Politics is mostly indifferent to and above it. War-making uses it, but maintains an arms-length separation. Business? It gets into bed with it. It is sort of vaguely plausible that you could switch artists, politicians and generals around with their peers from another age and still expect them to function. There is no meaningful way for a businessman from (say) 2000 BC to comprehend what Mark Zuckerberg does, let alone take over for him.”
Some think that a corporation is a technology of people management because of the trappings of psychology (human behavior), engineering (organizational design), and other sciences. To some, a corporation is a product of a social contract, a nifty compendium of quasi-religious beliefs that have taken an animate form, with self-preservation as its motivation.
PMAP @60
PMAP (People Management Association of the Philippines) is the premier organization of human resources in the Philippines. Sixty years ago, a handful of personnel practitioners, led by founding President Perfecto Sison, formed the Personnel Management Association of the Philippines. As we write, there are six surviving founders, namely: Vicente C. Abella, Reynaldo G. Alejandro, Marinella K. Fabella, Orlando P. Peña, Lilia Q. Ramos, and Aladdin F. Trinidad.
On October 19-21, PMAP President Jesse Francis Rebustillo will lead the holding of the 53rd PMAP annual conference to discuss current and emerging HR issues. The main event is David Ulrich, America’s foremost HR guru. Ulrich has practicallyset the HR agenda for the 1990s, and enabled HR professionals to become strategic partners in their organizations. In June 2005, Ulrich and Wayne Brockbank published “The HR Value Proposition” and charted “the path HR professionals must take to help lead their organizations into the future.”
The PMAP’s 53rd annual conference boasts of an unparalleled roster of speakers led by Ulrich, a dynamic learning design, showcase of best practices, and great opportunities for networking. The conference has five tracks: HR innovation, HR velocity, HR endurance, HR execution and HR excellence.
Thanks to PMAP, its founding fathers, and its officers for the recognition of HR as the function charged with the human side of the enterprise.
(Ernie is the 2013 Executive Director and 1999 President of the People Management Association of the Philippines (PMAP); Chair of the AMCHAM Human Capital Committee; and Co-Chair of ECOP’s TWG on Labor and Social Policy Issues. He is President and CEO of EC Business Solutions and Career Center. Contact him at [email protected])
