Is It Necessary a Renewal of the Theory of the Firm Based on Pandemic realities?

This paper deals with the study of the reverse impact made by the state regulation of entrepreneurial activity on economic development indicators and with substantiation of the expediency to develop new business management theories. According to the analysis of studies on “firm” definition and the peculiarities of its operation, these issues have been actively studied since Adam Smith when the firm was an important component of the marketplace, and until the legislative definition and certification of its operation. The article considers the firm a legal entity, an open economy institution operating under corporate law. The study is conducted based on a critical review of the literature in this field, including information and news of the pandemic period, the synthesis of which allows to draw conclusions about the possibility and need to update the theoretical basis for organizational management, based on the deduction method. According to the analysis results, today, the firm operates in conditions of increased competition and an open environment. Its main functions are the production of goods or services, making a profit and meeting the needs of the population, government agencies or other firms, and the basis of the activities of legislation and regulations approved by government agencies. One of the main problems in modern firms’ functioning is the coronavirus pandemic, which is the essential structural crisis in the economy after World War II. It caused rising unemployment, significant loss of profits, and bankruptcy of small and medium-sized enterprises. Thus, one of the most stable and efficient sectors of the pandemic economy is the IT business and the catering sector. The study shows the need to transform organizations’ existing management strategies in terms of their adaptation to the realities of the modern world economic system. The study results can be useful for managers and heads of enterprises in improving the efficiency of firms during the crisis. Keywords: Lockdown, Pandemic, Profit, Public Authorities Support, Theory of the Firm, Wellbeing.