Toward a theory of business. (2015)

• Record Type: Journal Article
• Authors: Donaldson, Thomas; Walsh, James P.
• Is Part Of: Research in organizational behavior. Volume 35(2015)
• Page Start: 181
• Page End: 207
• Publication Date: 2015
• Subjects: Organization -- Periodicals; Organizational behavior -- Periodicals; 302.3505
• DOI: 10.1016/j.riob.2015.10.002
• Languages: English
• ISSNs: 0191-3085

Abstract

Abstract: What is the purpose of business? While most agree that business minimally involves the creation of value, a blurred double image of value haunts our discussion of purpose. The image of what counts as value for a single firm is laid atop an image of what counts as value for business in general. These two images cannot match. Indeed, the resulting conceptual blurriness is a classic example of a composition fallacy. We should never mistake the properties of a part for the properties of the whole. A theory of the firm is ill equipped to handle the many expectations we hold for business practice. As such, we seek to establish the beginnings of a theory of business, one that is both empirical and normative. Offering four central propositions about the purpose, accountability, control and success of business, we close with a consideration of several important theoretical issues and practical opportunities that await us in the years ahead.