Corporations are organizations that are formed by an act of incorporation and are registered with and recognized by a state as legal entities. Corporations differ from traditional companies in several features: corporations have special legal rights and responsibilities (separate from their owners), ownership is divided into “shares” (sometimes called stocks), they often employ separation of management and ownership, legal status is not dependent on individual shareholders, and owners and management of a corporation aren’t personally liable for the actions of the corporation. There are three basic types of corporations: 1) privately held companies (private equity) whose shares are not traded on the stock market, as shares can only be bought or traded privately, 2) publicly traded corporations whose share prices are openly known and whose shares can be bought and sold on stock exchange markets; 3) corporations owned by the state.     

Max Weber was a great proponent of capitalism and the bureaucratic organization of companies and the state. He viewed the bureaucratic organization of corporations as the most rational mechanism of management. Bureaucracy enables efficient and systematic management of a large number of people and material resources.

John Kenneth Galbraith’s book Affluent Society describes new feature of modern corporations that survive, above all, creating new needs, and not only, as before, passively responding to the already existing needs of consumers. In the book The New Industrial State, Galbraith concludes that in the modern age, large corporations are led and controlled by employed bureaucratic technocrats, while owners have less and less power. The technocratic non-proprietary elite, which Galbraith calls “technostructure”, exert actual control over corporations, and they primarily strive to survive, thrive, and maintain independence, while less interested in profit maximization. Management, marketing, and connections with politicians are key resources of this group.

In the book White Collar: The American Middle Classes (1951) Wright C. Mills attributed the increase in the size of a part of the middle class, the so-called "white collars", to three processes: the growth of bureaucracy in all spheres of work, the development of technology, and the growth of industrial production. Corporations are getting bigger, so former small entrepreneurs are becoming ordinary employees within large companies. The growth of bureaucracy in companies requires the creation of more managerial levels within companies, and these levels are linked into chains of superiority and subordination. At each level, specific coordination and supervision of subordinate employees take place.

Harry Braverman, in  Labor and Monopoly Capital (1974), studies a massive decrease in the skills and knowledge of manual workers in the sphere of industrial production in the twentieth century. Such a reduction in the skills and knowledge of workers is not the product of chance, but of the systematic action of the corporations to weaken the organized labor movement. The main method by which the deskilling of workers was achieved was by the application of principles of Taylorism, or scientific management. The basic principles of Taylorism are the separation of the work process from the skills of workers, the separation of ideas from execution, and that all mental work should be removed from the plant and concentrated in the planning department, in order to use the knowledge monopoly to control every step of the work process. Braverman believes that the scientific management movement is of invaluable importance in shaping modern corporations and that it rules the world of production.

Erik Ohlin Wright believes that three related processes took place during the development of modern capitalism: 1) the reduction of control over the labor process by direct producers; 2) the establishment of complex hierarchies within corporations and bureaucracy; and 3) the differentiation of functions within corporations, previously performed by capitalists. The last process concerns the increase in the importance of management, but also an increase in the influence of large shareholders over small shareholders.

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