Market Value(s): Is there room for social responsibility in the profitable tech company?

This paper explores the relationship between information and the structure of the firm, arguing that a firm that uses available information to innovate is necessarily engaged in ethics. Using suggestions from the knowledge-based theory of the firm and from design thinking, the paper argues that the process of design for technological innovation necessarily involved value-laden questions about human needs and harms, and how best to serve humankind. The classic theory of the firm in Transaction Cost Economics assumed that firms only need limited price information, that humans processed this information poorly, and that employees would exploit that information for their gain. It justified a hierarchical, multidivisional structure for the firm, as a way to capitalize on prices without falling prey to irrationality and shirking. Later scholars argued that actually existing firms are not structured in the way TCE predicts; and that firms should not be structured in the way TCE recommends. Some said that the “knowledge-creating company” should adopt a more flexible structure that allows management to set the “intentions” of the company and employees to use their knowledge to find innovative ways to fulfill those intentions - equivalent to saying that the company expresses its “values” and the employees act them out. This paper builds upon that argument, by suggesting that these corporate “values” are indeed ethical values. Design for innovation envisions a future world which serves the needs of human (including the innovators) more than it harms them. The tech corporation must orient itself towards ethical values to achieve market value.