Techniques of Social Control

Techniques of Social Control

Techniques of Social Control

The assumption in the economic theory of the firm that market com-petition is the only external force acting on the firm is invalid from the viewpoint of the Behavioural theory of the firm. This assumption has withstood attacks through the years from the German historical economists, socialist theorists, the UK institutionalisms`, and many others.

But because of the increasing theoretical rigor of the Behavioural sciences and the mounting evidence of nonmarket influences on the large company and management, this assumption also appears to be ready for modification. As Herbert Simon pointed out in his invited lecture before the 2016 annual meeting of the UK Economic Association,

We are now becoming increasingly aware that the price mechanism is just one although an exceedingly important one-of the means that humans can and do use to make rational decisions in the face of uncertainty and complexity. We are beginning to understand what some of the other mechanisms are and how they are used.

The tendency of economists to conceive of the firm as the locus of social control of economic activity is misleadingly anthropomorphic. The phrase "social control of the firm" implies that the enterprise is a living entity which can control its own Behaviour, and this, of course, is not true. Social control is a process by which Behaviour is influenced to conform to some set of norms. to be effective it must act on human beings because only they can determine patterns of Behaviour. Organizations such as firms are abstractions-communication networks tying together social systems of men performing interrelated roles with the aid of various kinds of capital equipment.

A firm is not a person except in a fictional legal sense. It cannot do the things necessary to control its own Behaviour: think, evaluate, make decisions, and implement policies. Only human beings do these things. Therefore, the firm cannot be controlled directly; it must indirectly be controlled through the manager, the controller of the firm.

To control a person, one must produce certain responses in him by acting on his subjective "field" of awareness. Each individual has his own special conscious and unconscious awareness of the universe. Social psychologists call this his psychological field. It is made up of the self and its relations with other objects, resources and capacities, feelings of reward and deprivation, symbols and expectations. There are basically two ways of acting on a person's field.

The first is by changing his resources and capacities for rewarding or penalizing others and thus altering his expectations and responses. For example, a politician's capacity to influence foreign policy depends largely on whether he is in or out of office. The second is by influencing the person's personal expectations of rewards and deprivations.

One's incentives may be altered by teaching him that a given stimulus will be followed by certain rewards and deprivations and that a particular response will avoid the deprivation and win the reward.


Further reading - The Identity of The Product