The Economics Of Business Ownership Configuration Logic

This thesis discusses the allocation of the enterprise ownership. The allocation of the enterprise ownership, also named as managerial structure of corporation, not only serves the source of the efficiency of enterprise, but also reveals the allocation of the status and interest of enterprise organizers. Logically speaking, the study on enterprise should begin with the definition of the nature of enterprise since it is the basis for resolving the relevant problems. However, it is pitifully found that the definition of the nature of enterprise is still unclear.In light of the theoretical history of the development of enterprise, the study on the nature of enterprise normally lays emphasis on either production or transaction. At the angle of production, economists have found that enterprise is a systematic structure for organizing the division of labor and cooperative production; it is capable to form the core competitiveness generally or specifically through study or imitation. As an enterprise develops, it is able to acquire its value. While at the angle of transaction, enterprise relates itself closely with the economy of transaction cost, and the contracts signed by non-HR and HR capital.This thesis thinks that the study on the nature of enterprise should take the consideration of both the similarities and differences in the enterprise and other organizations. Therefore, enterprise should be considered as a whole integrated with the nature of production and transaction. The nature of transaction turns the enterprises of different types into contracts and thus reveals the similarities between enterprise and market. The nature of production combines the inside division of labor and team-work system, and thus differs enterprise from market.The contract nature of enterprise regards enterprise as s special contract together signed by the non-HR capital and HR capital. Since this type of contract is incomplete and enterprise produces products and excess productive units through non-HR and HR capitals, the allocation of enterprise ownership is of vital importance. Clearly speaking, this thesis focuses on the degree of the inclination to either capital or labor in the allocation of ownership and its logic in economic sense. In this case, three types of allocation emerge: the capital-engage-labor enterprise owned by the material capital owner exclusively, cooperative enterprise owned by the material capital owner and HR capital owners, and labor-engage-capital enterprise owned by the HR capital owner exclusively. Due to the capital classic enterprises emerged first in history, the type of capital-engage-labor was traditionally considered as the start of analysis. Therefore, on the basis of the entrust-agent model by Holmstrom & Milgrom(1987), as the premise of this theory is the capital-engage-labor relation, with the changes of the risk-taking capabilities of agents, three types of contracts are reasoned out: first, the agent is out of risk and acquire fixed salary, and the enterprise is operated exclusively by the owner; second, a more frequently used type is that, the agent takes risk to some degree and the party with optimal contract is able to guarantee the risk-taking capability of the agent and provide proper incentives for the agent. However, the contracts in practice require that the risk be taken by both consigner and agent to obtain optimal balance between insurance and incentive. Third, the agent is neutral in risk-taking with entire control of ownership; the ownership and operational power are combined into a whole. However, it is interesting to see that the three types of contracts correspond with the previously discussed types of enterprises. The three types of ownership are reasoned in terms of efficiency and ideology from the viewpoint of the mainstream schools.Why is capital-engage-labor? The classic theory points out that the workers with labor capital and the capitalist with capital are equal in their status, thus resulting in capital-engage-labor. The modern mainstream schools think that...