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THEORIES OF BUSINESS BEHAVIOUR AND THE DISTRIBUTION OF SURPLUS PROFITS
Author(s) -
Dunning John H.,
Stilwell* Frank J.B.
Publication year - 1978
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1978.tb00662.x
Subject(s) - shareholder , purchasing , economics , distribution (mathematics) , microeconomics , economic surplus , payment , business , industrial organization , marketing , market economy , finance , corporate governance , welfare , mathematical analysis , mathematics
SUMMARY This paper attempts a partial reformulation of the theory of the firm around the central issue of the distribution of profits. According to the institutional, market and purchasing environment in which they operate, the firms can generate surplus profits. Depending on their bargaining strength participants in the firm viz.– management, shareholders, customers, labour and suppliers of other inputs – can share in this surplus by securing payments above opportunity costs. The paper (i) presents a taxonomy of business conduct for incorporating the distribution of profits into existing explanations (ii) examines the extent to which these explanations require modification if this is done, (iii) explores the determinants of the relative bargaining strengths of the stakeholders, and (iv) suggest some implications for future studies of business behaviour.