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Government code of california

  1. Mar 21, 2006 #1
    the government code of california (section 16649.80 (b)) defines business firm as "any foreign or domestic organization, association, corporation, partnership, venture, or other entity, its subsidiary, or affiliate which exists for profitmaking purposes or to otherwise secure economic advantage, other than a financial institution."

    (i am sure that financial institutions also exist for profitmaking purposes or to otherwise secure economic advantage.)

    i think the only way to make profit and secure economic advantage is to sell goods at a price higher than what they cost to produce or buy.

    if you observe an organization in which the profit appears to increase, the state of that organization has changed from a relatively disorganized state to a more organized state. the same can be said of any system in which the entropy appears to decrease. if you observe a system in which the entropy appears to decrease, the state of that system has changed from a relatively disorganized state to a more organized state. in other words, if you observe an organization in which the profit appears to increase, it is the same as saying that you observe a system (the organization) in which the entropy appears to decrease.

    what happens to the environment of an organization that exists for profitmaking purposes or to otherwise secure economic advantage?

    it is the change in entropy that ultimately provides us with the answer to how systems will naturally evolve in one direction with time and not the other: systems always evolve in time in such a way that the total entropy of system + environment increases. if you observe a system in which the entropy appears to decrease, you can be sure that somewhere there is a change in the entropy of the environment large enough to make the total entropy change positive. in other words, suppose we represent the change in the entropy of the system with the letter N and the change in the entropy of the environment with the letter P. then N + P is positive because the magnitude of P is greater than the magnitude of N and the direction of P is positive while the direction of N is negative. the cost of N to the environment is P.

    with respect to organizations that exist for profitmaking purposes or to otherwise secure economic advantage, it is the change in profit that ultimately provides us with the answer to how organizations will naturally evolve in one direction with time and not the other: organizations always evolve in time in such a way that the total profit of organization + environment decreases. if you observe an organization in which the profit appears to increase, you can be sure that somewhere there is a change in the profit of the environment large enough to make the total profit change negative. in other words, suppose we represent the change in the profit of the organization with the letter M and the change in the profit of the environment with the letter L. then M + L is negative because the magnitude of L is greater than the magnitude of M and the direction of L is negative while the direction of M is positive. the cost of M to the environment is L.

    while the entropy of organizations that exist for profitmaking purposes or to otherwise secure economic advantage decreases, the entropy of their environment increases. the magnitude of the change in the entropy of the environment is greater than the magnitude of the change in the entropy of the organizations.

    if you observe the environment in which the entropy appears to increase, the state of the environment has changed from a relatively organized state to a more disorganized state. or to say the same thing in a different way, if you observe the environment in which the profit appears to decrease, the state of the environment has changed from a relatively organized state to a more disorganized state.
     
    Last edited: Mar 22, 2006
  2. jcsd
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