In Organizations and Organizing we’re faced with the primary task facing organizations, managing their relationships with other organizations. Organizations begin by facing which tasks to do inside their boundary and what to leave to outside suppliers. This process is considered the “make-or-buy” question by transaction cost analysts and is considered essential to understanding why there are firms at all. Goods and services will pass through certain steps from beginning to end, known as the value chain. The critics argue that this reasoning fails to take culture and social structures into consideration while focusing too much on economic factors. The second problem organizations face is managing relations with organizations that remain outside their boundaries. The exchanging of resources creates power relations and dependence relations that can leave them vulnerable to demands of resource providers. A tactic that organizations use to manage resource dependence is developing and maintain alternatives, coopting representatives of outside groups, forming joint ventures, forming alliances, or even a merger. Population ecology is a new approach defocalized attention on a single organization. The approach examines wider systems that are comprised of similar kinds of organizations or of organizations operating in the same domain. Ecologists are looking at the dynamics of population processes as well as its founding, growth, and failure rates. Many efforts have been devoted to examining the entrepreneurial processes and their technical factors that form new types of organizations. Institutional theorists have broa...
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...financial ration analysis. Once the banks of China read the article they began refusing to extend loans to Lantian Stock. During the turmoil, Liu was served with a defamation lawsuit from the company who initially denied the allegations. Of course, the lawsuit was eventually dropped as the authorities began to unveil the truths of Lantian being involved in misreporting and perpetrating accounting fraud. The Chinese media also dug up more controversial background of Lantian was creating mythical tales and their previous fraud record. Liu was skeptical about why the misstatements were not discovered earlier during company audits, especially after the CPA firm stated that the fraud was undetectable due to going beyond what CPAs could uncover from their procedures. The CPA firm blamed everything on the Chinese environment that made companies susceptible to account fraud.
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