Introduction
The division and use of knowledge within the firm has long been a central concern in organization studies (Alvarez and Porac, Reference Alvarez and Porac2020; Boissot, Reference Boisot1998; Carnabuci and Operti, Reference Carnabuci and Operti2013; Dosi and Marengo, Reference Dosi and Marengo2015; Drucker, Reference Drucker1993; Foss and Pedersen, Reference Foss and Pedersen2019; Grant, Reference Grant1996, 2022; Kogut and Zander, Reference Kogut and Zander1992; Reference Kogut and Zander1993; Nonaka and Takeuchi, Reference Nonaka and Takeuchi1995; Hadjimichael et al., Reference Hadjimichael, Ribeiro and Tsoukas2024; Schreyögg and Geiger, Reference Schreyögg and Geiger2007; Spender, Reference Spender1996; Stoian et al., Reference Stoian, Tardios and Samdanis2024; Tsoukas, Reference Tsoukas1996; Reference Tsoukas2009). The core theoretical contribution of this article is to bring republican political theory to bear on problems of bounded rationality and knowledge use within firms. It is argued that firms organized according to republican principles may exhibit comparative epistemic advantages in addressing certain knowledge distortions associated with bounded rationality. In this article, bounded rationality is understood not only as a cognitive limitation, but also as an organizational condition shaped by relations of authority that affect what knowledge is expressed, transmitted, and contested within firms. This article develops an analytical framework rather than an empirical assessment of organizational performance.
The argument advanced here is that epistemic performance constitutes one dimension of organizational governance among several. Organizational forms emerge, persist, and diffuse through the interaction of multiple institutional and economic factors, including capital requirements, risk allocation, scalability, legal structure, and patterns of institutional inheritance. The capacity to communicate and utilize dispersed knowledge is therefore an important consideration, but not the sole determinant of organizational selection. Governance structures may consequently endure through path-dependent legal, financial, and organizational arrangements even where alternative institutional forms possess comparative epistemic advantages under particular conditions. The claim is therefore not that markets will necessarily select the epistemically superior organization, but that epistemic performance provides an additional criterion by which alternative forms of firm governance can be evaluated. Organizational forms may persist and diffuse for reasons extending beyond the communication and use of dispersed knowledge, making epistemic performance one important dimension of institutional assessment rather than the sole measure of organizational success. The focus of this article is that dimension.
To make this case, the article draws on Friedrich Hayek’s argument that freedom is essential to the effective use of dispersed knowledge and reconstructs this insight in republican terms as the absence of arbitrary power. The novelty of the argument does not lie in redescribing familiar organizational problems in republican vocabulary, but in extending Hayek’s own epistemic concerns into the internal governance of firms. Although Hayek developed these arguments primarily in relation to market coordination, this article argues that authority structures within firms are themselves epistemically consequential because they shape whether dispersed and tacit knowledge is disclosed, contested, and incorporated into organizational judgement.
Theodore Burczak (Reference Burczak2006) has previously argued that Hayek’s epistemic critique of central planning is compatible with democratic forms of worker self-management, developing this argument within a broader Marxian capability framework. More recently, Gerlsbeck and Herzog (Reference Gerlsbeck and Herzog2020) have advanced a broader epistemic defence of workplace democracy centred upon deliberation, reflexivity, and the utilization of dispersed knowledge. The present article builds upon these important contributions while pursuing a different analytical objective. Rather than asking whether worker self-management can satisfy Hayek’s epistemic challenge, or defending workplace democracy on epistemic grounds more generally, it reconstructs Hayek’s own epistemic economics together with his republican conception of liberty in order to develop a constitutional account of authority within the firm. In doing so, it seeks to identify the institutional mechanisms through which constitutional constraints on arbitrary authority may improve the communication, contestation, and organizational use of dispersed, tacit, and evolving forms of knowledge.
In this manner, the article contributes to a Hayekian agenda for organization theory while departing from approaches that treat managerial authority as epistemically sufficient once coordination is internalized within the firm. It can inform a theory not only of market freedom, but also of freedom within the firm (Foss and Klein, Reference Foss and Klein2012). Hayek (Reference Hayek1982a, Reference Hayek1982b) explicitly considered how his concept of liberty and epistemic economics might inform the design of legal frameworks and constitutions. In a similar spirit, this article takes up those same elements of his thought and employs them in considering the institutional design of firms.
The article develops a set of institutional principles intended to mitigate epistemic distortions associated with arbitrary authority, including dispersed ownership stakes, constitutional constraints on managerial discretion, and limited forms of firm democracy. This Hayekian firm republicanism is not a proposal to abolish managerial hierarchy or organizational direction. It is a proposal to constitutionally constrain discretionary authority so that managerial coordination occurs under conditions of contestability and non-domination (Hsieh, Reference Hsieh2005, Reference Hsieh2008). Furthermore, it does not advance a general theory of firm formation, capital investment, or risk-bearing. It does not propose a general explanation of organizational form within market economies, nor does it argue that republican firms necessarily outperform conventional hierarchical firms across all margins of institutional performance. Its analytical focus is narrower: it concerns the epistemic problem that arises within firms once production is organized outside the price system.Footnote 1
Part I reconstructs Hayek’s epistemic economics and republican conception of liberty before considering its implications for authority and institutional design within the firm. Part II applies this framework to organizational governance, arguing that where coordination no longer occurs primarily through prices, republican constraints on arbitrary authority may improve how dispersed and tacit knowledge is communicated, contested, and incorporated into organizational decision-making.
Part one
Firm republicanism, knowledge, and Hayek
Although republican ideas have increasingly been applied to economic life and the workplace (Claasen and Herzog, Reference Claasen and Herzog2021; Cicerchia, Reference Cicerchia2022; Hasan, Reference Hasan2021; Rahman, Reference Rahman2017), such work has primarily focused on domination and liberty rather than the epistemic consequences of organizational authority. The argument developed here extends republican concerns into problems of knowledge use, coordination, and institutional learning within firms.
From the alternative perspective of business scholarship, there has been a recent emphasis on considering the firm as a regime of power, making a strong analogy between the firm and the state (Néron, Reference Néron2024; Ferreras, Reference Ferreras2017, Reference Ferreras2023). One consequence of this has been an effort to apply political theories of government, such as republicanism, to the firm. Although related to such efforts, the proposals offered here are not grounded in normative principles. The argument developed differs in emphasizing the epistemic consequences of organizational authority and contestation within firms.
The central epistemological problem faced by firms is the communication of knowledge. Much of what is valuable in organizational settings originates in the experiences, discoveries, or intuitions of individuals and is therefore held privately (Grant, Reference Grant1996). Such knowledge is dispersed across the organization and often remains tacit in character (Hadjimichael et al., Reference Hadjimichael, Ribeiro and Tsoukas2024). Organizational theorists have long emphasized that firms must coordinate dispersed, tacit, and context-dependent forms of knowledge under conditions of bounded rationality (March and Simon, Reference March and Simon1958; Kogut and Zander, Reference Kogut and Zander1992; Nonaka and Takeuchi, Reference Nonaka and Takeuchi1995; Grant, Reference Grant1996). More recent work has extended these concerns to problems of organizational learning, knowledge sharing, and institutional adaptation within firms (Foss and Pedersen, Reference Foss and Pedersen2019; Ganz, Reference Ganz2018).
Firm republicanism seeks to improve the institutional conditions under which such coordination takes place. It is contrasted with the Coasean model of authority in the firm. Coase (Reference Coase1937) famously described firms as ‘islands of conscious power’ where coordination is achieved by the command of the ‘entrepreneur co-ordinator’, rather than by prices. In the surrounding sea of the market, by contrast, coordination is established via the price mechanism. Simon (Reference Simon1951) developed these Coasean insights to show how authority works through the employment contract’s ‘zone of acceptance’. Williamson (Reference Williamson1975) further refined the notion of authority as a governance mechanism (Argyres and Zenger, Reference Argyres and Zenger2022). When he argued that managers need discretion to run complex organizations, he also argued that unchecked power leads to inefficiency. Nevertheless, all the checks he proposed were either external, such as the legal system or the market, or top-down forms of oversight, including incentives for performance.
Although existing theories of the firm (Foss and Klein, Reference Foss and Klein2012) emphasize the coordinating role of authority, they often treat managerial power as epistemically sufficient once coordination is internalized within the firm. In contrast, some organizational theorists have argued that decentralized organizational forms are better suited to knowledge-intensive production (Ciborra, Reference Ciborra1996; Lee and Edmondson, Reference Lee and Edmondson2017). The argument made here takes a different perspective from both. Its focus is the epistemic benefits of constitutionalizing the power of management along republican lines. It accepts Williamson’s external, top down, checks while institutionalizing breaks on the exercise of arbitrary rule.
Hayek (Reference Hayek and Hayek1948a, Reference Hayek and Hayek1948b) was the first to identify the dispersed, tacit, and contextual nature of knowledge in the economy. Central to his epistemic economics was the knowledge problem: the challenge of coordinating economic activity in a world where knowledge is dispersed, tacit, contextual, and constantly changing. Despite Hayek’s influence on institutional theory, he himself did not contribute to the theory of the firm directly (Castillo, Reference Castillo2016; Foss and Klein, Reference Foss, Klein and Adler2014; Tsoukas, Reference Tsoukas1996). His mission was to make the case for individual liberty as the basis of effective market coordination. In this, he is typical of the classic tradition to which he belongs (Foss, Reference Foss, Foss and Klein2007; Walsh and Brady, Reference Walsh and Brady2019). Despite this, Foss and Klein (Reference Foss, Klein and Adler2014: 477) have written extensively about the insights that can be gained from applying Hayek’s ideas about knowledge to the firm, even suggesting a ‘Hayekian Agenda for Organization Theory’. This article can be read as a contribution to this agenda but one that deviates distinctly from the direction which Foss and Klein have set out for it.
Hayek’s epistemic economics
Hayek’s epistemic economics emerged from the socialist calculation debates (Boettke, Reference Boettke2000; Caldwell, Reference Caldwell1997; Lavoie, Reference Lavoie1981; O’Neill, Reference O’Neill1996). For present purposes, three claims are central:
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a. knowledge is dispersed among individuals before it is shared;
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b. much knowledge is tacit and tied to context;
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c. centralized direction can inhibit institutional learning and development.
The first two claims concern coordination directly, whereas the third concerns institutional evolution (Hayek, Reference Hayek and Hayek1948a, Reference Hayek and Hayek1948b, Reference Hayek1982a).
Dispersed knowledge
Hayek (Reference Hayek and Hayek1948a, Reference Hayek and Hayek1948b) argued that economics should focus on the division of knowledge. Because knowledge is widely dispersed, any attempt to collect it for use by a central authority will remain partial and incomplete. Central planning therefore fails not simply because planners lack sufficient data, but because the relevant knowledge is distributed across actors, circumstances, and changing subjective valuations. Business scholars have since extended these epistemic insights to firms, where similar knowledge problems arise once coordination no longer occurs primarily through competitive prices (von Hippel, Reference Hippel1994; Langlois, Reference Langlois2003; Mises, Reference Mises1944).
Tacit and contextual knowledge
Hayek’s second claim is that much economically relevant knowledge is tacit, contextual, and bound to circumstances of time and place. This is why knowledge is often best employed by the ‘man on the spot’ rather than transmitted fully to a central authority (Hayek, Reference Hayek and Hayek1948b). Organizational research makes a parallel point; tacit knowledge embedded in routines, skills, and local practices is central to firm performance and innovation (Polanyi, Reference Polanyi1966; Nonaka and Takeuchi, Reference Nonaka and Takeuchi1995).
For Hayek, the price system addressed this problem by condensing dispersed and tacit knowledge into signals actors could use without possessing full economic knowledge themselves (Hayek, Reference Hayek and Hayek1948a, Reference Hayek and Hayek1948b). This matters for the present argument because firms cannot rely primarily on internally generated market prices to perform the same coordinating function. They must therefore use organizational rules, authority structures, routines, and communicative processes to coordinate knowledge internally (Kogut and Zander, Reference Kogut and Zander1992).
Knowledge and institutional evolution
Hayek’s third claim concerns institutional evolution. Central direction can distort processes of trial-and-error learning by imposing forms of behaviour disconnected from local practice and accumulated experience (Hayek, Reference Hayek1960, Reference Hayek1982a; Polanyi, Reference Polanyi1951). This is the institutional dimension of the knowledge problem; the issue is not only whether dispersed knowledge can be communicated to a centre, but also whether central authority disrupts the evolutionary processes through which workable practices emerge. Although Hayek developed this argument at the level of markets and social orders, similar issues arise within firms, where routines, local problem-solving, and emergent practices may be weakened by rigid top-down design (Klein Reference Klein1996; Langlois, Reference Langlois2003).
Hayek’s republican liberty
Although commonly associated with a negative conception of liberty as non-interference, Hayek’s account of freedom is more accurately understood in republican terms as opposition to subjection under arbitrary power (Hayek, Reference Hayek1960, Reference Hayek1982a, Reference Hayek1982b; Irving, Reference Irving2020). For Hayek, freedom depended not simply upon the absence of interference, but upon protection from dependence upon the discretionary will of others through stable, general, and non-arbitrary rules. Individuals may therefore remain unfree even where interference is absent if they remain exposed to authority that is insufficiently constrained, contestable, or rule-bound.
This corresponds closely to the republican conception of liberty as non-domination (Pettit, Reference Pettit1997). On this view, freedom does not require the absence of all authority, but rather the prevention of authority from operating in arbitrary and insufficiently contestable forms. One is free insofar as one is not subject to domination, understood as exposure to arbitrary power. Republican institutions therefore seek to constrain domination by subjecting authority to stable rules, contestation, and mechanisms of accountability.
We can appreciate how Hayek’s understanding of freedom aligns with this by comparing it with a definition of freedom offered by Philip Pettit (Reference Pettit1997: 17), arguably the chief theorist of republicanism:
…non-domination … requires that no one is able to interfere on an arbitrary basis – at their pleasure – in the choices of the free person. This is the conception espoused in the long republican tradition.
Hayek himself explicitly situated this conception of liberty within the republican and commonwealth tradition, drawing particularly on Cicero and later English republican thought (Hayek, Reference Hayek1960). He aligned liberty with protection from dependence upon discretionary authority exercised outside stable and general rules, even describing himself as ‘an unrepentant Old Whig’ (Hayek, Reference Hayek1960: 409). Hayek therefore adopted a distinctly republican conception of liberty. It was the dispersed and tacit nature of knowledge that meant its effective use depended upon individuals being free, a freedom he understood as the absence of arbitrary power.
The institutional conditions for freedom in the market
Having established how Hayek defines freedom, we now need to identify the institutional conditions he believed necessary to sustain it. Broadly, these can be divided into three categories:
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a. Private property,
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b. Rules and order, and
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c. Democracy.
Democracy occupies a more ambiguous place in Hayek’s thought but nevertheless forms part of the institutional architecture through which he believed liberty could be secured.
Private property
Hayek made numerous statements about private property being the foundation stone of freedom. ‘What our generation has forgotten’, Hayek (Reference Hayek1944: 108) wrote, ‘is that the system of private property is the most important guarantee of freedom’. This was true, he insisted, not only for those who own property but also for those who do not. He continued:
It is only because the control of the means of production is divided among many people acting independently that nobody has complete power over us … If all the means of production were vested in a single hand … whoever exercises this control has complete power over us.
Private property matters because the dispersion of control over productive assets prevents any single actor from exercising comprehensive domination over others. Business and organizational scholars similarly treat property rights as central to institutional stability, autonomy, and the distribution of power within economic life (North, Reference North1990; Foss and Foss, Reference Foss and Foss2005; Mahoney and Kim, Reference Mahoney and Kim2005; O’Connor, Reference O’Connor2024).
Rules and order
Predictable and general rules provide a stable institutional order that minimizes arbitrary interference and enables individuals to coordinate their actions using localized knowledge (Hayek, Reference Hayek1982a). In Hayek’s account, liberty depends not upon the absence of rules, but upon authority being exercised through stable and non-arbitrary legal forms. He therefore distinguished between higher-order constitutional rules and lower-order legal and administrative rules (Hayek, Reference Hayek1982b). Organizational theorists likewise argue that predictable institutional environments promote long-term investment, organizational learning, and effective knowledge sharing (North, Reference North1990; Nelson and Winter, Reference Nelson and Winter1982; Ostrom, Reference Ostrom1990; Djelic and Quack, Reference Djelic and Quack2003).
Democracy
Hayek regarded democracy as instrumentally valuable means of sustaining the wider rules-based order (Hayek, Reference Hayek1944, Reference Hayek1982b). Equally, however, he felt that democracy could pose a threat to a rules-based order if it were given power over too many areas of life or worse and were empowered to overturn fundamental higher-order rules. He was also particularly concerned that democratic demands would intrude into market processes, which ought to be protected by law (Hayek, Reference Hayek1944). Such innovation amounts to an exercise of arbitrary power and is inimical to freedom as non-domination and hence epistemically damaging. Instead, Hayek (Reference Hayek1982b) advocated a limited form of democracy, the reach of which is determined by the constitution.
Part two
Shifting Hayekian theory to the firm
The argument now shifts from conceptual reconstruction to institutional analysis. The question is no longer simply how Hayek understood freedom and knowledge at the level of market society, but how these concerns when shifted to the level of the firm might inform the organization of firms. We have one major conditioning difference to contend with: unlike the market, inside the ‘black box’ of the firm prices only inform behaviour; they are not the primary means of coordination.
Burczak (Reference Burczak2006) has previously shown that Hayek’s knowledge argument need not rule out democratic forms of worker self-management. The question pursued here is a different one. Rather than asking whether worker self-management can overcome Hayek’s critique of socialist planning, the argument asks what Hayek’s own account of dispersed knowledge and republican liberty implies for the constitutional organization of authority once coordination has been internalized within the firm.
Hayek’s analytical focus remained overwhelmingly fixed upon state power and the dangers it posed to freedom, competition, and coordination. As a result, his epistemic economics concentrated primarily on the distortions generated by public coercion and central planning, leaving the internal organization of firms comparatively underexamined. Republican theory, however, distinguishes between public domination (imperium) and private domination (dominium) (Kriegel, Reference Kriegel and Marc1995). Extending Hayek’s account of freedom to encompass dominium raises the question of how concentrated managerial authority within firms may also shape the communication and use of dispersed knowledge.
Republicans have begun to identify domination within the firm (Cicerchia, Reference Cicerchia2022; O’Shea, Reference O’Shea2020). For those of Hayekian persuasion, this should raise questions about the use of knowledge by those within firms. Some theorists have, however, argued that workers cannot be dominated because they retain the option of exit (Alchian and Demsetz, Reference Alchian and Demsetz1972; Taylor, Reference Taylor2017). Whatever one thinks about the viability of exit a prophylactic against domination, its potential provides limited insight into how authority and knowledge function within firms once individuals are in fact subject to authoritarian organizational hierarchy. It therefore has limited relevance to epistemic matters associated with organization.
Elizabeth Anderson (Reference Anderson2017) has engaged directly with the model of the Coasean firm on republican grounds. It is, she insists, a form of ‘private government’, animated and characterized by domination. Republican theory, therefore, identifies domination not only in that nexus of state, market, and individual identified by Hayek, but also in that of employer, production, and individual. Private power, exercised by bosses, is as potentially dominating as public power exercised by bureaucrats.
Hayek’s neglect of private power precluded his engagement with problems more recently identified by business scholars, namely, how organizational hierarchy and concentrated managerial power can constrain knowledge use and coordination (Ghoshal, Reference Ghoshal2005). Extending Hayek’s account of republican liberty to encompass dominium therefore opens the possibility of applying his insights concerning freedom and knowledge to the internal governance of firms.Footnote 2
The institutional conditions for freedom in the firm
Although numerous institutional theorists have noted the importance of Hayek’s work, there has been a tendency to approve of his insights in a general sense (Castillo, Reference Castillo2016; Foss and Klein, Reference Foss, Klein and Adler2014; Tsoukas, Reference Tsoukas1996). Here, however, informed by Hayek’s epistemic economics and his concept of liberty, we will consider the concrete institutional conditions that best provide for freedom, and hence for the use of knowledge in the firm.Footnote 3
Any application of Hayek’s theory to the firm must confront the fact that internal coordination no longer occurs primarily through the price mechanism. Firms, as Coase tells us, are organized on the basis of incomplete labour contracts precisely because this reduces transaction costs that would otherwise be incurred through market exchange (Coase, Reference Coase1937; Williamson, Reference Williamson1975). Market-based management represents one attempt to simulate market coordination within the firm through internal rules and incentives (Koch, Reference Koch2007). Although such approaches seek to open the black box of the firm, they remain subject to managerial override and therefore do not constrain arbitrary authority.
Firm republicanism rejects the assumption that coordination must rely either upon the introduction of internal price-like signals or upon the unconstrained coordinating power of management. The distinct contribution of republican organization of the firm is that it aims to address the epistemic problem not by simulating prices, but by constitutionally constraining power and securing conditions for non-dominating discourse. Furthermore, achieving such discourse does not require unrestricted majoritarian control over all aspects of organizational life. In keeping with Hayek’s wider constitutionalism, democratic participation is enabled principally through lower-order governance rules, accountability mechanisms, contestation, and constraints upon arbitrary authority. The proposals advanced here therefore aim not to eliminate hierarchy as such, but to constrain its arbitrary exercise and improve the communication and use of dispersed knowledge within the firm.
Although the argument is primarily theoretical, its institutional components are not wholly unfamiliar. Elements of republican constraint already appear, in partial and uneven form, within existing organizational practices. Formal examples include co-operative constitutions, asset locks, and governance rules that limit discretionary authority, including limited forms of workplace democracy. Such arrangements are most commonly observed in organizational settings where production relies heavily on shared knowledge, long-term participation, or professional judgement, rather than on tightly specified tasks alone. These arrangements do not amount to full realizations of firm republicanism, but they indicate that the institutional logic described is not purely speculative.
We have already established the institutional conditions necessary for freedom as non-domination according to Hayek:
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a. Private property,
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b. Rules and order, and
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c. Democracy
Now we turn to consider the form these might take within the firm.
Private property
Within the republican tradition, the view of private property as a foundation of freedom is closely linked to the principle that property should itself be widely distributed. Property should not become so concentrated that it enables some individuals to exercise arbitrary power over others (Hayek, Reference Hayek1944: 108). In the context of the firm, what matters are the control rights that accompany ownership (Foss and Klein, Reference Foss and Klein2012; Jensen and Meckling, Reference Jensen and Meckling1976; Williamson, Reference Williamson1975). Because ownership confers authority, persistent concentrations of ownership are liable to generate relationships of domination. Accordingly, the more widely ownership stakes are distributed within the firm, they need not be equal, the more closely organizational authority is likely to conform to republican principles.
At the same time, domination within the firm does not arise from ownership of capital alone. It arises when contractual arrangements allocate to one party discretionary authority to direct, discipline, and sanction another. Capital owners possess control over capital; workers possess control over their labour power. The employment contract reallocates certain control rights from workers to employers for the duration and purposes of production. The republican question is therefore not simply who owns assets, but which distributions of control rights and forms of contractual authority are compatible with non-domination. Ownership conditions how authority is exercised within the firm, but the republican concern with domination attaches primarily to relations of command between persons rather than to property ownership in the abstract. It is those empowered by owners, managers, who are more likely to wield arbitrary power on a daily basis.Footnote 4
Nevertheless, although day-to-day authority is exercised by management, it is control rights that constitute the ultimate power. As Anderson (Reference Anderson2017: 34) notes, ‘without robust protection of private property rights … a republican form of government is insecure, because the state is liable to degenerate into despotism, exercising arbitrary power over its subjects’. This insight applies not only to political society but also equally to the internal governance of firms, where the wide distribution and protection of property, broadly understood, remains central to securing freedom as non-domination.
Rules and order
As in the state, the rule of law in the firm requires a constitution setting out higher-order rules and the principles of governance. Critically, rules are there to preclude any exercise of arbitrary power by owners or management. It also requires a judicial apparatus and process for deciding when rules have been contravened and what the appropriate response ought to be. In this way, the lower-order rules of the firm can evolve in a manner resembling the common law tradition. No model constitution is proposed here, however, and constitutions may vary from firm to firm. Although management must be afforded flexibility, the more the constitution can limit the exercise of arbitrary power, the more republican the firm is likely to be.
Rules coordinate collective action by enabling tacit and dispersed knowledge to guide practice without full articulation. As Polanyi (Reference Polanyi1951) emphasized, rule-following transmits practical knowledge implicitly, whereas Hayek stressed that commands cannot fully specify action in complex environments. Constitutionalizing the exercise of power therefore does not replace authority but structures its exercise, preventing discretionary power suppressing tacit knowledge embedded in practice. This would also allow for a free and frank sharing of dispersed knowledge and opinion, with workers confident that they could not be sanctioned beyond the bounds of established rules.
Furthermore, a constitution could preclude the permanent openness of a firm’s fundamental purposes, such as its business model, core productive activity, or long-term investment commitments, to majority revision. Such arrangements are not novel. Analogous mechanisms exist in long-established co-operative forms, where assets are typically subject to constitutional restrictions, often described as asset locks, that prohibit their distribution for private enrichment, whether during the life of the enterprise or upon dissolution. Importantly, these restrictions are not merely prohibitions on extraction: many co-operative constitutions also impose positive duties of stewardship, requiring the preservation of productive capital and the maintenance of the firm as a continuing commercial undertaking. Co-operative practice thus provides an existing empirical foundation for the republican firm, one in which domination through exit, liquidation, or asset appropriation is structurally constrained, when productive activity and profitability remain central.
Democracy
Firm republicanism on Hayekian lines does not require direct democracy over all firm decisions. It requires institutionalized contestability: governance rights, representative mechanisms, procedures for challenge, and limits on unilateral managerial discretion.Footnote 5 No single model is proposed here, and this democratic element may take a more or less direct democratic form; in others, it may take the form of works councils, codetermination, constitutional veto rights, or participatory review procedures. It may allow for direct election to managerial posts, or it may simply provide for challenge to managerial decisions.
Liberal advocates of workplace democracy have not always explicitly connected their arguments to worker ownership (Anderson, Reference Anderson2017; Schemmel, Reference Schemmel2024). However, in the absence of dispersed ownership, powerful interests are likely to distort democratic processes.
Furthermore, when ownership is concentrated in a few hands, the entire democratic process can only ever be contingent. In conventional firms, ownership and the contractual rights attached to it ordinarily confer control over the governance structure of the enterprise. Because capital owners typically negotiate from a position of superior bargaining power, they retain the ability to determine, modify, or terminate participatory arrangements unilaterally (Malleson, Reference Malleson2025). Although workers may possess the power of exit, exit alone does little to reform established intra-firm institutions or alter the underlying allocation of governance rights. Firm republicanism addresses this problem by dispersing ownership and constitutionally entrenching democratic governance so that participatory rights do not depend solely upon the continuing consent of capital owners.
To remain true to Hayekian principles, democracy must be of a limited form, with power over only lower-order rules and processes. The fundamental business model and purpose of the firm are not subject to democratic change. Critically, as noted above, the core purpose of the firm as a profit-seeking enterprise is fixed and stabilized through higher-order rules that constitute the firm’s identity and define the scope of its activity over time. Even a workplace democrat such as Anderson (Reference Anderson2017: 46) concurs with some of Hayek’s concerns, noting that ‘even a direct democracy with majority voting would need to follow rule of law constraints to avoid degenerating into unjust rule’. Hence the need to restrict democracy to lower-order rules and potentially a choice in who staffs certain positions.
Democracy has two functions within firm republicanism. First, it acts to prevent managerial authority from exercising arbitrary power (Anderson, Reference Anderson2017; Hsieh, Reference Hsieh2008). With accountability mechanisms, the potential of management to abuse its authority will be checked. Second, it has an epistemological function (Gerlsbeck and Herzog, Reference Gerlsbeck and Herzog2020). The democratic process itself acts as a forum in which workers can communicate dispersed and tacit knowledge, in a way that simply does not exist in authoritarian Coasean firms (Belloc et al., Reference Belloc, Burdin and Landini2023).
The epistemic advantages of firm republicanism
Having identified, through Hayek, the knowledge problems associated with domination, this section examines the potential epistemic advantages of firm republicanism. The central concern of republican thought, as discussed above, is the containment of arbitrary power. It is therefore plausible to argue that republican reforms within firms may mitigate the epistemic distortions generated by arbitrary authority. Although this claim cannot be empirically demonstrated within the scope of the present article, it advances a theoretically grounded argument about the institutional conditions under which knowledge can be more freely expressed, contested, and utilized. Such reforms may also create more favourable conditions for organizational learning and institutional evolution. The purpose is not to prescribe a particular organizational design or a set of best practices for knowledge use. Rather, it is to show how, in principle, firm republicanism may possess comparative epistemic advantages over the authoritarian Coasean firm, and why, once coordination is internalized within the firm rather than mediated by prices, discursive forms of coordination may, under certain conditions, outperform unilateral command.Footnote 6
Before proceeding, however, it is worth briefly considering another response. Kirzner (Reference Kirzner1992) argues that firms operate through command authority, expanding its use up to the point at which doing so ceases to be transaction-cost efficient. At this stage, they then switch to market or hybrid solutions, contracting out, entering into partnerships with other firms or market agents. Richardson (Reference Richardson1972) suggests that transactions considered ‘similar’ are more likely to be managed within firms, whereas ‘dissimilar’ transactions are more often coordinated through markets or hybrid arrangements. These arguments, however, accept that there are bound to be problems of coordination within the firm that can be tolerated until they cannot. The approach taken here is different; it is to make the case that such problems can be minimized by adopting republican principles inside the firm. This is analogous to Hayek’s arguments that non-domination is necessary for market coordination.
It is also worth noting that epistemic performance represents only one dimension of organizational effectiveness. As evolutionary and institutional accounts of the firm emphasize, organizational forms persist because they survive selection pressures across multiple dimensions rather than optimize any single one (Alchian, Reference Alchian1950). Governance structures that confer epistemic advantages may nevertheless remain comparatively rare where alternative forms better facilitate capital concentration, risk allocation, scalability, managerial coordination, or long-term investment, or where path-dependent legal, financial, and organizational arrangements reproduce existing patterns of ownership and control. The argument advanced here is therefore comparative and conditional; it identifies a potential source of epistemic advantage within firms, not a universally superior organizational form.
In comparing firm republicanism with the Coasean firm, we return to the three facets of knowledge outlined earlier and consider each in turn:
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a. Dispersed knowledge,
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b. Tacit and contextual knowledge, and
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c. Knowledge and institutional evolution.
Dispersed knowledge
How might a firm organized along republican lines have epistemic advantages over the classic firm described by Coase? Consider, for example, a manufacturing firm deciding whether to proceed with a major investment in a new production process. A frontline employee possesses operational knowledge indicating that the proposed system is likely to create significant production difficulties. Under a conventional hierarchical firm, the employee may possess incentives to withhold or soften that information. Raising objections may delay the project, undermine managerial priorities, damage promotion prospects, or simply prove futile. The question is therefore not why the employee should suddenly become altruistic under republican governance. Rather, it is whether different constitutional arrangements alter the incentives, opportunities, and capacity of organizational members to communicate dispersed knowledge. Republican organization does not eliminate opportunism or guarantee truthful revelation. Its comparative claim is narrower: that constitutional arrangements may reshape the institutional conditions under which knowledge is disclosed, scrutinized, and incorporated into collective decision-making.
One material reason why republican governance may alter these conditions is that dispersed ownership stakes strengthen participants’ incentives to disclose knowledge by aligning individual interests more closely with collective outcomes. If the employee possessing localized knowledge also holds an ownership stake and meaningful governance rights, disclosure is no longer simply a matter of assisting others. It becomes more closely connected to protecting their own long-term interest in the success of the enterprise. More generally, where ownership stakes and governance rights are more broadly distributed, participants bear a greater share of the consequences associated with poor collective decisions. This matters because the incentive to disclose dispersed knowledge depends partly on whether those who possess it also share in the gains and losses generated by collective action.
Second, constitutional constraints upon arbitrary authority may reduce barriers to communicating dispersed knowledge. Even in relatively small firms, local knowledge can be suppressed where workers fear arbitrary interference from superiors (Gouldner, Reference Gouldner1954). Under such conditions, governance structures may restrict the upward flow of information despite subordinates often being ‘on the spot’ with the most contextually relevant knowledge (Hayek, Reference Hayek and Hayek1948b). Workers possessing operational insights, practical improvements, or critical feedback may become reluctant to voice dissent where disagreement risks managerial retaliation, reputational damage, or exclusion from advancement opportunities. Studies of managerial hierarchies suggest that employees frequently learn to anticipate the informal expectations of superiors and adapt their communication accordingly, encouraging caution, self-censorship, and the selective disclosure of information (Jackall, Reference Jackall1988). Research on organizational silence consistently finds that employees frequently withhold concerns, operational criticisms, and corrective feedback where they believe speaking up will prove futile or personally risky (Milliken et al., Reference Milliken, Morrison and Hewlin2003; Morrison, Reference Morrison2014). Detert and Edmondson’s (Reference Detert and Edmondson2011) work on ‘implicit voice theories’, for example, demonstrates how employees often internalize taken-for-granted organizational assumptions discouraging disagreement with superiors, even where management formally solicits feedback.
Concentrated authority may also weaken the capacity of organizations to identify and correct errors once decisions have been made. Leader biases may further compound these problems where concentrated authority allows individual cognitive errors to propagate more widely throughout the organization before they are identified or corrected (Janis, Reference Janis1972). Such dynamics may intensify where organizational advancement depends heavily upon managerial approval, internal competition, or the successful defence of existing projects and routines. Under these conditions, information can acquire strategic value within internal positional struggles, encouraging selective disclosure, overstatement of success, or the suppression of disconfirming evidence. Informational distortions may therefore persist not simply because decision-makers are cognitively limited, but because organizational actors adapt strategically to hierarchical incentive structures.
Third, republican governance may provide institutional opportunities through which dispersed knowledge is not only communicated but also scrutinized, challenged, and incorporated into collective decision-making. Under concentrated authority structures, subordinates may possess incentives to suppress contrary operational evidence, particularly where disagreement risks appearing disloyal, obstructive, or career damaging. Information challenging existing decisions can therefore become progressively filtered as it moves upwards through the organization, reinforcing escalation dynamics and increasing the likelihood that weak decisions become institutionally entrenched (Janis, Reference Janis1972). Staw’s (Reference Staw1976) work demonstrates how organizational actors frequently continue investing in failing courses of action once authority structures and reputational incentives become attached to prior decisions.
Conversely, institutions that subject managerial authority to broader scrutiny may partially mitigate these risks by widening opportunities for challenge, review, and corrective feedback before organizational commitments become irreversible. Mechanisms of limited firm democracy, including representative councils, codified procedures for contestation, and institutional protections for voice may therefore reduce some of the informational distortions associated with concentrated and weakly contestable authority (Anderson, Reference Anderson2017). By widening opportunities for dispersed knowledge to circulate within the organization, such arrangements may make organizational judgements more responsive to local knowledge, corrective feedback, and operational experience (Landemore and Ferreras, Reference Landemore and Ferreras2016). Where workers possess formal opportunities to question proposals, challenge managerial decisions, or justify objections before peers without risking unilateral retaliation, disagreement is less likely to remain privatized or strategically suppressed.
Against this institutional background, the employee may still withhold information if concealment helps secure his preferred project. But if the employee is also a residual claimant, works repeatedly with the same partners, and must justify proposals before peers who share authority over future decisions, concealment carries costs that are not present in the same form under more unilateral hierarchy: a bad decision reduces the value of the employee in question’s stake; discovery damages future credibility; and future cooperation with other members becomes harder. The mechanism, therefore, is not moral conversion but altered exposure to the consequences of error. Republican governance does not eliminate the potential for knowledge concealment, but it changes the institutional setting in which withholding takes place; knowledge is less easily treated as a purely private strategic asset when decision rights, accountability, and exposure to collective consequences are more broadly shared.
This logic is consistent with work on participatory and collaborative production systems showing that knowledge-sharing and opportunism are linked problems. The account of Helper et al. (Reference Helper, MacDuffie and Sabel2000), learning by monitoring’ in automotive supply relations, is useful here because it shows how repeated interaction, mutual monitoring, and shared problem-solving can both advance knowledge and limit opportunism. Freeman and Lazear’s (1995) analysis shows that where workers possess institutional standing over how information is used, rather than merely being asked to supply knowledge to management, knowledge flows are improved.Footnote 7
Tacit and contextual knowledge
Similar considerations apply with particular force to tacit knowledge. Residing in localized and subjective practices, it is especially vulnerable to suppression in firms organized along the lines described by Coase. Although efficient at codifying explicit knowledge to minimize transaction costs, such organizations struggle to harness tacit knowledge because it cannot be easily aggregated or transmitted through centralized channels (Polanyi, Reference Polanyi1966; Nonaka and Takeuchi, Reference Nonaka and Takeuchi1995). Practical operational knowledge frequently depends upon judgements that workers themselves may struggle fully to formalize: a machine operator noticing subtle irregularities before equipment failure, or an experienced technician relying upon accumulated troubleshooting intuition developed through repeated exposure to particular problems. Such knowledge is often difficult to communicate through standardized reporting systems alone and may therefore become simplified or lost as it moves upwards through hierarchical structures.
Tacit knowledge frequently develops and circulates through collaborative practice rather than formal managerial instruction alone. Brown and Duguid (Reference Brown and Duguid1991), for example, argue that organizational learning often depends upon ‘communities of practice’ within which workers collectively share informal understandings, troubleshooting strategies, and practical workarounds developed through everyday activity. Orr’s (Reference Orr1996) study of Xerox repair technicians similarly demonstrates how workers routinely relied upon peer discussion and shared experiential knowledge to solve technical problems inadequately addressed by formal manuals or centralized procedures. Such forms of practical learning depend upon institutional environments in which workers can share uncertain judgements, challenge established routines, and exchange practical experience without fear of arbitrary sanction.
Edmondson’s (Reference Edmondson1999) research on psychological safety demonstrates that organizational learning improves where participants can raise concerns, admit mistakes, and experiment without fear of humiliation or punishment. Tucker and Edmondson’s (Reference Tucker and Edmondson2003) study of nursing units similarly found that frontline workers frequently identified operational failures but often did not communicate them where organizational conditions discouraged local experimentation and speaking up. Instead, they engaged only in first-order problem solving. These findings suggest that the effective utilization of tacit knowledge depends not merely upon opportunities for communication, but upon institutional conditions that make workers willing to disclose practical experience and uncertain judgements.
Consider, for example, a production team responsible for maintaining a complex manufacturing process. A machine operator has gradually developed an informal workaround that prevents a recurring equipment failure. The operator cannot fully explain why the adjustment works; it has emerged through repeated practical experience rather than formal instruction. Under a conventional hierarchical structure, communicating such knowledge may carry considerable risks. The workaround departs from officially sanctioned procedures, may be interpreted as criticism of established routines, and may expose the worker to accusations of bypassing managerial authority or safety protocols. Faced with these incentives, the operator may simply continue using the workaround privately when the organization remains dependent upon individual experience that never becomes organizational knowledge.
Under republican governance, however, constitutional arrangements may alter these institutional conditions. Regular deliberative forums or codified review procedures provide protected opportunities through which workers can explain practical difficulties, defend experimental solutions, and collectively evaluate proposed modifications without relying solely upon managerial discretion. The operator’s practical intuition therefore becomes the subject of collective scrutiny rather than remaining a private adaptation. Other workers contribute their own experiences, managers evaluate operational implications, and the organization may subsequently revise its formal procedures in the light of knowledge that previously remained tacit and localized. The epistemic advantage lies not in assuming that workers possess superior knowledge, but in creating constitutional arrangements through which practical experience can be transformed from private intuition into collectively scrutinized organizational knowledge (Nonaka Reference Nonaka1994).
Without freedom as non-domination, however, even formally participatory processes may remain vulnerable to arbitrary managerial interference (Anderson, Reference Anderson2017). Workers may possess opportunities to contribute while nevertheless remaining reluctant to challenge entrenched routines, disclose uncertain practical judgements, or propose unofficial modifications where managerial retaliation or reputational penalties remain possible. Republican governance arrangements may partially mitigate such tendencies by widening opportunities for practical criticism, institutional reflection, and the contestation of established organizational routines. By reducing the extent to which authority is insulated from operational feedback, republican structures may strengthen an organization’s capacity to learn from situated practical experience rather than merely reproduce existing procedures. In this sense, the institutional architecture of republican firms provides the scaffolding through which tacit knowledge becomes not only communicable but also epistemically productive.
Knowledge and institutional evolution
The epistemic implications extend beyond the communication of existing knowledge to the capacity of organizations to revise their own routines over time. In Coasean firms, institutional evolution presents a significant epistemic challenge because organizations frequently struggle to revise established routines even when operational failures become increasingly visible. Organizational knowledge is not simply accumulated but embedded within existing procedures, managerial assumptions, and established patterns of coordination. Argyris and Schön (Reference Argyris and Schön1978), for example, argue that organizations often develop ‘defensive routines’ that discourage the communication of uncomfortable operational knowledge and inhibit institutional learning. Under strongly hierarchical conditions, workers may therefore adapt informally to recurring failures while avoiding direct challenges to established procedures or managerial assumptions. March (Reference March1991) distinction between exploration and exploitation, and Levinthal and March’s (Reference Levinthal and March1993) subsequent work on the ‘myopia of learning,’ similarly suggest that organizations can become locked into familiar routines and established competencies, narrowing their capacity for experimentation and adaptive revision.
Bureaucratic rigidity can prioritize conformity, predictability, and managerial control over adaptive revision, particularly where established routines become institutionalized and resistant to revision over time (Burns and Stalker, Reference Burns and Stalker1961; Hodgson, Reference Hodgson2002). Under such conditions, operational failures may be accommodated informally at lower organizational levels, whereas criticism of underlying routines remains filtered or discouraged as information moves upwards through the hierarchy. Organizations may therefore continue reproducing established procedures even where workers possess practical knowledge suggesting the need for revision.
Republican firms, by contrast, open up space for organizational change even where a clear constitution is in place. Consider, for example, a production team repeatedly encountering delays caused by an inefficient workflow or quality-control routine. Under strongly centralized authority structures, workers may develop practices that allow day-to-day production to continue while avoiding direct challenges to established managerial procedures. The organization therefore continues reproducing inefficient routines despite practical knowledge indicating the need for change.
Republican governance arrangements, with their capacity to change lower-order rules and processes, can create formal opportunities for workers to question existing procedures, justify alternative practices before representative bodies, and participate in organizational review. Rather than keeping it from managers, the recurring workflow problem becomes the subject of collective investigation. Workers explain how the existing process affects day-to-day production, managers assess the wider operational implications, and alternative procedures are evaluated against shared organizational objectives. Where the evidence supports revision, the organization is able to modify its routines in the light of accumulated operational experience. The revised procedure is then incorporated into the firm’s operating routines and becomes available to future production teams, allowing localized practical experience to reshape the organization’s formal practices rather than remaining confined to individual workers.
The epistemic advantage lies not in assuming that workers individually possess superior knowledge, but in creating governance arrangements through which localized experience can be transformed into institutional learning. By widening the pathways through which operational knowledge enters organizational review, republican firms may become more capable of adapting both routines and governance arrangements to changing operational conditions.
Firm republicanism and knightian decisionism
In this closing section, we consider another attempt to tackle the knowledge problem Hayek identified, but within the context of the firm. Foss and Klein (Reference Foss, Klein and Adler2014: 477) have proposed a ‘Hayekian agenda for organization theory’. They emphasize the importance of rules and delegation in addressing the knowledge problem. In principle, these measures could help address the issue of bounded rationality internal to the firm.
Simultaneously, however, they propose the model of managers as ‘proxy entrepreneurs’, exercising judgement under conditions of radical, Knightian uncertainty (Foss et al., Reference Foss, Foss and Klein2007; Knight, Reference Knight1921; Rindova and Courtney, Reference Rindova and Courtney2020). Here, the problem of bounded rationality is considered from another external perspective, the ‘limits of knowing’ when managers confront the market (Foss, Reference Foss2002; Foss and Klein, Reference Foss and Klein2012). To deal with this, they insist that proxy entrepreneurs must have authority, in effect, arbitrary power, to make decisions in the light of market developments. Critically, however, they also allow managers the same degree of arbitrary power inside the firm. It is ‘decisionist’ in that it emphasizes the manager’s unconstrained authority and decision-making powers (Löwith, Reference Löwith1998). This stands in contrast to firm republicanism where power is checked to protect individual liberty.
Despite the purported Hayekian inspiration of their work, Foss and Klein overlook the core concept of Hayek’s thought: liberty. Consequently, they neglect its importance to the use of knowledge. In its absence, their approach exhibits a fundamental paradox. Although rules and delegation could, in theory, distribute knowledge and enable epistemically efficient coordination, their simultaneous reliance on a Knightian decisionism introduces arbitrary authority internally. Measures such as internal markets and delegated decision-rights may widen informational flows within firms while still leaving the disclosure, contestation, and revision of knowledge vulnerable to distortions associated with unilateral authority. The issue is therefore not simply whether firms decentralize information internally, but whether authority itself remains institutionally constrained and contestable once coordination is organized within the firm.
Managers empowered to act by fiat, unchecked within the firm, concentrate decision rights, and suppress subordinate contributions. Internal knowledge, which is often tacit, dispersed, and context-specific, remains underutilized, undermining the epistemic efficiency that a purely Hayekian account would seek to achieve. Where Foss and Klein attempt to reconcile rules and managerial judgement, this combination is internally contradictory; the Knightian discretionary element subverts the epistemic advantages of rule-based delegation by allowing power to operate without internal constraints.
Firm republicanism does not deny the need for managerial discretion in responding to market uncertainty. It treats such discretion as an unavoidable feature of decision-making under bounded rationality. Crucially, however, it distinguishes between discretion exercised in relation to the market and discretion exercised through authority within the firm.
From a republican perspective, the problem is not managerial judgement as such, but its elevation into sovereign decision-making. When discretion is coupled with unilateral authority, it risks reproducing bounded rationality and entrenching knowledge distortions within organizations.
Firm republicanism therefore accepts managerial discretion while rejecting decisionism as a principle of internal governance, instead embedding judgement within constitutional constraints, formal rules, and procedures of contestation. In contrast to Foss and Klein, authority in the Hayekian informed republican firm is situated within a broader constitutional order. Managers retain discretion to act, but their power is limited and contestable, ensuring that organizational knowledge can inform decisions. Decisionism may be compatible with action in the market, where coordination occurs through prices, competition, and the possibility of exit, but, on republican grounds, it cannot serve as a principle of governance within the firm.
Conclusion
This article has explored the case for introducing republican ideas and institutions into the governance of firms. It has been argued that firm republicanism can, under particular institutional conditions, offer epistemic advantages relative to Coasean and decisionist models of authority that predominate in real-world business practice and continue to influence elements of organization theory. In order to make this case, I have taken Hayek’s insights about the relationship between liberty and the effective use of knowledge in the market and applied them to the firm. Reconceptualized at the level of production rather than market, I have shown how Hayekian theory can take on an emancipatory character, challenging private dominium as well as public imperium. If Hayek’s epistemic concerns are extended into the internal governance of firms, republican constraints on arbitrary authority emerge as plausible institutional mechanisms for improving the use of dispersed and tacit knowledge.
The article developed a framework for understanding the firm as an epistemic entity in which freedom, defined as the absence of arbitrary power, is a condition for the effective use of knowledge. As part of this, it extended the knowledge problem into the organizational domain, showing how domination within firms curtails knowledge sharing, suppresses tacit expertise, and undermines adaptive learning. Transplanting the Hayekian theory developed in Part 1 from the market to the firm, I proposed a framework that sketched the institutional forms firm republicanism might take and outlined how this would yield epistemic advantages. Lastly, I contrasted Hayek-informed firm republicanism with Foss and Klein’s Hayek-informed theory of Knightian decisionism and overcame the paradox of their work via the firm republican framework.
The implications of this argument are both theoretical and practical. Theoretically, firm republicanism orients organization studies towards questions of power, freedom, and epistemic design and points towards further critical engagement with these issues. Although the case for firm republicanism has been made on essentially epistemic, thus instrumental grounds, it is hoped that this work also resonates with more normative work and the emerging view of the firm as a regime of governance analogous to the state. Firm republicanism thus provides a bridge between political theory and institutional analysis, offering a systematic account of how institutions that constrain domination enhance knowledge coordination. Existing comparative research has established worker cooperatives as an important empirical setting within which questions concerning democratic governance and organizational performance can be investigated (Pérotin, Reference Pérotin, Webster and Shaw2016), whereas more recent work has explored how humanistic governance within such firms may unlock collective capacities (McMahon and Novkovic, 2025).
The framework developed here identifies a more specific set of epistemic mechanisms through which constitutional arrangements may influence the communication, contestation, and organizational use of dispersed knowledge and therefore points towards a programme of future research. Comparative studies across conventional firms, employee-owned firms, worker cooperatives, and other constitutional arrangements could examine whether differences in governance shape organizational voice, knowledge disclosure, institutional learning, and organizational adaptation in the manner proposed here and identify the institutional conditions under which these mechanisms are most likely to operate.
The article therefore advances a constitutional account of firm governance that identifies institutional mechanisms through which republican reforms may incrementally improve organizational epistemic performance, rather than proposing a singular ideal model. Empirically, these proposals are actionable: even partial adoption of republican measures, such as broader ownership stakes, constitutional protections, or channels of firm democracy, has the potential to yield epistemic gains.
The conclusions should therefore be read as indicating possibilities rather than making empirical predictions. This article has argued that freedom understood as non-domination may improve the conditions for knowledge sharing compared with authoritarian command. Conceptualizing firms as republican orders opens a research agenda for examining how constitutional constraints on arbitrary authority shape the communication, contestation, and organizational use of dispersed knowledge across alternative forms of firm governance.
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