Alternative Theories of the Firm

This chapter’s aim is to contribute to a necessary debate on the principles governing management. The theory of the firm has led to unprecedented economic growth, but it has also produce important negative impacts that could compromise our own existence in this planet. It is urgent to explore alternative management models that can better satisfy our needs in a sustainable way. To this end, this chapter seeks to explore the attributes of a management model derived from indigenous social enterprises in Latin America. These enterprises are driven by local knowledge, values and ethics, a profound respect for human dignity, and a social purpose that is also shared by the community; they also prioritize the well-being of each stakeholder over profits or economic indicators. Evidence suggests that indigenous social enterprises have achieved sustainability and the common good by abandoning the logic of control and value appropriation that is typical of profit-maximizing firms. Instead, they have designed empowerment mechanisms that create value among stakeholders, strength their capabilities, and promote the development of these groups according to their own idea of the term.