MGEC40H3 Lecture Notes - Lecture 1: Sherman Antitrust Act, Kodak, Financial Accounting
10 Jul 2014
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The evolution of the modern firm: the changing nature of the firm. A brief historical flashback may help us to understand the nature of the firm better. Manufacturing was generally conducted on a small scale: one person, or a small group of people, usually family based, hired all the employees and directed all activities of the business. Each business was limited to a small scale that an entrepreneur could personally supervise. The steamship permitted scheduled, predictable ocean shipping. The railroad allowed speedy transportation of people, goods, and information over continental distances. The developments in transportation and communication made it possible to conceive of doing business on a large scale. By the end of 19th century, larger enterprises had emerged to sell their products at a nationwide scale. Since late 19th century, 1870, no longer limited by the size of their local markets, firms began to use new methods of production, designing specialized tools and introducing mass-production methods.
