Discussion on the Nature of the Enterprise and Boundary Model

Abstract

"The Nature of the Firm" that was published in 1937, written by R.H.Coase, is considered the beginning of the study on enterprise theory. In this article, R.H.Coase illustrated the issue about the nature and boundary of enterprise from the transaction expense. Since then, the different scholars and schools have carried on the deep-going study to this issue from different angles, having formed the quite mature enterprise theories currently. This article thinks that enterprise is regarded as a pattern of production or a pattern of group production and takes it as a kind of element of production from the historical and realistic angle. It launches a research to that problem from the worthy angle. From the historical angle, the production and the evolution of form of production of each kind of shape have its historical necessity. Inspecting from the reality, the pattern of group production in the modern firm is not only the objective demand of machinery economy and technical economy but also that of market economy. Relating to the pattern of family production, it can enormously release the productive efficiency that is included in productive forces. At the same time, the nature of the enterprise is different because of the difference of the structure of property right. The boundary of the enterprise is restrained by the following factors: 1) the level of development of production technology and management technology, 2) the possibility of the occurrence of the behaviors of adverse selection and the level of the administration upon them, 3) the risk and the cost of market transaction brought about by market economy, 4) property right arrangement system