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This chapter begins the book’s challenge to conventional theories of the firm by arguing that the central problem of the firm lies in purpose, which is more complex and provocative than typically assumed. The chapter examines the battle over corporate purpose between advocates of shareholder value maximization and stakeholder obligation, highlighting the clash of ideologies and the significance of purpose in shaping the identity and trajectory of a firm. It then delves into firms’ ontological multiplicity, emphasizing that purpose is not singular but rather takes different forms, manifests differently in various practices, and is influenced by a range of forces beyond human actors. It argues for the importance of developing a new theory of the firm that aligns with critical projects and offers alternative perspectives on corporate purpose.
This introductory chapter advocates for a new framework that ties together the core questions of why firms exist, how they operate internally, where their boundaries lie, and how they secure profitability. It establishes the need to develop a Communicative Theory of the Firm (CTF) that responds to the shifts in capitalism’s communicative foundation.
The aim of this chapter is to describe the socioeconomic shift toward ‘communicative capitalism’ and what that recognition summons from analysts. It begins with an account of how Fordism (and its standardized production, stable workforce, and the provision of adequate wages) became the predominant form of production and capital accumulation during much of the 20th century. Communicative capitalism, however, represents a new model of value generation, emphasizing the central role of communication in three central organizational practices: affect capture through emotional labor, platformization facilitated by digital infrastructures, and branding as a logic of socioeconomic life. The chapter highlights the implications of these shifts for organization studies, calling for a re-evaluation of traditional understandings of organizations as stable entities versus seeing them as fluid practices, which leads to a call for a shift towards practice-based analysis.
The book’s concluding chapter summarizes the claims of the book and condenses the unique perspective offered by the Communicative Theory of the Firm (CTF). It highlights the significance of the CTF in reimagining firms’ purposes as ontologically multiple and the influence of communicative capitalism in shaping their desires. It challenges traditional theories of the firm by emphasizing the need to understand the communicative becoming of firms in response to communicative capitalism. It also suggests three future directions for further developing the CTF, including digitalization, the centrality of the natural realm, and corporate advocacy. The chapter underscores the complexity of grasping what and how corporations want, emphasizing the importance of this understanding if scholars are to develop heuristic, useful, and critical conceptions of contemporary firms.
Organizations are communicatively buzzing assemblages of objects, actions, signs, persons, and passions. This vision leads to the articulation, in this chapter, of a Communicative Theory of the Firm (CTF), framing firms as authority machines that attract attachments, centralize decidability, and shape the trajectory of their own practice. It introduces the concept of authoritative texts, sociomaterial depictions of the organizational whole, providing insight into the organization’s mode of becoming. These texts encode promises of value and claims to property, shaping decision-making practices and providing a narrative representation of the organization’s identity, obligation, and trajectory. The text illustrates how authoritative texts configure three key practices that write the firm’s trajectory: boundarying, branding, and binding. With this set of conceptual tools, the chapter advances distinctly communicative responses to four theory of the firm questions introduced in Chapter 2: why firms exist, how they operate internally, where their boundaries lie, and how they pursue profitability.
The first of three case studies discusses the concept of boundarying and its implications for firms’ dynamic capabilities in the context of managing customer service performances under communicative capitalism. The chapter shows how boundarying is the result of agential cuts, where organizing practices generate conceptions of the real that become eligible for inclusion and exclusion in/from practice. The authoritative text, introduced in Chapter 4, is identified as a conceptual tool necessary to understand the influence of strategizers and the local performance of service encounters, particularly when the competencies developed in those encounters are ambiguous and tenuous.
The case concerns a growing US airline, highlighting its approach to boundarying through the authoritative text, which includes valuing ‘soft’ skills, fearing the dissipation of distinctiveness, and caring for its employees. It then discusses the dis/organizational consequences of the airline’s deployment of its authoritative text. It frames the mode of internal organization associated with a need to capture affect as a communicative practice and, using the Communicative Theory of the Firm (CTF), demonstrates how efforts to develop dynamic capabilities create unintended and ironic consequences.
The final case study explores the evolving landscape of corporate purpose and social responsibility, particularly in the context of B Corporations (B Corps). The chapter delves into the various forms of binding associated with B Corps, from the legal structure and certification process to the platform’s role in shaping firms’ authoritative texts and, in turn, their decision-making. It also addresses the tensions and contradictions inherent in B Corp operations, highlighting the complex interplay of values and property rights in shaping firms’ trajectories and decision-making processes.
As in the other empirical chapters, a dis/organizational consequence of the particular constitution of the authoritative text emerges. In this case, ‘collective atomization’ signifies the tension, even contradiction, of situating a firm as a collective in terms of its participation in a ‘socially responsible’ movement while, at the same time, understanding its atomization with respect to individualized sites for decision-making and value propagation. That outcome, however, can foster new potential trajectories for these firms.
The development of an alternative theory of the firm suitable to contemporary capitalism involves a shift towards focusing on communication practices as constitutive of organization, as opposed to the traditional representational/transmissive view. The chapter connects Communication as Constitutive of Organization (CCO) scholarship with new materialist thinking, focusing on the immanent potentialities and relational processes that comprise the practices of organizing. It then builds on the work of philosopher Gilles Deleuze to highlight difference and the virtual, assemblage and (hybrid, dispersed) agency, machinic practices, and the contrast between arborescent and rhizomatic models of organization to further hone CCO thinking. Through an exploration of these conceptual resources, the chapter establishes the theoretical foundation for a Communicative Theory of the Firm (CTF).
This chapter explores the practice of branding at a startup accelerator, connecting the concept to orders of worth in entrepreneurship. Drawing on the Communicative Theory of the Firm (CTF), it emphasizes the significance of the multiple and competing logics that underpin evaluations of value in the context of new firms’ emergence. The chapter examines practices of valorizing the technologically cool, mentorship, and funding in the accelerator’s efforts to launch startups. The accelerator’s branding practices influenced the startups’ authoritative texts and, in turn, their purposes and their wanting. The chapter underscores that such branding practices hinder the startups’ heterarchy: the accelerator’s branding practices narrowed the evaluative criteria to which the startups could appeal, limiting their potential for profitability.
This chapter argues for the need for an alternative theory of the firm in the context of communicative capitalism. It outlines two broad camps of existing theories of the firm: governance approaches (focusing on transaction cost economics and agency theory) and competence/capability approaches (including the resource-based view, dynamic capabilities, and the attention-based view). Both broad stances oversimplify the firm’s complexity and ignore its multiplicity, and consequently are constrained in their capacity to address the changes associated with communicative capitalism. The chapter emphasizes the need for an alternative theory of the firm that places communication at its conceptual core; re-imagines agency as a hybrid, heterogeneous, and distributed accomplishment; addresses the shifting trajectory of purpose; and considers dis/organization as the normal state of the firm. A responsive theory of the firm would need to provide satisfactory responses to the challenges of firms’ purposes under communicative capitalism by attending to the more-than-human, grasping organizations’ fluidity, advancing practice as the key unit of analysis, and re-imagining agency and authority. The chapter thus sets the stage for the development of a distinctly communicative theory of the firm in subsequent chapters.
“Corporate purpose” has become a battleground for stakeholders’ competing desires. Some argue that corporations must simply generate profit; others suggest that we must make them create social change.
Leading organization studies scholar Timothy Kuhn argues that this “either-or” thinking dramatically oversimplifies matters: today’s corporations must be many things, all at once.
Kuhn offers a bold new Communicative Theory of the Firm to highlight the authority that creates corporations’ identities and activities. The theory provides a roadmap for navigating that battleground of competing desires to produce more responsive corporations.
Drawing on communicative and new materialist theorizing, along with three insightful case studies, this book thoroughly redefines our understandings of what corporations are “for.”
