ABSTRACT

In order to advocate the embedded autonomy model of the firm, its antithesis, the free market, neoliberal image of the firm needs to be presented. The corporation was one of the major social inventions serving as the primary vehicle for the quick and welfare-generating expansion of the capitalist economy, and the regulatory state wherein the corporation was embedded. Corporate capitalism was a framework of loosely coupled visions of an economy wherein the corporation was a foremost legal device, conducive of economic venturing and welfare, and which provided various stakeholders with possibilities for advocating their interests within a joint scenario. In the economy, around three-quarters of all public companies’ stock are held by institutional investors, including pension funds, mutual funds, and hedge funds. The hypothesis regarding overbearing agency costs is a counterintuitive claim as the growth in economic welfare that has be witnessed is for considerable parts generated on the basis of informed and qualified managerial decision-making on various levels.