Thursday, September 11, 2008

Bye-Bye Firm

We had a class on Asian Business Systems (ABS) today as part of our MBA program at Asian Institute of Management (AIM). We were discussing firms and their existence which actually was very interesting coz there are so many different perspectives on what actually constitutes a firm... even an individual can be a firm for that matter... customers themselves are called firms who buy products based on differentials in their income to obtain utility. The definition I found most interesting was by Nightingale who says very simply... firms exist because people don't necessarily know what they want, people don't necessarily know how to make something and people don't necessarily know whether want they want will be made properly or not... so the most obvious thing to do is to get together, collaborate if you may, and get the work done....thus in effect creating a firm.
However, there are people who believe that the MNC-like structure of the firm is gonna disappear to make way for more entrepreneurial structures.. personally I don't see that happening coz I feel products are sold through directive strategies... companies induce buying through suggestive ads and marketing... consumers don't buy based on utility only... these company guys (maybe I shouldn't say that coz very soon I'm gonna be one) create demand perceptions which consumers buy into... even information to an extent (I'm not specifying what extent) is controlled....
unless unbiased, untampered information is made available to consumers I personally don't see MNC's making way for entrepreneurial ventures....
Our prof. said he'd give us an article written by an IBM manager on the age of MNC's being over... as soon as I get it, I'll post either the link or the excerpt... until then keep your views pouring in!

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