Lindblom - The Market System - Afghan Journalists' Committee

82 How It Worksecutive team. Those in control usually own shares of stock,but often those shares are issued to them as payment orbonus for their performance, clear evidence that the ownershipfollowed rather than preceded their assumption of controlof the enterprise and was not a prerequisite to it.In today’s world the relation between formal ownershipand actual control has become even more complex. Hencethe question: Who actually exercises control over the corporation—itsexecutives or its stockholders? A variety ofanswers is possible. An answer for Germany, for example, is“not necessarily either,” for the great German banks thatsupply corporations with credit have taken, as a conditionof making loans, a strong hand in corporate management.An answer increasingly true for the United States is again“not necessarily either,” but for a different reason. Americanmanagers of huge investment funds claim a share ofcontrol of the corporations in which they invest.I make this point about the various connections and disconnectionsbetween ownership and control not to lamenteither, nor to express any regret for the powerlessness ofmost stockholders or owners. Instead, I make it to suggestthat it no longer so much matters who formally owns a corporationas how its executives operate: by what rules, forwhat objectives, subject to what incentives, with what rewards,and to whom responsible. One can imagine a society’sdesigning packages of controls, each unique to a categoryof enterprises, the society no longer to be characterizedby any terms as simpleminded, as, say “the private enterprisesystem.”There may be, however, one basic critical distinction betweentwo kinds of corporations. Some corporations haveeasy access to governmental funds that bail them out whenthey run into difficulties. Others do not. Many, perhaps