Theory of the Firm in Decline
The theory of the firm posits that internal transaction costs of coordinating production are lesser than external transaction costs. Basically, it costs less to get things done within the company than to accomplish those things through coordination between smaller companies.
What is included within a firm is a constant battle between market forces, and in the last two decades management consultants have been paid a lot of money to identify what “core competencies” firms hold, with an eye to outsourcing anything which doesn’t absolutely have to be done internally to the firm.
The compounded effects of outsourcing and automation have lead to the latest round of thought leadership, whereby we are informed that employees are coming to an end, and that there “will be no employees outside of the C-suite” in the near-future.
There is a strong narrative building in the popular media linking...
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