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Corporate Governance and the Praxeology of the Owner-Capitalist-Entrepreneur. Recollecting Thoughts from the Modern Austrian School of Economics

Author

Listed:
  • Octavian-Dragomir JORA

    (The Bucharest Academy of Economic Studies, Romania)

  • Mihaela IACOB

    (The Bucharest Academy of Economic Studies, Romania)

Abstract

Traditional literature regarding “corporate governance” finds the “tension between ownership and management” (as it was shaped by the agency theory) to be a node in the logic of what should be the answer to the question “how the structure of the corporation property can be designated and, in this way, achieve its organizational architectural efficiency on the more developed financial markets, populated by public listed firms and owned by «diffuse» shareholders?”. In such modern capital markets, that are more dynamic due to a more liberal corporatist law (although uneven across jurisdictions), a phenomenon as “unprecedented” as “ambiguously” theorized by Berle and Means (1932) has been identified: the classic problem of the “separation of ownership from control”. This article makes a brief survey on a part of the corporate governance literature that is mostly neglected and in the ignorance of which lies the melting down in the same pot of the “separation of ownership from control” reality and the “managerial omnipotence” fatality, both associated to modern multinational corporation, and otherwise messed up by Berle and Means (1932). The Austrian School literature in the theory of the firm has the potential to mitigate bad explanations and poor policy prescriptions that undeservedly hamper the very capacity of corporate structures to adapt themselves to changes, the need turning more stringent in times of worldwide spread crises.

Suggested Citation

  • Octavian-Dragomir JORA & Mihaela IACOB, 2012. "Corporate Governance and the Praxeology of the Owner-Capitalist-Entrepreneur. Recollecting Thoughts from the Modern Austrian School of Economics," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 13(3), pages 353-365, July.
  • Handle: RePEc:rom:rmcimn:v:13:y:2012:i:3:p:353-365
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    File URL: http://www.rmci.ase.ro/no13vol3/01.pdf
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    References listed on IDEAS

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    1. repec:hrv:faseco:30728046 is not listed on IDEAS
    2. Klein, Peter G, 1996. "Economic Calculation and the Limits of Organization," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 9(2), pages 3-28.
    3. Peter G. Klein, "undated". "Entrepreneurship and Corporate governance," IVS/CBS Working Papers 98-15, Department of Industrial Economics and Strategy, Copenhagen Business School.
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    Cited by:

    1. Octavian-Dragomir Jora & Mihai-Vladimir Topan & Radu Cristian Musetescu & Matei-Alexandru Apavaloaei, 2015. "“Corporate Scene Investigation”: A Praxeological Attempt to Sketch the Profile of the Entrepreneur in Modern Business," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 456-456, February.

    More about this item

    Keywords

    praxeology; Austrian School; corporate governance; entrepreneurship; agency.;

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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