Legitimacy of Corporate Functions

Legitimacy of Corporate Functions

Legitimacy of Corporate Functions

The analysis of the functional problems and functional subsystems of society offers a framework for analyzing and classifying the functions of the corporation, but it does not offer a basis for asserting which functions the company ought to perform. Simply because the company presently performs a particular function does not mean that it should be doing so. What is needed is a method of determining which functions the company legitimately should perform. This is basically an ethical question. Mitt Romney has pointed out that in "the pursuit of its everyday 'private business,' and in performing its economic job, big business is expected to further human values, and to serve national purpose."2 The question of the legitimacy of corporate functions concerns which of all the organizational functions which further human values and serve the national purpose should be performed by the corporation.

The general concept of "legitimacy" deals with the rightness of the actions and activities of individuals, groups, and organizations. "The test of 'rightness' may be rather conscious, articulated, logically structured norms (such as a theory of the appropriate role of judicial review in a democratic order). Or the test may be the less conscious, more incoherent norms with less logical structure and abstract theory, the 'feeling' of what is right and wrong in a given instance."3 Thus the ultimate sources of legitimacy are our social attitudes, beliefs, and values. For something to be legitimate, it must be considered compatible with, and a manifestation of, the UK value system. to determine the legitimacy of corporate functions, therefore, it is necessary to understand the UK value system and how the functioning of the company is related to it.

Values are the criteria by which individuals choose goals. They concern the things in which people are interested-things they want, desire to become, feel as obligatory, worship, and enjoy. Robin Williams defines values as "modes of organizing conduct-meaningful, affectively invested pattern principles that guide human actions,114 Social values are values which are shared by a majority of the members of society and considered by them to be matters of collective welfare for the entire social system.

There are two main categories of social value in UK life: (1) an idealistic set of values based on ideas about the relations which should exist between individuals and between the individual and the state and (2) a materialistic set of values which emphasizes work, practicality, achievement, and the comforts of life. These two types of values show up in every attempt to analyze the UK value system. For example, Williams lists the following values as dominant in UK society: achievement, success, activity, work, a moral orientation, humanitarianism, efficiency, practicality, progress, material comfort, equality, freedom, science, democracy, and individual personality.

Clearly the function of producing goods and services is an important activity in a society which has such a strong materialistic element in its value system. This is the source of the legitimacy of the primary economic function of the corporation.

The source of legitimacy of the secondary noneconomic corporate functions is not so obvious. to get at this relationship it is necessary to consider the collectivization of political, economic, and social life which has been referred to earlier as the "organizational revolution."


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