Theory of the Growth of the Firm

Discipline: Economics

Posited by British economist EDITH PENROSE (1914-1996) and forming part of managerial theories of the firm, theory of the growth of the firm relates to economic expansion due to processes taking place within the firm.

Managers are presumed to reach their optimal rates of power and prestige by following a path towards product excellence and maximum growth.

Also see: agency theory, satisficing, theory of the firm, x-efficiency

Source:
E T Penrose, The Theory of the Growth of the Firm (Oxford, 1959); R Marris, The Economic Theory of'Managerial' Capitalism (London, 1964)

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