The Influence of Economic, Political, and Social Factors on Firms Essay

The Influence of Economic, Political, and Social Factors on FirmsThe long controversy exist over the influence of economic , politicaland accessible factors on the success of the firms. With many economistbelieving that economic factors much(prenominal) as management organisecontribute to the success of the firm. Karl Marx (1976)1 and othereconomist argued that economic factors be not the sole determiner offirms success. Marx believes that political, social and economicsplays a break open in making the firm to be effective. So the undermentionedpaper will address the question of whether political, economic orsocial factors contribute to success of the firms. The discussion ofeconomic, political and social factors will be ground on the argumentbetween Marglin and Landers.Competition creates a goading for companies to innovate, improveefficiency and drive down prices. Competition is a model of industrialstructure in which many firms compete in the supply of a singleproduct in a competitive environment where only the fittest or closelyaffective firm succeeds. Before going further I will like to emphasisethe competition Im referring to is perfect competition where naked as a jaybirdfirms can enter the market if it appears profitable2. Because ofinsignificant barrier to first appearance firms are faced with challenge toinnovate and to improve efficiency. As stated by the neo-classical speculation of the firm it is in the interest of the firm to keep the borderline approach as low as possible. The need to lower the average totalcost persuaded firms to look for efficient form of production.Competition from rivals forced firms to absorb management carcasss thatwill allow them to outperform their rivals .I cl first agree withLanders that the new management system emerged because itseffectiveness3. Firms adopted the putting out system because itallows them to have molding over other firms The creation of thefactories overcome the control that proles had o ver their work in theearly phase of capitalist through the bungalow system. Under thecottage system workers were working from home and the domesticcraftsmen was master of his time. The lack supervision under thecottage industry meant that workers had no control over how muchworker produced per day. Firms were not benefiting because it was easyfor workers to steal raw materials. As stated by Karl Marx and theo... ... as mentioned by Marglin both social and economic factorsplay a part , but they depend on competition .For example in thefactory system firms put-upon workers because of competition if Iwasnt because of competitions firms wouldnt have victimizedworkers. 1 Landers ,what do bosses really do ?p.5912 Landers ,what do bosses really do ?p.5913 Marglin What do bosses do ?p.184Marglin what do bosses do ?p.16-175 Marglin what do bosses do?6 Chandler (1992)managerial enterprise and competitive capabilities, fear taradiddle .p167 Elger ,T & Fairbrother , P (1992)fordism and flexibility .p.40REFERENECE LISTSChandler , A .(1992),managerial enterprise and competitivecapabilities Business history review , vol.58,no .4.Elger, T & Fairbrother ,P.(1992),inflexible flexibility in N.gigabit et al (eds) Fordism and flexibility Division andChange(London , Macmillan)Lazonick,w.(1991), Business organization and the myth the economy.Landers, D.(1986), What do bosses really do The journal of economichistoryMarglin.S.(1976)What do bosses do .In A .Gorz (ed),The division ofLabour (Brighton , Harvester) The Influence of Economic, Political, and Social Factors on Firms EssayThe Influence of Economic, Political, and Social Factors on FirmsThe long controversy exist over the influence of economic , politicaland social factors on the success of the firms. With many economistbelieving that economic factors such as management structurecontribute to the success of the firm. Karl Marx (1976)1 and othereconomist argued that economic factors are not the sole dete rminer offirms success. Marx believes that political, social and economicsplays a part in making the firm to be effective. So the followingpaper will address the question of whether political, economic orsocial factors contribute to success of the firms. The discussion ofeconomic, political and social factors will be based on the argumentbetween Marglin and Landers.Competition creates a spur for companies to innovate, improveefficiency and drive down prices. Competition is a model of industrialstructure in which many firms compete in the supply of a singleproduct in a competitive environment where only the fittest or mostaffective firm succeeds. Before going further I will like to emphasisethe competition Im referring to is perfect competition where newfirms can enter the market if it appears profitable2. Because ofinsignificant barrier to entry firms are faced with challenge toinnovate and to improve efficiency. As stated by the neo-classicaltheory of the firm it is in the interest of the firm to keep themarginal cost as low as possible. The need to lower the average totalcost persuaded firms to look for efficient form of production.Competition from rivals forced firms to adopt management systems thatwill allow them to outperform their rivals .I clearly agree withLanders that the new management system emerged because itseffectiveness3. Firms adopted the putting out system because itallows them to have edge over other firms The creation of thefactories overcome the control that workers had over their work in theearly phase of capitalist through the cottage system. Under thecottage system workers were working from home and the domesticcraftsmen was master of his time. The lack supervision under thecottage industry meant that workers had no control over how muchworker produced per day. Firms were not benefiting because it was easyfor workers to steal raw materials. As stated by Karl Marx and theo... ... as mentioned by Marglin both social and economic factorspl ay a part , but they depend on competition .For example in thefactory system firms exploited workers because of competition if Iwasnt because of competitions firms wouldnt have exploitedworkers. 1 Landers ,what do bosses really do ?p.5912 Landers ,what do bosses really do ?p.5913 Marglin What do bosses do ?p.184Marglin what do bosses do ?p.16-175 Marglin what do bosses do?6 Chandler (1992)managerial enterprise and competitive capabilities, business history .p167 Elger ,T & Fairbrother , P (1992)fordism and flexibility .p.40REFERENECE LISTSChandler , A .(1992),managerial enterprise and competitivecapabilities Business history review , vol.58,no .4.Elger, T & Fairbrother ,P.(1992),inflexible flexibility in N.Gilbert et al (eds) Fordism and flexibility Division andChange(London , Macmillan)Lazonick,w.(1991), Business organization and the myth the economy.Landers, D.(1986), What do bosses really do The journal of economichistoryMarglin.S.(1976)What do bosses do .In A .Gorz (ed),The division ofLabour (Brighton , Harvester)