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Industrial & Organisational : Introduction : Personnel : Organizational psychology : Occupations: Work environment: Index : Outline

Corporate Behavior (or corporate behavior) is the behavior of a corporation or corporations (or company or companies). The corporate behaviour of for-profit (capitalist) corporations and not-for-profit (non-capitalist) corporations differ due to the fundamental drive for profit in for-profit corporations, compared to the non-monetary goals often held by not-for-profit corporations.

The Characteristics of for-profit (Capitalist) Corporate Behaviour Edit

Corporate behaviour of for-profit corporations has characteristics. These characteristics are unlikely to remain fixed for various reasons, but key characteristics are discernable from the history of for-profit corporations. Some of the key characteristics may not apply to individual for-profit corporations at a point in time and space, though some key characteristics are probably present at all times. The best example is the drive for profit. The strength or importance of a key characteristic will also vary in time and space for many reasons. For instance a for-profit corporation may be able to grow at a faster rate if it has subsidiaries in other countries.

Reasons are numerous as to why key characteristics are absent or vary in strength or importance. Some reasons could be as follows:

  • Economic decline
  • Poor performance
  • Size of for-profit corporation
  • Management decisions
  • Type of for-profit corporation
  • Competition

Certain individuals and groups have proposed and described the characteristics of corporate behaviour. Read: [1] & [2]. These attempts, whilst a useful contribution, are not objective and should be read with this in mind.

Key characteristics of for-profit Corporate BehaviourEdit

The key characteristics of corporate behaviour are as follows:

Note: This section is under development.

  • Profit: Profitability is the ultimate driver of corporate decisions. Corporations prefer higher profits to lower profits, at least in the long-run. Profitability is not necessarily the same as community well-being, though a profitable company is more likely to, for example, employ more people than an unprofitable company. Conflicts can exist, however, between what's good for a corporation and what's good for the environment, for example, or its employees or even the good of the state. A corporation is a complex organism and there has been much debate about what drives it. There is an argument that the divorce of ownership from decision-taking means that profitability isn't the main drive - senior managers may have other imperatives like keeping their jobs and avoiding being taken-over (which might run counter to the interests of share-holders). Corporations often like to grow, if only because they fear a bigger competitor having cost advantages. This is not always true, however: there have been cases where corporations have been broken up into constituent parts.
  • Amorality: Not being human, corporations as such do not have morals or altruistic goals. Neither, though, does any other organisation. Corporations are, though, run by people who are subject to law and rules of morality.
  • Hierarchy: Corporations are usually hierarchical, though the structure of the hierarchy varies. Some are relatively flat with a wide layer of middle managers answerable to a few individuals while others are like a pyramid. A very few corporations have a great degree of democracy to them. Ricardo Semmler owns corporations in Brazil but allows all his staff to pick managers and decide strategy. He puts himself up for election as a chief executive.

The "Profit Frame" for OrganizationsEdit

The mandate of a for-profit organization is to maximize profits. Behind every organization's products, processes and strategies are its people. It is ultimately the people that determines the level of creativity, innovation, energy, focus and commitment that drives profits and profitability. However, even hiring the best individuals does not assure success. People join companies but leave because of bosses and colleagues--the people factor. The secret to organizational success lies in evolving the people factor which eventually cultivates the profits.

According to James Leong Chan Foo, creator of the "Profit Frame" for organizations, understanding the psychology that drives group dynamics coupled with a "Profit Frame" mindset empower people to make the most rational, team-aligned and financially sound decisions which contribute to profitability. The psychology element multiplied by the "Profit Frame" mindset would unleash previously latent energy and creativity which could exponentially transform human capital into potential profits.

Characteristics of organizations with a "Profit Frame" concides with the Directive Communication Psychology five pillars of transformational groups, Plus the additional "Financial intelligence":

  • Greater purpose
  • Unified identity
  • A methodology that can make a difference
  • Common language
  • Mutually supportive environment
  • Financial intelligence

The Characteristics of not-for-profit (non-Capitalist) Corporate Behaviour Edit

As non-capitalist corporations such as NGO's or charities are not driven by the fundamentals of profit and economic growth, these do not show many of the characteristics of capitalist corporations. The behaviour of non-capitalist corporations is however often influenced by these characteristics of capitalist corporations, in similar ways to the influence of corporate behaviour on individuals. Due to this influence non-capitalist corporations can sometimes be seen to exhibit the characteristics of hierarchy, competition and ephemerality.

The Influence of Corporate Behaviour on Individuals & Society Edit

Due to the dominance of capitalist corporations in Western societies the behaviour of corporations can be seen to have significant impacts on individuals and society. A person or group of people can have links to a corporation or corporations that range from weak to strong, if a person or group of people exhibit corporate behaviour that does not mean the person or group of people is employed by a corporation or corporations. A person or group of people may show corporate behaviour for different lengths of time, for some people they exhibit this behaviour at their place of work; for others it is exhibited at work, home and outside the home. Many people display corporate behaviour but do not agree with actions and outcomes that result from it.

The fact that individuals may not agree with the outcomes of corporate behaviour is central to the concept in itself, the characteristics of capitalist corporations do not reflect the characteristics of any individual or group of individuals but are the characteristics required for the survival of capitalist corporations due to the nature of the system within which corporations operate.


Main article: Ethics

Under the law, corporations are treated in many ways as persons in order that corporations can conduct business as if the corporation were a person. Since corporations are not actual people, corporations do not have ethics as such. The people within the corporation provide the ethical framework for a corporation. The ethics of a corporation is the combined ethics of the people working in the corporation always keeping in mind that power differences among people means that some people and their ethical framework, influence the behavior of the corporation more than others.

The people within the corporation operate from two major ethical dimensions, the personal dimension which involves a particular individual's ethical framework guiding their behavior and the organizational dimension which involves not only the official ethical policies of the corporation but also the organizational culture which influences the behavior of the people within the corporation. The official ethical policies of a corporation would be congruent with the organizational culture in an ideal world but in reality there can be startling differences between the official ethics and the ethics as provided by the organizational culture. Large corporations, especially corporations that span several industries or markets or have offices in multiple locations operating in different geographical regions may have divisions or subgroups that will have significantly different cultures from each other.

Because of the large influence of organizational culture on the behavior of people within a corporation, many ethical lapses within corporations happen not from planning but more from step by step down a slippery slope with small incremental decisions that combine into a total mess. While there are obviously people with little or no discernable ethics, most people are reasonably law abiding, reasonably spiritually healthy, and have a reasonable ethical framework. However, the people who occupy positions of power within corporations are in those positions because their behavior and beliefs are close to those of other people of power. This leads to a kind of groupthink within the corporate management. People in power have a habit of either ignoring or dealing harshly with whistleblowers or troublemakers. For individual people to object to a decision or to actually refuse to carry out an action is an act of insubordination and courage that is difficult for most especially when there is not a crisis and where the action lies in the gray area of not really wrong and not really right.

See also Edit

References Edit

Mander J (1991). In the Absence of the Sacred: The Failure of Technology and the Survival of the Indian Nations. Sierra Club Books, San Francisco.

Milchen J (2002). Inherent Rules of Corporate Behavior: A Primer., Bozeman, Montana, USA.

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