ABSTRACT
This chapter focuses on firm theories and the managerial theory of the firm. It provides a brief summary of the evolution of firm theories, so as to provide a theoretical background for the research. The chapter introduces transaction cost economics and relevant theories, with the aim of providing a methodology and analytical tools for the research. It discusses main schools of thought in management theories and their evolutionary processes. The contributions made by George A. Akerlof, A. Michael Spence and Joseph E. Stiglitz form the core of modern information economics. It is interesting that the development of economics of information is in some way parallel with the development of transaction cost economics, and there is a parallel literature on both fields. Modern large enterprises occupy an important position in both national and international economy, and, profound changes have taken place in their internal organizational structure and management systems.
