The Big Engine That Couldn't; The Endangered Public Company  

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Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Economist (http://search.proquest.com/) vol. 403 no. 8785 (May 2012), page 27-29.
Topik: Trends; Public Companies; Banking Industry; Entrepreneurs; Initial Public Offerings; International

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.71 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Public companies have been the locomotives of capitalism since they were invented in the mid-19th century. They have installed themselves at the heart of the world's largest economy, the United States. In the 1990s they looked as if they would spread round the world, shunting aside older forms of corporate organisation such as partnerships, and newer rivals such as state-owned enterprises (SOE). Public companies triumphed 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.But during the past decade, the title of a 1989 essay, "Eclipse of the Public Corporation", by Michael Jensen of Harvard Business School, has turned out to be prescient. And the rise of the Asian economies, with their legions of family-owned conglomerates, challenged the idea that they are best equipped to advance capitalism's geographical frontier. So, even though public companies are flush with cash (American firms are sitting on $2.23 trillion, see Free Exchange) and even though the world's most talked-about entrepreneur, Facebook's Mark Zuckerberg, is due to take his company public on May 18th, the signs of health are misleading. Public companies are in danger of becoming like a fading London club. Their membership is falling. Public companies have shown an extraordinary resilience. They have survived the Depression, the fashion for nationalisation, and the buy-out revolution of the 1980s. But the challenge to them looks unusually strong at the moment, and the auguries for the future grim.

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