• Summary
  • Contents
  • Subject index

Economic Foundations of Strategy provides not only the essential basic tenets of strategy, it also shows the inter-relationships of five major theories of the firm: the behavioral theory; transaction costs theory; property rights theory; agency theory; and dynamic resource-based theory.  Even though technological, organizational and institutional change advances breathlessly, the theories of the firm provided in this research book are durable principles that have stood, and the author maintains will continue to stand, the test of time.  Economic Foundations of Strategy emphasizes the complementarities among these five theories of organization, and the potential for integrating these theories in the evolving science of organization. Applications of these theories to business practice are emphasized throughout the book.  

Behavioral Theory of the Firm
Behavioral theory of the firm

The chapter begins with Barnard's (1938) The Functions of the Executive and is followed by four books from the Carnegie School: Simon's (1947) Administrative Behavior, March and Simon's (1958) Organizations, Cyert and March's (1963) A Behavioral Theory of the Firm, and Simon's (1982) Models of Bounded Rationality: Behavioral Economics and Business Organization. These books contain some of the best scholarly writings that the research literature has to offer on the behavioral theory of the firm. These research books are worth studying in detail because they continue to be widely cited today and because their clarity and relevance have not yet been surpassed.

The decision to classify the behavioral theory of the firm as part of an organizational ...

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