[영문과제] 기업은 왜 생겨났는가? 기업의 장점은 무엇인가? _WHY HAS A FIRM BEEN ORGANIZED IN THE FIRST PLACE?

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WHY HAS A FIRM BEEN ORGANIZED IN THE FIRST PLACE?

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I think this question is much related to the history of human society and macroeconomics. Firm, if we define it for a sentence, is an organization which sells or produces something or which provides a service which people pay for. This sentence refers to the most important components in explaining a firm; an organization, products or services, people (consumers) and payment (money etc.). With this sentence, we can assume that a firm can never take place without existence of the concepts ‘product (or services)’ and ‘payment’.

Anthropologists say that the ancient men would have not known about money, products or markets from the beginning. They produced something they need by themselves, according to their instant needs. They collected fruits when they were hungry, made a tool when they felt its necessity. Then, they started to exchange something they made with other things other people made, because they realized that one can only specialize in making few things. The divisions of labor made the original formation of market happen. The division of labor meant that people could have their own jobs. The invention of money has brought about the concept ‘product’, as they no longer made products for their use but for exchange.

As time goes by and technology improves, human needs increased and so did the scale of production system. Because the economy of scale applies, the production system had to stretch its size and associations to other relevant production system: such as a bike producer who is associated to delivery service provider. And the division of labor got more and more sophisticated, as the bike producer did not produce tires in the bikes anymore, and as the tire producer did not produce the little rubber tab inside the tires. (In fact this stage of production was far before the invention of a bike.)

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