Theory of the Firm: Historical Review and Future Perspectives

Multiple theories of the firm have sought to provide interpretative models of economic phenomena to support management. The aim of this article is to provide a descriptive-exploratory overview of the main traditional contributions on theories related to the firm. Through a managerial perspective, the underlying arguments, basic assumptions, key implications, as well as strengths and weaknesses for each theoretical model are summarized chronologically. Current contexts demonstrate the need for an approach that can grasp the «complementarities » among different theories, using a framework that integrates various perspectives. There is no one superior theory, and by synthesizing multiple approaches it is possible to enhance the understanding of current economic phenomena. The study of firm theories fortifies the management toolkit of policy-makers and members of the business community, enabling a better grasp of the causes and consequences of economic phenomena, and better identification of potential solutions for various issues related to business activities, thus fueling more efficient decision-making processes. Important directions for future research are identified, starting from the changing nature of the firm.