Identity and the Economics of Organizations, Article Critique Example

In “Identity and the Economics of Organizations”, Akerlof and Kranton examine the economic structure of organizations in terms of the roles and motivations of workers. Namely, the central inquiry of the text is to answer how phenomena such as monetary rewards and punishment affect the worker’s participation in an organization. (9) As opposed to merely emphasizing such material rewards so as to engender a successful organization, the authors introduce a concept of identity, whereby the worker’s economic relationship to the organization is not paramount, but rather it is how the worker conceives his or her own identity in the organization that becomes decisive.

As the authors state, this conclusion is based upon their interpretations of the “classic sociology of military and civilian organizations.” (9) Hence, their work is geared towards an analysis of theory, as opposed to practice. This is not to say that they do not rely on concrete empirical examples. For example, the authors discuss military organizations such as West Point and the importance of identity in the function of such organizations. (10) Irrespective of theoretical or practical approaches, the key argument is nevertheless that problems of motivation can only be resolved with a concept of identity. Namely, the organization itself must confer to the participant an identity, or a belonging to the organization. This identity makes the worker feel a part of the organization in question, making them more amenable to performing the tasks that the organization sets for them.

The conclusions of the authors about the economics of organizations thus heavily rely upon sociological analyses of identity. This approach is problematic insofar as these theories of identity remain theories: sociology is not a rigorous science. Moreover, the essential proposal of the thesis is to turn organizations into ideology-producing machines, whereby identity is merely a means towards the end of the success of the organization itself: the identity of the worker is only relevant to the extent that it is beneficial to the company, a tool with which to “motivate.” From a purely ethical perspective, such an approach is clearly deficient.

Works Cited

Akerlof, G.A. & Kranton, R.E. (2005). “Identity and the Economics of Organizations.” Journal of Economic Perspectives. Vol. 19, No. 1, Winter. pp. 9-32.