The recent events at BHS demonstrate how owners use complex firm structures, intercompany debt and limited liability privileges to avoid tax, pay special dividends and limit owner obligations. These financialized practices are now commonplace across much of the corporate sector (see Bowman et al 2015), raising important questions about the contemporary social and economic purpose of the firm.
In light of this, our project aims to explore the social, moral and legal foundations of the financialized firm and to develop a new theory of the firm (TOTF) from this analysis. This TOTF aims to challenge mainstream Economic theories that understand the purpose of the firm deductively - in the abstract - from theory, and therefore tend to be ahistoric, tautological and inadequate when explaining contemporary corporate practice.
Our work will:
explore how financial extraction for elite advantage has become central to the financialized firm
locate these financialized practices within a broader history of the changing relations and obligations around the firm, looking at the evolution of the financialized corporation inductively from empirical and archival work, not deductively from theory.
show that the purpose of the firm was never singular: it does different things and serves different interests at different points in time,.
develop a new empirically informed theory of the firm that engages with these specifics, to better understand the financialized corporation in context.
Our conceptual approach is necessarily interdisciplinary and draws on the anthropological and critical accounting methods employed in Leaver and Martin (2016). We aim to publish our ideas as a co-authored book, making a critical contribution to knowledge in the field by re-evaluating the moral foundations of our financialized economy. In so doing we hope to promote the ISRF’s goals of developing interdisciplinary research that improves understanding of social entities and processes.