This stimulating research review analyses how the theory of the firm evolved from several core concepts and building blocks that underpin this important area of economics. It discusses a variety of perspectives from leading scholars in the field, including the basic elements of: risk and uncertainty; information and knowledge; bounded rationality and decision making; motives and incentives; resources and capabilities; and transactions. The review goes on to examine how the various elements are integrated into the modern Theory of the Firm with the notion of organization coming increasingly to the fore. It focuses on norms; rules and routines; the entrepreneur; governance; hierarchies; co-operation, teams and networks; innovation and appropriability. This comprehensive review will be an invaluable reference tool for all researchers and students with an interest in the modern theory of the firm, highlighting how it needs to evolve further to address the important management and policy issues of our time.

What is the nature of the firm? Why do firms adopt certain strategies in preference to others? What are the competitive implications of large firm mergers and alliances for government policy? These are extremely important and highly topical questions which tend to be treated separately in most contemporary analysis. However, in this new book based on his original research, Neil Kay shows how these questions are closely inter-related and explores the implications this has for the formulation of corporate strategy and public policy.