EconomicsCode 9708
Growth and survival of firms
What this topic asks you to be able to do
- the causes behind firms being of differing sizes
- internal growth, where a firm expands from within, through organic growth and diversification
- external growth of a firm through integration (mergers and takeovers): the methods, horizontal, vertical (forwards and backwards) and conglomerate; why firms integrate; the consequences of integration
- cartels: the requirements for a cartel to function effectively; the outcomes that follow from a cartel
- the principal–agent problem that stems from shareholders/owners and managers holding different aims