Theories of the Business Firm in Critical Perspective

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Course Number:
LAW 762

Credit Hours:
3 Credit Hours

Prerequisites: RCC*. This course will explore the following idea and why it might be important for law: just exactly what is a "firm" (or any other "organization" for that matter), how does the law conceive of "firms," and what difference does it make? An underlying theme of the course, not surprisingly, is that answers to these questions might make a very big difference, and the course will ask what the law could learn from them from economics and from a specialized area of social science literature, improbably neglected among legal academics, that goes by the name “the theory of organization.” This body of thought has special value in understanding business entities and, indeed, in understanding law generally. The course will begin with generally adopted ideas about what constitutes the "firm" at use in the legal literature and those in economics. It will consider the mainstream evolution of the concept in transaction cost economics and the “nexus of contracts” theory currently predominant among legal economists. The course would then consider critiques of the traditional concept and its economic evolution, including the Legal Realist perspective, the Critical Legal Studies (CLS) perspective, and other viewpoints. Finally, in a sense as its capstone, the course would delve into general, non-normative consideration of the theory of organization, to show how organization theorists have cast doubt on the ability of traditional models and traditional critiques to explain real-world organizations. Those organizations, it turns out, are often complex and ambiguous places where traditional models of human motivation are not up to the task of explanation. At its core, the course would seek to highlight the practical and political significance of the particular theory of organizations chosen by a legal system. The course will be well suited for students with a social science background, and may also be of interest to students interested in business organizations, management, and counseling business clients.

The grade will be based mainly on one seminar paper of sufficient length and content to justify 3 hours of credit. In addition, some portion of the grade will be based on a few short assignments in which each student identifies the “main idea” of papers that are read in the course. The course satisfies the upper level writing requirement and the perspective elective requirement. Permission of the instructor is required. Offered infrequently.

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