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The purpose of this multi-voiced paper is to propose a prosocial paradigm for the field of performance management and management control systems. This new paradigm suggests cultivating prosocial behaviour and prosocial groups in organizations to simultaneously achieve the objectives of economic performance and sustainability.

The authors share a common concern about the future of humanity and nature. They challenge the influential assumption of economic man from neoclassical economic theory and build on evolutionary science and the core design principles of prosocial groups to develop a prosocial paradigm.

Findings are based on the premise of the prosocial paradigm that self-interested behaviour may outperform prosocial behaviour within a group but that prosocial groups outperform groups dominated by self-interest. The authors explore various dimensions of performance management from the prosocial perspective in the private and public sectors.

The authors call for theoretical, conceptual and empirical research that explores the prosocial paradigm. They invite any approach, including positivist, interpretive and critical research, as well as those using qualitative, quantitative and interventionist methods.

This paper offers implications from the prosocial paradigm for practitioners, particularly for executives and managers, policymakers and educators.

Adoption of the prosocial paradigm in research and practice shapes what the authors call the prosocial market economy. This is an aspired cultural evolution that functions with market competition yet systematically strengthens prosociality as a cultural norm in organizations, markets and society at large.

Darwin’s theory of natural selection, which explains how individual organisms can become exquisitely adapted to their environments, does not explain the evolution of adaptive societies with equal ease. To understand the nature of the problem, imagine a mutant individual who behaves in a way that increases the survival of everyone in her society, including herself, to an equal degree. Such a “no-cost public good” might not appear very feasible (and will soon be amended), but is useful for illustrative purposes. By increasing the fitness of everyone, the mutant trait will not increase in frequency within the society (other than by drift, which can equally cause a decrease in frequency). This example illustrates the elementary fact that natural selection is based on relative fitness. It’s not enough for a mutant trait to increase its own survival and reproduction; it must do so more than alternative traits in the population. The relative nature of fitness makes the evolutionary forces within a population insensitive to the welfare of the population as a whole.

Multi-level analysis offers a useful approach to examine social and cultural questions, evolutionary biology, and research methods. Attempts to interlock the three streams of analysis can provide a rich, holistic view of past, current, and possible future research. A clarification of the possible importance of evolutionary biology and the research underpinnings of the original chapter on trustscapes and distrustscapes is attempted here.

This paper seeks to expand the value of multidisciplinary research and research methods that were discussed in the original chapter. First, I attempt to clarify the importance of studying and integrating both social and biological disciplines as they relate to organization trust and distrust issues. Second, I expand the discussion of evolutionary biological issues in ways that clarify their importance to an understanding of the social concepts of trust and distrust. Finally, I argue that multi-level analysis is best served by multi-research methodologies: methodologies that explore the researcher’s and research subject’s basic assumptions, their values, and their operating environments. All three issues are framed within the contexts of Denise Rousseau’s and Jone Pearce’s commentaries on “Trustscapes and Distrustscapes: A Multi-Level Approach for Understanding Stability and Change.”

The modern revival of “Austrian economics” dates to the South Royalton conference of 1974 (Vaughn, 1994, pp. 103–111). At that time, neoclassical orthodoxy excluded evolutionary concepts. It was, in Ludwig Lachmann’s memorable phrase, “late classical formalism” (1977, p. 35). Opposition to neoclassical orthodoxy was part of the definition of Austrian economics. It formed part of our identity. Today it is no longer clear what “orthodoxy” is or whether current mainstream economics is “neoclassical” at all (Colander et al., 2004). One of the more salient changes in mainstream economics over the last 30 years is the introduction of evolutionary ideas. Mainstream economics is rich with evolutionary concepts. Evolutionary game theory, for example, is certainly a part of today’s standard toolbox. Thirty years ago, it did not even exist.¹ Some of the evolutionary ideas entering mainstream economics are similar or identical to ideas from the Austrian tradition. In this situation, it is no longer clear what the Austrian differentiae are. I hope this volume will help to sort out some of the issues relating to Austrian economics and one group of evolutionary ideas, namely, those of evolutionary psychology.

According to Whitman, Hayek’s conception of MI pertains just to the relationship of individual psychology and the social sciences, and is neutral on broader questions about reductionism in other scientific domains. Since hypotheses of group selection frequently concern organisms that are taken to be mindless (e.g. viruses and social insects), it is clear that they do not come into contact with MI thus construed. And even when group selection hypotheses make claims about human evolution, as do the hypotheses we discuss in Chapters 4 and 5 of Unto Others, there is, once again, a relationship of mutual irrelevance. The reason is that MI addresses what biologists call the question of proximate mechanism, whereas hypotheses about natural selection are part of the project of ultimate explanation (Mayr, 1961). An example used in Unto Others helps to illustrate this distinction. If one asks why sunflowers turn towards the sun, there are two ways in which this question might be understood. One might wish to understand how the machinery inside of each plant causes the plant to exhibit phototropism. Or one might want to understand the evolutionary processes that caused this behavior to evolve. Both types of understanding are important, and there is no conflict between them. By the same token, when a human society exhibits some property – e.g. the type of egalitarianism among adult males that Boehm (1999) argues is characteristic of nomadic hunter-gatherers – we might seek both a proximate and an ultimate explanation of that arrangement. MI constrains the former problem; it asserts that a group’s having that property must be understood in terms of the beliefs and desires of the individuals in the group (with properties of the physical environment brought in where necessary). But even if the question of proximate mechanism gets answered in the way that MI insists, the question is left open as to whether the group phenotype is the result of natural selection, and if it is, whether group selection was involved. MI says nothing about the form that an evolutionary explanation must take; it concerns proximate explanation only.

The phenomenon of the ethnically homogeneous middleman group (EHMG) or ethnic trade network – the Chinese merchants in Southeast Asia, the Gujarati-Indians merchants in East Africa, the Jewish merchants in medieval Europe, etc. – is ubiquitous in stateless societies, pre-industrial and in less-developed economies (Curtin, 1984). Neoclassical (Walrasian) theory of exchange cannot explain the existence of merchants let alone the phenomenon of the EHMG. This is because Neoclassical theory of exchange is a static theory of frictionless, perfectly competitive markets with the Walrasian auctioneer costlessly coordinating the plans of anonymous producers (sellers) and consumers (buyers) so as to achieve equilibrium. There is no role for merchants in the Neoclassical theory of exchange.

Whitman argues that group selection is consistent with methodological individualism. He begins by defining a weak form of methodological individualism in which agents are not necessarily self-interested or rational and shows that this form is consistent with Sober and Wilson’s model of group selection. However, Sober and Wilson’s group selection is also consistent with a methodological individualism in which the individuals are rational and self-interested, and consistent with individual selection as well. A version of group selection similar to what Hayek may have had in mind when he talked about groups out-competing other groups is presented, however, this is not a version of group selection that is compatible with methodological individualism.

Why has responsible management been so difficult and why is the chorus of stakeholders demanding responsibility getting louder? We argue that management has been framed within the structural confines of corporate governance. Corporate governance in turn has been developed within the frame of agency theory (Blair, 1995; Eisenhardt, 1989). Agency theory in turn is based on ontological assumptions that do not provide for responsible actions on behalf of management (Jensen, 2001; Jensen & Meckling, 1976; Jensen & Meckling, 1994). As such, we argue that managers need to be aware of the paradigmatic frame of the dominant economistic ontology and learn to transcend it in order to become truly response-able.