In November 1937 Ronald Coase discovered Good Decision Making.
He won a Nobel Prize for Economics in 1991.
Here's the gist of what he published in his paper.
The patron of the Good Decision is the Entrepreneur.
She creates a Widget.
Other Entrepreneurs apply their Widget to hers on its way to a buyer. Each demands decisions: pricing, colour, size, insurance, contracts, transport, dispute resolution, intellectual property ownership. Each decision has a cost which is passed on to the price of her Widget.
She realises it's cheaper to bring all of those individual decisions under one roof.
The Firm is born.
The external costs of decisions move to be cheaper internal Firm expenses that still add to the cost of the Widget.
The price of a Widget is the sum of each decision that is made on its way to find a buyer.
The Firm is only viable if its Decision Making costs less than out in the market - or another firm.
Good Decision Making defines the successful Firm.
In May 2012 at age 101 and a year before his death, Ronald Coase made another contribution to our understanding of Good Decision makers.
When asked why such a great mind as his failed to predict the speed of China's rise as an economic power, he said:
'I've been wrong so often I don't find it extraordinary at all.'