The theory of the firm and its critics: a stocktaking and assessment
Abstract
Since its emergence in the 1970s the modern economic or Coasian theory of the
firm has been discussed and challenged by sociologists, heterodox economists, management
scholars, and other critics. This chapter reviews and assesses these critiques, focusing on behavioral
issues (bounded rationality and motivation), process (including path dependence and the selection argument), entrepreneurship, and the challenge from knowledge-based
theories of the firm.