Microeconomics

Advanced Macroeconomics Solutions by Romer

By Romer

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5 Firm entrepreneurial wealth-creating and risk-taking activities by individuals stakeholder groups groups who have an interest in the performance of an organisation The concept of firm (or enterprise) implies deliberate organisation for productive purposes; it evokes notions of ownership and control, direction and coordination, and processes of decision making and risk taking. As indicated previously, the structures to which the term can be applied range from the very simple type of business enterprise owned and run by one person to the highly complex, multinational corporation, with component elements (units) spread across the globe and operating with different degrees of autonomy at different times and/or in different locations.

2003), The Business Environment, 4th edition, Financial Times Prentice Hall, Harlow. 20 SECTION 1 · THE FIRM IN ITS ENVIRONMENT Organisation and management texts Fincham, R. and Rhodes, P. (1999), Principles of Organizational Behaviour, 3rd edition, Oxford University Press, Oxford. Hall, R. H. (1999), Organizations: Structures, Processes and Outcomes, 7th edition, Prentice Hall, Old Tappan, NJ. Mullins, L. (2002), Management and Organisational Behaviour, 6th edition, Financial Times Prentice Hall, Harlow.

In reality, of course, the public corporation is the legal form through which the industry is both owned and run and every corporation is to some degree unique in structure as well as in function. As organisations largely financed as well as owned by the state, public corporations are required to be publicly accountable and hence they invariably operate under the purview of a ‘sponsoring’ government department, the head of which (the Secretary of State) appoints a board of management to run the organisation.

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