Week 9_MNGT 5990_FINAL PAPER_Rajaram

Week 9_MNGT 5990_FINAL PAPER_Rajaram - Rajaram 1 FINAL...

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Rajaram 1 FINAL PAPER Can the endangered public company survive? Should it? Chan Rajaram This paper is submitted in partial fulfillment of the requirements for graduation from Corporate Responsibility and Society (MNGT 5990) Webster University: George Herbert Walker School of Business & Technology Spring Term II 2016
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Rajaram 2 Can the endangered public company survive? Should it survive? Evaluate the challenges that for-profit public companies face from recurrent scandals, political attacks and alternative corporate structures such as the B-corp. Abstract A number of reports over the past several years have discussed the declining number of public companies, particularly in the U.S. However, perhaps the outlook for public companies isn’t as bleak as some might think, according to an analysis by several professors at the University of Pennsylvania’s Wharton School. Introduction According to the Economist, “PUBLIC companies have been the locomotives of capitalism since they were invented in the mid-19th century”. They have existed to be sort of the heart of the world’s largest economy, the United States. In the 90s, their spread across the world seemed imminent even at the cost of older forms of corporate organization at that time such as partnerships, and newer rivals such as state-owned enterprises (SOEs). In that period, NASDAQ was considered “the crown jewel of all that is great about America” by the Chinese president at that time. Moreover, Russia rejected the five-year plans in favor of stock market listings and Wall Street banks abandoned cozy partnerships in favor of public equity: the turn of the century even saw Goldman Sachs, the last big holdout, going public. Discussion Since their inception in the mid of the 19th century, the public sector companies have been the driving force or the locomotives of the capitalistic economy. However, the last decade and a half saw the “Eclipse of the public sector cooperation”. During the years from 2001 to 2002, the world saw many of the public domain corporations of America imploding. These companies included Global Crossing, Tyco Internationals, Enron and WorldCom. To add to the fury,
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Rajaram 3 Lehman Brothers collapsed after the six years following the collapse of Enron and WorldCom. The other giants of American corporate world, like General Motors and Citigroup were living on the mercy of American government to reach salvation. However, in 2012, Facebook went public. The social networking company Facebook held its initial public offering (IPO) on Friday, May 18, 2012. The main reason that the company decided to go public is because it crossed the threshold of 500 shareholders, according to Reuter’s financial blogger Felix Salmon. According to the Wall Street Journal, it was reported Facebook planned on using the proceeds from the IPO for working capital and general corporate purposes and there were no specific plans for the proceeds. The company also said it planned to
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  • Spring '14
  • Barton,Ch
  • Public company, public companies

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