Abstract
The social responsibility literature generally agrees on the necessity for a renewal of economic theory to understand social and ecological issues faced by the firm. In this chapter, we analyse some features of the dominant economic conceptualizations of the firm, showing that their representations of the firm are hardly compatible with social responsibility theories. But those theories do not provide a unified alternative conceptualization of the firm able to challenge the dominant economic perspective. Moreover, their representations often remain confined to an organizational level unable to grasp today’s transformations and challenges. Here, we draw upon early analyses of the modern corporation to propose a conceptualization of the firm as a social institution. Such a definition enhances the social and historical construction processes of the corporate form, but also its changing nature with regard to social and economic conflicts and challenges of a particular time. It also opens the debate about the legal framing of what has become a major structuring institution, and its relevance and effectiveness in light of current challenges of our societies.
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Notes
- 1.
As Putterman (1993) proposes: With respect to a firm, the right to utilization means the right to determine what contracts the firms enters into and the right to unilaterally fill in the details of incomplete contracts with some agents, e.g., employees. Revenue rights over the firm mean both a limited or a unlimited obligation for financial liabilities incurred by it and a claim on all earnings accruing to it. The right of alienation means that the bundle of ownership rights may be transferred to another party or parties on mutually agreeable terms (p. 246).
- 2.
Even if it is true that in the debate that followed between Berle and Dodd, Berle has been more associated with a restrictive conception where manager’s must work in the interest of shareholder primacy while Dodd is associated with an open view of the firm that has been theorised later by the stakeholder theory.
- 3.
Bratton and Wachter confirm this interpretation by saying that “the whole point of the separation of ownership and control […] meant that private property rights by themselves did not assure the corporation’s responsible operation. It followed that the corporate legal entity, a construct theretofore thought to be private, should be re-characterized as public” (p. 148).
- 4.
In particular, the public corporation form has been a useful tool to finance large transportation infrastructures.
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Gendron, C. (2019). From Shareholders to Stakeholders: Portraying an Ambiguous Corporation. In: Sales, A. (eds) Corporate Social Responsibility and Corporate Change. Ethical Economy, vol 57. Springer, Cham. https://doi.org/10.1007/978-3-030-15407-3_3
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