Chair “Theory of the Firm”
Models of Governance and Collective Creation
An innovation-driven view of the firm
The main proposal of our program is that modern companies, with professional management, have emerged at the end of the 19th century, because of the need to organize the development of new collective capabilities (technologies, functions, methods, competencies…), that would not be available otherwise on the markets.
This breakthrough in the organizations has deeply transformed our societies. But, despite the tremendous expansion of companies all over the 20th century, it hasn’t been conceptualized enough and has remained overlooked by classical theories of the firm and by business rules or corporate law.
This fundamental proposal has lead our team:
- To explore a new theory of the firm: building on management history, we see modern companies as innovation-driven organizations and we analyze the conditions of joint “venture in unknown” to revisit the foundations of managerial authority and of stakeholders’ participation (Segrestin and Hatchuel, 2008).
- To analyze forms and models of corporate governance: considering that the law of (public) corporations was already set up before the birth of modern management, we question the implications of this gap and investigate possible management-based (or innovation-driven) principles of governance, such as for instance mission-driven corporations (Segrestin and Hatchuel, 2010) (Levillain et al., 2014) (Segrestin and Hatchuel, 2011).
Results and receptions: first validations
Bridging traditionally distant academic fields, the program has connected management, innovation management and design theory, with business history and law. Academic and business communities have already recognized some early results:
- The new model of the firm oriented toward collective creation (Segrestin and Hatchuel, 2012) have been awarded several time (Manpower foundation for employment’s award, AFCI award, Best book in applied research in management Syntec-SFM…).
- The proposals for new “mission-driven” governance have been already experimented by different companies, discussed and further promoted by different institutional and official reports (e.g. Taskforce for the G8 on Impact Investing…) (Blanche Segrestin, 2014) and in April 2015 Mines ParisTech will host the international workshop on “emerging models of governance: the case of purpose-with-profit corporations” (with Society of Comparative Legislation and French Supreme Court).
- As regards to education and lecturing programs, the new approach of the firm and the implications for governance have resulted in several new programs and seminars for graduate students and doctoral students (Mines ParisTech, Dauphine University…).
The scientific objectives of the Chair
The research program will focus on 4 major dimensions:
- Theory of the firm. Model of innovation-driven management, managerial authority and subordination as commitment into collective venture in the unknown. Study of the condition of stakeholders’ investments into processes of innovation and capabilities building
- Solidarity and collective creation. The impact of Management’s Decision upon the parties and general equilibrium between the parties: models of “generative solidarity” and mechanisms
- Investments and growth. Investments of the various stakeholders are necessary but not enough to make either innovation or growth. Potential for social and economic growth may depend on capabilities building not only within firms but also among firms. Conditions for sustainable growth.
- Collective “creative contracts”, new statutes or charters and corporate law. Corporate law hasn’t conceptualized management: today CEO can appear in corporate governance as “agents” of shareowners. Corporate law has failed to protect managerial latitude and collective long-term innovative investments. We need to explore principles and feasibility of existing and potential models of business governance to combine social justice and the challenge of contemporary innovations.
Our Academic Partners
For a full list of references see Publications
Blanche Segrestin, K.L., Armand Hatchuel (ed.) 2014. La Société à Objet Social Etendu : proposition pour un nouveau statut de l’entreprise, Paris: Presses des Mines.
Levillain, K., Hatchuel, A. and Segrestin, B. 2014. The blind spot of Corporate Social Responsabilities: changing the legal framework of the firm. EURAM. Valence: EIASM.
Segrestin, B. and Hatchuel, A. 2008. The shortcomings of the corporate standard: towards new enterprise frameworks? International Review of Applied Economics, Vol. 22, pp. 429 – 445.
Segrestin, B. and Hatchuel, A. 2010. Theories of the firm in a post-crisis world: management theory as the foundation of new business law? . EURAM. Rome.
Segrestin, B. and Hatchuel, A. 2011. Beyond Agency Theory, a Post-crisis View of Corporate Law. British journal of management, Vol. 22, pp. 484–499.
Segrestin, B. and Hatchuel, A. 2012. Refonder l’entreprise, Paris, Le Seuil.