Firms Primarily Exist Because Larger Organisations Utilising Specialisation and Division

question 41

True/False

Firms primarily exist because larger organisations utilising specialisation and division of labour can be much more efficient in producing goods and services.

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Definitions:

Economic Viability

The ability of an entity, project, or activity to sustain its operations and make a profit over the long term.

Wrongful Dissociation

In the context of business partnerships or limited liability companies, this term refers to the improper withdrawal of a partner or member from the business, breaching the operating agreement and possibly resulting in liability.

Novation

Novation is the act of replacing one obligation with another by mutual agreement, effectively transferring the rights and duties to a new party.

Valid Obligation

A duty or commitment that is legally binding and enforceable by law.