A Communicative Theory of the Firm: Developing an Alternative Perspective on Intra-organizational Power and Stakeholder Relationships

Abstract

Existing theories of the firm exhibit significant shortcomings when questions turn to intra-organizational power and extra-organizational relationships — two issues central to understanding firm operations. Here I advance an alternative view, founded on the Montreal School of organizational communication's conception of conversation—text relations, yet extending it in several ways. In developing a communicative theory of the firm, I highlight the functions of, and relations between, `concrete' and `figurative' texts, paying particular attention to their participation in the construction of an authoritative (yet never monolithic) system for cooriented and distributed action. Using examples drawn from struggles over power, strategy, and organizational form at GM, I show that seeing the firm in textual terms presents a very different view of its operations. Doing so, portrays individuals and collectives as engaging in sophisticated games where firms marshal consent and attract capital through textually mediated practice. Moreover, through game playing, the firm's trajectory is authored. Building on these arguments, I present two novel and testable propositions about the nature of organizational change in interfirm and stakeholder relationships.