Behavioural Approach to the Functioning of Enterprises
DOI:
https://doi.org/10.15678/ZNUEK.2016.0953.0501Keywords:
rationality, behavioural theory of the firm, economic theory, goals of the firmAbstract
Unlike the mainstream neoclassical theory of the firm, the behavioural approach assumes lack of full rationality of entrepreneurs, which implies the necessity to satisfy rather than optimise the objective function. In this approach the firm is seen as a coalition of various groups of stakeholders, which conduct negotiations with one another to hammer out objectives, their implementation and possible remedial actions required. The article compares the behavioural approach to the neoclassical school, presents weaknesses of the behavioural approach (including the lack of a long-term horizon, non-falsifiability, and empiricism) as well as the benefits (attention to goal formation and the role of organisational slack) as well as its contribution to the development of both the neoclassical school and new concepts in economics, such as agency theory or the theory of contracts.
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