3 ms·
You might want to read "The Nature of the Firm", which discusses this.
by zeroonetwothree 2y ago
You might want to read "The Nature of the Firm", which discusses this.
- DrScientist 2y agoThat's a slightly different angle - if I understand correctly it's about why firms exist at all - and if I were to summarise it's because lack of trust costs - a firms boundaries are created to balance transactional costs ( within the firm it's low, between firms or individuals it can dominate ) versus the costs of perhaps not being market efficient. My argument above is about not what shapes a firm's boundary but how it operates internally - too much top down control potentially risks exacerbating the risks associated with being a company and also potentially increases internal transactional costs as well - worse of both worlds! - all that ceremony around decision making, time spent justifying existences, inability to just act. Obviously as I said above - it's a balance - just as it is with country/international systems.