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Towards a social theory of the firm: Worker cooperatives reconsidered


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Authors

Thompson, S 

Abstract

This paper argues that the predominant economic theories of the firm neglect the importance of cooperation based on trust and loyalty, and that as a result, their criticisms of worker cooperatives are incomplete. While competence-based theories tend to focus exclusively on coordination and thus fail to acknowledge that the development and application of productive knowledge also involves cooperation, contract-based theories cling to a rigid model of behaviour that does not account for the type of cooperation thus involved. Thus, although contract-based theories denigrate cooperatives for failing to achieve cooperation, cooperatives may in fact be more propitiously situated than conventional firms to achieve the cooperation involved in the development and application of productive knowledge. Meanwhile, although competence-based theories imply that cooperatives are incapable of achieving coordination, cooperatives may in fact be more propitiously situated than conventional firms to achieve coordination without incurring potentially adverse effects on cooperation. This ability, however, may be suppressed by a hostile institutional environment, which biases both the options available to individuals and the way they perceive those options against cooperatives. Although inter-cooperative associations can alleviate this institutional bias, they involve structural and cultural obstacles of their own.

Description

This is the accepted manuscript. The final version is available at http://www.sciencedirect.com/science/article/pii/S2213297X15000038.

Keywords

theory of the firm, cooperation, cooperatives, worker ownership, worker control, hierarchy, inter-cooperation, Japanese firms

Journal Title

Journal of Co-operative Organization and Management

Conference Name

Journal ISSN

2213-297X

Volume Title

3

Publisher

Elsevier BV