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The organisational factor and the growth of firms

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  • Fabrizio Traùf

Abstract

The paper analyses the role played by the ‘managerial factor’ in conditioning the rhythm and intensity of firms’ growth. It argues that growth has to be intended as a measure of the capability of the firm to successfully cope with the problems arising from increasing complexity. According to a Penrosean perspective, such a capability may be bounded at any given time by a lack of those (internal) managerial resources which provide the firm with a set of ‘uniquely valuable’ services, and which create a differential advantage over its competitors. In a ‘dynamic capabilities’ view, such advantages need to be continuously modified through a process of search and selection. This has assumed peculiar relevance in the face of the ‘hyper-competition’ regime characterising the more recent phase of industrial development, asking firms’ executives to develop an increasing ability to find creative solutions to continuously moving targets, therefore making the management function a key driver to change.

Suggested Citation

  • Fabrizio Traùf, 2017. "The organisational factor and the growth of firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 749-774.
    • Handle: RePEc:oup:cambje:v:41:y:2017:i:3:p:749-774.
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    File URL: http://hdl.handle.net/10.1093/cje/bev082
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    References listed on IDEAS

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    1. Hayek, F. A., 1996. "Individualism and Economic Order," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226320939, April.
    2. Foss, Nicolai J, 1999. "Edith Penrose, Economics and Strategic Management," Contributions to Political Economy, Cambridge Political Economy Society, vol. 18(0), pages 87-104.
    3. Chong Ju Choi & Carla C. J. M. Millar & Caroline Y. L. Wong, 2005. "Knowledge and the State," Palgrave Macmillan Books, in: Knowledge Entanglements, chapter 0, pages 19-38, Palgrave Macmillan.
    4. Hart, Peter E & Oulton, Nicholas, 1996. "Growth and Size of Firms," Economic Journal, Royal Economic Society, vol. 106(438), pages 1242-1252, September.
    5. repec:nsr:niesrd:77 is not listed on IDEAS
    6. Pitelis, Christos (ed.), 2002. "The Growth of the Firm: The Legacy of Edith Penrose," OUP Catalogue, Oxford University Press, number 9780199248520.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Firm growth; Managerial factor; Entrepreneurship; Willingness to grow; Dynamic capabilities;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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