1OVERVIEW OF THE PRAGMATIC THEORY OF THE FIRM
In my experience, motivating employees with a sense of purpose is the only way to deliver innovative products, superior service, and unsurpassed quality over the long haul.… An organization of highly motivated people is hard to duplicate. The motivation will last if it is deeply rooted in employees' commitment to the intrinsic purpose of their work.
Business ethics, then, has to do with the authenticity and integrity of the enterprise.… Those who cannot serve the corporate vision are not authentic businesspeople and, therefore, are not ethical in the business sense.… In a company, a leader is a person who understands, interprets, and manages the corporate value system. Effective managers, therefore, are action-oriented people who resolve conflict, are tolerant of ambiguity, stress, and change, and have a strong sense of purpose for themselves and their organizations.
—Bowen H. McCoy2
Theories of the firm arise from the motivations of their developers. They initially define a firm in a way that is compatible with their objectives and their worldview. This chapter shows how theories of the firm evolved in the disciplines of economics, finance, and management. In addition, this review places the pragmatic theory of the firm in historical context, highlights the main differences separating the pragmatic theory from alternative theories, and provides an initial assessment of its usefulness.
THE NUCLEUS OF THE PRAGMATIC ...
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