Entrepreneurship & Organization Management

Dispersed Knowledge With in Markets and Companies

Abstract

Abbott Jason Haron*

General economic thinking considerably influences Market Based Management (MBM). Opportunity-cost, marginalanalysis, creative-destruction and more, are rooted in economic thought. However, what about central planning? In the “Use of Knowledge in Society” Hayek was careful to distinguish between “central planning” by the government, which he thought was damaging and decentralized planning by individuals and organizations, which led to advantageous competition. The Market Based Management method tries to find ways to adapt the principles of a free society and market economy to advance management practice in organizations. Hayek argues that given the heavy oratorical emphasis on markets, it should come as no wonder that Market Based Management ideas have attracted attention from individuals in the varied field of organizational economics. Contrariwise, some academics in management and other social sciences express doubts, precisely because they perceive all the market based talk to be a form of monetaryimperialism that seeks to reduce all human behavior to hyper-rational self-interested enhancing.