| dc.description.abstract | Firms are major economic institutions in market economies. They come in all shapes
and sizes, but have the following common characteristics:
g Owners.
g Managers.
g Objectives.
g Apoolofresources(labour,physicalcapital,¢nancialcapitalandlearnedskillsand
competences) to be allocated roles by managers.
g Administrative or organizational structures through which production is
organized.
g Performance assessment by owners, managers and other stakeholders.
Whatever its size, a ¢rm is owned by someone or some group of individuals or organiza-tions.
These are termedshareholdersand they are able to determine the objectives and
activities of the ¢rm. They also appoint the senior managers who will make day-to-day
decisions. The owners bear the risks associated with operating the ¢rm and have the
right to receive the residual income or pro¢ts. Whereownershiprights are dispersed,
controlof the ¢rm may not lie with the shareholders but with senior managers. This
divorce between ownership and control and its implication for the operation and
performance of the ¢rm is at the centre of many of the issues dealt with in this book. | en_US |
