Question

Interaction between product market and factor market

Answer 1

Think about corporations, they usually imagine a large company with hundreds or even thousands of employees. With so many people working within one company, there has to be an order and structure that keeps the areas of communication clear and easy to understand. This form of structure is known as corporate governance. Corporate governance isn’t just one structure though, but instead it consists of the various duties, obligations, and rights that control and direct a corporation. The point of this governance is to properly distribute the responsibilities that those who participate in the corporation have, such as the managers, stakeholders, creditors, regulators, and of course those in the board of directors. In addition to informing these people of their responsibilities, the corporate governance also informs people of their rights within the company.