Co-ordination and Spontaneity in Non-Hierarchical Business Organizations
New Thinking in Political Economy series
Chapter 5: Employees as Creative Agents
When people make their own decisions about how to do their work and allocate their time, they often put more energy, eﬀort, and creativity into their jobs. Studies of R&D projects, for instance, have found that when the members of project teams feel more freedom and control over their work they become more innovative. That sense of autonomy is probably part of entrepreneurial motivation, too: Not only do you keep the economic rewards of your own work, but you also can make your own decisions and feel like an owner. When people feel tightly controlled, by contrast, they are often less motivated and less creative. Albert Einstein put it well when he remembered the militaristic school he attended as a child: ‘This coercion had such a deterring eﬀect upon me that, after I had passed the ﬁnal examination, I found the consideration of any scientiﬁc problems distasteful for an entire year.’ (Malone 2004, pp. 34–5) ENTREPRENEURSHIP AND CREATIVITY We have a much better understanding today of the beneﬁts and costs of delegation and decentralization, and the relevant tradeoﬀs between the two. But there is one beneﬁt of decentralization that has not been discussed in great detail so far: the creative response within ﬁrms. Discussion of elements of creativity within ﬁrms remains mostly neglected, even by Austrian economists.1 Creativity in action is best understood as innovative behavior that results in the introduction of new knowledge. That new knowledge can take the form of...
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