The Theory of the Growth of the Firm

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OUP Oxford, 2009 - Business & Economics - 301 pages
There are not many books that are genuine classics, and only a handful in business and management whose insights and ideas last for 50 years and more. This book is one of the very few 'must reads' for anybody seriously interested in the role of management within the firm.Originally published in 1959, The Theory of the Growth of the Firm has illuminated and inspired thinking in strategy, entrepreneurship, knowledge creation, and innovation. Edith Penrose's tightly-argued classic laid the foundations for the resource based view of the firm, now the dominant framework in business strategy. She an.

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The classic book from 1950s which paved the way for the resource-based view on the development of the firm. It outlines the primary factors which influence whether the firm will grow or fail. The most important contribution of this book to the later business and strategy theory has been the concept of the inherent management limit - it is the limited management capacity which is the primary limit for the business growth. The most valuable resources in any firm are the entrepreneurial and management resources.
Clear and logical conclusions, however when reading this book now, many of them seem rather trivial. This feeling is enhanced by Penrose's (author's) writing style - she tends to describe the same argument several times and remind of them later in the book. I would recommend to read the first three chapters which capture the main argument - the rest is becoming repetitive and specific.
The book might be especially interesting for the management consultants, those dealing with conceptualising M&A processes and business&strategy scholars.

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