For too long, business has prioritised performance at the expense of societal progress – be it fairness, well-being or sustainability.
A new book, edited by Subramanian Rangan, Professor of Strategy and Management at INSEAD, explores how flawed assumptions in business theory are cleaving apart performance and progress.
In Core Assumptions in Business Theory: A Wedge Between Performance & Progress, Professor Rangan brings together leading social scientists and philosophers to analyse and reflect on these fundamental assumptions across various business disciplines, including economics, strategy, marketing, leadership and operations.
They propose new ways to integrate performance and progress, such as a revised profit function considering harm and a two-stage rationality approach that includes well-being. They argue for the evolution of business thinking through education, emphasising moral reasoning alongside traditional business and prudential reasoning.
Core Assumptions in Business Theory boasts contributions from a number of renowned scholars, including the late James March, the Nobel Laureate Jean Tirole, David Autor, Philip Kotler, known as the “father of modern marketing”, INSEAD Professor of Marketing and Decision Neuroscience, Hilke Plassmann, and Raghuram Rajan of the University of Chicago.
Complementing these insights are reactions and commentary from distinguished philosophers such as Amartya Sen, Philip Kitcher, Elizabeth Anderson, and Kwame Anthony Appiah.
“The very operating system of capitalism may contain flaws – unintended as they may be,” says Rangan. “We began to explore whether the issue lies not in the logic of business, but in the underlying assumptions. When the latter don’t match reality, then following the recommendations of even clever models can produce dramatic shocks and scandals.”
This is the third volume in a trilogy from collaborations under the aegis of the Society for Progress. The previous volumes are "Performance & Progress" (Oxford University Press, 2015) and "Capitalism Beyond Mutuality?" (Oxford University Press, 2018).
Core Assumptions in Business Theory: A Wedge Between Performance & Progress, edited by Subramanian Rangan, is available now from Oxford University Press.
Listen to Professor Rangan’s podcast about the book: https://knowledge.insead.edu/strategy/business-practice-gone-astray-improve-business-theory
