Abstract

1
We Give You Science Organizational Economics
and the Evolution of a New Management
Science Kevin Christ, Rose-Hulman Institute of
Technology
Abstract   During the 1970s and 1980s, agency
theory, transactions cost economics, and game
theory came of age, collectively providing the
theoretical hardware for a new sub-discipline
called organizational economics that combined
traditional managerial interests in
organizational dynamics with rigorous economic
analysis. At a moment in business school history
when the search for scientific credibility
created a demand for the tools that economists
had on offer, management educators generally
greeted the new tools of organizational economics
with open arms. Here were methods and models,
forged in the respected realm of scientific
economics. As a result, organizational economics
exercised significant influence on the evolution
of management science. In hindsight, this
influence has become a focal point for harsh
criticisms of contemporary business school
outcomes. While it may be easy to characterize
this infiltration of new methods and models as
economic imperialism, and to label the pernicious
outcomes as unintended consequences, the full
story is more complex. This paper reviews this
episode of economic history and argues that it
reveals much about the difficulties associated
with value neutrality in economics and the search
for method in developing academic disciplines
such as management science.

• Annotated Outline
•  
• Introduction
• A. Economics and the ethos of value neutrality
• Blaug, Mark (1992). The Methodology of
  Economics, or How Economists Explain. Cambridge
  Cambridge University Press.
• Caldwell, Bruce (1994). Beyond Positivism,
  Economic Methodology in the Twentieth Century.
  London and New York Routledge.
• Mongin, P. (2006). Value Judgments and Value
  Neutrality in Economics. Economica, 73, 257
  286.
• Business schools in transition
• Khurana, Rakesh (2007). From Higher Aims to
  Hired Hands The Social Transformation of
  American Business Schools and the Unfulfilled
  Promise of Management as a Profession. Princeton
  and Oxford Princeton University Press.
• Development and Influence of Organizational
  Economics
• A. Canonical texts of the emerging discipline of
  organizational economics

2

• Incorporation of Organizational Economics into
  the New Management Science
• Eisenhardt, Kathleen (1985). Control
  Organizational and Economic Approaches.
  Management Science 31 134 149.
• Jensen, Michael C. (1983). Organization Theory
  and Methodology. The Accounting Review 58 319
  339.
• Milgrom Paul. and Roberts, J. (1992). Economics,
  Organization Management. Englewood Hills, NJ
  Prentice-Hall.
• Rumelt, R., Schendel, D., and Teece, D. (1991) .
  Strategic Management and Economics. Strategic
  Management Journal 12 5 29.
• Retrospective Views on the Influence of
  Organizational Economics in Management Education
• The Ghoshal critique and other views
• Bennis, Warren G. and OToole, James (2005). How
  Business Schools Lost Their Way. Harvard
  Business Review.
• Ghoshal, Sumantra (2005). Bad Management
  Theories are Destroying Good Management
  Practices. Academy of Management Learning
  Education 4 75 91.