A ‘Managerial-Behavioural’ Paradigm

Abstract

Two streams of theory are combined in this chapter: the ‘managerial’ and the ‘behavioural’. Unlike the holistic neoclassical theory discussed in Chapter 1, which views the firm in toto as an economic actor or as a ‘black box’ whose behaviour can adequately be described in terms of inputs and outputs, these two streams regard control of firms as resting with intra-firm groups, consisting of (or dominated by) management. As a result, while neoclassical theory asks ‘what do firms do?’, the managerial and behavioural traditions are more concerned with the question ‘what do managers do?’