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A Final Word on Edith Penrose

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  • Alan M. Rugman
  • Alain Verbeke

Abstract

ABSTRACT Rugman and Verbeke (2002) established that Edith Penrose's contribution to the resource‐based view in strategic management has been misunderstood by many scholars in the field. The present paper augments this analysis, and demonstrates that Penrose did not view the pursuit of rents as a worthwhile endeavour. Penrose did build on a number of conceptual foundations of neo‐classical economics, and accepted the profit‐maximizing assumption as largely consistent with the pursuit of an optimal growth path. But optimal growth, not the pursuit of rents, was the focus of her analysis. In addition, Edith Penrose's real normative agenda was the increase of societal welfare at the macro‐level through innovation at the firm‐level. Penrose's work on multinational enterprises shows that she had a strong preference for eliminating rents that would accrue to large multinational firms at the expense of local firms in host countries.

Suggested Citation

  • Alan M. Rugman & Alain Verbeke, 2004. "A Final Word on Edith Penrose," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 205-217, January.
    • Handle: RePEc:bla:jomstd:v:41:y:2004:i:1:p:205-217
    DOI: 10.1111/j.1467-6486.2004.00429.x
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    Cited by:

    1. Pattit, Jason M. & Pattit, Katherina G. & Spender, J C, 2021. "Edith T. Penrose: Economist of "The Ordinary Business of Life"," MPRA Paper 106375, University Library of Munich, Germany.
    2. Peter J. Buckley & Mark Casson, 2010. "Edith Penrose’s Theory of the Growth of the Firm and the Strategic Management of Multinational Enterprises," Palgrave Macmillan Books, in: The Multinational Enterprise Revisited, chapter 11, pages 277-300, Palgrave Macmillan.
    3. Raúl Estrada-Lavilla & José Ruiz-Navarro, 2024. "Method for and Analysis of Early-Stage Firm Growth Patterns Using World Bank Data," Sustainability, MDPI, vol. 16(4), pages 1-17, February.
    4. John Joseph & Alex J. Wilson, 2018. "The growth of the firm: An attention‐based view," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1779-1800, June.
    5. Steve Thompson & Mike Wright, 2005. "Edith Penrose's contribution to economics and strategy: an overview," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 57-66.
    6. Mie Augier & David J. Teece, 2007. "Dynamic capabilities and multinational enterprise: Penrosean insights and omissions," Management International Review, Springer, vol. 47(2), pages 175-192, March.
    7. Steven Toms, 2010. "Value, profit and risk: accounting and the resource‐based view of the firm," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(5), pages 647-670, June.
    8. Anthony Goerzen & Paul W. Beamish, 2007. "The Penrose effect: “Excess” expatriates in multinational enterprises," Management International Review, Springer, vol. 47(2), pages 221-239, March.
    9. Fariborzi, Hadi & Osiyevskyy, Oleksiy & DaSilva, Carlos, 2022. "The effect of geographic scope on growth and growth variability of SMEs," Journal of World Business, Elsevier, vol. 57(5).
    10. Finch, John & Wagner, Beverly & Hynes, Niki, 2012. "Resources prospectively: How actors mobilize resources in business settings," Journal of Business Research, Elsevier, vol. 65(2), pages 164-174.
    11. Adams, Kweku & Attah-Boakye, Rexford & Yu, Honglan & Chu, Irene & Ishaque, Maria, 2023. "Competence and enterprise of management as drivers of early foreign listing of medium-sized emerging market multinationals (EMNEs) from Africa," Journal of Business Research, Elsevier, vol. 158(C).

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