Towards a Human Centered Theory and Practice of the Firm

In this paper we review the challenges to the current economic system, and proceed by presenting two competing paradigms – the economistic and the humanistic paradigm of business.

Management theory and practice are facing unprecedented challenges. The lack of sustainability, the increasing inequity and the continuous decline in societal trust in ‘business as usual’ translate into a general acceptance that carrying on as we do is not an option we have indefinitely.

In this context we develop a humanistic view for the theory of the firm and the practice of the firm. We examine business strategy, governance structures, leadership styles, and organizational culture and illustrate them based on global case examples. In this manner we contribute to the discussion on alternative theories of the firm centering the debate on authentic human needs and their consequences for management theory.