Toward a theory of business

By Thomas Donaldson, James P. Walsh. 2015

260 citations recorded by the source corpus.

Abstract What is the purpose of business? While most agree that business minimally involves the creation of value, a blurred double image of value haunts our discussion of purpose. The image of what counts as value for a single firm is laid atop an image of what counts as value for business in general. These two images cannot match. Indeed, the resulting conceptual blurriness is a classic example of a composition fallacy. We should never mistake the properties of a part for the properties of the whole. A theory of the firm is ill equipped to handle the many expectations we hold for business practice. As such, we seek to establish the beginnings of a theory of business, one that is both empirical and normative. Offering four central propositions about the purpose, accountability, control and success of business, we close with a consideration of several important theoretical issues and practical opportunities that await us in the years ahead.

Subfields: Information Systems and Management, Organizational Behavior and Human Resource Management, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/ea544ecd94fdaac2e19d146da85738ea800a15b7

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