Bruton et al. (2025) invited us to a Point/Counterpoint debate about management and organizational scholarship (MOS) in various institutional contexts. The Point’s primary thesis was that MOS is misguided because it reflects a U.S.-centric capitalist bias. It then presented four “varieties of socialism” and an agenda for entrepreneurship research in socialist contexts.
Our Counterpoint challenges the view that MOS is biased toward capitalism, takes issue with the Point’s treatment of capitalism and socialism, and offers an alternative research agenda that focuses on institutions themselves (not labels like “capitalism vs. socialism”). In this post, we also discuss research methods and consider implications for organizations and policymakers.
MOS already embraces “socialist” contexts.
Contrary to the Point’s claims, our Counterpoint suggests that MOS has examined “socialist” contexts for decades. The impacts of such contexts on business are evident in the work of economists such as Frank Knight, Ludwig von Mises, and Joseph Schumpeter in the early 20th century. Subsequently, over a dozen economists—including Friedrich Hayek, Milton Friedman, Ronald Coase, Douglas North, Elinor Ostrom, Oliver Williamson, Daron Acemoglu, Simon Johnson, and James Robinson—have won Nobel Prizes for their research on related issues.
More recently, large literatures on emerging economies, political structures, and state intervention highlight the heterogeneity of institutions and their implications for strategy, entrepreneurship, and international business. Likewise, multiple journals—such as Asia Pacific Journal of Management and Africa Journal of Management—and their scholarly organizations are dedicated explicitly to MOS scholarship (often focused on institutions) in non-U.S. contexts. Ironically, the Point’s claims about the supposed neglect of MOS scholarship in socialist contexts illustrates U.S.-centrism because it overlooks such vast bodies of work.
There is disagreement about the meaning of “capitalism” and “socialism.”
Our Counterpoint also raised three concerns about the Point’s definitions of capitalism and socialism. First, the Point states that the capitalism/socialism distinction boils down to ethos. By arguing that capitalism is individualist and socialism is cooperative, the Point emphasizes distinct belief systems, social norms, and behavioral standards. Indeed, individualism (vs. collectivism) is a core attribute of culture (see the GLOBE project and Hofstede’s work). Conversely, in economics (home to much of the capitalism and socialism literature), the capitalism/socialism distinction is rooted more in legal systems. Public policies that promote private ownership, property rights, and exchange via markets are more indicative of capitalism. Those that promote more state ownership, centralized decision making, and government intervention are more indicative of socialism. Viewed this way, both capitalism and socialism facilitate cooperation. One difference is that cooperation is decentralized and voluntary under more capitalist institutions, but it is centralized and coerced under most socialist institutions.
Second, the Point’s emphasis on ethos enabled puzzling conclusions that lack face validity. The Index of Economic Freedom (2025) rates 176 country governments based on their protection of property rights, interference with markets, and related issues. All five Nordic countries rank in the top 12% on this index. Russia, China, and Cuba rank in the bottom quarter. Yet, the Point refers to all eight countries as “socialist.” Moreover, the Point treats the U.S. as the quintessential capitalist country. However, all five of the supposedly “socialist” Nordic countries score at least 25% higher than the U.S. on individualism (Hofstede, 2025).
Third, the Point assumes that capitalism and socialism exist at multiple levels. For example, it identifies socialist religious groups (e.g., Anabaptists) and organizational structures (e.g., cooperatives). If socialism is defined this broadly, the term starts to lose its meaning as a scientific concept. Indeed, as we wrestled with the Point’s view of socialism, we frequently asked “what is socialism not?” We also wondered what this characterization would mean for research, politics, and practitioners. Defining public policies and their consequences using the same “socialism” label enables both circular reasoning and logical contradictions. On the one hand, the argument that socialist governments produce socialist communities might be too trivial to be useful. On the other hand, many of the Point’s “socialist” communities thrive in “capitalist” countries too. Why would this supposed mismatch be allowed?
One answer is that purely capitalist or socialist countries do not exist. For example, all U.S. states recognize cooperatives as a form of governance, even North Korea has introduced modest reforms to strengthen markets and property rights, and systematic departures from capitalist archetypes are well-documented in the “varieties of capitalism” literature. In turn, we question the value of the Point’s efforts to re-classify several “capitalist” countries (e.g., Brazil and Japan) as “varieties of socialism.”
More generally, recent surveys reveal little agreement about the meaning of the terms “capitalism” and “socialism,” the terms have become politicized, and groups with different ideologies use the terms differently (Gallup, 2021; Pew, 2019). Therefore, we are increasingly skeptical that such terms are ideal for scholarly dialogue.
Research on institutions should focus on institutions, not labels.
Rather than continue with contested labels, we argue that MOS scholars should focus on institutions themselves. First, we suggest examining micro-foundations that explain why and how institutions matter. Ultimately, institutions influence entrepreneurs’, managers’, stakeholders’, and policymakers’ judgments and decisions. Uncertainty about institutional rules, for example, undermines efforts to estimate returns or experiment with resource combinations. Further, individuals view and react to the same institutions differently. Studying these topics might require not only multi-level methods, but also methods to account for firms’ self-selection into locations and their efforts to influence institutions in those locations.
Second, scholars should attend more to process. Team production models highlight the importance of stakeholder’ contributions. Drawing on this research, scholars could examine how laws that prioritize some stakeholders (e.g., shareholders) affect contract negotiations between entrepreneurs and other stakeholders (e.g., employees). Recent advances in qualitative methods and text analysis (e.g., machine learning) could provide new insights here.
Third, scholars should pay more attention to interdependencies. Institutions exist and interact at multiple levels, including local, regional, country, and supranational. And the nature and influence of institutions depend on several factors, such as culture, economic conditions, organizational actions, and other institutions. Moreover, firms’ goals shape the attractiveness of different institutions. Whereas foreign investors often prefer richer countries with stronger intellectual property laws when they want to develop new technologies, for example, they often target poorer countries with less stringent regulations when they want to obtain natural resources (e.g., rare-earth minerals). Configurational theory and methods can shed light on the combined influence of institutional, economic, and strategic factors.
Thus, scholars need not resort to capitalist vs. socialist labels. Institutions can be studied more richly and deeply by avoiding such labels and focusing on institutions themselves.
Institutions are important for managers, entrepreneurs and policymakers to understand.
We now examine implications for organizations and policymakers. First, it is important to understand micro-foundations. For example, political polarization research suggests that ideological disagreements affect employee, executive, organizational (e.g., relationships with government officials), public policy outcomes in important ways. With this knowledge, managers, entrepreneurs, and policymakers can take steps to mitigate the influence of different political preferences by, for example, being more respectful of those with opposing viewpoints.
Second, process perspectives shed light on the evolution of cooperation and decision rights in startup teams and established organizations. In startups’ early stages, decentralized cooperative norms can facilitate intra-team relationships and coordination among founders and employees. In their later stages, management by fiat might be needed to resolve conflict, design incentives, and provide direction to stakeholders who lack ownership stakes. However, these processes depend on how surrounding institutions protect property rights and prioritize the interests of various stakeholders. Additionally, managers and entrepreneurs should understand how organizations and various interest groups try to affect public policy, as well as institutional and organizational conditions that affect such efforts.
Third, interdependencies are relevant to socioeconomic outcomes that affect business. Extractive institutions which violate property rights and enable corruption can inhibit economic development, potentially facilitating political instability. Additionally, the precedent that for-profit corporations exist “primarily for the profit of the stockholders” is a foundation of U.S. corporate law. Nonetheless, 181 CEOs signed a 2019 public statement committing “to lead their companies for the benefit of all stakeholders.” Though critics question the statement’s ultimate impact, it illustrates competing institutional and stakeholder pressures organizations often face.
Conclusion
Given the importance of institutions, MOS scholarship in this area should be rigorous, comprehensive, and insightful for organizations and policymakers. Despite our disagreements with the Point, we hope this Point/Counterpoint debate will facilitate more of such scholarship.
