Theory of the Firm for Strategic Management

Citation

Dyson, K. (2010), "Theory of the Firm for Strategic Management", Leadership & Organization Development Journal, Vol. 31 No. 3, pp. 285-286. https://doi.org/10.1108/01437731011039370

This book integrates and expands on key theories on strategy and economic value developing a value‐based theory for the organisation. The book assumes a considerable level of prior knowledge and understanding in relation to strategy, strategic thinking and economic theory and is therefore more appropriate for postgraduate study.

The book is divided into two sections Part 1 covering Theories of the Firm and Part 11 Firm strategies. The opening pages of Part 1 looks at the firm i.e. the company, business or corporation through four theoretical “lenses”, discussing the organisation as a production init, as a decision making process as a contracting solution and as a collection of resources. The ensuing chapters in Part 1 provide a comprehensive and in depth review of the strategy and economic literature including for example Prahalad and Hamel, Grant, Coase and Porter. Chapter 4 attempts to shed light on the difficult question of what is economic value? It examines value from the perspective of economic, marketing finance and strategy exploring the range of sources of customer value creation.

The first four chapters of Part 11 examine the strategies of the Firm from the perspective of Business, Corporate, International and Strategy and Social Value. Each chapter examines these perspectives in depth. There is a case study at the end of each chapter that gives insight into the value analysis in that particular organisation. Examples used include The Body Shop in relation to its corporate social responsibility agenda and Wal‐Mart and Ikea and their relative success in international expansion of their respective business.

The final chapter details value analysis in strategy and summarizes the contribution a value perspective can make to an organisation. There is a very useful further reading section with an annotated bibliography for each chapter.

This academic book is clearly targeted at the postgraduate market who already have an in depth knowledge and understanding of the subject area and undoubtedly the book is a useful addition to the wealth of strategy materials at doctoral study level.

However, written in a more appealing and engaging style it could also be marketed as a useful resource for business leaders needing to identify strategic direction. In its present format that potential readership is definitely excluded. It also lacks any real practical application, the case studies and references to actual businesses or corporations and their strategies are very limited. Adding these as a either an additional text or web link through the book would greatly enhance the overall readability of the book.