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IZA
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Social Evolution, Corporate Culture, and Exploitation
by
Ekkehart Schlicht
(November 2002)
final version published in: Journal of Institutional and Theoretical Economics, 2004, 160 (2), 232-42
Abstract:
It has been claimed that the market fosters selfishness and thereby undermines the moral
basis of society. This thesis has been developed with an emphasis on market exchange.
Everyday life is, however, predominantly shaped by interactions in the workplace rather than
by shopping behaviour. This essay places emphasis on firm organisation, rather than market
interaction, in moulding cultural traits. The argument starts with the observation that workers
may perceive the employment relationship in two different ways, with different behavioural
consequences. The first is the conventional incentive view. The other is the social exchange
view. Implementing the social exchange perspective may be profitable for firms which
organize complex tasks. This requires an appropriate corporate culture, governed by
reciprocity, fairness and commitment. Such a culture can be viewed as a refined form of
exploitation, however, as it involves creating an atmosphere of mutuality for profit. I shall
argue against this thesis that the same attribution mechanisms which render corporate
culture an effective management instrument shape the self-perception of management and
engender true, rather than faked, social exchange. The market shapes firm organizations
which foster mutualism rather than selfishness.
Text: See Discussion Paper No. 651
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