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

The Word In 1840  Doing Business in 1840  John’s Decision  What did impact John’s Decisions?  Information  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

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

The Emergence of Chicago Figure 1.1 Case 1

Summary Infrastructure  Extended demand and 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

 Business Condition in1910: A “Modern” Infrastructure  Production Technology Vertical integration  Scale economic Horizontal integration  scope economic  Transportation Infrastructure  throughput  production capacity expansion  Communications M-form firms  division and professional managers  coordination and control problems  (1)overexpansion: (2)bureaucracy  Finance  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 and competition *Risk *No scale economic for production & distribution

The World Today  Doing Business Today *Market niche strategy *Diversity: Distribution channel, skill, and acquire  Antitrust *SBU *Matrix Structure  coordination * Function outsourcing  The Infrastructure Today  Transportation Automobile and Air Way Better coordination  Communication Fax and Internet  Finance Cost and managerial accounting Activity-based accounting  Production Technology CAD/CAM: customizing, high quality, and low cost  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

 Infrastructure in Emerging Markets

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

Summary  Coordination   Vertical integration 

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

*Buy: (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

Example1.5  Building national infrastructure: The transcontinental railroad.

Example1.6 The risks of modernity :The Halifax.

Example1.7 Parties, Scandals, and Directors Behaving Badly: After the ball.

Example1.8 Blaming Wal-Market: The Prequel.