Organizational Governance, Individual Wellbeing, and Needs Theory

Abstract

A needs theory of governance is introduced and discussed, in which the new institutionalist economics, which consider selfishness and opportunism as the main behavioral principles, are confronted with a new theory in which the organization, as a social system, is embedded in the broader social and cultural context and in a network of social relations. It develops symbiotically with the needs expressed by its internal stakeholders and must seek to increase their welfare through the adaptation of governance rules to both needs and production goals. Institutional solutions informed by the goal of sustainably meeting needs are discovered and developed. Comparison of the two theories leads to theorizing a new layered model, reminiscent in part of Maslow's hierarchy of needs, in which different institutional layers satisfy different types of needs, from the most basic ones of survival and security to the highest ones of belonging, self-esteem, and self-actualization.