The Future of Enterprise Organizations

Both the law and business schools at the University of Michigan offer a basic course in Enterprise Organization. This tradition owes to the influence of Professor Alfred Conard, one of the leading scholars of his generation, who taught during most of his career at the University of Michigan Law School. The tradition persists in part because Enterprise Organization suggests an appropriately broad view of its topic, unlike more common course titles such as Corporations or Business Associations. We live in a world populated not only by people but also the organized legal entities we create. Business firms and nonprofit organizations have legal frameworks, and economic forces affect them in various ways. An important topic for social research – including not only law and economics, but also other disciplines – is to uncover the springs of motivation, power, and belief that underlie the organizations that figure so largely in our everyday existence. The Ownership of Enterprise and Institutional Shareholders and Corporate Governance confirm Professor Conard’s broad view of the subject of Enterprise Organization, though they travel in two different directions. One direction focuses on what may be called the “microanalysis of institutions,” which breaks down complex forms of organization in terms of their elements – namely, individuals and their motivations. The other direction focuses on the big picture, a “macroanalysis of society” and its major developmental changes. These two directions correspond roughly with the functional differentiation between micro- and macroeconomics. In my estimation, the same division of labor makes sense in studying the law of enterprise organization and characterizes its likely future.