Types of company structure

The joint-stock company – looks surprisingly durable. But pressure on it is increasing.
The future seems to hold almost every possible fate for the corporation except one: being bland and boring. It was argued that America was run by a handful of big companies planned the economy in the name of stability. They were hierarchical and bureaucratic organizations that introduced “new and improved” varieties with predictable regularity; they provided their workers with life-time employment; and they enjoyed fairly good relations with the giant trade unions.
America’s giant companies have been failed or transformed by global competition. Dramatic changes are taking place. But where exactly will they take us? Where is the modern company heading? There are three standard answers to this question.
1. The first – particularly popular in anti-globalisation circles. The past couple of decades have seen an unprecedented spurt of mergers. The survivors, it is maintained, are the real lords of the universe today: far more powerful than mere nation states.
2. The second school of thought argues almost the opposite of the first: it says that big companies are a thing of the past. For incense, Monorail Corporation, which sells computer. Monorail owns no factories, warehouses or any other tangible asset. It operates from a single floor that it leases in an office building in Atlanta. Its computers are designed by freelance workers. To place orders, customers call a free-phone number connected to Federal Express’s logistics service. FedEx then ships the computer to the customer and sends the invoice Monorail’s agent. The company is not much of anything except a good idea, a handful of people in Atlanta, and a bunch of contracts.
3. The third forecast is an offshoot of the second: that the discrete company is no longer the basic building block of the modern economy. This school argues that it is being replaced by the

“network”. Networks are seen not just as an answer to external competition, but also as a way of giving more freedom to today’s prized “knowledge workers”
None of the three main proposals for the future of the company looks definitive. Another way to look at the future of the company is to focus less on structure than on the environment that will determine it. That environment is dominated by one thing: choice. Technology and globalisation open up ever more opportunities for individuals and firms to collect information and conduct economic activity outside traditional structures. Consumers have more choice over where they spend their money. Producers have more choice over which suppliers to use. Potential shareholders have more choice over where to put their money. With all that choices around, future companies have to be very flexible or have to quickly adapt to changing environment if they are up to survive.



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Types of company structure