This paper wishes to problematize the foundations of production governance and offer an analytical perspective on the interrelation between agents’ preferences, strategic choice, and the public sphere . The value is in the idea of preferences being social in nature and in the application both to the internal stakeholders of the organisation and its impacts on people outside. Using the concept of ‘strategic failure’ we suggest that social preferences reflected in deliberative social praxis can reduce false beliefs and increase individual (...) wellbeing. From this approach, the paper offers a taxonomy of production organisations, based on social preferences about two variables: the governance form other strategic decisions that characterize the management of a company at a more operational level, once its fundamental legal form has been chosen. Each dimension is then categorised alongside two basic preferences: towards inclusion or exclusion of ‘publics’ that have no substantial access to decision power about these variables. Our framework explains governance heterogeneity by contrasting exclusive and inclusive social preferences in cooperatives, social enterprises, as well as traditional corporations. A discussion of the evolution of social preferences and organizational forms is addressed through examples and regional experiences. (shrink)

Contemporary Austrian‐school economists reject neoclassical welfare theory for being founded on the benchmark of a perfectly competitive general equilibrium, and instead favor a formal theory deemed consistent with the notions of radical subjectivism and disequilibrium analysis. Roy Cordato advances a bold free‐market benchmark by which to formally assess social welfare, economic efficiency, and externalities issues. Like all formalist, a priori theory, however, Cordato's reformulation cannot meet its own standards, being theoretically and empirically flawed, and perhaps ideologically suspect.

Postmodernism is often characterized, among other things, as the belief in the unattainability of objective truth and as a rejection of teleological and reductionist, or essentialist, forms of thought. For instance, in his provocative book The Rhetoric of Economics, Donald McCloskey sketches the implications for economic methodology of Richard Rorty's rejection of the modernist quest for Truth, as represented by various rationalist and empiricist epistemologies. McCloskey describes modernist methodology as displaying a desire to predict and control, a search for objective–;which (...) often means measurable–;knowledge, and an attempt to develop a value-free inquiry, among other characteristics. This “methodological correctness,” McCloske suggests, is discredited by the postmodern dissatisfaction with traditional epistemology. Thus, in place of the modernist belief in a rule-guided path to truth, he advocates a “free market” approach to knowledge, in which participants in the variety of theoretical conversations agree to be earnest and listen politely to one another. (shrink)

Consumer complaining behavior (CCB) is an important stream of research and practice, as it links the domains of service failure and service recovery. CCB research, although extensive and temporally wide, exhibits a lack of concern for the underlying assumptions of scholarly inquiry. Researchers neither explicitly mention, nor consciously indicate their ontological, epistemological, and methodological assumptions. We systematically identify the extant CCB literature and map it to two well-accepted paradigmatic classifications (Burrell and Morgan 1979; Deetz Organization Science 7(2): 191–207, 1996). Normative (...) or functionalist paradigm with the assumptions of an objective external reality, a positivist epistemology, a determinist view of human nature, and nomothetic methodology emerges as the dominant CCB research paradigm. The implications of this dominance are discussed as a barometer of the future of CCB research and practice. (shrink)

Hayek and the Efficient Market Hypothesis are often seen as proposing a similar theory of prices. Hayek is seen as proposing to understand prices as information conveyer, incorporating inform...

Research in the cognitive sciences indicates that metaphors significantly shape perceptions and approaches to problem solving. With this in mind, this essay argues that it is problematic for ethicists that mainstream economics and other social scientific literature relies on naturalistic metaphors to describe markets. These imply an inaccurate picture of economic phenomena and rhetorically frame many solutions to problems such as inequality as interventionist. This essay proposes that religious ethicists may find resources for avoiding this conceptual hazard in emerging fields (...) of heterodox economics that are attentive to the role of culture and human agency in shaping markets. It introduces feminist, behavioral, institutional, and Austrian economics in particular and highlights some of the specific approaches to inequality adopted in these fields. It then suggests that engaging heterodox perspectives more generally may help ethicists keep in view the full complexity and social nature of the economic problems they analyze. (shrink)

Hayek argued that the central question of economics is the coordination problem: How does the spontaneous interaction of many purposeful individuals, each having dispersed bits of subjective knowledge, generate an order in which the actors' subjective data are coordinated in a way that enables them to dovetail their plans and activities successfully? In attempting to solve this problem, Hayek outlined an approach to economic theorizing that takes seriously the limited, subjective nature of human knowledge. Despite purporting to have appropriated Hayek's (...) thought by acknowledging the information-transmitting role of prices, mainstream economists have missed Hayek's point. The predominant tool of formal economics—equilibrium analysis—begins by assuming the data held by actors to have been pre-reconciled, and so evades the problem to be solved. Even the more advanced tools for modeling knowledge in economic analysis, such as the economics of information, assume away either the subjectivism of knowledge and expectations (rendering the coordination of beliefs and plans a trivial matter) or the frictions and “imperfections” of reality (rendering the coordination problem indeterminate). (shrink)

This paper uses a game-theoretic framework to formalize the Hayekian notion of equilibrium as the compatibility of plans. To do so, it imposes more structure on the conventional model of strategic games. For each player, it introduces goals, goal-oriented strategies, and the goals’ probabilities of success, from which players’ payoffs are derived. The differences between the compatibility of plans and Nash equilibrium are identified and discussed. Furthermore, it is shown that the notion of compatibility of plans, in general, differs from (...) the notion of Pareto efficiency. Since the compatibility of plans across all players can rarely be achieved in reality, a measurement is introduced to determine various degrees of plan compatibility. Several possible extensions and applications of the model are discussed. (shrink)

In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial innovation has also meant losses and hardships for some members of society: it is destructive of some stakeholders’ wellbeing even as it creates new wellbeing among other stakeholders. Both the positive benefits and negative externalities of innovation are problematic because entrepreneurs initiate new ventures before their private profitability and/or social costs can be fully recognized. In this paper we consider three (...) analytical frameworks within which these issues might be examined: pre-commitments, contractarianism, and an entrepreneurial framework. We conclude that the intersection of stakeholder theory and entrepreneurial innovation is a potentially rich arena for research. (shrink)

AbstractDespite the evident importance of imagination in both ethical decision-making and entrepreneurship, significant gaps remain in our understanding of its actual role in these processes. As a result, scholars have called for a deeper understanding of how imagination impacts value creation in society and how this critical human faculty might more profoundly connect our theories of ethics and business decision-making. In this paper, we attempt to fill one of these gaps by scrutinizing the underlying philosophical foundations of imagination and applying (...) them to the challenges facing entrepreneurs attempting to create new value in an increasingly unpredictable and kaleidic world. Accordingly, we apply a view of imagination developed by the pragmatist philosopher John Dewey to the radically subjective economic philosophy of G.L.S Shackle. As a result, we develop a concept of imagination which we believe can be both significant and hopeful for research at the intersection of business ethics and new value creation. (shrink)

Adam Smith raised a series of obstacles to effective large-scale social planning. In this paper, I draw these Smithian obstacles together to construct what I call the “Great Mind Fallacy,” or the belief that there exists some person or persons who can overcome the obstacles Smith raises. The putative scope of the Great Mind Fallacy is larger than one might initially suppose, which I demonstrate by reviewing several contemporary thinkers who would seem to commit it. I then address two ways (...) the fallacy might be overcome, finding both wanting. I close the paper by suggesting that Smith's Great Mind Fallacy sheds interesting light on his “impartial spectator” standard of morality, including with respect to the specific issues of property and ownership. (shrink)