Authors : Daksh Agarwal

Volume/Issue : Volume 10 - 2025, Issue 8 - August

Google Scholar : https://tinyurl.com/45whnnak

Scribd : https://tinyurl.com/3873v588

DOI : https://doi.org/10.38124/ijisrt/25aug871

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Abstract : The innovation of technology, especially of Artificial Intelligence (AI), is reshaping business systems and redefining company behavior across industries. AI is broadly defined as technology mimicking human thought processes. It is now a general-purpose tool driving efficiency, scale, and competitive advantage. Its impacts are being felt differently across the spectrum of company sizes and specialties. Small companies leverage it to improve operations; larger ones are applying it to core activities like marketing and sales. Along the way, it has also triggered some rethinking of our theoretical frameworks for understanding business behavior like the Theory of the Firm, including Transaction Cost Economics and the Resource-Based View that explain why companies internalize versus outsource functions when AI, in particular, is lowering transaction costs and thereby increasing organizational agility. Meanwhile, the timeline of these impacts as mentioned earlier is accelerating. Increasingly, business structures themselves will also change: more flattening of hierarchies, for example, as self-managing teams and automation come into play. So what is the Cost-Benefit Analysis that's going on behind this change? And who's going to do the work inside these structures of the future?

Keywords : Artificial Intelligence, Theory of Firm, Transaction Cost Economics, Cost-Benefit Analysis.

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