The Oxbridge view of the corporation is a person standing on a street corner selling a television that does not work. However, this is a pretty poor version of the modern firm. Though the immediate profits are fairly high, the long term outlook is very poor. The person cannot stand on the same street corner tomorrow. The ‘customer’ with the defective television will return for repayment. This means that costs rise with increased sales. The person selling the dud televisions has to keep running to more obscure and less optimal places.
Isn’t a corporation more like the corner shop? The initial investment that has taken place means that reputation and a longer term outlook are important. Those firms that are successful are usually appreciated by their customers.
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