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Sector blurring: A systems-theoretical perspective

Author

Listed:
  • Valentinov, Vladislav
  • Daniel, Gabriela

Abstract

Why are the public, private, and nonprofit sectors increasingly difficult to distinguish? This paper offers a new systems theory-based explanation. We argue that organizations today must respond simultaneously to demands from multiple function systems—legal, economic, political, scientific, and more. This creates internal pressure to accommodate competing expectations. As organizations adapt by integrating these demands into their structures and practices, traditional sector labels lose their descriptive value. We introduce a process model that explains this transformation in three stages: rising functional turbulence, multifunctional restructuring, and the erosion of established sectoral categories. This perspective moves beyond conventional accounts of sector blurring that focus on resource dependence and institutional logics. Instead, it shows how deeper shifts in today’s functionally differentiated society are reshaping how organizations function, how they are evaluated, and how they are classified—with far-reaching implications for governance, legitimacy, and the future of organizational identity.

Suggested Citation

  • Valentinov, Vladislav & Daniel, Gabriela, 2025. "Sector blurring: A systems-theoretical perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 36(4), pages 1-14.
    • Handle: RePEc:zbw:espost:336446
    DOI: 10.31083/MRev44005
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    References listed on IDEAS

    as
    1. Vladislav Valentinov, 2019. "The Ethics of Functional Differentiation: Reclaiming Morality in Niklas Luhmann’s Social Systems Theory," Journal of Business Ethics, Springer, vol. 155(1), pages 105-114, March.
    2. Johanna Jauernig & Vladislav Valentinov, 2019. "CSR as hypocrisy avoidance: a conceptual framework," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 10(1), pages 2-25, February.
    3. Johanna Jauernig & Vladislav Valentinov, 2019. "CSR as hypocrisy avoidance: a conceptual framework," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 10(1), pages 2-25, February.
    4. Steffen Roth & Augusto Sales & Jari Kaivo-oja, 2017. "Multiplying the Division of Labour: Functional Differentiation of the Next Key Variables in Management Research," Systems Research and Behavioral Science, Wiley Blackwell, vol. 34(2), pages 195-207, March.
    5. Wolfgang Rennison, Betina, 2007. "Cash, codes and complexity: New adventures in the public management of pay scales," Scandinavian Journal of Management, Elsevier, vol. 23(2), pages 146-167, June.
    6. James Brackley, 2024. "Accounting for public value," Chapters, in: Hendrik Vollmer (ed.), Handbook of Accounting in Society, chapter 6, pages 78-90, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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