Social Reality, the Boundaries of Self-fulfilling Prophecy, and Economics

Teppo Felin, Nicolai J. Foss

    Publikation: Working paperForskning

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    Abstrakt

    Organizational scholars have recently argued that economic theories and assumptions have adversely shaped management practice and human behavior, leading not only to the incorporation of trust-eroding market-mechanisms into organizations but also unnecessarily creating self-interested behavior. A number of highly influential papers have argued that the self-fulfilling nature of (even false) theories provides the underlying mechanism through which economics has adversely shaped not just social science but also management practice and individual behavior. We question these arguments, and argue that there are important boundary conditions to theories falsely fulfilling themselves, boundary conditions that have hitherto been unexplored in organizational research, and boundary conditions which question the underlying premises used by organizational scholars and social scientists to attack economics. We specifically build on highly relevant findings from social psychology, philosophy and organizational economics to show how (1) objective reality and (2) human nature provide two important boundary conditions for theories (falsely or otherwise) fulfilling themselves. We also defend organizational economics, specifically the use of high-powered incentives in organizations, and argue that self-interest (rightly understood) facilitates in creating beneficial individual and collective and societal outcomes.
    OriginalsprogEngelsk
    Udgivelses stedFrederiksberg
    UdgiverCenter for Strategic Management and Globalization
    Antal sider38
    ISBN (Trykt)9788791815324
    StatusUdgivet - jun. 2008
    NavnSMG Working Paper
    Nummer19/2008

    Citationsformater

    Felin, T., & Foss, N. J. (2008). Social Reality, the Boundaries of Self-fulfilling Prophecy, and Economics. Center for Strategic Management and Globalization. SMG Working Paper, Nr. 19/2008