Taxonmy Taxonomy Classical Theory 1:

TAXONMY

Taxonomy

Classical theory 1: Penrose's Theory of the Growth of the Firm

Pitelis, Christos. (2009, March 14). Edith Penrose's the Theory of the Growth of the Firm fifty years later. Available at SSRN Working Paper series October 20, 2009: http://ssrn.com/abstract=1477885

Penrose's theory of firm behavior emphasized the degree to which appropriate allocation of administrative, human, and strategic resources affect an organization's success. It challenged traditional rationalist 'black box' concepts of the firm that stressed external market constraints on productivity. Resource allocation, according to Penrose, is critical for value maximization, including appropriate allocation of human resources. This is an internally-focused theory of growth that deemphasizes the overall market environment. This article argues that her theory is still relevant today in its analysis of the impact of interior forces on firm behavior and the need for specialization within the firm itself.

Classical theory 2: Stakeholder/Shareholder theory

Business ethics: New data from Drexel University illuminate research in business ethics. (2009, August). Economics Week. Retrieved October 20, 2009, from ABI/INFORM Global. (Document ID: 1808144581).

Stakeholder theory, as opposed to shareholder theory, stresses the need to fulfill all of the needs of individuals with stakes in the organization's success, rather than simply to make a profit for the owners of the firm. Stakeholder theory emphasizes the importance of integrating government, employees, the general population, and concerns about the long-term health of the environment into the decision-making process. This article challenges the theory from a libertarian perspective.

Labor-driven theory 3: Employer of Choice Status

Wickham, M., & O'Donohue, W. (2009). Developing Employer of Choice Status: Exploring an employment marketing mix. Organization Development Journal, 27(3), 77-95. Retrieved

October 20, 2009, from ABI/INFORM Global. (Document ID: 1851849331).

In employee-driven markets, high-quality employers such as Google can use employer 'branding' to establish themselves as an Employers of Choice (EOC), or firms that are highly desirable to work for: this can secure top talent, foster an image of the company as ethical and forthright, and further organizational productivity and market-driven success overall.

Labor-driven theory 4: Strategic use of work teams

Pryor, M., Singleton, L., Taneja, S., & Toombs, L. (2009). Teaming as a strategic and tactical tool: An Analysis with recommendations. International Journal of Management, 26(2), 320-333. Retrieved October 20, 2009, from ABI/INFORM Global. (Document ID: 1874986681).

This article argues that the use of work teams is important to achieve many organizational goals, but cautions that teamwork is not an instinct, rather the skills inherent to good team work must be taught.

Mathematical/Game Theory 5: Competitive dynamics

Guidice, R., Alder, G., & Phelan, S. (2009). Competitive bluffing: An examination of a common practice and its relationship with performance. Journal of Business Ethics, 87(4), 535-

553. Retrieved October 20, 2009, from ABI/INFORM Global. (Document ID: 1786751071).

This article examines the strategic use of bluffing and concludes that its value is often overrated, given it quickly diminishes in utility. The authors used a simulated competitive market game to prove their thesis, however they also conclude that even in the real world, bluffing is often not conducive to high levels of real performance, and can have undesirable consequences, including a general eradication of trust.

Mathematical Theories 6 & 7: Modern Portfolio Theory (MPT) and fuzzy logic theory

Hui, E., Lau, O., & Lo, K. (2009). A fuzzy decision-making approach for portfolio management with direct real estate investment. International Journal of Strategic Property

Management: Special Issue: Capacity Building for Post-Disaster. 13(2), 191-204.

Retrieved October 20, 2009, from ABI/INFORM Global. (Document ID: 1743699321).

One problem with use of mathematical analysis in firm decision making is that the exactitude of quantitative analysis does not always take into consideration the dynamics of real life and faulty. human decision-making processes. This has been one criticism of Modern portfolio theory (MPT), a mathematical portfolio optimization strategy using the concept of asset allocation, risk minimization and profit maximization. The authors find that introducing fuzzy logic into MPT can be helpful, given that the foundation of fuzzy logic allows for conclusions to be arrived at in an environment of imprecise, ambiguous, and irrelevant information.

Internal and external marketing based-theories 8, 9, & 10: Resource-based view of the firm, Porter's Five Forces, SWOT