Various organizations and organization development scholars and practitioners have explored alternatives to the dominant neoclassical theory of the firm, ranging from transaction cost theory, resource-based theory, stakeholder theory, agency theory, institutional theory and the like over the last several decades with varying explanations for the existence of the firm. In these, different evolutionary pathways such as the reason for the existence of the firm as going beyond profits (Orts, 2023), a self-managed culture where management is based on autonomous teams and peer relationships (Laloux & Wilber, 2014), and the idea of multiple dimensions in measuring organizational performance (Hubbard, 2009) have been examined. The limiting factor in their adoption has been lack of alignment across these pathways and the central question of performance measurement, which is especially challenging in the case of non-financial indicators. The question of the theory of the firm in today’s context of the poly-crisis cannot be answered without due regard to the underlying institutions, the measurement models and therefore issues of incentive alignment (Williamson, 2000). A transformative pathway requires one to examine the fundamental assumptions at each level, design processes for each, and articulate outcomes that can be measured and worked with. The authors propose a new Theory of the Dharmic Firm and a measurement model in harmony with a new “idea of Man”. In the workshop, the authors will share an experiment, explore the idea further and seek avenues for collaboration to develop this into a viable alternative to the dominant theories and practices.
