Managerial Theories of the Firm

The continuing growth in the size and importance of very large joint‐stock companies in the modern economy has prompted a search for new theories of the firm which are more relevant in explaining the behaviour of giant enterprises. For whilst the traditional profit‐maximising theory of the firm derived from neo‐classical economics may be an appropriate generalised approximation of the behaviour of firms operating in competitive markets, the need for broader theories to explain the behaviour of large manager‐controlled, oligopolistic companies has been recognised.