Enterprise System And The Historical Changes And Technological Innovation

The firm is the typical organizational form of the market economy. The most significant characteristics of the firm are the asymmetric contractual arrangements between different participants (factor-owners) in both distribution of returns and control rights. Within the firm, some participants are called "employers", while others are called "employees". In a sense, the firm system is how to solve the interest problems between employers and employees in order to encourage them to work hard. Either employers or employees have their own private interests different from the firm, they may benefit themselves, but cost others in one way or another. Especially when some social trick rules have not completely prohibited depriving the interests of firm, often will they do so; just at the same time, rampant rent-seeking behaviors arise among the police, officials and the owners of a firm for a long historical time. The people in such a society have to own the firm with their family, friends to lower the transaction cost, the trinity of owner, manager and even the worker is the significant characteristic of the classic firm system, that is often adopted by people in the unstable social or in the small market size. Although it is useful to secure the fortune of owners in a good condition and clearly tells benefit or cost each other, and it is difficult to attract persons of high ability to work for them. All kinds of interests groups may exert all strength to push the government to make a good policy for their own, naturally the characteristics of the main interests groups, to some extent, will decide the character of the policy. If one or several interests groups can seize the rights and benefits in the country, the policy from the government is often not equal; people usually have to select the classic firm system in order to secure the interests and fortune of their own.But this logic does not mean that any society or country will obey it, for example, many socialist countries adopted the planned economy and state-owned firm system, which brought about some negative influences on rampant moral hazards, adverse selection and especially could not tells any one's benefits or costs from others', the state-owned firm could not try it best to prompt any one to work hard in the planned economy, so most socialist countries have experienced the failure of the socialist planned economy and have now begun a market-oriented reform program, the aim is to clearly separate one's benefits or costs from other's and make full use of people's talents, that is to say, how to scientifically select firm systems to make full use of capital and other resources is the goal of thesis. With the change of conditions, the status of interest groups will go up or down, they will play games with each other to push the change of trick rules. When the strength of the main interest groups become equal, the laws and policies will have come to be stable and equal, any one in the country can forecast what people will do or not, he can make full use of almost resources in the country, even in the world under the condition. These are the conditions that the modem firm system exists. If some one thinks that the modem firm system is superior to classic firm system, maybe he is not correct. Because both only adapt to his own social or market conditions and make more money at low traction cost. In fact, there is no possibility that the modern firm system will certainly supersede the classic system. But the firm system will certainly turn toward the one with clear rights of property in order that people and firms can make more money only on improvement of the technology.