a new theory of what? humanizing the firm in the time of the precariat
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A New Theory of What? Humanizing the Firm in the Time of the Precariat. JC Spender ESADE / LUSEM. complementary methods for examining ‘humanizing’ - ‘ dignitizing ’ - human work. 1 /13. from method to substance ‘theory of the firm’ as socio-political entity - but which society ?. society - PowerPoint PPT PresentationTRANSCRIPT
IESE 2nd Theory of the Firm Conference
A New Theory of What?Humanizing the Firm in the Time of the Precariat
JC SpenderESADE / LUSEM
27-June-11
IESE 2nd Theory of the Firm Conference
complementary methods for examining ‘humanizing’ - ‘dignitizing’ - human work
universal ethics - homogeneity conformance
uniqueness - heterogeneityindividual flourishing
etic methods emic methods
independent & dependent variablescausality, equilibrium
Knightian uncertainty - agencytransitive
work (1) - knowledge-using work (2) - knowledge-making
academics ‘theorizing’ managers ‘framing’
27-June-11 1/13
IESE 2nd Theory of the Firm Conference
from method to substance‘theory of the firm’ as socio-political entity - but which society ?
society (markets)
‘firms’production functions
individuals -rational
society (environment)
‘firms’social systems
system elements -rational
society (democratic capitalism)
socio-economic institutions& private-sector ‘firms’
individuals -‘human’
economic model systems theory model humanizing model
rationality - simple or behavioral or …homogeneous
human being = a-rational, unique ?politics, sympathy, morality, emotion
heterogeneity/agency/practice
27-June-11 2/13
IESE 2nd Theory of the Firm Conference
‘rights’ - State, individual and owners’
• humanizing (top level) - ‘society’ using power, regulation and other institutionalized constraints over private sector firms
• humanizing (bottom level) - e.g. legislation to protect employees’, customers’ and others’ ‘rights’ against the rights and powers legally granted to private-sector owners
• firms straddle state’s constrained rights to shape the firm and the firm’s constrained rights to shape the individual’s practice
• framing the private-sector firm (middle level) - back to the etic/emic
27-June-11
conference target
3/13
IESE 2nd Theory of the Firm Conference27-June-11
figure - ground
reversal
bottles or glasses ?
4/13
IESE 2nd Theory of the Firm Conference27-June-11 5/13
IESE 2nd Theory of the Firm Conference
k-presences and k-absences that define ‘the BCG firm’ (Example1)
27-June-11
• interplay of k-presence and k-absence
• portfolio, life cycle, time• firm (as cash machine) synthesized
by executive agency• judgments - allocation, dogs• managing as agentic repairing -
complementing rational designing
6/13
IESE 2nd Theory of the Firm Conference
Porter’s firm (Example 2)
27-June-11
• firm not industry
• ‘force’ = power to disturb the firm’s rent-stream
• many dimensions of ‘force’ - multi-layered, multi-timed
• firm arises from agentic ‘positioning’ in a multi-dimensional force/time context
7/13
IESE 2nd Theory of the Firm Conference
principal-agent theory’s firm ? (Example 3)
27-June-11
• Jensen & Meckling 1976– single period– perfect markets
• Fama 1980– multi-period– imperfect markets– mutual learning
• ‘firm’ arises from principal’s and agent’s time-full mutual learning and preparedness to adjust their utilities
8/13
IESE 2nd Theory of the Firm Conference
‘ToF’ as defined k-absences to be filled by agency
27-June-11
• diagnostics - framing entrepreneurial ‘opportunity space’
• executive’s ‘bounded agency’• T methodology - fact-driven analysis• U methodology - coup d’oeil, augenblick• preparation, history, theory (von Clausewitz)
• ‘added value’ - endogenous growth
T U
eticK-presencerationality
emicK-absence
imagination
9/13
IESE 2nd Theory of the Firm Conference
emic firm analysis & construction
27-June-11
technological advance
competitor’smarketing
labor market -
Precariat
government
standards
funding limits
TMT’s moral/ethical scruples
business
model
• might, can, should, want - LCAG’s 4 emic dimensions
• Balanced Scorecard - 4 etic? dimensions• Spender - Industry Recipes (1989) - 12 emic
dimensions
unoccupied strategicopportunity-space
executiveagency
10/13
IESE 2nd Theory of the Firm Conference
after the entrepreneur’s vision comes harnessing others’ reason & agency
27-June-11
• decision to participate - a matter of reason or persuasion ?• incentives (extrinsic and intrinsic) - or rhetoric ?• others offer both reason & agency• firm (profit) arises from the subordination of others’ agency
- not from instructions guiding others’ reason • ‘docility’ - becoming ‘another’• beyond logos and into ethos & pathos• stasis theory, argument theory, inventio• work (1) ‘toil’ - work (2) ‘fulfillment’, ‘flow’
11/13
IESE 2nd Theory of the Firm Conference
Precariat - new meaning of ‘work’
27-June-11
• not ‘participating’ in 20th century-style work - e.g. long-term employment contracts, training, pensions, health-care
• not having one’s agency managed by others
• ‘living by one’s wits’ in today’s democratic capitalism
• undergrad business education - post-crisis, economic history, time
• graduate - staffer’s diagnostic tools (von Clausewitz)• leadership - should BSchools teach rhetoric once again ?
12/13
IESE 2nd Theory of the Firm Conference
summary
27-June-11
• humanizing (top level) - public control of private-sector firms’ activities
• humanizing (bottom level) - counter-balance owners’ legal rights
• mid-level synthesizing of T and U (Barnard 1938)
• rhetorical engagement of others’ agency + reasoning
• private-sector firms’ legitimate seizures - quasi-monopolies & employees’ agency
• humanizing mid-level - owners & managers acknowledging and remunerating the value added by others - both toil & fulfillment
• U - agency - rhetoric - practice - value-adding
• extending the BSchool agenda - diagnostic tools + rhetoric & art
13/13
IESE 2nd Theory of the Firm Conference27-June-11
‘theory of the firm’ - academic concept or
real value-add ?