A Behavioral Theory of the Firm

by Richard M. Cyert, James G. March

A Behavioral Theory of the Firm has become a classic work in organizational theory, and is one of the most significant contributions to theory intended to improve the operation of the modern corporation. The authors use experiments and empirical observations to build their model of decision making. They reject the structure of the firm as represented by classical economic theory, instead they focus on the discretion of management. They also offer a new way of viewing the effects of organization, communications and individuals on the firm's overall activity. This is path breaking book and among the most important and provocative interpretations yet advanced for seeing inside the firm to understand it as an organization and an economic entity.

Genres: Business, Nonfiction, Economics, Management

346 pages, Paperback

First published July 27, 1992

Reviews

[Atulit Singh · Rating 5 out of 5]

Economic decision-making in firms is influenced not only by market factors but also by internal dynamics. Firms, as large and complex organizations, actively shape and respond to market conditions through their structures and strategies. Four key aspects have been emphasized in order to study the internal dynamics of firms, which are: 1. Focusing on a few critical economic decisions made by firms, 2. Developing a process-oriented model of the firm, 3. Ensuring models are closely linked to empirical observations, and 4. Creating a theory with general applicability beyond the specific firms studied. This classic work highlights the importance of understanding the internal and external factors that influence firm decision-making. Throughout the book the assumption of rationality is challenged, both empirically and descriptively.

[Jaakko · Rating 5 out of 5]

Klassikko, jonka monista käsitteistä tärkeimmät ovat jääneet elämään organisaatioteoriaan.

Lisäbonuksena toisen painoksen epilogi tarjoaa hyvän katsauksen 60-80- lukujen organisaatio- (ja talous-)teorian tärkeimpiin edistysaskeliin.

[Jen Watkins · Rating 1 out of 5]

I found this book to be completely unreadable and I really gave it a good shot because I am interested in understanding the behavioral theory of the firm (or at least I was before trying to read this sucker).

[Stephen · Rating 3 out of 5]

READ MAR 2010

This classic work uses economic and decision theories to describe the behavior of the firm. Best quote, "...we cannot assume that a rational manager can treat the organization as a simple instrument in his dealings with the external world" (p. 205).

[Steen Sørensen]

A must read Classic