Edith Penrose
Encyclopedia
Edith Elura Tilton Penrose (November 15, 1914 – October 11, 1996) was an American-born British economist
whose best known work is The Theory of the Growth of the Firm, which describes the ways which firms grow and how fast they do. Writing in The Independent
the economist Sir Alec Cairncross, stated that the book brought Dr. Penrose "instant recognition as a creative thinker, and its importance to the analysis of the job of management has been increasingly realized."
in Los Angeles
. She received a bachelor's degree in 1936 from the University of California at Berkeley. In 1936 she married David Burton Denhardt who died two years later in a hunting accident leaving her with an infant son. She moved to Baltimore
, and took her MA and PhD under the supervision of Fritz Machlup
at Johns Hopkins University
. In 1945 she married Ernest F. Penrose, a British-born economist and writer who had been one of her teachers at Berkeley
. After working for the American Embassy in London
, she received her doctorate in 1950. Her first book, Economics of the International Patent System, was published in 1951.
for many years. When fellow academic Owen Lattimore
was accused by Senator Joseph McCarthy
of being a Soviet spy, Penrose and her husband played a central role in his defence. Because of this experience, Penrose became disillusioned with the US and the couple went on sabbatical leave, first to the Australian National University
in Canberra
and then to Baghdad University.
monarchy, the couple were expelled from Iraq and drove across the Syrian Desert
, through Turkey
and on to the UK.
and the School of Oriental and African Studies
(SOAS). In 1964 she was appointed Chair of Economics with special reference to Asia at the SOAS, a post which she held until 1978. During this time she continued her interest in multinational oil companies, travelling extensively. She also became involved in a number of academic and public bodies including the Monopolies Commission and was elected a Fellow of the Royal Commonwealth Society
in 1985.
in Fontainebleau
, France
. When her husband died in 1984 she retired from INSEAD and moved back to the UK settling at Waterbeach
, Cambridgeshire
near to her surviving sons.
was inadequate to explain how firms grow. Her insight was to realize that the 'Firm' in theory is not the same thing as 'flesh and blood' organizations that businessmen call firms. This insight eventually led to the publication of her second book, The Theory of the Growth of the Firm in 1959. In the introduction to the book, she writes:
"All the evidence we have indicates that the growth of firms is connected with the attempts of a particular group of human beings to do something"
In theorizing about companies that grow, Dr. Penrose wrote: "There are important administrative restraints on the speed of the firm's growth. Human resources required for the management of change are tied to the individual firm and so are internally scarce. Expansion requires the recruitment of more such resources. New recruits cannot become fully effective overnight. The growth process is, therefore, dynamically constrained." Penrose also determined that for companies to grow, their people must grow.
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
whose best known work is The Theory of the Growth of the Firm, which describes the ways which firms grow and how fast they do. Writing in The Independent
The Independent
The Independent is a British national morning newspaper published in London by Independent Print Limited, owned by Alexander Lebedev since 2010. It is nicknamed the Indy, while the Sunday edition, The Independent on Sunday, is the Sindy. Launched in 1986, it is one of the youngest UK national daily...
the economist Sir Alec Cairncross, stated that the book brought Dr. Penrose "instant recognition as a creative thinker, and its importance to the analysis of the job of management has been increasingly realized."
Personal and marital life
Edith Tilton was born on 15 November 1914 at Sunset BoulevardSunset Boulevard
Sunset Boulevard is a street in the western part of Los Angeles County, California, that stretches from Figueroa Street in downtown Los Angeles to the Pacific Coast Highway at the Pacific Ocean in the Pacific Palisades...
in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
. She received a bachelor's degree in 1936 from the University of California at Berkeley. In 1936 she married David Burton Denhardt who died two years later in a hunting accident leaving her with an infant son. She moved to Baltimore
Baltimore
Baltimore is the largest independent city in the United States and the largest city and cultural center of the US state of Maryland. The city is located in central Maryland along the tidal portion of the Patapsco River, an arm of the Chesapeake Bay. Baltimore is sometimes referred to as Baltimore...
, and took her MA and PhD under the supervision of Fritz Machlup
Fritz Machlup
Fritz Machlup was an Austrian-American economist. He was notable for being one of the first economists to examine knowledge as an economic resource....
at Johns Hopkins University
Johns Hopkins University
The Johns Hopkins University, commonly referred to as Johns Hopkins, JHU, or simply Hopkins, is a private research university based in Baltimore, Maryland, United States...
. In 1945 she married Ernest F. Penrose, a British-born economist and writer who had been one of her teachers at Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
. After working for the American Embassy in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, she received her doctorate in 1950. Her first book, Economics of the International Patent System, was published in 1951.
McCarthyism and departure from US
Dr. Penrose was a lecturer and research associate at Johns Hopkins UniversityJohns Hopkins University
The Johns Hopkins University, commonly referred to as Johns Hopkins, JHU, or simply Hopkins, is a private research university based in Baltimore, Maryland, United States...
for many years. When fellow academic Owen Lattimore
Owen Lattimore
Owen Lattimore was an American author, educator, and influential scholar of Central Asia, especially Mongolia. In the 1930s he was editor of Pacific Affairs, a journal published by the Institute of Pacific Relations, and then taught at Johns Hopkins University from 1938 to 1963...
was accused by Senator Joseph McCarthy
McCarthyism
McCarthyism is the practice of making accusations of disloyalty, subversion, or treason without proper regard for evidence. The term has its origins in the period in the United States known as the Second Red Scare, lasting roughly from the late 1940s to the late 1950s and characterized by...
of being a Soviet spy, Penrose and her husband played a central role in his defence. Because of this experience, Penrose became disillusioned with the US and the couple went on sabbatical leave, first to the Australian National University
Australian National University
The Australian National University is a teaching and research university located in the Australian capital, Canberra.As of 2009, the ANU employs 3,945 administrative staff who teach approximately 10,000 undergraduates, and 7,500 postgraduate students...
in Canberra
Canberra
Canberra is the capital city of Australia. With a population of over 345,000, it is Australia's largest inland city and the eighth-largest city overall. The city is located at the northern end of the Australian Capital Territory , south-west of Sydney, and north-east of Melbourne...
and then to Baghdad University.
Baghdad & the Oil Industry
While in Baghdad, Penrose saw an opportunity to study the economics of the oil industry. This work culminated in a book, The Large International Firm in Developing Countries: The International Petroleum Industry, which was published in 1968. After the overthrow of the HashemiteHashemite
Hashemite is the Latinate version of the , transliteration: Hāšimī, and traditionally refers to those belonging to the Banu Hashim, or "clan of Hashim", a clan within the larger Quraish tribe...
monarchy, the couple were expelled from Iraq and drove across the Syrian Desert
Syrian Desert
The Syrian Desert , also known as the Syro-Arabian desert is a combination of steppe and true desert that is located in the northern Arabian Peninsula covering 200,000 square miles . also the desert is very rocky and flat...
, through Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
and on to the UK.
Move to UK
In 1959, she took a joint readership post in economics with at the London School of EconomicsLondon School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
and the School of Oriental and African Studies
School of Oriental and African Studies
The School of Oriental and African Studies is a public research university located in London, United Kingdom and a constituent college of the University of London...
(SOAS). In 1964 she was appointed Chair of Economics with special reference to Asia at the SOAS, a post which she held until 1978. During this time she continued her interest in multinational oil companies, travelling extensively. She also became involved in a number of academic and public bodies including the Monopolies Commission and was elected a Fellow of the Royal Commonwealth Society
Royal Commonwealth Society
The Royal Commonwealth Society is an international educational charity and a private members' club. Its mission is to support and promote the modern Commonwealth, its culture and core values...
in 1985.
INSEAD
At age 64, Penrose retired from SOAS and took up a position as Professor of Political Economy at INSEADINSEAD
INSEAD is an international graduate business school and research institution. It has campuses in Europe , Asia , and the Middle East , as well as a research center in Israel...
in Fontainebleau
Fontainebleau
Fontainebleau is a commune in the metropolitan area of Paris, France. It is located south-southeast of the centre of Paris. Fontainebleau is a sub-prefecture of the Seine-et-Marne department, and it is the seat of the arrondissement of Fontainebleau...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. When her husband died in 1984 she retired from INSEAD and moved back to the UK settling at Waterbeach
Waterbeach
Waterbeach is a large fen-edge village located 6 miles north of Cambridge in Cambridgeshire in England, and belongs to the administrative district of South Cambridgeshire. The parish covers an area of 23.26 km².- Village :...
, Cambridgeshire
Cambridgeshire
Cambridgeshire is a county in England, bordering Lincolnshire to the north, Norfolk to the northeast, Suffolk to the east, Essex and Hertfordshire to the south, and Bedfordshire and Northamptonshire to the west...
near to her surviving sons.
The Theory of the Growth of the Firm
While at Johns Hopkins, Penrose participated in a research project on the growth of firms. She came to the conclusion that the existing theory of the firmTheory of the firm
The theory of the firm consists of a number of economic theories that describe the nature of the firm, company, or corporation, including its existence, behavior, structure, and relationship to the market.-Overview:...
was inadequate to explain how firms grow. Her insight was to realize that the 'Firm' in theory is not the same thing as 'flesh and blood' organizations that businessmen call firms. This insight eventually led to the publication of her second book, The Theory of the Growth of the Firm in 1959. In the introduction to the book, she writes:
"All the evidence we have indicates that the growth of firms is connected with the attempts of a particular group of human beings to do something"
In theorizing about companies that grow, Dr. Penrose wrote: "There are important administrative restraints on the speed of the firm's growth. Human resources required for the management of change are tied to the individual firm and so are internally scarce. Expansion requires the recruitment of more such resources. New recruits cannot become fully effective overnight. The growth process is, therefore, dynamically constrained." Penrose also determined that for companies to grow, their people must grow.
Published works
- The Economics of the International Patent System, Baltimore, MD, Johns Hopkins PressJohns Hopkins University PressThe Johns Hopkins University Press is the publishing division of the Johns Hopkins University. It was founded in 1878 and holds the distinction of being the oldest continuously running university press in the United States. The Press publishes books, journals, and electronic databases...
, 1951, ISBN 0837166535 - The Theory of the Growth of the Firm, New York, John Wiley and Sons, 1959, ISBN 9780198289777
- The Growth of the Firm - A Case Study: The Hercules Powder Company, Business History Review, Volume 34 Spring Issue, S. 1-23, 1960
- The Large International Firm in Developing Countries: The International Petroleum Industry, London, Allen & Unwin, 1968, ISBN 0837188504
- New Orientations: Essays in International Relations, with Peter Lyon, Frank Cass & Co, 1970, ISBN 0714625930
- Iraq: International Relations and National Development, with Ernest Penrose, Boulder, Westview Press, 1978, ISBN 0891588043