**6. Sustainability of a firm**

According to the traditional concept, a firm is composed of contracts among interrelated groups within. The nexus-contract meaning of firms [4, 21, 32, 33, 53] views the value of firms as the value of explicit contracts among monetary stakeholders, such as shareholders and debt holders. Such meaning of the term "firm" is challenged by the increasing importance of nonmonetary and *implicit* stakeholders. From this perspective, values of firms can be increased because of the increasing value of implicit contracts [22, 75] and intangible assets [11, 51, 82]. Further, since each constituency can bargain with a firm over the effective means for protecting its interests, value of firms can be increased (or decreased), when each constituencies' individual interest is satisfied [11]. Stakeholders' theory and nexus-of-contract firms are aligned to each other because all stakeholders participate as contractors in the formation of a firm. In this view, the intrinsic value of each groups' interest is the added value to a firm. As explained earlier by the author, the main normative clause from the nexus-of-contract theory is the agency theory, which posits that agency cost or agency problem is naturally occurring in the separation of ownership and controls [53]. Under the agency base theory, the value of a firm can be increased when agency costs are minimized. Agency theory focuses on explicit contractual relationships. Hill and Jones [46] and Boatright [11] proposed a new conceptual theory of agency-cost among stakeholder groups, which is called stakeholder-agency theory. Their model contends that stakes of constituencies or the various sizes of stakes are derived from the implicit contracts of the specific assets invested by stakeholders. By definition, specific assets means assets that cannot be redeployed to an alternative use without a loss of value [11, 46, 79, 80]. In this model, the relationship between manager and each stakeholder depends on such specific assets [11] and the power of difference between managers and stakeholders [46].

Promotions in the job, a continuing production of handling quality products, or services to customers are examples of implicit contracts that can affect a firms' value. As outlined by Williamson [79, 80]), Hill and Jones [46] and Boatright [11], human capital is an example of an intangible asset *and is called on as a specific asset only if the human assets in the particular firm pose a unique skill to work within only that kind of business*. Talented staffs with specific skill are usually found in the computer business or airlines business.
