Contemporary Managerial Issues in Accounts and Finance - Literature review Example

Political theorists like Veblen argued that the separation of corporate ownership from control generates a transfer of power from a minority of stockholders to a group of decisive owners who have the control over the way of access to credit and finance (Roe, 1994, p. 5).However, contemporary analysts of corporate power contested that dominance and ownership in modern corporations have shifted to a property-less group of managers. Consequently, this current shift of power and control in large modern corporations could usher in ultimate preoccupation over profit rather than non-financial motives.

Furthermore, the separation of power and ownership will lead to the destruction of the traditional legal theory of property which ensures unison of the different responsibilities in large corporations. Profit then will be duly affected and will be disoriented since the division of critical functions within a corporate organization will be carved up between the managers and the stockholders. However, there is still a need for sufficient justifications on the managerial control of profits since corporate enterprises nowadays are following dissimilar trends in administering authority and control over extremely important matters, such as credit and finance.

Nonetheless, the separation of power and ownership in modern corporations becomes a dilemma when the management takes advantage of its vital functions to act in its own interests which are commonly in contradiction with those of the stockholders. In large corporations, stockholders’ control and influence over the management weakens because of vast stocks that are widely held (ibid, p. 7).The management is oftentimes regarded as the agents of the owners. Stockholders are risking the possibilities of the takeover of control by the managers in a corporation for the purpose of hopefully reinforcing their best interests through effective decision making of the managerial organization.