Kozminski University, Poland
Revisiting Business Management’s Ur-Question
Abstract
Rising anxieties about capitalism remind us of unresolved questions about the purpose, ethics, and management of private sector 9irms. The explosive growth of AI systems will inevitably magnify the naı̈ve strategic advice that is generated from today’s weak or even untenable notions of business 9irms. We stay off track so long as our current teachings in microeconomics, behavioral theory, organization theory, agent-based modelling, etc. or even legal theories of corporate personhood fail to address Ronald Coase’s ur-question ‘Why 9irms?’ and, entailed, ‘What is business management?’. Nor does transaction cost economics help. To the contrary, we know 9irms are creatures of entrepreneurial responses to the business world’s uncertainties rather than data-driven. Thus business is the capitalist era’s most crucial art-form. I discuss how Frank Knight’s uncertaintybased theory of the 9irm can be useful to working managers. Its essence is language-making, the rhetorical art that precedes persuasion and managing practice. Relatedly, Herbert Simon suggested a 9irm is a bounded island of practical language (heuristics) that engages wisely selected internal and external uncertainties. This leads to tractable and computable analysis. Against this, the academic fetishizing of rigorous theory has derailed our engagement with Coase’s question. While questionable consulting advice is plentiful, there is huge commercial potential for an uncertaintyoriented LLM that can get this right.
Biography
Research Professor, Kozminski University, Warsaw
Visiting Scholar, Rutgers University, Newark NJ
Visiting Scholar, Fordham University, New York NY
Served in Royal Navy (UK) submarines, BA in Engineering (Oxford) and then worked with RollsRoyce on nuclear propulsion. Later with IBM on 9inancial computing, and as an investment banker
before earning a PhD at the Manchester Business School (UK). Retired in 2003 as Dean of the School
of Business & Technology at FIT/SUNY (New York).
He has published 8 books, and over 100 journal articles and book chapters. Most recent book is
Business Strategy: Managing Uncertainty, Opportunity, and Enterprise (Oxford UP 2014) on
managing a business’s creative responses to uncertainty. He also writes about the theory and ethics
of the 9irm, business strategy, and the history of management education.
In 2014 he was awarded an honorary doctorate in economics by the Lund University School of
Economics & Management.
Most recent publication:
Spender, J.-C. (2024). Simon and Knight. In Gerd Gigerenzer, Shabnam Mousavi, & Riccardo Viale (Eds.), The
Herbert Simon Companion (pp. 97-127). Cheltenham: Edward Elgar.
He is also Commissioning Editor for the Cambridge University Press Elements in Business Strategy:
https://www.cambridge.org/core/what-we-publish/elements/business-strategy-elements#
https://jcspender.com/