Transdisciplinary Theory of the Firm

There is an imperative need to reconceptualize the role of the firm in modern society based on a holistic perspective in order to correct the imbalances and excesses generated by a too narrow conception of purpose and the inadequacies of current theory to explain and reveal the underlying process by which firms, stakeholders and society at large grow, develop and evolve in a synergistic, mutually reinforcing and beneficial manner. The concept of the firm as a separate independent entity striving to maximize its own individual benefit in competition with other firms needs to be replaced by a conception of the firm as a nodal element in a comprehensive commercial system and social organization designed to deliver maximum benefits to society as a whole and to distribute those benefits rationally for the welfare of all. The concept of efficiency narrowly defined in terms of shareholder value needs to be replaced by the concept of effectiveness broadly defined as the total value generated to all stakeholders and society at-large. The unique role of the firm as an agent for free expression of individual initiative, innovation and creativity can best be preserved and enhanced only in a commercial, regulatory and social environment which safeguards the welfare of the collective, while providing maximum opportunity for individual choice and action. This article views the firm from the perspective of an integrated transdisciplinary science of society, examines the relationship between the individual firm, business community and the wider society, and considers the concept of value from the perspective of impact and overall benefit on society and human wellbeing