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Purpose The economic theory of the firm apparently concurs with Niklas Luhmann’s theory of social systems with regard to the primary function of the firm to be complexity reduction, i.e. the alleviation of the cognitive burden on agents whose cognitive capacities are limited. At the same time, however, the theory of the firm ignores the attendant...
The prevailing theories of the firm acknowledge the importance of trust and loyalty but neglect such behaviour in the substance of their analyses. The present paper unravels this paradox by drawing on Niklas Luhmann's groundbreaking insight that the complexity-reducing function of social systems leads them to neglect their critical environmental de...
This article contends that, in their treatments of worker cooperatives, the predominant theories of the firm adhere to the logic of technological determinism, and can accordingly be evaluated using the ideas of Thorstein Veblen and Karl Marx. Invoking these patriarchs’ respective distinctions between instrumental and ceremonial institutions and bet...
The purpose of this dissertation is to challenge the predominant theories of the firm in economics by demonstrating that the firm can only be properly understood if the importance of cooperation based on trust and loyalty, and the ability of the firm to achieve that cooperation by influencing the social foundations of behaviour, is appreciated. C...
This paper argues that the predominant economic theories of the firm neglect the importance of cooperation based on trust and loyalty, and that as a result, their criticisms of worker cooperatives are incomplete. While competence-based theories tend to focus exclusively on coordination and thus fail to acknowledge that the development and applicati...
It has frequently been presumed that the ability of the Mondragón group of co-operatives to achieve a remarkable degree of trust and loyalty amongst its members while maintaining relatively bureaucratic workplaces is due to the uniquely solidaristic traits of Basque culture, implying that the same feat will be unattainable amidst less favourable cu...
From politically antipodal perspectives, Karl Marx and Joseph Schumpeter both recognised that the public corporations which have since become the mainstays of advanced capitalism are effectively non-profit organisations, defying conventional notions of property and pursuing the interests of a range of stakeholders. Over the past half-century, however, corporations have diverged from this de jure archetype, placing shareholders as the sole principals of corporate activity and share price as the sole indicator of corporate performance. The results for both shareholders and society appear to be devastating. The recent emergence of non-profit, multi-stakeholder cooperatives in Italy and elsewhere provides a window into the possibilities of a more 'public' model of corporate governance. At the same time, social enterprises are themselves subject to degenerative processes, and in this regard can learn from the history of corporations - as well as the ideas of Marx and Schumpeter.