Firms as social actors

Abstract

This essay considers firms as collective social actors from three perspectives associated with individualism. Ontologically, it describes firms as constantly changing relational contracts that define roles and relationships among the participants, and argues that the characteristic routines and capabilities of firms emerge in time from human performance in these roles and relationships. Methodologically, it shows that by introducing the entrepreneur more explicitly into the account of the firm's origin and emphasizing human performance within the routines as the ongoing manifestation of the relational contract itself, theories of firms as relational contracts can be grounded solely in the interactive behavior of individuals. Normatively, it briefly considers the problem of granting rights and powers to firms as collective actors and suggests that firms are poor candidates for rights but plausible candidates for responsibly exercised powers. A short conclusion offers directions for future work.

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