Edith Penrose, economics and strategic management

Edith Penrose's work on The Theory of the Growth of the Firm is often seen as a classic in strategic management and a precursor of today's resource-based view of the firm. However, it is argued in this paper that this is, at best, imprecise and rather a misrepresentation of Penrose: her interest was not in whether there can be rents in equilibrium, but in firm growth as a disequilibrium phenomenon. Moreover, her basic vision of the competitive process is very different from that which animates modern economic approaches to strategy, such as the resource-based approach and new industrial organisation economics. This paper briefly discusses some implications for modern strategic thinking of Penrose's vision.