Showing posts with label theory of firm. Show all posts
Showing posts with label theory of firm. Show all posts

Friday, 18 April 2014

Several views on the firm

What is it for a company to survive over a thousand years?  This currently tells you more about Japan and the relatively stable cultural institutions and non-Western approach to corporate life than it does about what it means to be a company.  But in a thousand years time, there'll also probably be Western companies which are that old.  

But consider how varied the political and cultural landscape will be when you compare 1500 with 2500.  A company (rather than just a bunch of people performing the same work in the same place for that time - like the family farm, for example) has a legal framework which can change over time.  Think how many job types, and by implication, though to a lesser extent, companies there have been and will ever be in the history of economics.  It is not a surprise that the average life of a company is much shorter than this.  It isn't so bad a fate for companies that they die.  Though there's much more to a company's end than it dying.

If a company is an animal, then there's the equivalent to animal ethology - the set of behaviours it currently engages in.  There's its own life history, birth, death, marriages, offspring, family.  There's the science of examining the company as a species - how that species interacts, competes.  But before all of that, there's the basic question of why?  In biology, you get something like the selfish gene/Hamiltonian kind of answer to the why of an organism's existence.  What's the answer to the primordial 'why' with the company?