The Social Contract and the Problem of the Firm

  • Colin Crouch


The business firm has become a central institution in contemporary society in ways which make it, whether the owners and managers of firms want this or not, a problematic institution for democratic politics, or indeed for any politics at all, and, therefore, for the construction of any new form of social contract. The question has several very diverse aspects, and it is their cumulative effect that makes the issue so problematic. First, increasing weight is placed on the individual firm (rather than a whole industry, or government policy) to find new opportunities for economic progress, which has raised the firm to a position of primacy among the institutions of our societies. Second, large corporations are in certain circumstances able to exercise real power in a manner that is not provided for in either economic or constitutional theory. Third, firms are becoming important institutions of identity for their personnel, partly because the most advanced firms increasingly feel a need to develop a company culture, and partly because this growing strength of firms is happening at a time when, with several other social institutions undergoing crises, people are becoming increasingly dependent on their place of work to satisfy a range of social needs. Fourth, firms have an increasing wider social legitimacy, partly through their role in funding or sponsoring aspects of social life outside the sphere of their market activities, and partly because their forms and practices are coming to be seen as almost the only acceptable ones for running organizations of many different kinds.


Small Firm Social Contract Strategic Alliance Advanced Society Supermarket Chain 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© Palgrave Macmillan, a division of Macmillan Publishers Limited 1998

Authors and Affiliations

  • Colin Crouch

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