The Evolution of the Modern Corporation

The article titled “The Modern Corporation: Origins, Evolution, Attributes” by Williamson (1981) discusses the introduction of the modern corporation that is described by the authors to have been utterly complex. The author discusses the initiation of the [G1] [G2] principles of the corporation as it was known at the tie, the progress it has gone through and the unique aspects that scholars have interested researchers in focusing on it. The advanced society through the role of economists [G3] outlined how they would use different interpretations of organizational innovations. The primary [G4] [G5] hierarchical

structure has since been noted to be formidable with the critical challenges experienced being the neoclassical theory[G6] and the focus on internal factors of the organization. The progression of the argument is also factored, but it is written based on the theoretical antecedents such as the role of the theory of the firm, the organization theory and other key models that were used to advance the [G7] [G8] [G9] [G10] institutional changes. [G11] [G12] [G13] [G14] [G15] [G16] [G17]

The author also focuses on describing the components of the nineteenth-century corporation that is inhe[G18] rently founded on principles of the formation of the railroads and the real integration by manufacturers to the outcomes of the railroad in[G19] [G20] tegration. The idea behind the forward integration is to establish a connection between

the industry’s key players including the retailers, manufacturers and the wholesalers.[G21] The ninetieth century is a period that was characterized by rapid developments as it involved the development of modern corporation as the principles of managing men, keeping records, and the importance of investment became apparent at this time. The idea that was developed at this time has since become more [G22] [G23] significant with the intervention of the railroads as the technological investment at this time proved to be the critical drive in business. The [G24] business dealings later would then be described to be through the process of consultations

by referring to the existing contracts. The [G25] [G26] period also ensured that there were different levels upon which the integration would be perceived including the none category, the minor, and the wholesale features. In the none classification, the traditional wholesalers and local processes would be continued while in the minor stag, [G27] the ownership of the plants was limited even though it was permitted to carry out presell of the product. The last dimension is the wholesale feature, described in the context of branded items that appeared to require specialized handling.[G28] [G29] [G30] [G31] [G32] [G33] [G34] [G35] [G36] [G37]

The author’s interest is also drawn to the 20th-century corporation as part of the more prominent subject of the business enterprise where the progression is summed into three dimensions. [G38] [G39] [G40] [G41] The multi-dimensional principle, the conglomerate and the development of the enterprise form the central idea with the growth at this stage being inherently defined by the level of portfolio investment. They were associated with controversies at this time especially the mechanisms that would be used in accounting the firms and markets as pertaining the need to[G42] integrate technology transfer. The transfer technology is given more focus as it determined the motivation that the buyer would have towards engaging in exchange programs. It thus necessitated the formulation of a related term, fundamental paradox, that the author refers to as the asymmetry in the distribution of information where it is contextualized in the perspective of how it gives value to the purchaser. Overall, the author provides a systematic process through which the developments of the corporation have been described as what is perceived in the present-day.[G43] [G44] [G45]

New Terms

There are essential new terms that are presented in the article including the [G46] [G47] description

of proclivity. The use of the word is in the context of [G48] [G49] economic agents that tend to behave opportunistically with the [G50] word being coined to refer to economic actors’ unethical[G51] [G52] practice. While such agents are thought to rational, it is established that they are not hyper-rational but end up facing challenges in solving complex problems and information systems. Asset specificity is a crucial topic that is also appropriately defined as the [G53] [G54] specialized dies are used to describe a particular component with the objective of ensuring that the buyer and the seller operate in a viable manner. [G55] [G56] [G57] [G58] [G59] [G60] [G61] [G62] [G63] [G64] [G65] [G66]

Transaction Costs

There were many references to transaction costs that have been covered in the class texts that are pertinent as demonstrated in the article. One significant area that has been considered is the establishment of comparative institutional analysis that focuses on the assessment of the variation between different parameters in contra textual terms. It is thus related to the class concepts where it is apparent that similarly to the class material as described in the textbook, the economics behind transaction costs are such that there is a variation between the governance structures in one perspective and the transaction on the other vie[G67] w. [G68] It is also worthwhile to discuss the subject of transaction costs from the standpoint of [G69] [G70] [G71] dimensionalizing features. Several unique features are relatable to the course outcome in the class text including the frequency with which the [G72] transactions are done and the extent to which investments support them.[G73] [G74] [G75] [G76] [G77] [G78] [G79] [G80] [G81] [G82] [G83] [G84] [G85] [G86] [G87] [G88] [G89]

References

Williamson, O. E. (1981). The Modern Corporation: Origins, Evolution, Attributes. Journal of Economic Literature. http://doi.org/10.2307/2724566