Understanding Corporate Ownership Types

Level: Undergraduate | Grade: 2.2 | Approx. Word Count: 1,300

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Overview

Following a brief review of the historical development of corporate ownership structures, this essay will examine theses within the context of UK corporations. For this purpose, two diverse ownership corporations will be used for analysis purposes. These consist of John Lewis PLC (Managerial ownership), and Marks and Spencer PLC (Shareholder ownership).

The structure that determines organisational ownership is intrinsically linked to the process of corporate governance. It is the capital ownership configuration that will have the most influence on the structure of the board, the future performance of the firm and ultimately determine where its strategic control is focused. Essentially, therefore, as argued in the literature (Mayers et al 1997; Marchica and Mura 2005), control of the business will be dependent on the trade-off between ownership type and board composition.