What major advantages of corporations have given rise to their dominance as a form of business organization?

Answer 1

Vertical and horizontal integration begets efficiency. Corporations grow large enough to vertically integrate; essentially buying their customers' and suppliers' businesses(either literally or in the sense that they purchase/provide so much of their product that they essentially control the company), as well as their competitors' businesses, which is horizontal integration. To consolidate so many businesses, processes and resources like that helps them become enormously efficient and then offer their goods or services for the lowest cost.

This creates barriers to entry for other businesses.

Think of Wal-Mart. They have mastered their supply-chain system and buy soooo much of other companies' products that they can sell it for the lowest price. This attracts just about everybody, smaller businesses don't survive, and it prospers further.

Answer 2

Thats a very complicated question. Im taking a Business organizations course right now (law), and from a legal, as well as economic perspective there are several advantages to the corporate form. Corporations are traditionally C corps (not S), which are organizations with a board of directors, officers, stockholders and employees. In a legal sense a corporation structure has one big advantage over other forms: it gives the stockholder limited liability. In a partnership the investor is completely liable for any debt or harm his business does. So if the business gets sued, or if the business gets deep into debt, then the owner (partner or solee proprietor) is personally responsible for that debt. In contrast, in a corporation, a stockholders risk is limited to his investment in the company. His risk is only that which he invested in the stock and he cannot be held perosnally liable. Another factor for favoring corporate form is that it is easier to raise money for company growth as well as direct resources. A large company can can essentially be described in law as being a series of contracts, with each person in the organizational structure functioning as an agent. The corporate form makes these agent relationships uniform and predictable, thus allowing for smoother opperation and easier methods of resource gathering. A finaly consideration is that a corporation is immortal. It is legally treated as an individual, with credit and its own bank accounts, however ulike a person, a corporation can never die in a real sense, therefore having a corporate structure insures that the company can survive the departure or death of its founders.
A final consideration has to do with legal predictability. business people like to have certainty. Corporations have been around for well over 100 years now and there is a wealth of case law and decisions on corporate governance and its operation. therefore by choosing a corporate form, business people adopt a system with predictable rules that have been hashed out over 100 years of jurisprudence.
All of these and other factors contribute to the corporations continual persistence as the most popular form of big business.

Answer 3

collective bargaining power