Firms as Social Actors
This essay asks what firms are, whether they are ‘real’ social actors, and whether their actions can be traced without remainder to the actions of living people or whether there is some irreducible aspect of their existence or operation that must be attributed to the organization itself. It describes firms as ongoing, multilateral relational contracts from whose operation, that is, from performance over time by specific individuals in the roles and relationships defined by the contract, emerge the firm’s idiosyncratic routines and capabilities. It emphasizes the role of entrepreneurs in the creation of firms and the close dependence of organizational capabilities on human performance, and argues that this account is consistent with a reasonable individualism that allows for social outcomes to be determined by the actions and interaction of individuals. It then proposes that firms are nonetheless institutional facts and thus ontologically subjective but epistemically objective components of reality, and concludes with directions for future work.
|Date of creation:||Jan 2010|
|Date of revision:|
|Publication status:||Published Journal of Institutional Economics 6 (2010): 329-349.|
|Contact details of provider:|| Postal: PAC 123, 238 Church Street, Middletown, CT 06459-0007|
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- Witt, Ulrich, 1999.
" Do Entrepreneurs Need Firms? A Contribution to a Missing Chapter in Austrian Economics,"
The Review of Austrian Economics,
Springer, vol. 11(1-2), pages 99-109.
- Ulrich Witt, 1999. "Do Entrepreneurs Need Firms? A Contribution to a Missing Chapter in Austrian Economics," The Review of Austrian Economics, Springer, vol. 11(1), pages 99-109, January.
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- Gindis, David, 2009. "From fictions and aggregates to real entities in the theory of the firm," Journal of Institutional Economics, Cambridge University Press, vol. 5(01), pages 25-46, April.
- Dow, Gregory K., 1987. "The function of authority in transaction cost economics," Journal of Economic Behavior & Organization, Elsevier, vol. 8(1), pages 13-38, March.
- Geoffrey M. Hodgson, 2003. "The hidden persuaders: institutions and individuals in economic theory," Cambridge Journal of Economics, Oxford University Press, vol. 27(2), pages 159-175, March.
- Searle, John R., 2005. "What is an institution?," Journal of Institutional Economics, Cambridge University Press, vol. 1(01), pages 1-22, June.
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