The economic theory of the firm has strongly influenced our current understanding of the raison d’être, functioning, and internal organization of organizations. Yet, organizations today operate under quite different conditions than the ones that prevailed when some of the foundations for the contemporary theory of the firm were laid (i.e., the 1930s to the 1970s). The unfolding knowledge economy and the growing pressure for corporate social responsibility promise to profoundly affect the nature of corporations. We discuss what the economic theory of the firm has to offer for understanding these challenges faced by corporations today and where the knowledge economy and corporate social responsibility push the limits of the economics of organization.
LINDER, S. and FOSS, N.J. (2019). The Changing Nature of the Corporation and the Economic Theory of the Firm. In: Thomas Clarke, Justin O'Brien, Charles O'Kelley eds. The Oxford Handbook of the Corporation. 1st ed. Oxford University Press, pp. 539-562.