BUSINESS ORGANIZATION

an entity formed for the purpose of carrying on commercial enterprise. Such an organization is predicated on systems of law governing contract and exchange, property rights, and incorporation. Business enterprises customarily take one of three forms: individual proprietorships, partnerships, or limited-liability companies (or corporations). In the first form, a single person holds the entire operation as his personal property, usually managing it on a day-to-day basis. Most businesses are of this type. The second form, the partnership, may have from two to 50 or more members, as in the case of large law and accounting firms, brokerage houses, and advertising agencies. This form of business is owned by the partners themselves; they may receive varying shares of the profits depending on their investment or contribution. Whenever a member leaves or a new member is added, the firm must be reconstituted as a new partnership. The third form, the limited-liability company, or corporation, denotes incorporated groups of personsthat is, a number of persons considered as a legal entity (or fictive person) with property, powers, and liabilities separate from those of its members. This type of company is also legally separate from the individuals who work for it, whether they be shareholders or employees or both; it can enter into legal relations with them, make contracts with them, and sue and be sued by them. Most large industrial and commercial organizations are limited-liability companies. This article deals primarily with the large private business organizations made up chiefly of partnerships and limited-liability companiescalled collectively business associations. Some of the principles of operation included here also apply to large individually owned companies and to public enterprises. Additional reading General John P. Davis, Corporations: A Study of the Origin and Development of Great Business Combinations and Their Relation to the Authority of the State, 2 vol. (1905, reprinted 1971), remains the definitive historical account of the corporate form in the medieval and mercantile periods. U.S. corporations Louis M. Hacker, American Capitalism, Its Promise and Accomplishment (1957, reprinted 1979), traces the rise of corporations in the United States in the 19th century. The divorce of ownership and management is analyzed in Adolph A. Berle and Gardiner C. Means, The Modern Corporation and Private Property, rev. ed. (1968); and the implications of this development are treated in John Kenneth Galbraith, The New Industrial State, 3rd ed. rev. (1978). Analysis of the competitive powers of the free market is continued in Nicholas Wolfson, The Modern Corporation: Free Markets Versus Regulation (1984). Wilbert E. Moore, The Conduct of the Corporation (1962, reprinted 1975), focuses on internal operations; while Richard J. Barber, The American Corporation: Its Power, Its Money, Its Politics (1970), concentrates on external aspects. Osborn Elliott, Men at the Top (1959), examines the backgrounds and behaviour of company executives. Joseph Livingston, The American Stockholder, new rev. ed. (1963), evaluates the individuals and institutions that own corporate shares. Milton Friedman, Capitalism and Freedom (1962, reprinted 1982), is a plea for noninterference by public agencies; while Estes Kefauver, In a Few Hands: Monopoly Power in America (1965), supports further regulation and antitrust action by government. Edward S. Mason (ed.), The Corporation in Modern Society (1960, reprinted 1980); and Andrew Hacker (ed.), The Corporation Take-Over (1964, reprinted 1970), contain theoretical analyses and research findings. Managerial styles of the modern corporation are examined in Bruce Henderson, The Logic of Business Strategy (1984); A.L. Minkes and C.S. Nuttall, Business Behavior and Management Structure (1985); Johannes M. Pennings (ed.), Organizational Strategy and Change (1985); and Edgar H. Schein, Organizational Culture and Leadership (1985). European limited-liability companies The growth of corporations in Europe is discussed in Michael M. Postan, An Economic History of Western Europe, 19451964 (1967). Ephraim Lipson, The Economic History of England, vol. 1, 12th ed., and vol. 23, 6th ed. (196064), provides a full exposition of joint-stock companies and chartered companies. See also P. Sargant Florence, Ownership, Control and Success of Large Companies: An Analysis of English Industrial Structure and Policy, 19361951 (1961); and John Sheahan, Promotion and Control of Industry in Postwar France (1963). Japanese companies For the historical development of the Japanese economy, see William W. Lockwood, The Economic Development of Japan, expanded ed. (1968, reprinted 1970); and Henry Rosovsky, Capital Formation in Japan, 18681940 (1961), which cover the period from the Meiji Restoration to World War II; and Ryutaro Komiya (ed.), Postwar Economic Growth in Japan (1966; originally published in Japanese, 1963), for the postwar period. For a statistical analysis of Japan's economic growth since the 1860s, Lawrence Klein and Kazushi Ohkawa (eds.), Economic Growth: The Japanese Experience Since the Meiji Era (1968), is useful. The characteristics of entrepreneurs in the early Meiji period, when modern capitalism rose in Japan, are given in Johannes Hirshmeier, The Origins of Entrepreneurship in Meiji Japan (1964). Kazuo Noda, The Postwar Japanese Executive, in Ryutaro Komiya (ed.), op. cit., explains the role of business executives in the post-World War II period. Some aspects of Japanese industrial labour are described in Ezra F. Vogel, Japan's New Middle Class, 2nd ed. (1971); and in a comparative study by Arthur M. Whitehill, Jr., and Shin-Ichi Takezawa, The Other Worker: A Comparative Study of Industrial Relations in the United States and Japan (1968). Regarding the Japanese industrial structure, Joe S. Bain, International Differences in Industrial Structure: Eight Nations in the 1950's (1966, reprinted 1980), is recommended, though rather outdated now. Japan's bureaucratic establishment is described in Marshall E. Dimock, The Japanese Technocracy (1968). For a view of Japan's management system, see Michael Y. Yoshino, Japan's Managerial System (1968, reprinted 1971); Thomas F.M. Adams and Noritake Kobayashi, The World of Japanese Business (1969); and Robert J. Ballon (ed.), Doing Business in Japan, 2nd ed. rev. (1968). In addition, James C. Abegglen, The Japanese Factory (1958, reprinted 1979); and Solomon B. Levine, Industrial Relations in Postwar Japan (1958), are considered semiclassics in the management field. See also James C. Abegglen, The Strategy of Japanese Business (1984). Cooperatives International Labour Office, Co-operative Management and Administration (1960, reprinted with rev. bibliog., 1978), is a comprehensive introduction and guide. Robert Oakeshott, The Case for Workers' Co-ops (1978), discusses the principles and reviews the experience; while Jaroslav Vanek (ed.), Self-Management: Economic Liberation of Man (1975), provides a collection of readings. Multinational development Growth of multinationals and the political implications of the phenomenon are reviewed in Christopher Tugendhat, The Multinationals (1971, reissued 1984); Ian M. Clarke, The Spatial Organization of Multinational Corporations (1985); and Thomas A. Poynter, Multinational Enterprises and Government Intervention (1984). Business law L.C.B. Gower, Gower's Principles of Modern Company Law, 4th ed. (1979); Robert R. Pennington, Company Law, 4th ed. (1979); and Robert R. Pennington and Frank Wooldridge, Company Law in the European Communities, 3rd ed. (1982), are textbooks written primarily for students but may also be used by practitioners. Robert R. Pennington, The Investor and the Law (1968), is primarily a comparative study of the laws of the United States and the western European countries on investment law, with consideration given to questions relevant to business associations. M.A. Weinberg, M.V. Blank, and A.L. Greystoke, Weinberg and Blank on Take-Overs and Mergers, 4th ed. (1979), is a practitioner's textbook on English law. Two works intended for the general reader are A. Rubner, The Ensnared Shareholder (1965); and G. Goyder, The Responsible Company (1961). Henry Winthrop Ballantine, Ballantine on Corporations, rev. ed. (1946); George D. Hornstein, Corporation Law and Practice (1959); and Richard W. Jennings and Richard M. Buxbaum, Corporations, Cases and Materials, 5th ed. (1979), are standard student textbooks. Edward Ross Aranow and Herbert A. Einhorn, Proxy Contests for Corporate Control, 2nd ed. (1968); and Edward Ross Aranow, Herbert A. Einhorn, and George Berlstein, Developments in Tender Offers for Corporate Control (1977), are detailed practitioner's books that the experienced reader will find interesting. Wolfgang G. Friedmann and Richard C. Pugh (eds.), Legal Aspects of Foreign Investment (1959); Robert R. Pennington, Companies in the Common Market, 2nd ed. (1970); and Edgar M. Church, Business Associations Under French Law (1960), are suitable works for the reader who has no knowledge of the company law of overseas countries. G. Ripert and R. Roblot (eds.), Trait lmentaire de droit commercial, 11th ed., vol. 1 (1983); A. Hueck, Gesellschaftsrecht, 17th ed. (1975); and Alessandro Graziani, Diritto delle societ, 5th ed. (1963), are standard students' textbooks on French, German, and Italian company law. S. Nicholas Woodward The Editors of the Encyclopdia Britannica