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The indispensable prerequisite for bringing in an era of industrial peace was a radical change of heart on the part of employers. [...]Taylor could not make this too emphatic. Over and over again he said that employers must undergo a change of heart like unto that of a religious conversion ([17] Copley, 1919, pp. 8-9).
Introduction
Organizational economics, including institutional economics, are frequently criticized because of their claimed negative image of human nature, which seemingly portrays human beings as purely self-interested or even outright opportunistic persons. For instance, behavioral economists ([73] Sen, 1990; [74], [75], [76] Simon, 1976, 1993, 1997) or sociologists ([23] Etzioni, 1988; [54] Morgan, 1997) bring forward such criticism. At times, even institutional economists are rather self-critical in this respect regarding their claimed assumptions about human nature and the portrayal of economic man (e.g. [96] Williamson, 1985, pp. xxi-xxiii, 44, 391). Such claims regarding a negative image of human nature in organizational economics may reflect a methodological misunderstanding ([86], [88] Wagner-Tsukamoto, 2003, 2007a). It can be argued that the model of economic man is instrumentally, methodically useful for the economic analysis and resolution of interaction conflict, specifically the testing of the incentive compatibility of institutional structures (governance structures). Economic man functions in this respect as a mere tool or method to examine incentive structures. This also implies that a moral assessment of organizational economics, including its image of human nature, has to focus on the theoretical and practical achievements that are generated by methodically applying the model of economic man. This paper analyses these issues by reconstructing the portrayal of human nature of Scientific Management in institutional economic terms. The paper shows that Taylor was an early organizational and institutional economist who misunderstood to a considerable degree how to instrumentally, methodically apply the model of economic man in his organization theory. The paper makes here various points which are not only insightful for advancing our knowledge on Scientific Management but also for fostering economic theory about formal, institutional organization.
There are longstanding accusations of a negative image of human nature being portrayed by Taylor's key works (b77 b78 b79 b81 b82 b83 1895a, 1895b, 1903, 1909, 1911, 1912). The key accusation is that Taylor fell for a too mechanistic, too inhumane image...