A firm is essentially a pool of resources the utilization of which is organized in an administrative framework. - Edith Penrose

A firm is more than an administrative unit; it is also a collection of productive resources the disposal of which between uses and over time is determined by administrative decision.

Internal inducements to expansion arise largely from the existence of a pool of unused productive services, resources and special knowledge, all of which will always be found within any firm.

Management tries to make the best use of the resources available.