ABSTRACT
Business administration classes in the United States usually advise students to create best-selling devices to make signifi cant profi ts for a fi rm, leading to growth in terms of stock, employees, property, plant, equipment, and so forth. In addition, students sometimes learn about mergers and acquistions (M&A), which increase corporation size. However, is fi rm growth really the goal of a company? Recent legal problems disclosed by large fi rms such as Enron and WorldCom suggest there may be a threshold of company size . Corporate control mechanisms may not function smoothly above this threshold, leading to moral hazard , i.e., an increase in reckless or immoral behavior because members of the fi rm believe they will be saved when things go wrong.
