Professional Documents
Culture Documents
1.0 INTRODUCTION
In this Unit, students would be introduced to the concept of Public Corporations. This is to enable
you to know the definition, meanings, and the origin of public corporation. The comprehension of any
concept depends on the analysis, ists features, problems, and prospects.
There are three types of domestic corporations in the Philippines: 100% Filipino-owned Domestic
Corporation. 60% Filipino-owned and 40% Foreign-owned Domestic Corporation. Regardless of the
type, the corporate structure consists of the following:
Shareholder(s)
Director(s)
Corporate Officers
President
Treasurer
Corporate Secretary
An individual may hold more than one of the above roles in a company. We discuss each of these in
further detail below.
The table below shows the requirements for shareholders in the Philippines:
Number of
Type of Corporation Who can be a shareholder
Directors
Natural person
Partnership
Association
Domestic Corporation 2 to 15
Corporation
*foreign or local
Natural person
Trust
One person Corporation 1 Estate
*foreign or local
Shareholders of a corporation in the Philippines have limited liability. As such, they will not be personally
liable for the corporation’s debts. Should the company fail, their personal assets will be safe. The extent
of their liability is the same as the value of their investment.
The factors that account for the phenomenal increase include the evolution of the Federal
administrative structures from four units in the 1950s to twelve in 1976, twenty-one in 1987,
thirty in 1991 and thirty-six in 1996 and the oil boom and successive governments commitment
to making public enterprises an instrument of state economic intervention in the 1970s.
Public/Statutory Corporations
These are enterprises which arise when the government assumes responsibility for the
management of an economic or social pursuit through a special entity that has its own legal
personality and still keeps some of the special prerogatives or privileges associated with a
governmental organization.
Statutory Corporation (or Public Corporation) refers to such organizations that are incorporated
under the special Acts of the Parliament/State Legislative Assemblies.Its management pattern, its
powers, and functions, the area of activity, rules, and regulations for its employees and its relationship
with government departments, etc. are specified in the concerned Act.
For example, Central or State bank of any country is usually a Statutory Corporation.
The blend of these features is aimed at enabling the organization to function effectively as an
autonomous body while it remains an instrument of government policy. Enterprises that fall under
statutory corporations include Central Bank of Nigeria (CBN) and Nigerian Television Authority
(NTA).
State-Owned Companies
A government-owned corporation is a legal entity that undertakes commercial activities on
behalf of an owner government. Their legal status varies from being a part of government
to stock companies with a state as a regular stockholder. There is no standard definition of a
government-owned corporation (GOC) or state-owned enterprise (SOE), although the two terms
can be used interchangeably. The defining characteristics are that they have a distinct legal form
and that they are established to operate in commercial affairs.
In the Philippines, state-owned enterprises are known as government-owned and controlled
corporations (GOCCs). They can range from the Social Security System (SSS) and
the Philippine Coconut Authority with no counterparts in the private sector, to Land Bank of the
Philippines, a wholly government-owned bank that competes with private banks. A number of
government-owned and controlled corporations, especially those that were seized by the
President Ferdinand Marcos during his time as the leader of the Fourth Republic of the
Philippines, were given back to the original owners by the end of the 20th and the beginning of
the 21st century, including Philippine Airlines (PAL), Philippine Long Distance Telephone
Company (PLDT), Philippine National Bank (PNB), and ABS-CBN Corporation.
Public/Private Partnership
These are enterprises where the government is the majority shareholder in a partnership with
private entrepreneurs. In such companies government usually dominates the board since it is the
major shareholder. I n line with the Duterte Administration’s thrust of regional development, the
Public-Private Partnership (PPP) Center has launched its Local PPP Strategy in 2017 which is
Public corporation came into existence as a result of an Act passed by the legislature or a decree
under a military rule. Public enterprise also defines its aims and objectives, powers and duties,
immunities, the form of management and relationship with established departments and
ministries.
It is a legal person, capable of suing and being sued, entering into contracts, acquiring and
owning property in its own name and can also dispose of property in its own name and can also
dispose of property than ordinary government departments. It is wholly owned by the state.
Except for appropriations to produce capital or to cover losses, a public enterprise is usually
independently funded or financed. It obtains its funds from the treasury or the public and from
revenues derived from the sale of goods and services. It is authorized to use and re-use its
revenues.
It is generally exempted from most regulatory and prohibitory statutes applicable to expenditure
of public funds. There are no hard and fast rules behind them in the matter of making contracts
of buying and selling, works, etc. Thus a great deal of liability and discretion is left for the
management in the matter of procedure. It is ordinarily not subject to the budget, account and
audit laws and procedures applicable to government departments.
Excluding the offices taken from government departments on deputation, the employees of
public corporations are not civil servants and are not governed by government regulations in
respect of conditions of service. The recruitment is not subject to civil service rules, promotion
is by seniority and personnel can be fired easily, if they are incompetent.
TheExecutive Board
In the executive board, majority of the board are staff of the organisation. They are usually the
heads of the various departments of the organization. However, a few outside representatives are
brought to be in charge of some outside interest.
ThePolicy Board
Majority of the members of the policy board are from outside the organization with few
members from within the organization. The policy board is responsible for managing all the
policy decisions of the organization, but the implementation of policies and the day-to-day
operation of the organization are carried out by the Managing Director. This method is applied
to most public corporations in Nigeria.
Control of Public Corporations
Even though public corporations are created to enable them have some degree of freedom to
manage their affairs, they are still subject to various levels of control.
Ministerial Control
The supervising minister controls the public corporations under his portfolio in the following
modes:
i. By the appointments of Board members
Since the minister is politically responsible for appointing members of the board, he can
dissolve it, if he is not satisfied with their performance. These controls may include the
appointment of external auditors to audit the account of public corporations, re-
organisation of departments and controls on borrowing.
According to Spiers (1975) organisations can be analysed through six (6) different perspectives:
Organisations as Machines
The most basic of all approach to the study of organization assumes that organizational
behaviour can be considered to be most usefully described in terms of machines. According to
him, if one supposes that organizations can in some sense, be perceived as machines, the
following consequences ensue.
First, the conception of organsiations as a system of interrelated parts predisposes one to think
that coordination is a primary task in the evaluation of organizational behavior.
Second, this necessitates the definition of functions in relation to work to be done, both for
separate parts of the organization and for interrelated parts.
Third, behaviour and activity are viewed primarily in terms of their work coordination.
There are certain thinkers who give more emphasis to structure and function in the interpretation
of organizational behavior. The functionalist approach mainly concentrates on needs and
responses to needs.
Organisation as Societies
This analysis closely resembles the functionalist approach. It views the organization as a
miniature society. The functionalists believe that the central problem from a society as a whole
is the reconciliation of varying needs and interests of its members. The social functionalism as
this may be called, points out the prior necessity of a shared value system in order that such
reconciliation may take place.
The broad administrative consequence of this kind of approach is that there is a predisposition to
see the organization not simply as a system of relatively discrete and interrelated parts but as a
community of people. The structure of this community is analogous to the structure of the
society at large. This conception aids in understanding the internal life of an organization.
An organization can be seen as an individual person. Instead of seeing organizations as elements
in society-wide system, this approach concentrates on the experience of the individual member.
This human relations approach stresses the need for organizations to make provision for the
adjustment of individual psychological needs as expressed through small group relationships, to
the wider needs of an organsation’s behavior.
Organization as a Culture
This theory states that the activities of persons in organizations cannot be understood apart from
meanings given to them by the persons themselves, colleagues, supervisors and officials, goals
which condition their actions and relationships.
Republic of the Philippines
CAGAYAN STATE UNIVERSITY-CARIG CAMPUS
Tuguegarao City, Cagayan
The main impact of this cultural approach is that individuals and groups are seen as
constrained, not by formal structures or even beliefs but by roles and expectations,
personally concerned, which in turn determines norms in an essentially relative fashion.
Secondly, it is assumed that the organizational change and possibilities for change to
have taken account of these roles and expectations. It also diverts attention towards the
exploration of internal sub-cultures and subtle cultural factors which determine norms
and attitudes to work, authority and types of organization.
4.0 CONCLUSION
This Unit dwelt mostly on public corporations, the definitions, origin, reasons for
establishment, classification and characteristics of public corporations/enterprises.
There was also control and typologies.
5.0 SUMMARY
This Unit was able to x-ray all the issues as regards public corporation.
6.0 ASSESSMENT.
Note: answers should not exceed per item into 300 maximum words.