The PERFORMABUSINESS project has just reached the middle of its official lifespan (this four-years project started in April 2011). The brief Mid-Term Report that has been transmitted to the European Research Council recaps on the main investigative directions that have been elaborated so far. The report is available here.
Elements for a Case on Harvard
The role of business schools in the formation of business reality is today an acknowledged topic in the social-scientific exploration of the cultural elements of entrepreneurial capitalism (see, for example, the work of Rakesh Khurana, in particular his book From Higher Aims to Hired Hands). It’s also part of our project’s agenda. One particularly relevant fieldwork site is of course the Harvard Business School. Part of my current research activities include fleshing out a few directions that were already exposed in “A flank movement in the understanding of valuation”.
Among the treasures of the Baker Library are a few collections with materials from faculty members from the early days (the 1910s, 1920s, 1930s): people that played a pivotal role in the development of both the case method (a very experiential method for the formation of the business mind, quite performative in a theatrical sense of the word) and the crafts of financial valuation (a critical set of capitalization techniques, with potentially performative effects in the repertoires of valuation in business conduct). My preference goes to Arthur Stone Dewing, professor of finance at Harvard, author of widely-read manuals, philosopher and fervent advocate of case-based business education. The papers of Cecil E. Fraser, which I had the chance to examine in April 2012, contain very interesting materials on the methods, sources and ideas of Fraser himself but also on other faculty members, Dewing in particular. Analysis of these, in combination with more contemporary sources, should translate shortly into something readable.
Entrepreneurial Formulas: Business Plans and the Formation of New Ventures
How are new business beings born? A paper by Liliana Doganova, member of the PERFORMABUSINESS team, and Martin Giraudeau, lecturer in accounting at the London School of Economics, proposes to study the populating of markets by looking at the very place where new firms are formulated and formed: the business plan. Research on business planning has tended to focus on consequences, with conclusions indicating that while business plans certainly help entrepreneurs learn and gain legitimacy in the eyes of external parties, they have little impact on the performance of the future firm. Our paper, instead, chooses to open the plans, to analyze their contents and to describe their uses. This method allows us to observe directly what they do, both in terms of visual formulation of the new venture and of its actual formation as a new business active on its markets.
In January, we presented a first draft of this paper, entitled “Entrepreneurial formulas: business plans and the formation of new ventures”, at a seminar at Centre de Sociologie de l’Innovation. The paper identified different techniques through which the future firm is put together in a business plan, and proposed to call them “formulas”. The business plan, we suggested, acts as a literary, chemical, financial and magical formula as well: it tells a story, made up of a limited set of characters and plots; it lists and bonds the resources that constitute the future firm; it transforms them into a stream of future revenues; and, in doing so, it helps bring into existence that which it describes.
The discussion of the paper raised interesting questions and opened new research paths. Isn’t it misleading, some colleagues asked, to envisage the business plan as a magic formula? How to describe the business plan – a peculiar object which is made to make do, which is addressed to a valuating agency (the investor), which is both inventively playful and rigidly standardized? What is the singularity of the business plan, as compared with, say, a project proposal, a scientific article, or an annual report? And, finally, if the business plan is a site to observe new business beings in the making, what does it tell us about the theory of the firm? We are currently incorporating these comments — new version of the paper will be made available sometime soon.
Chile as a Laboratory for Performativity Studies
Chile can be considered as one of the main laboratories of neoliberalism. Many colleagues have developed an interest in this, scrutinizing the social and economic impacts, the political system or the conditions of violence established by the “Chicago Boys” (see for instance the many blog posts at Estudios de la Economía about these issues, for example here). This is also part of PERFORMABUSINESS’s agenda.
As part of the PERFOMABUSINESS team, I initiated fieldwork in Chile in three different areas. The first, in collaboration with the ICSO at the Universidad Diego Portales, is a study of the networks of the Chilean inter-organizational business groups. We examine the dynamics and the evolution of these groups both at the level of the organizations and at an individual level. The second empirical site concerns the consulting firm Tironi Asociados. This company is at the heart of the renewal of thinking on post-dictatorial entrepreneurship. It is therefore an interesting place to explore how the culture of business builds and deploys in the Chilean context. Finally, I study business schools, especially at the Adolfo Ibañez and Diego Portales universities. My focus is on the way economic knowledge is taught, disseminated to and received by different student populations. A first part of the fieldwork was conducted in 2012, a second one is in preparation for 2013. I am using an approach which pays particular attention to the performative work carried out by actors. The objective of this research is to feed reflection on what has Chile been turned into and what it is becoming.
The Provoked Economy: Economic Reality and the Performative Turn
Are artifacts such as the consultancy slide-show, the valuation formula or the consumer test representations of an external reality? Or do they rather constitute, in a performative fashion, what they refer to? One of the official objectives of PERFORMABUSINESS (as stated in the project’s official “Description of Work”) is “to provide an empirically-grounded theorizing on the problem of the performativity of business”: not an easy task, given the wide array of manners in which the notion of performativity has been put to work in social-scientific literature (starting with the seminal work of Jean-François Lyotard), and given also the overwhelming variety of business sites and business-oriented forms of knowledge that feature performative elements (definitely not only finance). If things go well, however, 2013 will be the year in which The Provoked Economy: Economic Reality and the Performative Turn, a book that attempts at fulfilling this task, will see the light.
The book is an extensive elaboration of the materials that were submitted for my Habilitation Thesis. The proposed theoretical vocabulary draws from a pragmatist, process-oriented tradition in philosophy and concentrates on four specific problems: the problem of description (what kind of thing does a description produce?), the problem of the simulacrum (what are its truth and effects?), the problem of provocation (what does it mean to say that reality is really real when it is provoked, and hence realized?) and the problem of explicitness (what it is for reality to be bound to explication?). The empirical illustrations are based on original research on back-office operations in the financial industry, the automation of stock exchanges, consumer testing in market research, the pedagogy of financial valuation and the implementation of performance indicators in public management. The final manuscript is near completion and a contract with a publisher is in preparation. News on the finalization of this work (a crucial PERFORMABUSINESS deliverable) will be posted here soon.
Something You Should Know
A few further hints on the anthropology of capitalization (see earlier references to this research action here and here) were delivered last week at the FIAC, the international art fair in Paris (24-27 October 2012). That was part of “Something You Should Know”, an EHESS Seminar Series curated by Patricia Falguières, Élisabeth Lebovici, Hans-Ulrich Obrist and Nataša Petrešin-Bachelez, that joined forces with FIAC for a discussion on “the question of value”. The discussion featured, among other interesting contributions, an intervention inspired by the research endeavors discussed in PERFORMABUSINESS: video footage of the talk is available here (in French).
Call for Papers: Valuation Studies
PERFORMABUSINESS is an ERC-funded independent research project, but also a piece in a global conversation on the renewal of the social-scientific repertoire of the study of business, capital, markets and value. It links in that sense to initiatives such as the launch of Valuation Studies, a new academic journal that welcomes contributions on the study of the performative features of valuation practices.
The editorial office of the journal is based at Linköping University, CF Helgesson and Fabian Muniesa are the editors, together with an active community of researchers that sit at the editorial and advisory boards.
Call for Papers: Performing Business and Social Innovation
A project-related call for papers for an AOS Workshop on “Performing business and social innovation through accounting inscriptions ” (Galway, Ireland, 22-24 September 2013) is available here. The topic of the workshop connects with a number of research concerns that are at the center of the PERFORMABUSINESS research project.
Credit and Consumption Practices in Argentina and Brazil
I participated in a conference in Porto Alegre, Brazil, in August 20-21. Under the title “Finanças e Consumo”, it gathered sociologists and anthropologists from Mexico, Brazil and Argentina. The last two countries have experienced a period of high levels of GDP growth, with policies oriented towards sustaining internal demand. Financing low- and low middle-class consumption through credit has been part of this strategy. This raises questions about the sustainability of indebtedness, and about the political uses of the categories of “middle class” or “popular consumption”, which are often used by the economic and political actors involved in the process (be it celebrating or criticizing it), but which may be too broad to be used by social sciences to describe the concrete credit and consumption practices taking place.
“Risk Free Rate of Return”: Sovereignty in Financial Formulas
On June 28-30, the Society for the Advancement of Socio-Economics held its annual meeting at the Sloan Business School of the MIT, in Boston. The event gathered several hundred of contributors from all over the world. It was a fantastic concentration of researchers coming from the fields of political science, economics, sociology, anthropology and history, and attempting to grasp economic processes in an interdisciplinary dialogue.
My contribution had to do with the notion of “risk free” interest rate (Session on “The Concept of Prudence in Economic Life and Regulation”, organized by Sabine Montagne and Yuri Biondi). This notion is overwhelmingly assumed in financial formulas, but is being explicitly challenged by the IMF and the BIS, as they grapple with sovereign debt crisis in Europe and take into account the impact this has in financial regulation. After the collapse of AAA rated ABS and CDOs, the assumption that AAA rated notes are “risk free” is understandably questioned. This remark may seem historically obvious, but it undermines the concept of there being something “risk free”, in a way that still needs to be explored by regulators and the financial industry. This also challenges the idea that rich states will always pay their debts and be able to bail out financial institutions, i.e. it redefines what is understood by “sovereignty”, in financial matters, but also probably beyond them.