Edith Penrose’s Organizational Theory of the Firm: Contract, Conflict, Knowledge and Management

Christos Pitelis

Chapter 10 in Organizations as Knowledge Systems, 2004, pp 238-251 from Palgrave Macmillan

Abstract: Abstract In 1959 Edith Penrose published The Theory of the Growth of the Firm (TGF). This book marked the first attempt by an economist to examine the internal workings of firms, in order to explain endogenous knowledge creation, innovation and firm growth. Penrose saw the external environment as an ‘image’ in the minds of management, and suggested a dynamic interaction between the internal and external environments, which defined what she called firms’ ‘productive opportunity’. She placed particular importance on human resources — in particular management — and saw managerial constraints as limiting the rate of growth of firms, albeit not their size per se.

Keywords: Transaction Cost; Employment Contract; Shared Vision; Wealth Creation; Capitalist Firm (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-52454-5_11

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DOI: 10.1057/9780230524545_11

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