5 pages/≈1375 words
Business & Marketing
Small Firms as Economic Giants (Term Paper Sample)
1. The objective of the paper is to demonstrate understanding of one or more concepts introduced in class. 2. Understanding may be shown by: a. Presenting a critical analysis of the concept. For example you might take issue with Coase's position on social costs and research contrary positions such as that taken by Kahneman regarding asymmetric valuation of initial endowments versus prospective gain. b. Applying the concept to a real world issue. This might include applying the product life cycle (PLC) notion as developed by Steven Klepper to, say, cell phones or another product sector that you have insight into. The more you bring unique knowledge to bear, the better. Extending the concept beyond the level covered in the course. We touch only briefly on the economics of information (Stigler) and the issue of asymmetric information (Akerlof) but there is an enormous literature on the topic (just about any issue of Wired could prompt some thoughts). Much of the popular literature is of the sky is falling variety, “we are hopelessly deluged with information.” c. A synthesis of one or more concepts. For example, just about everything Herb Simon said about bounded rationality can be related to decision analysis under uncertainty as outlined by Alchian (1950) yet the chimera of profit maximization (as opposed to profit seeking behavior) remains potent. lease follow the hypothesis, prediction, evidence (test), and conclusion format described above. Brevity is valued. Simple declarative sentences make the graders' job easier. A well-structured outline format is also fine. Papers should be 5-7 pages long single-spaced using standard font sizes (e.g. 12) and margins. One or two additional pages for charts and tables may be allowed if necessaryCharts, illustrations and tables should be close to self-evident. I also wanted to confirm that the you got the guidelines that I uploaded along with brief draft outline. This is an economics of business essay, and I want to make sure that it will be originally written. source..
Small Firms as Economic Giants
Name: Course Title:
Table of Contents3 1.0 Small firms as Economic Giants3 1.1 Introduction3 1.2 Why BIG is always considered BETTER4 1.3 Maximization of Profits as a reason for companies to grow bigger6 1.4 Small Firms6 1.5 Economic role of small firms7 1.6 Use of innovation to keep small firms remain competitive7 1.7 Conclusion9 Reference
1.0 Small Firms as Economic Giants
1.1 IntroductionOne of the most influential economists of the 20th century and a Nobel Prize in Economics laureate Ronald Coase once posed the questions â€“ "Why is not all production carried out by one big firm?" and "Why is there any organisation?" he asked these questions because he puzzled by the existence of both large and small companies at the same time (Coase, 1937). If being large has got huge advantages, then it would be assumed that all the companies in existence around the globe would eventually merge and the existence of one huge company that has got more than three billion employees realised. However, that has never been the case. It implies that organising economic activities in large companies makes no sense at all. This notion too begs another question; if so, why then are people not self-employed? Furthermore, why do we have companies in existence today? The common notion amongst people is that companies are becoming fewer and larger at the same time. The belief is that the business world is slowly experiencing corporate power concentration into a minority of global behemoths (this fact has however not been substantiated). Joseph Stigler opines that if in business size does really matter, then most of the small companies would cease to exist. The smaller firms would loose in the unequal rave against the big companies and therefore disappear. The United States for instance has got one of the most competitive and most dynamic corporate sectors in the world presently. During the past few decades, there have been many acquisitions and mergers and the trillions of dollars in assets changing ownership after industry consolidations. The companies have grown and so has the country`s economy. The big firms have in fact held a lion`s share of the country`s economy since the onset of the 1970s. Coase stated that companies can be of any size. There are no advantages and disadvantages in the size of a business firm. This paper is going to further this idea and show that a firm`s size is not an indicator of its success in the business arena. To achieve this, discussions on why â€˜bigger` is always better will be discussed with the core elements on why firms think going â€˜big` is the solution to survive the cut throat competition. Additionally the paper will advance the idea that, a small firm is also a better way to achieve greater heights in the business world if the proper areas are focused into correctly.1.2 Why BIG is always considered BETT...
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