The Theory of the Managed Firm (TMF): Revision of the note written for the Seminar at Lund University's School of Economics and Management, April 24th 2012

John-Christopher Spender

Research output: Working paper

Abstract

Social scientists in general, and BSchool faculty in particular, are in sore need of a theory of the private sector firm that relates managers' activity to the creation of economic value. Rational-man based theorizing admits only managers' computable inputs so it cannot address value creation. Along with Adam Smith, I presume individual creativity is the source of all economic value and see the managed firm as democratic capitalism's principal apparatus for channeling creative inputs into the socio-economy. Thus managers have both economic and political functions. Firms generate value as managers contribute their judgment in the course of shaping their firm's responses to the Knightian uncertainties (KUs) and bounded rationalities (BRs) met with as the firm's goals are pursued. Under KU/BR, an analysis of manager' agentic activity and rhetorical practice complements their rational decision-making and helps us see more of the nature of the managed firm. The TMF provides a post-positivist basis for re-theorizing entrepreneurship, business leadership, strategizing, and innovation management. Practice rather than theory is its basis.
Original languageEnglish
Place of PublicationBarcelona, ES
Number of pages62
Publication statusPublished - 1 May 2012
Externally publishedYes

Publication series

NameESADE working paper
No.79796
ISSN (Print)2014-8135
NameESADE working paper
No.79796
ISSN (Print)2014-8135
NameESADE working paper
No.79796
ISSN (Print)2014-8135
NameESADE working paper
No.79796
ISSN (Print)2014-8135

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