Power relations in companies – a methodological and conceptual analysis

Economics has always been reluctant towards the concept of power, which cannot be operationalized in microeconomic models but can justify ex post rationalizations. Yet power is a vector of social institutionalization that economists must integrate to make the firm a political entity and accomplish real explanatory progress. Therefore, the article aspires to propose a renewed methodological analysis of power, which implies a collective structure while relying on individuals as actors. On the basis of this conceptual clarification, an essay for defining power in the firm is proposed: power is the latent capacity (which may or may not be exercised) of an entity A to constrain and draw the choices of an entity B so that the behavior and actions of B are oriented in a direction favorable to A, by mechanisms intrinsic to the socio-economic relationship that may be formal or informal. Such a definition of power makes it possible to reconsider transformative agency in the firm and to link power with the relational dispositions of the organizations of capitalism.