LOGO Chapter 1 The Evolution Of The Modern

LOGO Chapter 1 The Evolution Of The Modern Firm 主講人 : 趙琪老師

The Word In 1840 v Doing Business in 1840 v John’s Decision v What did impact John’s Decisions? v Information v John’s risk attitude and ability (personal role selection)

The Determinants of Industrial Scale and Structure Risk and information Output uncertainty 1. The willing to invest by their own resource 2. Banks’ willing to finance business expansion Small firms

v Conditions in Business in 1840 : Life Without a Modern Infrastructure ü Transportations railroad (case 1. The Emergence of Chicago) waterway ü Communications post telegraph ü Finance ü Production Technology unstandardized small firms ü Government public infrastructure

Case 1 The Emergence of Chicago Figure 1. 1

Summary Infrastructure Extended demand technology development High speed and high volume production and distribution Change organization and coordination Transaction costs down

The Word In 1910 Doing Business in 1910 Integration Large firms Professional managers Organizational hierarchy

v Business Condition in 1910: A “Modern” Infrastructure u Production Technology Vertical integration Scale economic Horizontal integration scope economic u Transportation Infrastructure throughput production capacity expansion u Communications M-form firms division and professional managers coordination and control problems (1)overexpansion: (2)bureaucracy u Finance u Government Professional manager demand education market MBA/university

Case 2 Responding to the business environment: The case of American whaling *No advantage from revolutionizing technology *Demand competition *Risk *No scale economic for production & distribution

v Doing Business Today The World Today *Market niche strategy *Diversity: Distribution channel, skill, and acquire Antitrust *SBU *Matrix Structure coordination * Function outsourcing v The Infrastructure Today u Transportation Automobile and Air Way Better coordination u Communication Fax and Internet u Finance Cost and managerial accounting Activity-based accounting u Production Technology CAD/CAM: customizing, high quality, and low cost u Government Relax the regulation Regional free trade zone

Case 3 Evolution of the steel industry *Early age: vertical integration Competitive disadvantage: Specific assets *Modern age: Heavy Light Competitive advantage: Minimill advantage

v Infrastructure in Emerging Markets

Case 4 Infrastructure in Emerging Markets Economic gyrations and traffic gridlock in Thailand

Summary v Coordination v Vertical integration

Three Different World: Consistent Principles, Changing Conditions, and Adaptive Strategies. *Make: 1910 1. Scale economic accessibility Firms were willing to invest 2. Poor infrastructure Coordination difficulty Hierarchy control

*Buy: 1. 1840 (1)No scale economic (2)Poor infrastructure Limited market size 2. Today Infrastructure coordination cost outsourcing function

Case 5 Infrastructure and emerging markets: The Russian Privatization Program *Goal conflict between manager and employees *No incentive

Example 1. 5 v Building national infrastructure: The transcontinental railroad.

Example 1. 6 The risks of modernity : The Halifax.

Example 1. 7 Parties, Scandals, and Directors Behaving Badly: After the ball.

Example 1. 8 Blaming Wal-Market: The Prequel.