The Theory of the Firm: An Historical Review
33 Pages Posted: 1 May 2019
Date Written: March 30, 2019
Many observations and attempts have been made to build a logical model that supports the management, linking the theory with business practices. Although today the management “toolbox” has been developed so strongly to address almost all of the complex competitions, there still exist many debates to find the best model with ability to synthesize the whole context and the theory that best explains the function of the business. There have been numerous contributions to identify theories that are capable of explaining the business systems and processes. There are many disciplines on this topic and each provides an analysis based on particular point of view. All the different theories that try to interpret the firm’s economic function rely on a series of exemplifications about the complexity of the real world so as to formulate a body of concept and common rule applicable to all firms. The objective of this article is to provide a review about main contributions about firm concepts by summarizing briefly each logical model, the basis behind reasoning, the assumptions, the principle implications as well as its strengths and weaknesses.
This work presents a descriptive-explorative content without giving out definitive answers to such theoretical hypotheses, with the aim to review different research fields, mainly in the chronological order.
Keywords: theory of the firm, historical review of firm's theory
JEL Classification: M00, N00, B20
Suggested Citation: Suggested Citation