Corporate rescue essay


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Smith begins his Wealth of Nations (1776) with an account of how a pin-making firm manages to produce so many pins, . efficiently, via the utilisation of a clever division of labour. Clearly, for Smith, firms are the locus of the division of labour. Firms are good for the purpose of creating economies of scale and thus of making it possible to reduce costs inexorably while boosting output geometrically. However, firms sees a threat to the Good Society because an inordinate success of one firm poses a threat to competition, the solvent of market (or monopoly) power that constantly undermines the invisible hand. For that reason, Smith was adamantly opposed to the idea of limited liability, to corporations in other words. In short, firms were essential as loci of divided and synchronised labour but their ultimate contribution to society was predicated upon being kept small, free of the division between ownership and control that is the feature of modern corporations and, lastly, engaged in constant, cut-throat competition with one another.

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Corporate rescue essay

corporate rescue essay

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