Organizations as Producers of Operating Product Flows to Members of Society

Cardao-Pito, Tiago (2017). "Organizations as producers of operating product flows to members of society." SAGE Open, 7(3), July-September, 1-18.

18 Pages Posted: 7 Nov 2017

See all articles by Tiago Cardão-Pito

Tiago Cardão-Pito

ISEG, University of Lisbon; University of Strathclyde - Department of Accounting and Finance

Date Written: November 6, 2017

Abstract

This article appraises a new empirical perspective about organizations, which disputes the mainstream economic view expressed in standard economic and financial economic textbooks. The mainstream view claims that organizations exist to increase their owners/shareholders value (wealth), and organizations’ operating activities could be dissociated from financial and investing activities (separability assumption). To the intangible flow theory, (a) the major aim of organizations is to deliver flows of operating products to members of society. These operating product flows are vital for human survival and existence.

Thus, (b) operating, investing, and financing decisions are not randomly associated. I have studied 21,108 firms listed in the stock exchanges of 10 countries (i.e., Australia, Canada, China, Germany, Japan, Malaysia, Singapore, South Korea, the United Kingdom, and the United States) at the beginning of the 21st century (2000-2011). These are stock exchanges with many listed firms, ranging from 679 firms in Singapore to 4,440 firms in Japan. Organizations’ operating, investing, and financial decisions seem to be actually connected, as suggested by the intangible flow theory.

Suggested Citation

Cardão-Pito, Tiago, Organizations as Producers of Operating Product Flows to Members of Society (November 6, 2017). Cardao-Pito, Tiago (2017). "Organizations as producers of operating product flows to members of society." SAGE Open, 7(3), July-September, 1-18. , Available at SSRN: https://ssrn.com/abstract=3065932 or http://dx.doi.org/10.2139/ssrn.3065932

Tiago Cardão-Pito (Contact Author)

ISEG, University of Lisbon ( email )

Departamento de Gestao
Rua do Quelhas, n.º 6
Lisboa, 1200
Portugal

HOME PAGE: http://www.iseg.ulisboa.pt

University of Strathclyde - Department of Accounting and Finance ( email )

Curran Building
100 Cathedral Street
Glasgow G4 0LN
United Kingdom

HOME PAGE: http://www.strath.ac.uk/accfin/

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