Information theory of the firm

The purpose of this thesis is to explain the role of information in the theory of the firm. This provides a new perspective on how information impacts firm expansion and boundary. Information helps a firm become more certain on how to direct the firm. Uncertainty is the opposite; it causes confusion and problems for the firm. This thesis discusses two ways a firm can develop certainty. The first is through experience and learning. These may require time and effort. The second is through expansion. Expansion increases resources and capacity for the firm to deal with uncertainty. Certainty is manifest as operational intelligence and stability. Operational intelligence is based largely on how the firm operates and stability focuses on the current position of the firm. These two elements of certainty determine the firm boundary.