Is the principle of corporate subsidiarity deceptive?

Abstract

The term « subsidiarity » started to appear in managerial literature in the last few years, to advocate innovative managerial practices. The resurgence of this concept that originated from a political context can create problems. The goal of this paper is to expose the main difficulty of translating this concept from the political field to a corporate situation. Indeed, subsidiarity gives its inherent power back to the lower echelons of a political community. But the economic approach of organization theory assumes, mainly by the means of agency theory, a top-down conception of the firm. Thus, it is not the lower echelons which delegates power to the higher echelons. Consequently, the subsidiarity principle seems not to be applicable to a corporate setting, unless we reverse the assumptions of economic approach of organization theory. Then, the principle of subsidiarity could be used as an illusion to con employees into believing they have legitimate power, in order to manipulate their freedom, and domesticate it for managerial ends.

Keywords

Subsidiarity principle, Catholic Social Teaching, Organizations, Community, Agency theory.

Code JEL: A12, D2, L2.