business: a standalone construct

In economics a business, or firm, is an organisation that coordinates production through managerial direction rather than through the price mechanism of the open market. Coase's The nature of the firm argues such businesses exist because organising activity inside a firm can be cheaper than contracting for every step in the market, so the boundary of the firm is set where the two costs balance. The referent is a productive organisation and the transaction costs that shape it, measured in output, costs, and boundaries, the everyday, senior meaning of the word, distinct from an actor's stage business.[1]

Unit

A production-coordinating organisation and the costs that bound it

Recovery means

Not applicable

Measured by

Analysed through transaction costs, firm boundaries, and the make-or-buy margin