I have to admit that I do not follow the annual announcements of the various Nobel Prizes with equal interest. Perhaps not surprising, the Nobel Prize for Economic Sciences usually scores rather low as compared to e.g., the Nobel Prize in Physiology or Medicine that is by default closer to the heart of a biologist. However, this year I learned that there are Nobel Prizes for Economic Sciences that deserve receiving a higher attention by biology researchers, if not researchers of any discipline. It was my daughter, Rebecca L. Bachmann, lecturer at the Department of Accounting and Corporate Governance, MACQUARIE University, Sydney, Australia, who made me aware of this by sharing a conceptual paper by Pfister et al. (2024) with the for biologists little appealing title ‘Performance management in the prosocial market economy: a new paradigm for economic performance and sustainability’.

In 2009, it was Elinor Ostrom who received the Nobel Prize for Economic Sciences for her work on “analysis of economic governance, especially the commons“. She was the first woman to win the prize which she received together with Oliver E. Williamson. Sadly, she passed away only a few years later in 2012. As part of her work, she forwarded a list of core design principles (CDP) of prosocial groups (Ostrom 1990) that later have been discussed, adjusted and expanded (e.g., Atkins et al. (2019). Ostrom also co-operated with David Sloan Wilson, an evolutionary scientist and Distinguished Professor Emeritus of Biological Sciences and Anthropology at Binghamton University, New York, USA. Together, they generalized the CDPs of prosocial group for any kind of organisation regardless if they manage common-pool resources or not (Wilson et al. 2013).

For organizations, performance management and management control systems (MCS) are of uttermost importance, and here is where the above mentioned conceptual paper by Pfister et al. (2024) comes in. According to the authors, ‘prosocial groups facilitate collaboration and cooperation within and across groups in a manner that manages the trade-offs between the interests of the individual, the organization and the common good.‘ They state that prosocial behaviour represents the ‘core activity of value creation that contributes to economic performance and sustainability in organizations.‘ In their paper, Pfister et al. (2024) propose a prosocial paradigm that bases performance management MCS research on three main hypotheses:
– Self-interested behaviour outperforms prosocial behaviour within a group, but prosocial groups outperform groups dominated by self-interest (Wilson et al. 2013).
– To establish prosocial groups, neither reliance on top-down regulation nor markets alone is sufficient (e.g., Hardin 1969).
– The systematic cultivation of prosocial behaviour in organizations could facilitate a broad shift in values and social norms in markets and society, which establishes what we call the prosocial market economy.

The prosocial paradigm challenges the neoclassical economic theory that assumes an economic man (homo economicus) that is a self-interested utility maximisers, who prioritises personal gain over organizational responsibilities (Mills 1874). Thus, organisations will need MCSs to mediate between self-interested and potentially opportunistic individuals and the objectives of the organization. For researchers in the field it has been clear for quite some time that selfish and antisocial behaviours, such as opportunism, short-termism, greed, excessive CEO pay, hypocrisy, corruption, exploitation, bullying and/or freeriding remain common challenges for MCS.

The conceptual paper by Pfister et al. (2024) is a relatively long discussion about various facets of prosocial behaviour and MCSs. In short, they support the views of Atkins et al. (2019) ‘that prosocial collectives are more productive, creative and innovative than groups dominated by self-interest‘ which they argue is in line with sociobiology and evolutionary theory. Pfister et al. (2024) conclude that leaders have a particularly crucial role in establishing a prosocial performance culture. 

Why do I now find the Pfister et al. (2024) paper relevant for researchers? No doubt, many researchers work in environments are characterized by strong competition among self interested individuals. Typical performance parameters for individual excellence such as publication record, various impact factors, attracted grants to mention focus on individual competition rather than prosocial behaviour in favour of the institution (although institutions frequently use such parameters their own benchmarks for excellence). As outlined in the paper by Pfister et al. (2024) opportunistic behaviour is an intrinsic issue of such organizations. Accordingly, one may ask if modern scientists mostly behave as the homo economicus, and, if so, are there prosocial alternatives? Such questions imply significant challenges for leaders of scientific institutions. Personally, I doubt that innovative answers to the challenges can only be of an administrative nature and recommend, instead, to initially focus on innovative interpretation and implementation of CDPs 1 (Clear group identity and shared sense of purpose) and 2 (Equitable distribution of contributions and benefits).

References and further reading:
Atkins PWB, Wilson DS, Hayes SC. 2019. Prosocial: Using Evolutionary Science to Build Productive, Equitable, and Collaborative Groups, Context Press/New Harbinger Publications, Oakland, CA.
Hardin G. 1969. The Tragedy of the Commons: The population problem has no technical solution; it requires a fundamental extension in morality. Science 162: 1243-1248. DOI: 10.1126/science.162.3859.1243
Mill JS. 1874. On the definition of political economy, and on the method of investigation proper to It, London and Westminster Review, October 1836. Essays on Some Unsettled Questions of Political Economy. Second, Longmans, Green, Reader and Dyer, London. Essay 5, paragraphs 38 and 48.
Ostrom E. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press, Cambridge. https://www.cambridge.org/core/books/governing-the-commons/7AB7AE11BADA84409C34815CC288CD79
Pfister JA, Otley D, Ahrens T, Dambrin C, Darwin S, Granlund M, Jack SL, Lassila EM, Millo Y, Peda P, Sherman Z, Wilson DS. 2024. Performance management in the prosocial market economy: a new paradigm for economic performance and sustainability”. Qualitative Research in Accounting & Management 21: 397–443. https://doi.org/10.1108/QRAM-02-2024-0031
Wilson DS, Ostrom E, Cox ME. 2013. Generalizing the core design principles for the efficacy of groups. Journal of Economic Behavior and Organization 90: 21-32. https://doi.org/10.1016/j.jebo.2012.12.010