Toward a ‘We’-Mode Team Production Theory of the Firm: A Confucian Approach

Abstract

Blair and Stout’s (1999) team production model of the corporation (TPM) has become an attractive alternative to principal-agent models of the corporation. TPM literature has been developed to address opportunism, that is, problems of exploiting one’s position within an organization to acquire a benefit without giving anything (e.g., firm-specific investments) in exchange. The problems of team production have prompted a revival of the concept of authority within firms. We maintain, however, that the prevailing conception of authority in the TPM literature is market-based and therefore fails to reflect some powerful ways to address team production problems through a properly thick concept of authority. In particular, we maintain that Blair and Stout’s TPM model does not adequately encourage team-specific commitments and fails to acknowledge the full prescriptive and descriptive potential of the TPM paradigm. We offer an alternative conception of authority in team production: a Confucian communitarian account of the internal workings of a firm, including the production team and the hierarchy endowed with the authority to govern it. On the standard market-based view of the team and its attendant conception of authority, each team member uses the team and its authority as an instrument for advancing her own personal interests. On our Confucian alternative, team production members see the team itself as inherently valuable and create team-specific commitments; they act for the team’s sake, and not merely for their own.