Excerpt
Table of Content
1 Introduction
2 Corporation
2.1 Entrepreneurship
2.1.1 Sole proprietorships
2.1.2 Partnerships
2.1.3 Limited Liability Company
2.1.4 Corporation
2.2 Who is a corporation?
2.2.1 Owners and managers
2.2.2 Employees
2.2.3 Stakeholders
2.3 Why businesses incorporate?
3 Governance
3.1 The history of corporate governance
3.2 The theory of corporate governance
3.2.1 Shareholder model
3.2.2 Stakeholder theory
4 Social Responsibility
4.1 Main theoretical foundations of CSR
4.2 Corporate Social Responsibility as a business tool
4.2.1 Misapprehension of CSR
4.2.2 Success Stories in CSR Implementation
5 Generic CSR Implementation Process
5.1 A step-by-stcp roadmap
5.1.1 The decision
5.1.2 Approaching shareholders
5.1.3 Formulating a Mission Statement
5.1.4 Elaborating a Vision
5.1.5 Identification of stakeholders
5.1.6 Stakeholder engagement
5.1.7 Development of a performance measurement system
5.1.8 Realignment of corporate strategies
5.1.9 Readjustment of internal processes
5.1.10 Reporting setup
5.2 Key success factors in CSR implementation
5.2.1 ' Charismatic CEO
5.2.2 Intensive Board-Management relationship
5.2.3 Stable ownership structure
5.2.4 Proactive and steady brand building
5.2.5 Ambition for staying on top
5.2.6 Innovativeness
6 Design and Implementation of a Tailored CSR concept at 3M Czech Republic
6.1 A brief introduction to 3M and its presence in the Czech Republic
6.1.1 3M Company
6.1.2 3M Czech Republic
6.2 Status quo of CSR at 3M
6.2.1 Global CSR concept of 3M
6.2.2 CSR activities of 3M Czech Republic
6.3 Designing a tailored CSR concept for 3M Czech Republic
6.3.1 Definition and positioning of stakeholders
6.3.2 Sustainability of non core business activities
6.3.3 Marketing aspects of the CSR concept
6.3.4 CSR as a driver of innovation - a key value of the company
6.3.5 Key Performance Indicators
7 Conclusion
Bibliography
List of Tables
"Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business"
(InterPraxis) Niall Fitzerald, Former CEO, Unilever
1 Introduction
During the past two decades, there has been a debate going on intensively in the Western world on social responsibility of businesses, yet countries of Central and Eastern Europe such as the Czech Republic have stayed behind. The transformation of the centralized, state-run economy and privatization of formerly state-owned enterprises exposed huge problems especially in areas of governance and financial responsibility, but there were no business best practices from the past communist economy and the new owners and managers often took advantage of the new situation to their own undue benefit.
A slow shift started to happen when foreign investors coming to the country brought not only their much-awaited capital, but also their codes of conduct and business practices. These were the result of the decisions at the corporate level and often bottom-up driven by their own employees in the countries where the discussion on social responsibility has been already going on. These policies have had a highly positive effect on the way business is done in the Czech Republic.
Change has also come from another angle — the regulation. With the prospect of the EU entry, Czech Republic had to implement Community Law into its own legal system. A number of the statutes in the Community Law deal with corporate responsibility issues such as investor protection, workers' rights and environmental protection, thus by implementing these measures into national legislation, Czech companies had to conform to these laws.
Increasingly, a number of NGOs (non-existent under Communism) have sprung up and executives and employees often felt that a company should be a good member of the community through philanthropic activities. As a result of this, the volume of charitable donations by companies increased significantly.
All these changes made companies in the Czech Republic act in a more socially responsible manner. Yet, despite all these positive developments, many Czech companies still see social responsibility either from the regulatory angle i.e. it is something we have to do or from a philanthropic perspective i.e. we want to do something good and often fail to see the strategic benefits for their business. In the last couple of years, it has been however observed that executives are asking questions about how can socially responsible corporate behavior boost their bottom line and feel the need to incorporate social responsibility into their strategy.
This thesis has been elaborated in cooperation with 3M Czech Republic, which had been looking at ways to implement its global CSR strategy into the local framework. The author of this paper has developed an implementation roadmap that can be broadly applied for CSR implementation. In addition, a specific solution has been designed exclusively for 3M Czech Republic.
It is a hope of the author of this paper that it will be successfully used not only by the top management of 3M Czech Republic but also by executives at various companies worldwide who want their companies to seize the benefits that a successful CSR implementation has to offer.
The core of this paper is structured into the following logical parts.
The first part starts with entrepreneurship and explains various legal forms of business ownership including corporations. The corporation is analyzed in detail to get an understanding of various internal forces within the corporation. The second part deals with governance; its historical developments and major theoretical concepts. Based on the understanding of governance, main theoretical foundations of CSR are presented in the third part, in addition to the description of CSR as a business tool and a list of major misconceptions of CSR. The fourth part delivers a generic implementation roadmap and identifies key success factors of the implementation. The fifth part presents a tailored CSR solution developed for 3M Czech Republic.
The hypothesis of this paper is that CSR concept can be tailored in such a way that it can be easily implemented in a local service branch of a multinational corporation (with CSR already implemented on the corporate level) and it can bring benefits to this local branch.
2 Corporation
During the past few years, the word corporation has been talked about much more often than previously. Why has this been the case? And why have corporations been viewed in such a negative light as to make some such as Google adopt mottos like "Don't be evil"1 ?
The corporation can be defined as "a group of people authorized by law to act as a legal personality and having its own powers, duties, and liabilities" (Collins English Dictionary - Complete & Unabridged 10th Edition). As shown in this chapter, corporations have certain distinct characteristics that make decisions on social responsibility more complex than in other forms of business ownership.
2.1 Entrepreneurship
People possess an immense entrepreneurial drive to make use of own ideas and skills despite the fact that statistically only 18% of first-time entrepreneurs succeed2. On this exciting yet highly challenging route, entrepreneurs encounter times when they have to make difficult decisions. These decisions often have to do with social responsibility. For example an entrepreneur needs to part with a long time business partner in a venture for it to grow. Or a painful restructuring decision needs to be made to save at least a part of the venture.
2.1.1 Sole proprietorships
A person, let’s refer to him/her an entrepreneur-to-be gets a business idea. This idea is original and has all the capability to create a competitive advantage for the firm enough to endure the hard competition on the market or is capable of creating a completely new market. The entrepreneur-to-be tries to project the costs and the benefits and to estimate the demand for his/her proposed product or service. If he/she finds the idea to be feasible, he/she moves to the next step of going to an appropriate legal authority to get the business registered under own name. From then on, the new entrepreneur can sign contracts with other personal and legal entities on behalf of his/her business. As there is no distinction between owner and the business, the entrepreneur is personally fully liable in case the business breaks the law or fails to honor a contract.
2.1.2 Partnerships
The entrepreneur-to-be can as well decide to enter into a partnership, which can be defined as "a legal relation existing between two or more persons contractually associated as joint principals in a business" (Merriam-Webster Online Dictionary). There are various reasons why people enter into partnerships, perhaps the most common one being complementary skills and knowhow of partners. Other reasons might include need for equity capital, risk sharing or as means of growing business. Business partnerships offer partners the benefits of co-owning a business, while holding an executive position within the company. This direct involvement in managing a part of the business and often close ties between the partners seem to be the success factors in this type of business ownership.
Usually the arrangement is set up in a way that partners act as bread winners for the business and get a certain share of revenues from the business which they obtain as a performance bonus. In addition, they are also entitled to share the profit generated by the business and often receive a regular salary.
2.1.3 Limited Liability Company
The concept of a Limited Liability company was established in 18923 in Germany as Gesellschaft mit beschränkter Haftung or GmbH. The LLC combines the flexibility of sole- proprietorship or partnerships structure while owners take advantage of limited liability. The company gets established by registration at an appropriate legal authority and by signing an agreement between the owners.
Nonexistence of double taxation presents another important advantage for the owners of an LLC. This, among many other benefits offered to an LLC, make it the most appealing non-corporate entity for business organization purposes4 Depending on the applicable jurisdiction, however, limited liability companies generally are subject to more complex taxation and reporting requirements than sole proprietorships and partnerships. In some legal systems, LLCs do not have a perpetual life cycle. This means that when an owner dies, the company dissolves.
2.1.4 Corporation
A Corporation has already been defined as "a group of people authorized by law to act as a legal personality and having its own powers, duties, and liabilities" (Collins English Dictionary - Complete & Unabridged 10th Edition). In order for the corporation to begin to exist, this group of entrepreneurs has to register it at the Commercial Registrar or other proper authority. Registration and associated vetting procedures are out in place to ensure that the corporation is robust enough to assume the limited liability.
The group of entrepreneurs files Articles of Incorporation at the Commercial Registrar. Once the registration is successfully completed, the directors formulate bylaws, which govern the internal procedures of the company. Once these basic and other additional prerequisites are met, the corporation is ready to issue stock and to hold the first general meeting of the shareholders.
A crucial aspect during the incorporation process is the selection of a jurisdiction. A multinational corporation has quite a range of places to choose from, because of its global scope of doing business. The important aspects taken into consideration include property rights, efficiency of a court system, disclosure requirements etc. For these reasons many European companies decide to incorporate in the Netherlands, while U.S. based corporations prefer the State of Delaware. Another factor is taxes with jurisdictions such as Cayman Islands favored by a number of corporations. This is, however, becoming less decisive as modem day corporations have found other ways how to minimize their overall tax burden and countries with significant corporate tax revenues are going after tax havens.
So why is there so much talk about the social responsibility of corporations? One reason is limited liability. Limited liability companies and corporations that take advantage of limited liability also need to face greater scrutiny as the ability of their creditors to recover in case of bankruptcy is limited to the extent of the firm’s equity. Taking the issue further, corporations can afford to be taking greater risks than for example a sole proprietor who faces the risk of being stripped of all personal property in case his/her business goes bust.
Another reason is the complexity of corporations. In case of a sole proprietor the owner is also the only manager and employee of his/her respective business. In partnerships, the partners tend to know each other in person, trust each other and also have a very active involvement in managing the firm. And although LLCs are generally more complex, they are usually smaller in size than corporations and privately owned. So exactly does a corporation work?
2.2 Who is a corporation?
There has been a lot of criticism of corporations since mid 1990s, labeling them with words such as greedy, evil, non-scrupulous, self-obsessed or exploitive5. Yet, corporation is not a living natural entity; it is only created by the law on the day of incorporation as a legal entity. Thus although acting under its own name just like a person, it is not a living being and it is really the people from within corporation, who influence its behavior.
2.2.1 Owners and managers
The two groups, broadly regarded as having the greatest power in a modem day corporation are owners and managers. The owners either have a full or partial ownership depending on the share of stock that they own. Owners do not usually have any executive duties within the company, but delegate the executive power to the managers who run the business and manage the assets of the owners. Even in a case of a single person owning 100% of shares in a corporation, he/she cannot be directly in charge of the firm unless holding a formal executive position as in the corporate structure ownership is separate from management.
In this setup, owners invest in corporation's equity with the anticipation of receiving return on the money invested. As corporation generates profits throughout the year, owners attending an annual General Meeting decide how this money will be spent. They can be either reinvested in business or paid out to shareholders according to their ownership share.
Managers, on the contrary, are professionals employed by owners to manage day-today operations of the business and to maximize the return on their investment. In other words, owners put their trust in managers to look after and develop their investment. As capital today is highly mobile around the globe, investors can shift their money elsewhere should they feel that they are not getting the returns they deserve. This sudden capital outflow would decrease the price of stock, making the company susceptible to a hostile takeover. The new owners who orchestrated the takeover and now own the majority of the company are highly likely to replace the management with a one guaranteeing higher investment returns than the former management could provide. This mechanism thus provides an incentive for managers to look after the investment of investors i.e. to manage other people's money as if they were their own.
2.2.2 Employees
Employees are usually understood as everyone on the company's payroll from assembly line worker to the CEO. The contract these employees have with the company, their level of responsibility and their negotiating power differs significantly thou. Let us then, for the purpose of this paper define the employees as natural persons having an employment contract with the company and no formal managerial responsibilities as part of their employment contract.
Employees have traditionally provided labour as a factor of production to their employer for which they received wage as a form of rent. And while employers wanted to maximize the productivity of labour, employees wanted to maximize their rent i.e. wage. In the modem times, this straight-forward relationship is made more complex primarily by two factors.
One of them is the existence of government as a regulator, regulating a number of aspects of employment such as minimum wage, working hours, employment conditions, layoffs or discrimination. This way, both the employer and the employee need to act within this legal framework which is designed to protect both parties.
Another aspect has been associated with the rising popularity of stock ownership among the general public. A number of companies have created loyalty schemes for their employees that enable them to buy the company shares at an advantageous price. Also, some remuneration packages include stocks or stock options. Some governments have even tax incentivized stock-based retirement savings plans, such as 401(k) in the US, in which the employer's retirement contribution is invested in the company stock. Overall, these schemes have put employees also into the position of co-owners of the company.
2.2.3 Stakeholders
The term stakeholder in English language describes a "person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies" (WebFinance, Inc.). Besides owners, managers and employees who make up the corporation, there are other persons and entities outside of the corporation that affect or are affected by a corporation. In order to offer a simple structure into corporation's stakeholders let us distinguish them as two groups. In this paper, the term internal stakeholder shall be used for managers, employees and owners from within the corporation, while the stakeholders from outside of the corporation shall be termed external stakeholders.
All in all, there has been no dispute that stakeholders like employees or suppliers do affect and are affected by corporation. The modem day business environment has, however, caught companies unprepared as to how far reaching the stakeholder relationships are. How about a child watching the company's commercial on TV? What about a distributor of the company's products? How about employees of a subcontractor?
These are the questions asked by numerous executives and attempted to be answered by many companies themselves worldwide. However as shown later, only an unbiased and proactive stakeholder engagement and dialogue can provide the right answers to these important questions.
2.3 Why businesses incorporate?
A key question still remains. Why would an entrepreneur or a group of entrepreneurs go through the extra procedures and requirements in order to choose a corporate forni?
A major advantage is the ability to offer stock publicly. Stock market represents an additional funding source, besides the traditional initial capital of founders, bonds or bank loans. In many markets, in order for companies to be able to list their stock, they need to be registered as a corporation among many other requirements. Company's equity divided into shares offer a broad range of possibilities when it comes to ownership. For example, A and В class shares allow investors, often the founder of a company, to maintain a majority control while having minority ownership and so on. As shareholders of a corporation are not registered in the Commercial Registrar, investors seeking greater level on anonymity might prefer corporations to other forms of business ownership. In addition, corporation, unlike most other forms, have a perpetual duration. This ensures that even after the death of the owner, the corporation doesn't have to disband.
There is a dilemma regarding whether the corporate forni as such serves as an advantage or a disadvantage from the tax point of view. One important point raised for example by Matheson (Matheson 16-17) is double taxation. As corporations are from the tax perspective entities separate from their owners, they are also taxed separately. This way the dividend income received by shareholders is taxed twice - once as an income of a corporation, second time as an income of the shareholder as an individual. Another interesting aspect pointed by Sanaz Poumasseh from Nelligan O'Brien Payne (Poumasseh) is that corporations are taxed at the corporate income rate which in many instances is lower than the personal income rate and they are also often eligible for special tax breaks.
After analyzing the corporation from more of an institutional angle, let us now have a look at the internal forces within the corporations and how they are governed.
3 Governance
Since the origin of mankind, human beings have lived as part of groups. First, they organized into families based on natural unity between a man and a woman and to provide for a safe environment to raise their descendants in. As families grew, their members still felt strong bonds to even more distant family members who were then the natural partners to be called upon when undertaking a more complex venture such as hunting. Clans evolved to tribes as they provided a better protection for their members against outside predators. Eventually, shift in ways that humans make a living, from hunting and agriculture to trade and services, created the need for regulatory institutions at a higher level than clans and so city states and states were created.
In all these types of societies, a need arose for rules and mechanisms that would secure order and stipulate the authority over important matters. In families, it was primarily the rules set by the father (patriarchal societies) or the mother (matriarchal societies) that set the basis of governance principles within families. In clans and tribes, respect for elders was the main governance rule. Modern democratic societies are governed by a set of rules created and implemented by a comprehensive system of independent powers (legislative, executive and judicial), which are fonned by the will of the majority of the population. These governance systems have throughout the history varied greatly from each other, but as Colley mentions, “the effectiveness of a given approach to governance has determined, to a large extent, the survival and prosperity of that society” (Colley, Doyle and Stettinius 3).
3.1 The history of corporate governance
A similar link between the effectiveness of corporate governance and survival and prosperity of a corporation could be observed in cases of numerous corporations. There is, however, a notable difference in the governance of societies and corporations. Members of societies like family, tribe or even a nation state tend to have certain natural bonds by blood, language, color of skin, facial features. A corporation is a legal entity created by the law, unlike by social evolution, and it is much more difficult to govern an organization where these bonds lack or are of a limited strength, similarly when comparing a family and a tribe. As shown in the previous chapter, members of a corporation i.e. owners, managers and employees have often conflicting interests and often the only bond they have with each other is their contract with the corporation.
The modern day corporate governance has been shaped by two historical shifts.
The first one is separation of ownership and management of a business.
Historically, business entities have been relatively small and operated primarily on local markets. While industrialization and emergence of new technologies increased capital expenditure needs and trade liberalization opened new markets, companies have grown in size. For the owner it was no longer possible to manage the business alone and had to hire managers who would manage parts or whole business for him/her. These managers had no ownership in the business and their only incentive to manage the business well was the reward they received in the form of a salary. This new setup created asymmetric risk. In case of business getting bankrupt, the owner lost all the investment, while the manager only lost his next months' salaries. This so called principal-agent problem will dealt with in detail in the next subchapter.
The second force that pushed corporate governance to its modern prominence has been the emergence of the concept of a limited liability. In old times, if an entrepreneur could no longer pay his debts, he was put into prison, his house sold and in some cases his wife and children even sold to slavery. The same principle applied to an entrepreneur co-owning a business, which meant that if the business could not honor its obligations, personal property of the co-owner could be seized. By 15th century, the English courts have broadly recognized the principle of limited liability6 "Si quid universitati debetur, singulis non debetur, пес quod debet universitas, singuli debent" which means “If something is owed to the group, it is not owed to the individuals nor do the individuals owe what the group owes” (Encyclopaedia Britannica). Although this concept was introduced relatively early, it was initially applied mainly to municipalities and guilds7 8. It was not until 1856 when England passed the Joint Stock Company Act which generalized limited liability, following Sweden - the first country to do so in 1844s. Other countries followed suit and now the concept of limited liability is widespread in vast majority of market economies.
Corporate governance has developed in line with the changes in the business environment. Throughout the past decades, it had to respond to the issues such as hostile takeovers, Enron-style corporate frauds, protection of minority shareholders and emergence of private equity groups and to ensure the survival and prosperity of corporations and whole economy.
3.2 The theory of corporate governance
The relationship between the owners and the managers has been the issue at the heart of any corporate governance debate. Increasingly, the focus shifts to looking at corporation in the context of broader liaisons between the corporate entity and a vast range of its stakeholders.
3.2.1 Shareholder model
According to Maher and Andersson, the shareholder model "describes the formal system of accountability of senior management to shareholders" (Maher and Andersson 387). This relationship between owners and managers is often referred to as agency relationship in which "one of the parties, called the principal, entrusts to the other, called the agent, the management of some business; to be transacted in his name, or on his account, and by which the agent assumes to do the business and to render an account of it" (US Legal, Inc.).
When an owner entrusts a manager with running his business, two key aspects emerge namely asymmetry of information and conflicting interests. Asymmetry of information results from the fact that manager is a profession. And like with any profession, it is very difficult to verify by the party receiving professional services (in this case by the owners of a company) that the recommendation and actions of that particular professional are indeed correct ones. The owner is here in a position of a patient who even thou might have some medical background is impossible to verify that the treatment prescribed by the doctor is the best one. The aspect of conflicting interests has already been touched upon and is a very important one. But just like in the case of 401 (k) plans for employees, owners find ways how to align the managers' interests with their own. Possible means include bonus payments in stock, stock options etc.
According to Eggers (Eggers 1), there seem to be two types of principal-agent problems; one being related to effort aversion / moral hazard, the second type to adverse selection.
Bryson calls moral hazard a "form of postcontractual opportunism that arises because actions that have efficiency consequences are not freely observable (monitoring problem) so the person taking them may choose to pursue his or her private interests at others’ expense" (Bryson 2). Example of a moral hazard can be managers hiring private jets for corporate trips. Owners will gladly allow this as long as managers can persuade them that flying private saves them valuable time that can be dedicated to clients for example. The owners have no completely accurate way to verify this claim thus often giving away such perk. And managers can avoid the extra effort of waiting in security lines at the airport or having to put up with a crying baby sitting on a nearby seat, thus effort aversion. Whether this aircraft is also being used for personal purposes is also often beyond control of the owners.
Table 1: Moral Hazard Timeline
Abbildung in dieser Leseprobe nicht enthalten
Source: Rauchhaus, Robert W.
The other problem called adverse reaction is, just like moral hazard, also associated with asymmetric infonnation. But as Rauchhaus points out, it "is the result of asymmetric information prior to entering into a contract" "whereas moral hazards stem from asymmetric information while a contract is in effect" (Rauchhaus 10). In other words, there is no completely accurate way for the owner to find out that the manager offering his services is the best candidate for the job. To use the doctor example again, one can only hope that the doctor he/she goes to visit is the best doctor available. The patient might use references of other patients or inquire about the doctor's experience but that is as far as the patient can often get.
While tackling both issues before and after the principal-agent contract, it is important to remember that a lot of issues arise from the contract itself. The key issue in an owner- manager contract is the complexity of the manager's job. Compare that to an assembly line worker whose job is to join two pieces of plastic together to create a product. The worker's contract can be very clear in describing what the worker needs to do in order to fulfill the contract. On the other hand, manager's contract cannot explicitly state all the tasks that the manager is required to do as part of his/her job. In other words, the contract between the owner and the manager is incomplete9.
The owners obviously attempt to minimize the risks stemming from the principalagent problem. Examples of measures applied include paying supervisory personnel or providing monetary incentives such as performance bonuses. These extra costs incurred by the owners are referred to as agency costs10 11.
3.2.2 Stakeholder theory
While the shareholder model analyzes the relationship between owners and managers, the stakeholder model focuses on the liaisons that the finn has with its stakeholders.
A person who is probably most widely quoted as being a proponent of the shareholder model and against social responsibility is Milton Friedman. Friedman indeed said in his famous New York Times article that "there is one and only one social responsibility of business-to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud" (Friedman). A number of authors such as Craig P. Dunn from Sand Diego State University have, however, recently suggested that Friedman was not only imprecise in his analysis, but also misunderstood to an extent1 .
Looking at Friedman’s quote in detail, it is necessary to acknowledge that as shareholders are stakeholders as well, Friedman explicitly recognizes a certain group of stakeholders. In a modem complex business environment, maximizing the value of shareholders is quite an intricate task. Firm's future cash flows from which its value is generally derived have their income and expense side. And while on the expense side, Friedman argues that a socially responsible executive spends "the stockholders' or customers' or employees' money" (Friedman), it is the customer - the ultimate judge generating the firm's top line who decides in the end, whether this money spent on stakeholders is money well spent, by buying a firm's product or not. And whereas financial accountability of the firm's executives has a direct impact on firm’s value, so do the news of sweatshops or environmental disasters. So how exactly should an executive balance the demands of different stakeholders?
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1 Code of Conduct — Investor Relations - Google http://investor.google.com/corporate/code-of-conduct.html Retrieved July 22,2010
2 Gompers, Paul, et al. "Performance Persistence in Entrepreneurship." HBS Working Papers (2008):!.
3 Guinnane, Timothy, et al. "Business Organization in the Long Run: Private Limited Companies Rule!" McMillan Center Paner. Yale University (2006): 19
4 Matheson, John H. "Choice of Organizational Form for the Start-Up Business." Minnesota Journal of Business Law and Lntrenreneurshin (2002): 14.
5 For more information on the anti-corporate movement please refer to Klein, Naomi. No Logo, New York: Picador, 2002.
6 "business organization." Encyclopædia Britannica. 2010. Encyclopædia Britannica Online. 23 July 2010 http://www.britannica.corn/EBchecked/topic/86277/business-organization.
7 dtto
8 Chang, Ha-Joon. " Institutional Development in Developing Countries in a Historical Perspective - Lessons from Developed Countries in Earlier Times." European Association of Evolutionary Political Economy (EAEPE) Annual Meeting (2001):
9 This issue was first indicated by R.H. Coase in his article titled "The Nature of the Firm" Coase, R.H. "The Nature of the Firm." Economica. New Series. Voi. 4, No. 16. (1937):386-405.
10 For a full definition please refer to Investopedia ULC. Agency Costs Definition. 2010. 7. August 2010 http://www.investopedia.eom/terrns/a/agencycosts.asp
11 Dunn, Craig P. "Commentary on Milton Friedman's Article "The Social Responsibility of Business is to Increase Its Profits1'." Craig P. Dunn. PhD, 9 August 2010. www-rohan.sdsu.edu/faculty/dunnweb/rpmts.friedman.dunn.pdf