Corporations. Wk-3. Db-1. Eco100.

What major advantages of corporations have given rise to their dominance as a form of business organization?
Corporations have a distinct advantage over privately owned businesses, as corporations are run by principal agents (managers) appointed by the owners-stockholders (Brue, McConnell & Flynn, 2010).   The principal agents are responsible for carrying out the day to day objectives of the company and if any financial mishaps occur, the agent, not the owners-stockholders are held responsible.   If the corporation is sued by creditors, the limited liability by law prohibits the suing of the individual owners; making the corporation the responsible party for any output of income to the plaintiffs (Brue, McConnell & Flynn, 2010).   Corporations tend to have more capital advantages from banking institutions as well.   Banks are willing to loan successful corporations large sums of money and when the loan(s) are paid back, the bank makes a substantial profit on the interest accrued (Brue, McConnell & Flynn, 2010).  
There are many financial resources available to corporations than there are for smaller firms and plants.   The active selling of stocks and bonds can help a corporation acquire new machinery, upgrade technologies, invent new products and improve existing products, as well as fund new research and development departments for future product innovations (Brue, McConnell & Flynn, 2010).   A successful corporation remains competitive by efficiently running its many facilities and incorporating new technologies at a faster pace than a mom & pop factory could afford to do.   One big advantage that corporations have over smaller businesses is that they can remain competitive, keeping their annual sales up and their economic implicit and explicit costs paid, even if their annual sales are down (Brue, McConnell & Flynn, 2010).
                     
                                                              Reference
Brue, S....