Performance management in the prosocial market economy: a new paradigm for economic performance and sustainability

Abstract

Purpose

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.

Design/methodology/approach

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

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.

Research limitations/implications

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.

Practical implications

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

Originality/value

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.

Citation

Pfister, J.A., Otley, D., Ahrens, T., Dambrin, C., Darwin, S., Granlund, M., Jack, S.L., Lassila, E.M., Millo, Y., Peda, P., Sherman, Z. and Wilson, D.S. (2024), "Performance management in the prosocial market economy: a new paradigm for economic performance and sustainability", Qualitative Research in Accounting & Management, Vol. 21 No. 5, pp. 397-443. https://doi.org/10.1108/QRAM-02-2024-0031

1. Introduction

The foundational assumptions of fields are often taken for granted, institutionally embedded and sacrosanct (Alvesson and Sandberg, 2011; Kuhn, 1962). In the field of performance management and management control systems (MCSs; e.g. Ahrens, 2018; Ahrens and Chapman, 2004; Anthony, 1965; Ferreira and Otley, 2009; Hartmann et al., 2020; Malmi and Brown, 2008; Merchant, 1985; Merchant and Van der Stede, 2023; Otley, 1980, 1999, 2016; Pfister et al., 2023; Simons, 1995), the foundational assumptions have been profoundly influenced by neoclassical economic theory. The origins of the field are rooted in the assumption of economic man [1] (“homo economicus”), which postulates that organizational members are self-interested utility maximisers, who shirk organizational responsibilities for personal gain if an opportunity to do so arises (e.g. Atkins et al., 2019; Lambert, 2001; Simons, 1995; Stevens, 2024). Drawing on this assumption, historically, one of the primary purposes of the design and use of MCSs is to align the self-interested and potentially opportunistic organizational members with the organizational objectives (e.g. Anthony, 1965; Flamholtz et al., 1985; Merchant, 1985; Otley, 1980). Although economic theory considers externalities and related market failures, by and large, it assumes that centering the analytical focus on organizational members’ self-preferences leads to the best global outcomes (Wilson et al., 2013).

At first glance, the assumption of economic man seems justified when examining the last century’s economic, societal and technological progress. During this time, market competition has enhanced productive and innovative organizational behaviour (e.g. Adler and Chen, 2011; Bedford, 2015; Chenhall and Moers, 2015; Pfister and Lukka, 2019) and has created immense growth and wealth (e.g. Bivor, 2022; King and Levine, 1993; Lucas, 1988; Schumpeter, 1934). However, the dark side of this progress is that organizational behaviour is inextricably linked to poverty, climate change, inequality, resource exploitation and many other grand challenges addressed by the Sustainability Goals for 2030 by the United Nations (2015) (Bebbington et al., 2021; Bebbington and Larrinaga, 2014; Gray, 1992, 2010; Hopwood, 2009). If we assume that performance management and MCSs have an important effect on organizational behaviour (Anthony, 1965; Hopwood, 1974; Merchant, 1985; Otley, 1980; Simons, 1995), then the underlying assumptions that inform performance management research and practice seem to be systematically ill-suited for the context of the wicked problems the world currently faces. Therefore, we argue that a paradigm shift in performance management could profoundly influence organizational behaviour and, over time, may even reshape the cultural norms on which the market economy operates.

Much critical research has been devoted to the problems of capitalism and the market economy over decades (e.g. Andrew et al., 2021; Cooper, 2015; Gendron, 2018; Goretzki and Pfister, 2023; Macintosh et al., 2009; Shearer, 2002; Zuboff, 2019). In addition, social and environmental accounting research reports that contemporary policy efforts struggle to hold individual organizations accountable for (un-)sustainability (e.g. Baker et al., 2023; Cho et al., 2015; Dillard and Vinnari, 2019; Laine, 2010; Tregidga et al., 2014) and an emerging literature on MCSs configurates and explores the links between performance management and sustainability based on the traditional MCS paradigm (e.g. Beusch et al., 2022; Gond et al., 2012; Laguir et al., 2019). Although opportunism [2] has long been identified as a key problem in those literatures, organizational behaviour remains contaminated by selfish and antisocial behaviours, such as short-termism, greed, excessive CEO pay, hypocrisy, corruption, exploitation, bullying and freeriding, to list a few (e.g. Ashforth and Anand, 2003; Bassani et al., 2021; Franco-Santos and Otley, 2018; Linstead et al., 2014; Pfister, 2009).

The purpose of this article is to challenge the foundational economic theory assumptions in MCS research and explore alternative evolutionary theory-based assumptions. We seek to redefine the primary purpose of performance management and MCSs as managing performance and controlling organizational activities in the pursuit of organizational goals by cultivating prosocial behaviour and establishing prosocial groups in organizations. Prosocial behaviour, as we define it in this article, is the core activity of value creation that contributes to economic performance and sustainability in organizations. It is intended to benefit others, or society as a whole. 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. We argue that systematically cultivating prosocial behaviour in organizations is a crucial prerequisite for solving the wicked problems of our time and nurturing a sustainable future for humanity and nature (Atkins et al., 2019; Pfister et al., 2023; Wilson et al., 2023).

Our proposition is inspired and scientifically supported by the work on economic governance of the commons by Elinor Ostrom (see Ostrom, 1990, 2000, 2005) for which she received the 2009 Nobel Prize in Economics. Specifically, we build on her joint work with evolutionary scientist David Sloan Wilson, in which they generalize her core design principles (CDPs) of prosocial groups for all types of organizations, not only those that manage common-pool resources (Wilson et al., 2013). Based on this background, we propose a prosocial paradigm of performance management and MCS research that draws on the following premises:

• Self-interested behaviour outperforms prosocial behaviour within a group, but prosocial groups outperform groups dominated by self-interest (Wilson et al., 2013; Wilson and Wilson, 2007). The purpose of performance management and MCS research and practice is to explain and perhaps even predict if, and if so, how, prosocial groups can be established, thereby creating the conditions in which prosocial behaviour is cultivated and opportunism is eradicated;

• To establish prosocial groups, neither reliance on top-down regulation nor markets alone is sufficient (e.g. Hardin, 1969). Rather, drawing on Ostrom (1990) and Wilson et al. (2013), this process necessitates the cultivation of basic self-governance principles. Therefore, we suggest incorporating the CDPs of prosocial groups, discussed later in the article, into the theory and practice of performance management. The quest for future MCS research and practice is to investigate how these principles are implemented through performance management in different organizational contexts and how they facilitate prosocial behaviour; and

• 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 market economy (a) cultivates the value of prosociality as a central driver for collaboration, cooperation and competition; (b) is driven by the premise of high economic performance while cultivating organizational behaviour aligned with the promotion and protection of sustainability; and (c) is feasible because it represents a cultural evolution rather than a radical systemic revolution within the conditions of the market economy.

The front end of this article presents an introduction of the proposed prosocial paradigm in performance management and MCS research based on evolutionary theory and compares it to the traditional thinking based on neoclassical economic theory. The proposition we make is a starting point for further exploration, refinement and debate in future accounting and management research. Such a proposition does not, by itself, constitute a new organizational practice. Instead, the paradigm we highlight allows for growing discernment between prosocial and opportunistic practices, thereby providing an analytical tool for future research and guidance for practice. The article’s back end consists of reflections on this prosocial paradigm of performance management relevant to the private and public sectors. The authors offer personal perspectives on how this paradigm relates to various domains in accounting and management research, as well as evolutionary science. In the concluding section, we offer implications from the proposed paradigm for research, practice, policy and education.

We hope that our interdisciplinary proposition inspires and contributes to the ongoing discussions on how to systematically cultivate organizational behaviour that simultaneously delivers economic performance and sustainability.

2. A prosocial paradigm of performance management and management control systems

2.1 Why are the foundational assumptions in performance management research problematic?

Performance management and MCSs [3] steer organizational behaviour (Ahrens and Chapman, 2004; Ferreira and Otley, 2009; Malmi and Brown, 2008; Merchant and Van der Stede, 2023; Otley, 1999; Pfister et al., 2023; Simons, 1995). This occurs through a variety of management control (MC) practices that managers have at their disposal. They can set targets, measure progress towards achieving them, give feedback and distribute individual and collective rewards. They can also influence organizational behaviour through vision, mission and value statements, strategic planning, hiring, training and socialization, and bring these MC practices to life through the tone at the top and leadership within the organization.

The combination of MC practices shapes the type of organizational behaviour and performance that is cultivated (Ahrens, 2018; Ahrens and Mollona, 2007; Chenhall et al., 2013; Pfister and Lukka, 2019). At one extreme, organizational members might be working relatively smoothly together as a prosocial group. In field interviews, they might reflect on the organizational ethos as follows: “I love working here – we have a great team, and everybody supports each other and aims to bring in their share according to their skills and capabilities. Our organization takes the protection of the natural environment seriously, and everybody knows that internal sanctions would follow if we do not comply; markets and customers will value our approach in the long run!” [4] In contrast, in an opportunistically minded organization, members might be fearful and pulled apart from one another, arguing that “You cannot trust anyone here, everybody is looking for their own interests only!” In terms of the environment, employees might reflect as follows: “Similarly as all of our competitors, we play the sustainability game, and everyone knows it’s only window-dressing”. The latter case example illustrates how opportunism can dominate the performance culture of an organization. This is expressed through the prevailing narratives among organizational members. Atkins et al. (2019, p. 33) explain:

“[…] (I)t changes how we expect others to behave. If we expect others to behave selfishly, we are more likely to behave so ourselves. If we expect others to behave benevolently, we are more likely to feel safe behaving so ourselves”.

Hence, the prevailing assumptions about how members of a group expect one another to behave are powerful in shaping organizational behaviour.

The above field examples raise caution for how we theorize performance management, and how our theoretical assumptions about the design and use of MCSs might affect organizational realities. Drawing on neoclassical economic theory and the assumption of economic man means in extremis to assume that organizational members are “solely focused on satisfying their own self-interest at the lowest possible cost irrespective of the effects of their actions upon others” (Atkins et al., 2019, p. 26). Some of the mainstream MCS literature has made attempts to challenge this opportunism assumption (see, for example, Simons, 1995), and various control theories provided alternatives decades ago (e.g. Burns and Stalker, 1961; Das and Teng, 1998; Ouchi, 1979, 1981). Nonetheless, MCS research remains significantly influenced by economic theory [5] and its initial premise that individuals are self-interested utility maximisers who might shirk their organizational responsibilities for personal gain, given the opportunity.

The problem is that social theories not only serve the purpose of providing explanations or predictions of social phenomena (Swedberg, 2014) but can also have profound performative and thereby even self-fulfilling effects on them (Ferraro et al., 2005; Lichen and Huber, 2023; Lukka and Becker, 2023; MacKenzie and Millo, 2003; Marti and Gond, 2018). The foundational assumptions in MCS research that direct the focus on people’s self-interested preferences, therefore, might be harmful to organizations, markets and society at large. Ferraro et al. (2005, p. 8) explain: “Social science theories can influence reality in profound ways by influencing how we think about ourselves and how we act”. Paradoxically, the foundational assumptions of MCS research create a narrative in research, practice, policy and education that reproduces and cultivates rather than challenges the underlying values and social norms of opportunistic behaviour. Given the wicked problems the world currently faces, institutionally normalising opportunism in theory and practice is a major threat to the future of humanity and nature. Hence, in our view, the cultural norms of the market economy require an evolution that is driven by a different economic rationale than the one centred around individual self-preferences.

In this context, a growing body of literature establishes a connection between management accounting and sustainability (e.g. Arroyo, 2012; Bebbington and Thomson, 2013; Beusch et al., 2022; Bouten and Hoozée, 2013, 2022; Gibassier and Schaltegger, 2015; Gond et al., 2012; Henri and Journeault, 2010; Laguir et al., 2019; Lueg and Radlach, 2016; Schaltegger et al., 2013; Wijethilake et al., 2018) and a significant field of social and environmental accounting research is centred around sustainability reporting and accountability (e.g. Baker et al., 2023; Bebbington et al., 2021; Cho et al., 2015; Dillard and Vinnari, 2019; Gray, 1992, 2010; Hopwood, 2009; Laine, 2010). Thus, the shift towards promoting and protecting sustainability in organizations has progressed – for example, standard setters and global associations pursue mandatory and voluntary sustainability reporting initiatives. However, we aim to address the underlying issue that the cultural assumptions embedded in the design and use of MCSs do not adequately mitigate opportunistic behaviour within organizations. This is important because opportunism may undermine efforts to render the market economy more accountable for sustainability.

The foundational assumptions of economic man remain ingrained in many contemporary organizational cultures and performance management regimes, making those internal and external measures and reporting efforts for sustainability often hypocritical (e.g. Cho et al., 2015; Tregidga et al., 2014). In that regard, critical research has been unveiling the dysfunctions of capitalism and the market economy over decades (e.g. Andrew et al., 2021; Chiapello, 2017; Cooper, 2015; Gendron, 2018; Hopper and Armstrong, 1991; Morales and Sponem, 2017; Shearer, 2002). In this article, we explore how those dysfunctions can be addressed within the conditions of the market economy.

2.2 What is the economic rationale for focusing efforts in performance management research and practice on prosocial assumptions?

Prosocial behaviour is about doing good for others, such as the team, the customer and society. It entails “the act of getting along and cooperating with others” (Atkins et al., 2019, p. 2) within and across groups, is underpinned by prosocial motives which entail the “desire to benefit others or expend effort out of concern for others” (Bolino and Grant, 2016, p. 1), and it results in prosocial impact, which denotes “the experience of making a positive difference in the lives of others through one’s work” (Bolino and Grant, 2016, p. 1). Prosocial behaviour contrasts with opportunistic behaviour, which is defined as selfish and antisocial behaviours that are intended to take advantage of others or even harm them, thereby exploiting situations or individuals for immediate or strategic advantage, often with little regard for ethics and long-term consequences (Atkins et al., 2019; Axelrod and Hamilton, 1981; Dawkins, 1976; Trivers, 1971).

Existing literature on prosociality – for example, in management (e.g. Bolino and Grant, 2016; Grant, 2007, 2012), economics (e.g. Bénabou and Tirole, 2006; Besley and Ghatak, 2018; Kamenica, 2012) and social psychology (e.g. Dovido et al., 2006; Penner et al., 2005; Schroeder and Graziano, 2015) – draws on diverse paradigms. The paradigm we propose in this article builds on evolutionary science (Atkins et al., 2019; Wilson et al., 2013; Wilson and Wilson, 2007).

The premise of this prosocial paradigm is that while self-interested behaviour outperforms prosocial behaviour within groups, which is known as within-group selection, prosocial groups outperform groups dominated by self-interested behaviour, which is known as between-group selection (Wilson and Wilson, 2007). Hence, in contrast to neoclassical economic theory, sociobiology, which studies the social behaviour in all species from an evolutionary perspective, reveals that maximizing the “relative fitness within a group seldom maximizes the fitness of the group” (Wilson et al., 2013, p. 23). Major evolutionary transitions occur when between-group selection is sufficiently dominant over within-group selection. In these cases, groups become so cooperative that they can “qualify as higher-level organisms in their own right” (Wilson et al., 2013, p. 24). Within-group selection is not eliminated in these cases, but it is suppressed by a set of mechanisms “that keep it under control” (Wilson et al., 2013, p. 25). Evolutionary science has demonstrated that prosocial collectives are more productive, creative and innovative than groups dominated by self-interest (Atkins et al., 2019).

In organizational settings, the contrast between groups dominated by self-interest and prosocial groups can be observed in group dynamics. Consider two hypothetical project teams: Group A, where members prioritize individual success, and Group B, where members prioritize collective success. In Group A, self-interested behaviour initially leads to high individual productivity and personal rewards. However, this behaviour fosters competition, a lack of trust and poor collaboration, ultimately resulting in inefficiencies and high turnover. Conversely, Group B, which emphasizes prosocial behaviour such as collaboration and mutual support, may progress more slowly initially. Nonetheless, over time, the strong trust, cooperation and supportive environment within Group B led to sustained high performance, innovation and team stability. While self-interested behaviour may yield short-term individual gains, prosocial behaviour can foster long-term group success and resilience (Atkins et al., 2019; see also Bolino and Grant, 2016; Grant, 2007).

Based on the above premise of the prosocial paradigm, we define prosocial behaviour as the core activity of value creation aiming to simultaneously achieve economic performance and sustainability in organizations. This definition can be explained as follows. First, the prosocial paradigm is aligned with market competition because it considers performance comparisons within and between groups. However, it illuminates the economic importance of establishing prosocial groups. The primary focus for MCS design and use therefore moves away from aligning individual preferences with the organizational objectives. Instead, the economically purposeful focus for MCS design and use shifts towards cultivating prosocial behaviour and establishing prosocial groups to perform well in the market. Second, prosocial groups are not only assumed to perform well but they also manage the trade-offs among the interests of the individual, the organization and the common good. This is because prosocial behaviour, like altruism, [6] entails “becoming part of something larger than oneself” (Wilson, 2015, p. ix), thereby cultivating values and social norms for an increased awareness of others and nature. Third, although prosocial behaviour is generally associated with being kind and cooperative, by definition, it is incompatible with and must socially sanction opportunism. To this end, the prosocial paradigm seeks to create conditions in which between-group selection takes precedence over within-group selection, and opportunism is mitigated. We will discuss in the next section how such prosocial groups and prosocial behaviour can be facilitated.

2.3 What are the core design principles of prosocial groups?

We make the case for integrating the CDPs of prosocial groups by Elinor Ostrom (1990) into performance management theory and practice. Her work was recognized with the Nobel Prize in Economics because it addressed and provided a solution to what Hardin (1969) famously popularized in an article published in Science as the “tragedy of the commons”. Hardin drew a pessimistic outlook on the future of common-pool resources because neither top-down regulation nor privatization alone seemed to be the solution to avoid opportunism and resource exploitation in the long run [7]. Ostrom’s work represents a third, more optimistic, option by explaining how to design groups that protect the common good. She studied how small communities around the world were addressing publicly accessible, finite resources that were vulnerable to depletion (e.g. forests, fisheries, pastures). Her interest was focused on how these groups were able to cooperate and self-govern in a manner that prevented over-exploitation of those resources. From her in-depth case research, she identified eight CDPs that proved crucial for the self-governing of the common good and that can be regarded as essential principles of cooperation. While Ostrom formulated those principles in the language of political science, she worked with David Sloan Wilson to translate them into a more generalizable form for cooperating groups (Wilson et al., 2013). Wilson et al. (2013, p. 28) explain how the CDPs address the problem of opportunism:

“To summarize, when a group possesses the CDPs, the opportunities for some members to benefit at the expense of others become extremely limited. Succeeding as a group becomes the only remaining option. This is the basic requirement for a major evolutionary transition in any species. There is a striking correspondence between the principles derived by Ostrom for common pool resource groups and the conditions that caused us to evolve into such a cooperative species in the first place” (Wilson et al., 2013, p. 28)

Therefore, the prosocial paradigm draws on the premise that Ostrom’s design principles provide the conditions in which between-group selection dominates within-group selection, which then cultivates prosocial behaviour and eradicates opportunism within groups. The CDPs of prosocial groups are described and summarized in Table 1. A group can be any collective, such as a team, an organization, an association or even a country.

CDP 1 is about defining a clear group identity and shared sense of purpose, which determine who is part of a group and identifies with it. Ostrom’s groups had a common-pool purpose. Here, we adapt Ostrom (1990) and Wilson et al. (2013) by arguing that, with contemporary awareness, the entire planet is a common-pool resource. Consequently, the purpose and identity of the group need to be aligned and not stand in conflict with the promotion and protection of sustainability, as outlined, for example, in the United Nations’ (2015) Sustainable Development Goals.

The next five CDPs are designed to balance individual and collective interests within the group. CDP 2 maintains that group members perceive an equitable distribution of effort with benefits from the group, for example, that they feel fairly assessed and rewarded for their contributions; CDP 3 specifies fair and inclusive decision-making, in which members perceive themselves as involved in decisions that concern them; CDP 4 demands transparency of behaviour and outcomes, in which members understand what is going on and what others in the group are doing; CDP 5 highlights the need for graduated responses to helpful and unhelpful behaviour in the group, such as rewarding and praising prosocial behaviour and sanctioning opportunistic behaviour in the group, including the possibility of excluding opportunistic group members; and CDP 6 specifies fast and fair conflict resolution in the group.

CDPs 7 and 8 are about relationships with other groups, such as other teams, other hierarchical levels within the organization, other organizations and other collectives. CDP 7 is concerned with whether, and to what extent, the group has the autonomy and authority to implement the CDPs. CDP 8 is a meta principle, which connects the application of CDPs 1–7 to the relationships with other groups independent of whether a particular relationship (to the other group) is characterized as collaboration, cooperation or competition and whether it is within or outside the hierarchy [8].

Jointly, these CDPs can be applied by any group or a group of groups, and, therefore, they are aligned with the purpose of performance management. Importantly, the CDPs might be implemented differently in different contexts. However, the analytical strength of the CDPs is their combined analysis of how they facilitate prosocial behaviour and eradicate opportunistic behaviour in specific empirical settings.

2.4 What is the challenge of the prosocial paradigm in performance management?

The challenge for performance management theory and practice is to explain, or even predict, how various combinations of MC practices (e.g. Pfister et al., 2023) shape prosocial behaviour and prosocial groups in different contexts and how and to what extent the different CDPs are implemented to achieve prosociality in these contexts. Figure 1 offers a broad framework for studying the prosocial paradigm. It can be used to explain what types of performance outcomes (e.g. economic, compliance, sustainability, innovation) these prosocial performance cultures create both within the focal group (e.g. team, organization and other collective) and across groups. In support of this endeavour, the framework integrates the study of MC practices with the CDPs to offer a conceptual orientation for the analysis of key features of prosocial groups.

However, it is important to distinguish between the design principle and its implementation in practice. This distinction is similar to the one between ultimate and proximate causation (Wilson and Gowdy, 2013) in evolutionary theory, as described by Wilson et al. (2013, p. 26): “Ultimate causation explains why a trait evolves in functional terms, while proximate causation explains the specific mechanism that evolves in any particular case”. Consequently, there is a one-to-many-relationship between a CDP and its implementation in specific organizational contexts, similar to the notion of equifinality in MCS contingency theories (Bedford et al., 2016; Grabner and Moers, 2013; Malmi and Brown, 2008; Otley, 2016). Compared to the traditional MCS paradigm based on neoclassical economic theory, it is expected that the aspiration to systematically establish prosociality within organizations requires great leadership efforts in performance management; notably, it requires leadership understood as an activity and not primarily as a role (e.g. Bassani et al., 2021). However, the combination of MC practices to establish prosocial performance cultures in different empirical settings (e.g. private versus public sector, various industries, company sizes) remains an empirical and theoretical puzzle for future MCS research.

Notably, the individual CDPs can be identified in many existing accounting and management studies, and we can observe prosocial teams in practice in many different contexts, both in the private and public sectors. However, the focus in research and practice has not made any systematic effort to explain how prosociality is established and how opportunistic behaviour is eradicated. This requires a refreshed narrative of how performance management is built, analysed and assessed both in research and practice.

In this context, the prosocial framework depicted in Figure 1 serves both normative and descriptive purposes. Normatively, the framework prescribes standards and ideals through the CDPs which are intended to cultivate prosocial behaviour and eradicate opportunistic behaviour within and between groups. The CDPs provide a set of practices that organizations can adopt to foster a cooperative and ethically driven environment that aligns individual and collective actions with broader societal values of the common good. Descriptively, the framework offers a tool to explain and predict phenomena related to group dynamics and organizational performance. It offers an analytical lens for performance management and MCSs research to investigate how prosocial behaviours can emerge, be sustained and outperform self-interested behaviours within and between groups.

The framework is versatile and can be applied across different research paradigms, including positivist, interpretive and critical (e.g. Chua, 1986). For positivist research, the framework can be utilized to develop and test hypotheses regarding the organizational antecedents, processes and outcomes of both prosocial and opportunistic behaviours. This can involve surveys, experimental and qualitative designs (e.g. Busse et al., 2017; Eisenhardt, 1989; Maas and Matejka, 2009; Sprinkle, 2003; Van der Stede et al., 2005) to assess the generalizability and boundary conditions of the CDPs across various organizational contexts in the private and public sector. In interpretive research, which seeks to understand the meaning and context of social phenomena, qualitative methodologies such as ethnographies and case studies can provide rich explanations (e.g. Ahrens, 2021; Ahrens and Chapman, 2006; Cooper and Morgan, 2008; Lukka and Modell, 2017) into the lived experiences of individuals within groups, exploring the cultural and contextual factors that influence prosocial behaviour. This is important because explaining prosocial behaviours and outcomes often requires in-depth contextual understanding (Atkins et al., 2019; Bolino and Grant, 2016). Critical research, which interrogates power dynamics and seeks transformative change (e.g. Cooper and Hopper, 2007; Gendron, 2018; Lukka and Becker, 2023), can use the framework to highlight and challenge the existing power structures that inhibit prosocial behaviour. By documenting and analysing how MCSs mediate outcomes related to power and inequality, critical scholars can advocate for organizational reforms that promote fairness and ethical behaviour.

For any of the above-mentioned research paradigms, the framework offers a tool that can be combined with interventionist and action research methods (e.g. Labro and Tuomela, 2003; Lewin, 1946; Suomala et al., 2014; Van de Ven, 2007). The prosocial paradigm can guide the design and implementation of initiatives aimed at fostering prosocial behaviours, enabling researchers to actively engage with participants and assess the impact of specific strategies or interventions on enhancing prosocial behaviour within organizations.

Overall, the normative and descriptive nature of the prosocial framework offers methodological flexibility to enhance understanding of prosocial behaviour in organizations and/or contribute to the development of more sustainable organizational practices. For exploratory research, the CDPs can help identify new areas of inquiry related to prosocial behaviour and its determinants. Explanatory research can utilize the framework to build theories that elucidate the mechanisms through which prosocial behaviours influence organizational outcomes. Evaluative research can assess the effectiveness of interventions designed to implement the CDPs in various organizational settings, providing evidence-based recommendations for practice.

2.5 How does the prosocial paradigm in performance management shape the prosocial market economy?

The prosocial paradigm encourages the systematic cultivation of prosocial behaviour in organizations. In doing so, it promises to facilitate a broad shift in values and social norms across markets and societies. The result is what we refer to as the prosocial market economy.

At the centre of the difference between the traditional and the prosocial paradigm is how and when competition is practiced. Although neoclassical economic theory recognizes problems of opportunism, the advocated design and use of MCSs tends to paradoxically cultivate opportunism rather than eradicate it. In this traditional view, MCSs are designed around self-centred preferences held by individuals, and they stress market competition as the economic imperative and motivational engine. This perspective, therefore, strives to replicate competition in organizational environments so that individuals and groups are compared and placed in competition with one another. In doing so, performance measures have become a central managerial tool in the market economy to enable competition by standardizing and comparing performance rankings. Such rankings of team members, units, organizations, associations and even countries distribute power, prestige and socially constructed identities (Espeland and Sauder, 2007; Pollock and D’Adderio, 2012) of superiority (“we are the best in the industry”) and inferiority (“we are only seventh in the industry”). Despite the benefits of such performance measurement practices, the literature increasingly recognizes the dysfunctional performative consequences of specific designs and uses of performance metrics, both in the private and public sectors (e.g. Becker and Lukka, 2022; Bottausci et al., 2024; Dambrin and Robson, 2011; Franco-Santos and Otley, 2018; Gendron, 2008; Goretzki and Pfister, 2023; Jordan and Messner, 2012; Lassila et al., 2019) [9].

The fact that individuals are interested in their own performance ratings, not least to survive and perform in the system, can enhance dysfunctional trade-offs. Competing individuals within a team tend to pull away from one another; similarly, organizations that would benefit from cooperation (e.g. Chesbrough, 2003; Pfister et al., 2017) isolate themselves. This fierce competition can lead to antisocial behaviour and the exploitation of resources for power and prestige (Atkins et al., 2019). Paradoxically, in extremis, these types of performance regimes tend to cultivate opportunism as the behaviour that moves organizational members forward in their careers. Not surprisingly, when organizations exhibit this type of performance thinking, organizational members are exposed to opportunism throughout their careers and become acculturated to believing that opportunistic behaviours are normal and needed for success. These performance measurement regimes arguably produce top executives (and other organizational members) with a self-serving mindset as they make “decisions that benefit themselves at the cost of the organization, or they make decisions that benefit the organization at the expense of the broader community” (Atkins et al., 2019, p. 15). Based on the design and use of performance measurement systems (PMSs), this illustrates how the current market economy can, to some extent, reward selfish (or even antisocial) behaviours instead of punishing them, thereby establishing a cultural norm for how to interact with others both inside and outside the organization.

In contrast, the prosocial paradigm’s logic produces a different market economy. The prosocial paradigm, which draws on the CDPs, focuses primarily on collaboration and cooperation within the group and with other groups, relying on competition in a graduated manner when required. Prosociality drives competition as a core dimension of behaviour and performance, and graduated competition refers to acting in competition in an ethical and fair manner, such as by adhering to fair play rules in sports. The prosocial paradigm recognizes individual or team performances (see CDP 2), but it connects any MCS design and use to cooperation and respect for healthy forms of competition. Personal and organizational achievements and celebrations remain important, but the primary aspiration is to make a positive difference in the lives of others through one’s work (Bolino and Grant, 2016; Grant, 2013). This paradigm operates from the logic of “being of service” in a way as, for example, in a start-up or team in a larger organization where every member aspires to bring out their best. As a result, it shifts the primary performance aspiration away from conformity and comparison with others and towards comparison with oneself. To serve and contribute, the individual, team or organization is required to aspire to become their best versions. From the perspective of the prosocial paradigm, performance management seeks to establish organizational environments that foster the flourishing of individuals and groups in the Aristotelian sense of eudaimonia, a concept that involves fulfilling their work with authenticity, meaning, excellence and personal growth (e.g. Huta and Waterman, 2014). Hence, the design and use of MCSs, including the specific design and use of performance measurement, must be critically explored in terms of how they support establishing prosocial groups. Using prosocial theory, research can help identify functional practices and critically expose dysfunctional practices. Table 2 provides an overview and comparison of the two paradigms.

2.6 How does the prosocial market economy establish sustainable behaviour in organizations?

The essence of the prosocial market economy is that, to establish prosocial groups, opportunism must be disqualified and socially sanctioned (Atkins et al., 2019; Ostrom, 1990, 2000, 2005; Wilson et al., 2013, 2023). According to CDP 5, this can mean a graduated response to opportunistic behaviour within the group or in relation to other groups. In more severe cases, it can mean the exclusion of a group member or the termination of a business relationship that, for example, repeatedly violates sustainability. The challenge for the design and use of MCSs is that prosocial groups, compared to groups dominated by self-interest, are more fragile and, therefore, require more leadership effort to become established (see the CDPs). This is important because it can take only one or just a few opportunistically acting group members to potentially jeopardize the prosocial group (Atkins et al., 2019). This so-called “bad apple in the barrel” effect (Felps et al., 2006) can undermine group members’ sense of safety to act in a prosocial manner (Atkins et al., 2019).

The literature on prosociality emphasizes that any member of a prosocial group, particularly the bystanders who are neither the perpetrators nor the victims of antisocial behaviours, can lead counteractions to opportunistic behaviour (e.g. Hussain et al., 2019). Ultimately, performance cultures emerge through everyday micro-actions (Ahrens, 2009); therefore those who silently accept opportunistic behaviours give power to the cultural normalization and expansion of these behaviours. Hence, the prosocial paradigm of MCSs, unlike the traditional paradigm, employs the potentially performative and self-fulfilling effects of social theory (Ferraro et al., 2005; Marti and Gond, 2018) to systematically counteract the dysfunctional effects of the assumptions of economic man, cultivated over several decades.

The strength of the prosocial paradigm is that it normalizes prosocial intentions, behaviour and outcomes (e.g. Bolino and Grant, 2016) in a self-governing manner at the micro level of everyday organizational behaviour. The decision about what prosociality means remains culturally and situationally negotiated among the specific groups. However, as considered by CDPs 7 and 8, no group is an isolated unit; it is always embedded within the social sphere of other groups, some of which are at higher and lower levels. If we think of groups as a hierarchy, then the CDPs connect the interests between the individual, the team, the organization and the planetary levels (Wilson et al., 2023). The last level, for example, is represented by the regulatory power of states and the guidance of multinational bodies, such as the United Nations. Through this multi-level perspective, the prosocial paradigm connects the micro-level of everyday organizational behaviour with the grand challenges at the planetary level.

Importantly, this interplay between the levels plays out differently depending on the perspective of the specific theoretical paradigm. The traditional paradigm, based on the metaphor of the invisible hand, assumes that the pursuit of self-interest at lower levels (e.g. by designing collectives driven by self-interest) robustly benefits the higher-level interests, that is, the common good. In contrast, the prosocial paradigm, drawing on multilevel selection theory, suggests that lower-level pursuit of self-interest undermines the interest of the common good (Wilson et al., 2023). Therefore, adhering to the evolutionary multi-level perspective, the prosocial paradigm assumes that the implementation of the CDPs is necessary to align lower levels with planetary interests in relationships both within and across groups.

As previously mentioned, prosocial group members develop a mindset in which they view neither themselves nor the prosocial group as an isolated unit. Instead, they identify themselves and their group as part of something larger (Atkins et al., 2019; Wilson, 2015; Wilson et al., 2023). In doing so, they work with the assumption that humans bear responsibility for one another as well as nature, even when entering competition. This poses the question for MCS research and practice: how MC practices (e.g. hiring, training, performance measures, performance evaluations, rewards and promotions) can be combined to acculturate prosocial behaviour in organizational members and, especially, produce top executives who possess a mindset that balances the trade-offs between the individual, the organization and the common good. As a result, those organizational members make decisions that genuinely nurture and protect sustainability in organizations.

2.7 What is the anticipated societal long-term impact of the prosocial market economy?

The proposal for a prosocial market economy invites one to step back and critically reflect on organizational behaviour and its cultural underpinnings in markets and society. For some readers, depending on their context and background, this proposal might sound idealistic. The prosocial paradigm is driven by the intention of doing good rather than pursuing greed. However, the driving forces remain fundamentally economic: they stem from the premise and realization that the systematic establishment of prosocial groups tends to outperform self-interested groups in competitive markets.

The increasing adoption of a prosocial paradigm [10] presumably would have multiple societal impacts over the long term. First, if the value of prosociality becomes strengthened in organizational cultures, it would provide an important condition that helps the market competition to become more aligned with the common good because the prosocial paradigm normalizes organizational behaviour that protects and nurtures sustainability. Second, it is presumed that the growing awareness of sustainability issues in society could make markets more positively receptive to organizations that embrace prosocial performance cultures [11]. Third, in an increasingly prosocial society, opportunistic behaviours would surface more quickly and become intolerable. In that case, it is expected that market participants would sanction harmful organizational acts more strictly than under the traditional paradigm. Finally, an increasing acceptance of the prosocial paradigm would likely motivate policy makers to take action. Regulations (e.g. tax law) would be increasingly evaluated based on how it could optimize the regulatory conditions so that organizations are encouraged to act prosocially and are granted the regulatory space (e.g. Hancher and Moran, 1989) to implement the CDPs, both in the private and public sectors.

This proposal of a prosocial paradigm is a starting point that requires further exploration, refinement and discussion in future research. The next section expands on this proposal’s ideas and provides reflections and research opportunities in a variety of domains.

3. Multi-voiced reflections on the proposed paradigm shift

In this section, the authors reflect individually on the prosocial paradigm. These reflections give an illustration of possible applications of the prosocial paradigm and provide selective resources depending on the reader’s domain of interest.

3.1 The prosocial organization: how to make prosociality function in formal organizations? (Thomas Ahrens)

The aim of prosociality speaks directly to performance management and MCS literature because it has a story about the best way of effectively organizing. It combines an objective with an organization. The objective is to behave in ways that benefit others or society as a whole. The organization relies on the idea that between-group competition outperforms within-group competition (because prosocial groups outperform groups organized by self-interest). Moreover, the principles advocated in the prosociality paradigm are familiar to MCS research: they include clear group identity and purpose (MC cultures, strategy), equitable distribution of contributions and benefits (agents’ efforts and payoffs), inclusive decision-making (participative budgets), transparency (information asymmetry, information content) and appropriate responses to behaviour (remuneration and sanctions).

Since prosociality asks performance management scholars to attend to improved system-level performance by focusing on competition between rather than within groups, it creates new problems for performance management and MCSs, namely, problems related to the idea of levels. Levels are nested, resulting in new types of managerial and performance management tasks. A prosocial team on a factory floor could outperform another factory floor team. How could the example of the prosocial team be used to turn the factory into a prosocial factory? Which key desirable practices could be made to anchor marginal ones (Ahrens, 2018; Carlsson-Wall et al., 2021)? The prosocial factory could outperform another factory. Can the prosocial factory, in turn, be used to create a prosocial manufacturing division? How does prosociality on lower levels interact with competition on higher ones? How can the competition between prosocial factories turn into the prosociality of factories that create a division and compete against other divisions? At what point would it be justifiable to call a large corporation prosocial? How much and what kinds of MCSs are needed to support cultural change (Dent, 1991)? How much opportunistic behaviour could it sustain (Crvelin and Becker, 2019)? Relatedly, how could MCSs be used to measure the prosociality of units and corporations? How could such measurements be used to change the ways in which they operate, for example, by discouraging opportunistic behaviour (Ahrens and Chapman, 2007)?

The problem of levels, however, extends beyond organizational hierarchy. Levels also apply to distinctions between business, government and society. What processes of corporate government and governmentality operate at a social level that have organizational effects (Miller and O’Leary, 1993, 1994)? We use it to validate business objectives against market success. A cheap, reliable combustion engine car with a rising market share was evidence of a commercially and socially successful car manufacturer. So was the production of cheap meat for an agrobusiness. If insights into climate change point towards the dangers of engine and cow emissions, higher levels of performance demands are created (national, transnational, global). Performance is affected by taxes, regulations, quotas or voluntary codes and missions. A growing body of literature is exploring these, but without reference to prosociality (Mehrpouya and Samiolo, 2016; Unerman and Chapman, 2014).

In the context of levels, we can also ask more directly how better uses of MCSs could be employed to discourage opportunism and encourage prosociality. For example, discouragement of selfishness may result from 360 reviews and group- or organization-wide performance-related pay instead of individual bonuses (Ezzamel and Willmott, 1998; Fisher et al., 2003). Furthermore, the encouragement of prosociality can be grounded in the organization as a model of prosociality that associates organizational strengths with its collaborative nature (Takatera and Yamamoto, 1989). This may involve greater reliance on cross-functional teams, which can demonstrate the importance of collaboration. Career paths can be made to routinely include stints in different functions, thereby clarifying functional interdependencies and the use of narrowly functional expertise for broader organizational and social advantage (Fruin, 1997). To reduce competition-induced dysfunctional behaviour, lifetime employment can be offered. Moreover, company socialising can be promoted, and norms of helpfulness such as mentoring can be instituted and recognized (Rohlen, 1974).

In support of this, MCSs can be developed that measure, for example, employee retention, wage dispersion, market share, innovation, brand and profit. Incentives can be based on company performance along these dimensions, and helpfulness can be reported. Company objectives and performance can be made transparent (Feldmann et al., 2024).

In practice, making prosociality happen necessitates intervention beyond MCS design and use. It needs active input from the hierarchy and bystanders; praising the good, admonishing the bad and using threats, punishment or ultimately even banishment. To become normal, functioning prosociality would be institutionalized in the organization. It calls for the prosocial subject. This requires thoughtfulness to create an ethos of prosociality. The tyranny and the gaming of 360 reviews serve as warnings. It would be essential to remain focused on what prosociality represents in specific situations and how ethics and exchange connect (Parry and Bloch, 1989).

This can be understood from a functional perspective. Humane organizations are a worthy objective, but we need to remember that organizations are long-lived artificial agents built specifically to avoid the weaknesses of human impulses and fickleness (Runciman, 2023). Organizations are capable of superhuman efforts to accumulate vast resources in pursuit of formal and relatively stable missions. If they manage to absorb prosociality into their missions and practices, they will not become “nice” for niceness’ sake. Niceness is too diffuse a guideline for large groups, and it does not map to organizational purposes. Niceness or “the humane” as objectives would only serve to repeat the controversies that have arisen around unthinking forms of political correctness. A key challenge of prosociality is that it needs to be ethical as well as organizationally functioning.

3.2 Power dynamics in organizations: how to combine critical and prosocial views on performance measurement systems? (Claire Dambrin)

For scholars like myself who develop non-normative (Dambrin and Grall, 2023; Dambrin and Robson, 2011), sometimes critical studies (Dambrin and Lambert, 2017; Van Den Bussche and Dambrin, 2021) of PMSs and individual evaluation processes in organizations, adhering to prosocial assumptions is challenging.

Firstly, it requires taking a reformist view of organizations, aiming to change and improve them beyond producing a critical diagnosis of them. This is not impossible, however, as critique in organizational studies can include working with firms to help them change their practices towards a more desirable world (Fournier and Grey, 2000).

Secondly, and this is much more challenging, it requires dealing with assumptions that sound idealistic. Our society is built on unequal power relations, and PMSs are good at providing justifications for unequal distributions of social goods (Bourguignon and Chiapello, 2005). Prosocial groups may outperform selfish groups, but if the former have less power, the latter may exploit them. Even if a prosocial paradigm makes between-group selection dominate within-group selection, opportunism may persist between groups. And if we trust time to have prosocial groups accumulate sufficient autonomy and authority to outperform others (as the CDP 7 requests), we might wait forever. For critical scholars, group performance is actually not a mere fact driven by economic evidence, but a social construct driven by political and institutional dynamics. If prosocial groups excel economically, it does not guarantee a natural alignment of market competition with the common good (as a prosocial paradigm would expect).

Does this mean that prosocial and critical views of PMSs are incompatible? Arguably, we can incorporate prosocial ideals into frameworks acknowledging power dynamics in organizations and society.

To develop prosociality, organizations need to acknowledge the diversity, relative importance and prosocial relevance of different “groups” in relation to performance in the design of their PMSs. This starts with ensuring that PMSs are not ready-made tools that organizations implement without reflecting on what performance means to their many stakeholders, not just their shareholders or customers.

Consequently, it is important to document situations in which PMSs mediate unexpected outcomes in terms of known power relations, such as when powerful selfish groups are rendered less capable of action and, conversely, when less powerful prosocial groups are rendered more capable of action. In this spirit, critical accounting research has emphasized the potential of counter accounts to provide such desirable change. For instance, reframed calculations of sugar production’s profitability were used by social movements in England in the XIXth century to push for abolishing slavery (Himick and Ruff, 2019). More recently, Australian student workers, with the support of unions and journalists, leveraged the absence of legal accounting documentation, such as payslips, to counter the unregulated, cash-in-hand jobs to which they were submitted (Yang et al., 2021). These counter-accounts are close to the counter-quantifications studied by statactivists in the context of pushing for public policies that enhance the living conditions of the more vulnerable social groups (Bruno et al., 2014; Mennicken and Salais, 2022).

At higher organizational levels, developing a prosocial paradigm through PMSs also raises ethical challenges. Prosocial activities should be incentivized within organizations to avoid free labour situations typical of the sharing economy (Fleming et al., 2019). Win–win situations are certainly one way of fostering prosociality in organizations (see Table 2), but they do not really dismantle the fundamental assumption of primarily self-interested individuals on which MCSs rely. It is in its altruistic assumption that the prosocial paradigm is truly radical. Hence research should investigate how PMSs support or induce organizational situations where there is a “gift” without expecting reciprocity.

Theoretically, these research opportunities require conceptions of power not as something that a group possesses but as something that circulates, as emphasized by Foucault (2004).

Ethical approaches could also be beneficial, including not only the ethics of care (Larrabee, 1993) but also the Thomistic trend in business ethics, which legitimizes the pursuit of the common good within organizations and highlights the fundamental role of companies and managers in fostering the common good at the societal level (Mandray, 2022). The ethics of design (Verbeek, 2011) is also particularly relevant, as it emphasizes that morality is best expressed not as a set of overarching principles but as an activity. This means that accounting technologies such as PMSs do not merely reflect moral values that emanate from outside. By design, a PMS both distributes moral responsibilities and guides moral choices and actions (Bottausci et al., 2024). Consequently, prosocial decisions and actions are not confined to the realm of human values but unfold in the design of PMSs such as incentive systems, dashboards or scoring devices.

3.3 Poverty elevation: prosociality and the divide between the rich and poor (Solomon Darwin)

Despite the exponential rise in knowledge and technology since the industrial era, the wealth gap between the rich and poor continues to widen. Research indicates that the top 1% of the population holds an increasingly larger share of wealth, while the bottom 90% have experienced a decline. The rich get richer, while the poor struggle to keep up with the rising costs of living, housing, education and healthcare (Riddel et al., 2024; Saez and Zucman, 2020).

Those at the top hold on to their wealth, authority and control, influencing policies that govern our political and business landscape. Globalization has contributed to this gap as wealth accumulates among shareholders of large multinational firms. Additionally, globalization has reduced the bargaining power of unskilled workers, resulting in lower wages. Family inheritance perpetuates this cycle of inequality by transferring wealth across generations (Chancel et al., 2022; Dorling, 2019; Riddel et al., 2024). Given that technology and innovation continue to empower the rich and powerful, it is relevant to examine how the vast majority can be assisted in bridging the gap.

To address this growing inequality and digital divide, the world demands a paradigm shift in the market economy towards prosociality. Organizations must design performance management and MCSs to promote equity, equality and harmony. One root problem lies in the age-old pyramid model deeply embedded within human organizations (e.g. Anderson and Brown, 2010; Yu et al., 2019). This structure drives the business and political systems that have been seen throughout history. Pyramids have long symbolized hierarchy, power and authority across civilizations, from the Tower of Babel in Mesopotamia to the pyramids of Egypt, India, China, Southeast Asia and Latin America. Today, the pyramid model, often driven by greed, is evident in the chain of command in corporate and government organizations. This top-down approach has historically legitimized political and economic inequality, exacerbating the divide between the rich and poor and the powerful and underserved.

Drawing on the CDPs, organizations require flatter hierarchies without layers of management, offering greater autonomy for employees. Power and responsibility should be shared more equally among all members within an organization, fostering fairer wages, collaboration, innovation, ownership, teamwork and loyalty. The question, then, becomes how to engineer a transition from the non-inclusive pyramid model to all-inclusive and equitable organizations and societies.

The traditional chain of command models in performance management and MCSs need to be inverted to ones in which the leaders, with increasing authority and influence, position themselves at the bottom by inverting the entire pyramid structure. This inverted structure is driven by the ethics and values a firm holds at its core to promote equity, equality and harmony. This leads to better stewardship of the resources of human organizations as well as the ecosystems that sustain life on this planet (see Darwin, 2020).

Hence, if the prosocial paradigm is to be effective, it requires a shift in the attitudes of leaders. Throughout history, servant leaders (Greenleaf, 1977; Spears, 1996), who flipped the pyramid upside down to serve their people, validated the prosocial paradigm proposed here, placing people at the top. This approach values empathy, listening and collaboration, resulting in a more engaged and motivated workforce than that found in the traditional pyramid. It also fosters a culture of trust, with leaders empowering employees to make decisions and take risks (van Dierendonck, 2011; Liden et al., 2008; Sendjaya et al., 2008).

The prosocial paradigm encourages ideas and innovations to flow from the bottom to the top to capture the value of the global brain. This requires a transformation in thinking and a change in direction, such as the one necessitated by the COVID-19 crisis. Societal values must be reassessed, educational curricula rewritten and corporate training programs realigned to achieve this transformation.

The challenge becomes how humankind’s accumulated knowledge and wisdom can be utilized to reconstruct a more equitable market economy. Some may argue that such a paradigm works only in heaven, but it is worth striving to build a prosocial market economy here on Earth.

3.4 Higher education: on prosocial behaviour and management control systems in academia (Markus Granlund)

These days, there is not only a great need for prosocial behaviour but also many threats to it (Atkins et al., 2019; Bolino and Grant, 2016). In organizational life, such behaviour should be taken for granted, but this is often not the case. Several reasons could explain why individuals may not behave prosocially, ranging from self-interest to time constraints to competing priorities. Traditionally, MCSs are designed and used for monitoring and controlling employee behaviour in ways that do not foster prosocial behaviour, as explained in Chapters 1 and 2.

If one contemplates the mission of universities – to make science from research groups freely available and to provide liberal education based on the good of society – prosociality comes easily to mind. In fact, prosociality could be added to the list of basic values of academia: freedom of research, ethicality, constructive criticism, creativity, openness, responsibility, communality, et cetera. However, performance measurement and management, in the spirit of managerialism and scientific instrumentalism, have led to MCSs that do not necessarily align with such principles as academic freedom and good scholarship. This has endangered the motivation and well-being of academic researchers and teachers and, potentially, the mission of universities (Becker and Lukka, 2022; Bedford et al., 2023; Kallio and Kallio, 2014; Rhodes and Pullen, 2023). For instance, studies like Bedford et al. (2023) indicate that academia can effectively manage the relationship between MCSs and prosocial behaviour. Consequently, MCSs are seen only as tools; for example, in tenure and recruitment decisions, comprehensive and responsible evaluation practices can be applied instead of journal rankings-based evaluations. Ultimately, this choice falls to the decision-makers and their willingness to use their agency (Alvesson et al., 2017; Bedford et al., 2023). An important factor in the greater picture is the operating or discipline-based culture that defines and appreciates high shared understandings related to the CDPs of prosocial groups (Atkins et al., 2019).

Despite these positive observations, it seems obvious that, in many cases, the relationship between MCSs and prosocial behaviour is clearly problematic, or more problematic than meets the eye. Therefore, we need sensitive qualitative research on these relationships at various organizational levels, from ministries to the university, departments, research groups, and, further, in the everyday lives of researchers, from professors to doctoral students.

What is at stake here is how academic freedom and prosocial behaviour can be secured in academia for the good of societies in an era in which external efficiency and other demands must be considered as well. In the worst-case scenario, harsh competition driven by simple metrics could lead to situations in which researchers refrain from sharing ideas due to fear of academic theft. Such developments are counter to the notion of academia as an agora, a place where people meet, share their ideas and debate them in the academic spirit for the greater good. Unfortunately, I have observed that such incidents are a reality.

How to design and apply MCSs in a way that balances control and autonomy, fosters intrinsic motivation and generally encourages genuine prosocial behaviour in universities for the good of society remains a question. If MCSs are not designed and used carefully in this regard, they may lead to unnecessary and harmful competition rather than trust and unselfish collaboration. Existing literature suggests that MCSs can be used to drive issues that are connected to the prosocial paradigm. However, this has not been analysed explicitly, following the framework of prosocial behaviour to obtain more nuanced and, theoretically, better-informed views on the issue.

In the context of academia, we may ask, for example, could it be that the efficiency gains demanded by external stakeholders have already been reached since the introduction of New Public Management and related performance measurement? Could we even abandon journal rankings and other mechanisms potentially feeding harmful competition in universities? This is a valid question especially as we consider the multifaceted and partly “unknown” nature of quality of research (Bedford et al., 2023), and the complex nature of innovative activities in general.

3.5 Management research: prosociality and management and organization scholarship (Sarah L. Jack)

Prosocial behaviour involves positive social behaviours that benefit those to whom they are directed (Brief and Motowidlo, 1986). Helping others, respecting others, sharing with others, cooperating with others and volunteering offer examples of prosocial behaviour in the management and organization context (Brief and Motowidlo, 1986). Through prosocial behaviour, individuals may join an organization and remain loyal to it because they embrace its prosocial values (Brief and Motowidlo, 1986) and the potential social impact of the organization (Moynihan et al., 2012).

In the management and organization context, the key to prosocial behaviour is the leader and their desire for positive change. As Lorenzi (2004, p. 283) explains, “A good leader is prosocial and has a positive, effective influence, with constructive goals that serve the common good […]. They create or add value […]. The leader’s actions attend to the needs of a broader group (‘social’) rather than to limited, personal interests”. Consequently, prosocial leadership has been viewed as constructive rather than destructive, leading effectively towards outcomes for the good of all and embracing positive key and common goals valued by the social collective (Lorenzi, 2004). However, for the prosocial paradigm to work, it is important that leadership also promote prosocial groups that embrace well-being and community-building initiatives for the good of all.

The crises we have been witnessing in recent times have shown that the future is uncertain. They also demonstrate society must promote an inclusive and responsible approach for our future (Batjargal et al., 2023; Dodd et al., 2022; Herbane, 2019; Ramli et al., 2023). For example, the climate crisis and sustainability agendas illustrate a critical need to engage with nature much more productively, in a way that protects and promotes natural resources rather than draining them (Dodd et al., 2022; Kalonaityte, 2018). Therefore, it is imperative that, as humans, we take a more inclusive look at the natural environment and our interactions with it (Kalonaityte, 2018). This leads to questions about how organizations should engage with nature, whether nature should have a seat at the table among organizations (Kalonaityte, 2018), and, if so, how that should be accomplished. It also pushes us to think about how organizations work with nature, sustainability in all its forms, and the relevance of nature for building a prosocial paradigm.

At the same time, questions arise, such as: how can this prosocial approach assist in shaping how people work in the future and in contexts of uncertainty? Entrepreneurship provides a context in which individuals are known to live with – and even thrive on – uncertainty. It is also a context that has seen more prosocial behaviour through crises. Ramli et al. (2023), for instance, demonstrate that during the pandemic, entrepreneurs became more prosocial in how they engaged with employees. This created benefits for employees, entrepreneurs and their ventures.

Interestingly, Mittermaier et al. (2023) indicate that the benefits of self-interest do exist in prosocial movements. In response to the many crises the world is dealing with, prosocial ventures, which are purposefully built to help those in need, have emerged and are evolving. Mittermaier et al. (2023) found that the suffering of others can be an incentive for individuals to launch prosocial ventures, advancing themselves in doing so. Also emerging from the work of Mittermaier et al. (2023, p. 985) is that individuals who engage in prosocial venturing can build “enduring ventures that address more long-term social problems.”

If, as Dodd et al. (2022) argue, academics should be looking at what can be done to advance scholarship, then additional research questions arise regarding how concepts of management and organization are taught; should educators be doing more to reflect on how they include prosocial behaviour into their education programmes? Can this be managed in a way that embraces the prosocial paradigm, so students are encouraged to become “agents of transformation” and build better futures for all? To what extent should educators encourage inclusivity and responsibility? Other critical questions relate to the theoretical perspectives on which management and organization studies are drawn, including how does a prosocial paradigm work with other theoretical perspectives, such as stewardship theory, and in other organizational contexts, such as family business? The questions posed would benefit from longitudinal research to determine how the prosocial paradigm plays out over time.

3.6 Digitalization: from surveillance capitalism to constructive competition in the digital space (Erkki M. Lassila)

The implications of digitalization on management accounting and control have received increasing attention during the past decade (see e.g. Arkhipova et al., 2024; Knudsen, 2020; Möller et al., 2020). Researchers in this field have highlighted how the emergence of big data technologies, digital platforms, artificial intelligence and other digital tools and technologies have influenced organizational practices and the domain of performance management and MCSs (see e.g. Arnaboldi et al., 2017; Bhimani and Willcocks, 2014; Moll and Yigitbasioglu, 2019). Along with the development of digital tools and technologies, a rapid expansion of the digital space (Lassila, 2022) into new areas of individuals’ everyday lives has enabled the emergence of new data points that were previously unreachable and disconnected from organizational performance management and control practices (Bhimani, 2020; Nappert and Bamber, 2023).

While digitalization has increased organizations’ knowledge base, the attitude towards it seems to be ambivalent and polarized. On the one hand, digitalization can be seen as an opportunity for the improvement of organizational practices (e.g. Ibrahim et al., 2021; Warren et al., 2015). On the other hand, the implications of digitalization and surveillance of everything can be viewed as problematic (Kellogg et al., 2020; Quattrone, 2016). Digital tools and algorithms, like other human-made artefacts, can never be “value free”, as they are socio-material (Orlikowski and Scott, 2008) and thus always embedded with human values and intentions (Kitchin, 2019). Financial aims and objectives often become embedded into the design of digital applications (Lassila et al., 2019). If those are coupled with opportunistic and selfish intentions without considering possible externalities, digitalization can serve as a driver for what has been labelled “surveillance capitalism” [12] (Zuboff, 2019) and “psychopolitics” [13] (Han, 2017). As traditional assumptions related to the purposes of performance management and MCSs in organizations have directed the focus on individual’s self-interested preferences, it can be speculated if the use of these systems has had some performative implications on the development trajectory (Christner and Sjögren, 2022) of digitalization and its present form.

The prosocial paradigm seems to encompass several characteristics that could provide solutions to many of the concerns related to the traditional neoclassical economic theory approach to utilizing the opportunities of digitalization. In this context, prosocial organizations should focus on exploring new digitalization opportunities to foster prosocial behaviour within and beyond their organizations, rather than seeking new and improved opportunities in digital performance management and control to align individuals’ self-interested preferences with organizational objectives. This type of reasoning should be in the interest of organizations, as Atkins et al. (2019) have indicated that prosocial collectives are more productive, creative and innovative than groups dominated by self-interest.

As explained in the front end of this article, the core premise of the prosocial paradigm is that self-interested behaviour outperforms prosocial behaviour within a group, but prosocial groups outperform groups dominated by self-interest (Wilson and Wilson, 2007). Such a prosocial approach to digitalization, which seeks to find new opportunities for creating conditions in which between-group selection dominates within-group selection, would well be aligned not only with the interests of the organization but also with the interests of society and the environment. According to this paradigm, organizations that aim to be successful and profitable in competitive markets should explore the emerging opportunities of digitalization for prosocial purposes rather than for the purpose of exploiting others. Acting this way, organizations might diminish or even avoid many problematic issues related to the intrusive surveillance and monetization often linked to the digital evolution (Han, 2017; Zuboff, 2019). If the cultivation of prosocial behaviour were embedded and rooted in organizations’ strategy, performance management and control practices, could it make a difference in how accounting materializes in digital tools and technologies (Berlinski and Morales, 2024)?

It is an empirical question as to whether and how using digitalization for organizational endeavours with the prosocial paradigm, compared to the traditional paradigm, leads to better outcomes. Therefore, it is important to initiate research that employs the prosocial paradigm as a lens through which researchers could study organizations regarding their ways of utilising digitalization for the purposes of performance management and MCSs.

3.7 Finance: prosociality in financial markets (Yuval Millo)

Financial markets are usually associated with institutionalized selfish behaviour. Trading and intermediation in such markets are typically motivated by improving one’s position at the expense of others, trading interlocutors or others. That said, research in economic sociology, and more specifically, in the sociological study of financial markets, shows that informal but highly prevalent prosocial practices and ways of thinking abound in financial markets (Carruthers and Kim, 2011; Davis and Kim, 2015). This discrepancy between empirical findings and the widely accepted image of financial markets provides an initial basis for future research on the less recognized ways in which prosocial behaviour underpins the market economy.

Below, I illustrate a few empirical examples that discuss prosocial behaviour among actors in financial markets. Research shows that the advice given by sell-side analysts to buy-side investors is rooted in trust (Millo et al., 2023). This is so because the information communicated and the knowledge generated in such interactions are sensitive and expose both sender and receiver to possible negative implications if the information is exploited. This trust is based on the years-long, and frequently decades-long, development of networks of interpersonal ties.

The evolving interpersonal relationships between buy-side and sell-side actors are regarded as economic resources by all parties, but critically, these economic resources are not exploitative but instead demand and exhibit prosocial behaviour. In particular, both sides emphasize the importance of treating others fairly and transparently in order to maintain ties. This informal prosocial infrastructure is a basis for more formal connections between sell-side analysts’ firms and institutional investment firms. Here we see that the interorganizational ties are related to more prosocial governance practices. Financial organizations that develop and maintain long-term prosocial connections with other organizations tend to have more retrospective and transparent governance mechanisms and are less dependent solely on profit-related considerations when making decisions. For example, decisions regarding the creation and severance of commercial ties.

These two intertwined phenomena have implications for both research and the potential reorientation of financial markets’ institutions. First, as researchers acknowledge and incorporate the insight implied above that important social and organizational structures in the markets are based on de facto pro-social principles, the academic examination of the financial market would regard these institutions not merely as arenas for the expression of selfish behaviour but instead as organizational settings where both prosocial and selfish behaviour and practices are exhibited. As such, we should look at financial markets as a “hybrid forum” (Farías, 2016), where one cannot presuppose that a certain paradigm about human nature would dominate, but as a field where different paradigms struggle for dominance or where different paradigms coexist. Second, when considering the possibility of moving towards a more prosocial economy, financial markets, being a central part of today’s capitalistic system, need to play an important role in such a transformative process. The already-existing clusters of prosocial behaviour can serve as potential breeding grounds for inter-organizational imitations through which prosocial practices would spread. More specifically, as a potential goal of transforming financial markets is that they would support and perhaps even facilitate a more prosocial economy, this broad task could be broken down into the task of identifying influential prosocial behavioural clusters and encouraging and promoting these so that other organizations would pick up similar behavioural traits. Relatedly, since such prosocial behaviours are based on biography-length temporalities that evolve and are established over career-length time periods, such imitation and dispersion of prosocial practices cannot instil these directly but instead should aim to bring about the conditions that would help such practices to evolve over time.

3.8 Public sector: on the implementation of public (financial) management reforms from the perspective of the prosocial paradigm (Peeter Peda)

Public sector management reforms that are launched with great expectations often result in tiny benefits (Grossi et al., 2022). As a root cause of problems, the private sector business logic and management (control) mechanisms transferred to the public sector are found to be incompatible with the public service ethos, an important dimension of job motivation (John and Johnson, 2008). Nevertheless, it is difficult to argue against the viewpoint that politicians and officials should care about efficiency and effectiveness that are relevant in the private sector. In this context, I argue that one key question for reformers is about how to enhance goal prioritization during public planning and budgeting processes. The other key question for public sector reformers (employers) relates to the ways in which their employees would work towards these prioritized goals under new reform conditions. Hence, organizational culture and employee behaviour must be discussed as factors affecting the outcome of public sector reforms.

Here, the prosocial paradigm could serve as a useful prism of analysis for accounting reform research, as well as a practical planning criterion for performance management initiatives. First, the core idea of prosocial behaviour is not fundamentally different from the broader notion of public value (Bracci et al., 2021) and its co-creation, which is targeted by public sector organizations. Public servants could be assumed to behave prosocially. Second, it is important to outline that, essentially, prosocial behaviour is not in conflict with the aspiration of performance improvement in public sector organizations. Neither does it exclude competition in the public sector per se. In turn, a prosocial mindset can be destroyed by public sector employers who treat their employees as self-interested actors, prompting them to behave in an egotistical fashion without contributing to the welfare of society at large. Hence, for any government reform to have a positive long-term effect on society, it should look at how it changes individuals’ behaviour, specifically how it promotes or protects a culture of prosocial performance in and outside of the public sector.

Most of the reforms have been initiated by crises and pressures to reduce public expenditures (Jõgiste et al., 2012). These are turbulent and uncertain times surrounded by super-wicked problems, such as climate change (Levin et al., 2012). Looking through the lens of the prosocial paradigm, current sustainability crises, along with earlier reform lessons, put forward several focal points for future research. First, the question of how to help current welfare states transform into eco-welfare states is crucial (Hirvilammi et al., 2023). New budgeting and reporting practices, such as climate budgeting, can be seen emerging as part of polycentric urban governance (Vedeld et al., 2021). It remains an interesting area of investigation to analyse how these initiatives, in the name of a common goal, transform various doings, beings and resources and contribute to the creation of a prosocial performance culture in a transformative capacity (Hirvilammi et al., 2023).

Second, budgeting is the most popular part of public sector financial management, capturing most of the financial decision-making in public sector organizations (Bergmann, 2009). Following the calls to rethink the role of public sector accounting and to focus on public value (Grossi et al., 2022), future research could analyse how prosocial behaviour is created/facilitated or destroyed/hindered through interactions in the budget process. Methodologically, attention could be paid to governance and communication interactions between social actors as spontaneous microprocesses of organizing, especially during budget preparation, negotiations and adoption.

Finally, in the context of budget deficits, suggestions have been made that governments should reduce the number of public servants. However, one should remember Drechsler’s (2009) point that society’s best hope for managing crises is to have a highly motivated, capable, responsible and long-term-oriented civil service sector. In short, hope builds on behaving prosocially as performance-oriented public servants. Therefore, public sector accounting research should pursue an open approach and analyse the MC practices of successful prosocial companies in the private sector. What is valuable in the private sector that can provide an example for politicians and public managers to learn from, and, of course, vice versa? Considering the prosocial market economy, perhaps it is time to return to some core values, which are important both in the public and private sectors.

3.9 Environmental, social and governance research: a prosocial perspective and future development (Zachary Sherman)

Environmental, social and governance (ESG) standards are crucial for assessing a company’s commitment to sustainability and ethical practices (van Duuren et al., 2016). This emergence recognizes the connection between organizations, industries and the global community. The prosocial paradigm as a novel management philosophy emphasizes cooperation, transparency, and sustainable conduct and, therefore, echoes ESG as a framework aimed at protecting the common good (Atkins et al., 2019; Ostrom, 1990).

While ESG focuses on evaluating a company’s impact and sustainability, the prosocial paradigm addresses the motivations behind organizational behaviour. Prosociality extends beyond surface-level standards and emphasizes genuine collaboration and commitment to the common good (Atkins et al., 2019). Some social and organizational accounting studies (Brunsson, 2002; Cho et al., 2015; Gray, 1992, 2010) are in line with a deeper examination, while much sustainability accounting research (Laine and Vinnari, 2017; Vinnari and Vinnari, 2022) exists somewhere between conceptual frameworks and underlying behaviour.

Cho et al. (2015) provide an entry point by discussing organized hypocrisy in sustainable reporting. This research highlights how organizations might project a commitment to ESG responsibility while engaging in various practices that contradict their stated values (Cho et al., 2015). This raises critical questions about the reliability of sustainability reporting and the need for further exploration. Cho et al. (2015, p. 81) state, “Managing conflicting stakeholder demands can therefore tempt organizations to adopt specific stakeholder strategies that lack internal consistency, raising fundamental concerns over the behavioural integrity of the organization.” This builds on organized hypocrisy and decision-making research (Brunsson, 2002, 2007), with empirical examples from Europe and the USA (Cho et al., 2010; Laine, 2010). Applying the prosocial paradigm in these contexts may help address the issue of internal consistency and hypocrisy while also highlighting organizational differences.

Integrating ESG reporting and prosociality builds on social accounting research exploring social and ethical dimensions of corporate activities (Gray, 1992, 2010). Concepts such as social disclosure, accountability and responsibility resemble the prosocial paradigm and offer a strong foundation for a new stream of research. Gray’s (2010) review of social accounting literature suggests that advancing the field requires more theorizing paired with the experience of engagement. When paired with compelling empirical evidence, the prosocial paradigm, or prosocial market economy, may offer a path forward.

The domain of social and environmental accounting includes research on sustainable reporting materiality and the failure of reporting standards (Cooper and Michelon, 2022; Flower, 2015). Including prosocial themes in this domain is already well-established outside of ESG reporting. Specifically, Vinnari and Vinnari’s (2022, p. 6) work on sustainability and non-human animals demonstrates how their new framework could “hold organizations accountable through mandatory reporting.” This research aligns with prosocial themes, engaging with them implicitly (Laine and Vinnari, 2017; Vinnari and Vinnari, 2014).

Looking forward, ESG research through the lens of the prosocial paradigm, or prosocial market economy, raises several questions. Researchers could examine organizational behaviour to understand how the genuine collaboration advocated by the prosocial paradigm manifests within organizations. Does prosociality enhance teamwork, innovation and employee well-being, or do other factors shape its impact? Additionally, the prosocial paradigm offers a way to scrutinize the authenticity of ESG reporting and sustainability efforts, something critical to the prosocial market economy. How do organizational cultures reconcile their stated ESG commitments with actual practices? Can the prosocial lens unveil instances of organized hypocrisy identified by Cho et al. (2015) and others, shedding light on organizational conduct’s internal consistency? Furthermore, researchers could explore factors driving prosocial behaviour within organizations. What motivates individuals to contribute to collective well-being, and how do leadership styles and organizational structures influence prosocial values? Such questions explore the interplay between prosociality, organizational dynamics and societal impact.

This future line of inquiry promises to enhance our understanding of organizational ethics, responsibility and motivations concerning ESG reporting and other sustainability activities. Building on diverse social and organizational accounting research, this integrated approach sets the stage for fostering a more optimistic and socially responsible ethos within organizations. Ultimately, shifting this organizational ethos has the potential to contribute to broader, positive societal transformations.

3.10 Evolutionary science: reflections on the proposed paradigm shift from the broader evolutionary perspective (David Sloan Wilson)

This article, which argues for paradigmatic change in the field of performance management, is a welcome addition to a larger paradigm shift that is already in progress. The larger shift is away from the reductionism and individualism associated with neoclassical economics, which have influenced the field of performance management along with so many other topic domains. However, it is not enough to gravitate away from one paradigm; there must also be an alternative paradigm to gravitate toward.

The new paradigm is centred on the concept of prosociality as something that does not emerge from self-interested behaviour (in contrast to the metaphor of the invisible hand) and therefore must be directly selected at multiple scales and contexts. Hence, what is called the prosocial paradigm and prosocial market economy in this article relies upon developments in evolutionary science that explain the genetic evolution of prosociality in all species (Wilson and Wilson, 2007) and the cultural evolution of prosociality in our own species (e.g. Henrich, 2015; Richerson and Boyd, 2005). I call this “completing the Darwinian revolution” (Wilson, 2019) and not only does it explain the broad sweep of human history (Turchin, 2015) but also provides a new foundation for economics and public policy (Wilson et al., 2023, 2024; Wilson and Snower, 2024). I am delighted that a group of performance management experts is assimilating and developing the prosocial paradigm in their own way, and I offer the following observations on their effort.

A new common sense: The neoclassical paradigm makes sense of the world in certain ways that inform action. If individuals are “self-interested utility maximisers who might shirk their organizational responsibilities for personal gain” (Pfister et al., current article, p. 7), it becomes common sense to use financial incentives as the primary tool for aligning individual self-interest and to pit individuals and subunits within the organization against each other.

The prosocial paradigm makes sense of the world in a completely different way. Throughout our history as a species, individuals never lived alone. They always lived in highly cooperative groups, even when those groups were warring with other groups. This means that acquiring a group identity and subordinating one’s personal interests to the interests of one’s group is perfectly natural. Cooperative groups are vulnerable to failures of coordination and disruptive self-serving behaviours, but these can be minimized by rules of governance that worked for our ancestors and can work equally well for us in our modern organizations.

The actions that flow naturally from the prosocial paradigm provide a new toolkit for performance management and reveal the neoclassical toolkit to be pathological in many respects. The target article and references cited therein should be consulted for details. Here, I want to emphasize how much is accomplished at the level of common sense. Even moderate exposure to the prosocial paradigm is sufficient to create a new sense of possibilities, which can then be followed up in a more rigorous fashion.

On the pragmatic focus of performance management and management control systems. My work on rethinking the theoretical foundation of economics (most recently summarized in Wilson and Snower, 2024) is important for capturing the intellectual high ground but often seems abstract and far removed from practical applications. In contrast, the field of performance management begins with practical applications: real-world organizations that vary in their performance, providing a laboratory for theory-informed experimentation. This makes the target article highly complementary to my work. In the future, the ideal scenario would be for performance management experts to collaborate closely with scientists at the cutting edge of human cultural evolutionary theory.

On solving the archipelago problem. Current knowledge, both academic and applied, is like a vast archipelago of many islands with little communication among islands. As with mutations, good ideas and practices originate and spread on the basis of their success but then encounter geographical, cultural and disciplinary barriers beyond which they are unknown. Each “island” has its own vocabulary and explanatory framework that are like foreign tongues to inhabitants of other “islands”. The prosocial paradigm can transcend these disciplinary boundaries, and this article provides a useful illustration within the field of performance management. The multi-voiced reflections of this article include topics as diverse as formal business organizations, higher education, leadership training, digital technologies, financial markets and the public sector. I look forward to the field of performance management playing a lead role in the larger paradigm shift that is in progress.

4. Conclusion

4.1 Summary of proposition

In this multi-voiced article, we suggest that one of the primary purposes of performance management and MCSs should be to establish prosocial behaviour and prosocial groups in organizations in the pursuit of attaining organizational goals. We argue that prosocial behaviour – behaviour that benefits others or society at large – is the core activity of value creation that contributes to economic performance and sustainability in organizations. Building on evolutionary science (e.g. Wilson et al., 2013, 2023; Wilson and Wilson, 2007), the prosocial paradigm we propose develops the premise that while self-interested behaviour may outperform prosocial behaviour within a group, prosocial groups outperform groups dominated by self-interest.

This new paradigm builds on the realization that fundamental behavioural change is needed in the market economy to ensure a sustainable future for humanity and nature. Such a cultural evolution towards what we call the prosocial market economy is driven by an economic rationale and demands an institutional shift in theory and practice, moving away from assumptions that foster egocentrism and towards those that enhance and normalize prosociality within groups, organizations and societies as a whole. Prosociality, in our view, is a basic societal value that protects life on the planet and deserves the same relevance and discourse as other fundamental societal values such as equality, ethics, freedom, peace and justice. Below, we provide implications for research, practice, policy and education derived from the proposed paradigm shift.

4.2 Implications for research

The framework to study the prosocial paradigm (see Figure 1 in Section 2.4) serves both normative and descriptive purposes. It builds a foundation to study the linkages between performance management, that is, the design and use of MCSs (e.g. Ahrens, 2018; Ahrens and Chapman, 2004; Anthony, 1965; Ferreira and Otley, 2009; Hartmann et al., 2020; Malmi and Brown, 2008; Merchant, 1985; Merchant and Van der Stede, 2023; Otley, 1980, 1999, 2016; Pfister et al., 2023; Simons, 1995) and prosociality. As discussed in Section 2.4, this opens research opportunities for explorative, explanatory and evaluative research and any research paradigm, including positivist, interpretive and critical research, and those using qualitative, quantitative and interventionist methods. For positivist research, the framework can help in developing and testing hypotheses about organizational antecedents, processes and outcomes of prosocial groups using surveys, experiments and qualitative designs. Interpretive research can employ ethnographies and case studies to understand the cultural and contextual factors influencing prosocial behaviour and prosocial groups, theorizing rich explanations of the observed social phenomena. Critical research can use the framework to examine power dynamics and advocate for transformative change by highlighting and challenging power structures that inhibit prosocial behaviour. Moreover, interventionist and action research can guide initiatives to enhance prosocial behaviour, for example, by co-creating with organizations the implementation of the CDPs and observe and assess the outcomes.

Importantly, the framework offers the possibility to synergise and accumulate knowledge across research paradigms. Given in-depth contextual understanding is often necessary to make sense of prosocial intentions, behaviours and outcomes (Atkins et al., 2019; Bolino and Grant, 2016), qualitative field studies and ethnographies are particularly suitable for exploring prosocial performance management in situ. Those approaches allow researchers to observe and theorize the underlying meaning structures of organizational behaviour in day-to-day organizational realities (Ahrens and Dent, 1998; Dent, 1991). Theoretical generalizations from such research can be mobilized by other approaches, such as survey and experimental research, to explore the generalizability and boundary conditions across larger populations as well as in controlled settings.

Regardless of the chosen approach, we advocate for research that enhances the discernment of prosocial performance management practices. In this context, it is important to stress that prosocial groups and prosocial behaviour are already widely established in organizations, markets and societies. However, they tend to be meshed with opportunistic assumptions and behaviours. To contribute to a cultural evolution requires, in our view, research on the conditions and mechanisms of performance management that facilitate prosocial behaviour and eradicate opportunistic behaviour. Drawing on evolutionary science, such research could draw on the triad of variation, selection and replication (Wilson et al., 2023) to explain whether, how, and why prosocial performance management practices evolve and are replicated within specific organizations, industries and other collectives.

We view the study of groups (e.g. teams in organizations) as a useful starting point to investigate how MCSs can facilitate prosocial behaviour and establish prosocial groups in different contexts. Two key contributory problems to be focused on are the measurement of individual performance and the use of rewards based on these measures. We suspect that to establish prosocial groups, performance measures should be focused on group or team performance and behaviour and that rewards, particularly variable monetary rewards, should also be based on this. This exploration could be carried forward to successive higher levels, ultimately to the top organizational level, with systems such as profit-sharing rather than individually determined amounts (e.g. an annual bonus for all employees or partners based on an equal share of profits as a proportion of base salary).

Drawing on the multi-level perspective of evolutionary science (e.g. Wilson et al., 2023), the prosocial paradigm raises questions about the nature of competition in the prosocial market economy. A prosocial group, as defined here, acts in alignment with sustainability. But how does the shift from within-group selection to between-group selection change competition among groups? To what extent and in what manner do prosocial groups compete with other groups? What are the features of such competition, and how do those features differ from groups dominated by self-interest? How do prosocial organizations protect themselves from being exploited in the market? How do groups dominated by self-interest become sanctioned in organizations, markets and society? These are, in our view, relevant questions to explain how competition in markets changes when market participants increasingly embrace the value of prosociality.

The reflections in this article provide many further entry points to explore the prosocial paradigm in organizations. The authors address various domains in and beyond MCS research. Drawing on the multi-level perspective, Ahrens raises a variety of important questions for future MCS research. Dambrin connects the prosocial paradigm to critical research and power dynamics within and beyond organizations. Looking at the public sector, Granlund reflects on how MCSs in academia enhance or undermine prosociality, and Peda raises questions about prosociality related to the implementation of public (financial) management reforms. Lassila, Millo and Sherman reflect on how the prosocial paradigm relates to digitalization, the finance industry and ESG reporting. Darwin and Jack apply the prosocial paradigm to a broader management perspective and highlight the importance of leadership and education in solving the grand challenges of our time. Finally, Wilson positions the prosocial paradigm in evolutionary science and elaborates on how it relates to the larger paradigm shift that is under way.

The reflections are thought to provide a variety of personal perspectives on how the prosocial paradigm could be applied in academic discourse. Importantly, the list is not exclusive. There are numerous other market participants, such as pension funds, consulting firms or auditing and assurance services, among others, that could be explored to ascertain their role in promoting or impeding prosociality in the market economy. We hope these ideas inspire further academic discourse on the prosocial paradigm in accounting and management research.

4.3 Implications for practice

The prosocial paradigm offers several implications for practitioners. First, although this new paradigm for economic performance and sustainability promotes moving away from self-centeredness and towards a focus on serving others, almost paradoxically, it starts with oneself. Regardless of one’s role as an executive, manager, employee, public servant, investor, politician, consultant, auditor, scholar, consumer or any other market participant, embracing this new paradigm necessitates a personal conviction that change is necessary, and everyone plays a crucial role in driving this change. This requires a critical examination of our cultural programming and our utilization of our social influence to foster responsible relationships with others and the environment. Are the practices we engage in centred around ego-driven self-preferences that might cause harmful trade-offs for the team, the organization or the common good? Or do they aim to establish prosociality across all levels? Are our behaviours and the institutional structures we design and use constructive or destructive to others and nature? Do we confront others within and across organizations when the behaviour appears destructive? This paradigm calls for any market participant to enact self-responsibility and self-leadership and to expand an awareness that harming others and nature essentially equals harming oneself. Prosociality, in this context, involves fostering a culture of performance management that encourages individuals to strive for self-improvement (see Table 2).

Second, senior leaders have a particularly crucial role in establishing a prosocial performance culture. Those at the top of the organizational hierarchy often best display what the current performance culture values in a team or organization. What kind of tone gets displayed at the top? For example, are excessive CEO pay and hypocrisy displayed, or is prosocial leadership shown? Moving from the traditional paradigm to the prosocial paradigm changes to some extent what we value as good performance and how we manage, measure and evaluate performance. The decision to become a prosocial team or a prosocial organization therefore affects everyday behaviours and decision-making, including vision and mission, strategy, and how the organization operates as an entity. The shift in focus creates a different value-orientation in the type of behaviour that is incentivized and promoted, and it influences what types of behaviours are disqualified in organizations.

Third, the CDPs of prosocial groups (see Table 1 and Figure 1) provide guidance on how to establish prosociality and build the cultural conditions and mechanisms that help eradicate opportunism in organizations. Notably, those principles essentially represent common-sense best practices. The academic and professional management literatures largely confirm that success in business depends on practices such as establishing purpose and a sense of identity (CDP1), ensuring equitable distribution of contributions and benefits (CPD2), enacting inclusive and fair decision-making (CDP3), building transparency (CDP4), applauding prosocial behaviour and sanctioning opportunistic behaviour (CDP5) and resolving conflicts quickly (CDP6). However, to ensure prosociality and eradicate opportunism, a holistic implementation of those CDPs is required – which can be challenging. To achieve such cultural change, leaders need to have an open attitude to experiment with CDPs and explore their implementation. It is not a one-size-fits-all solution. Ostrom (2005) emphasizes that the CDPs are context-dependent and that practitioners should not misunderstand them in their application. Hence, how the CDPs are implemented depends on the specific organizational and industrial circumstances. However, a common core driver is to foster the narrative of prosociality in relations within and beyond the organization, and in doing so, counteract behaviours that are opportunistic.

Fourth, contrary to what one might expect, a prosocial performance culture is not “softer” per se than a performance culture driven by the traditional paradigm. In some ways, it is rather the opposite. To create an environment where people feel safe to act prosocially, it requires a tougher treatment of opportunistic behaviour. Organizational members cannot shy away but must confront those who act opportunistically (see CDP5). While such confrontation may require courage and may create tension, we assume that, in the long run, most organizational members support a prosocial performance culture. In contrast, a culture dominated by selfish and antisocial behaviours tends to devalue and frustrate many members. Therefore, depending on the composition of the group, establishing a prosocial performance culture is likely to be embraced by the majority.

Finally, the prosocial paradigm builds on the assumption that prosociality – which integrates sustainability – is not a costly burden for organizations but a solution for long-term value creation and high economic performance. Market competition in the prosocial market economy is focused on the strategic assumption that the highest outcome is achieved by being of service and expressing oneself authentically. Hence, compared to the traditional paradigm that stresses cost-efficiency in markets, this new paradigm builds on competition for prosociality.

4.4 Implications for policy

The implementation of the prosocial paradigm relies on an institutional environment where the specific policies that influence the performance of organizations align with prosocial behaviour. Therefore, in our view, organizations in a prosocial market economy rely both on the regulatory space to optimally self-govern prosociality and on the legal and institutional support through which opportunism is sanctioned and prosociality is incentivized and rewarded.

In this context, regulatory and multinational bodies can define the desired organizational and societal outcomes for a sustainable future, but they can only reinforce them to a certain extent (Atkins et al., 2019; Ostrom, 1990). The effectiveness of these aspirations is often realized through the self-governing mechanisms within organizations. Drawing on CDPs 7 and 8, organizations depend on the regulatory space to pursue self-governance through performance management in organizations.

Regulatory impact assessment can be an important tool for policymakers when formulating new regulatory proposals. This could include an ex-ante assessment of how the proposed legislation and regulations will affect prosocial behaviours at the local, regional or national levels. Drawing on the prosocial paradigm and the CDPs, laws and regulations could be critically examined to determine whether they are built on the assumptions of economic man and the related exploitative market logic, or whether they support prosociality in organizations and markets. Corporate tax law could be an important area for such an assessment. For example, are organizations incentivized to act prosocially in their choices about business partners, such as environmentally responsible service providers, suppliers and even customers? And are they incentivized sufficiently to serve customers in a manner that supports their health and protects them from exploitation?

4.5 Implications for education

The prosocial paradigm and the potential performative effects of theories have significant implications for educational policy. Research indicates that top managers with a business school background, rather than those with other backgrounds, seem more likely to act opportunistically towards employees (e.g. Acemoglu et al., 2022). Hence, acculturation to a specific paradigm and way of thinking starts in the education sector. Are business school students acculturated to focus primarily on their self-interests, or are they taught the importance of prosociality to achieve both economic performance and sustainability?

Business school courses (including their evaluation procedures) could be assessed to determine whether and to what extent they are based on the assumptions of economic man and to what extent teaching those assumptions might be harmful to the common good. This is particularly important for courses in fields that heavily rely on the assumptions of neoclassical economics, such as economics, accounting, finance and other business subjects. In this context, the prosocial paradigm also promotes interdisciplinary teaching that aims to expand learners’ awareness of nature and the power that performance cultures entail.

More generally, the prosocial paradigm offers the possibility to (re-) evaluate teaching curricula at all stages, from early childhood to higher education. Teachers could integrate prosocial behaviour into the curriculum to ensure that it is covered across subjects. This allows students to view prosocial behaviour not just as an isolated issue but as something important in all areas of their lives.

Teachers at any educational stage are role models for learners. However, they can only be role models if they practice and believe in prosociality themselves. This poses several questions: Are teachers trained to be aware of prosocial assumptions? Are performance measurement and management at educational institutions based on the CDPs and the logic of the prosocial paradigm? Do teachers have the resources available to act prosocially, especially when schools are confronted with efficiency demands and a lack of resources? Teachers in schools, universities and professional education play an important role in the development of the next generation of politicians, business managers, health care professionals and lawyers. Whether these individuals will be able to discern prosocial practices from opportunistic practices can significantly influence our societal norms across organizations and within families, relationships and societies.

4.6 Towards a prosocial market economy

To conclude, an important objective in solving the wicked problems of our time is, in our view, to systematically cultivate prosociality as an aspired norm in organizations, which will then help shape what we call the prosocial market economy. Neither top-down regulation nor a laissez-faire market can sufficiently tackle opportunistic organizational behaviour. However, self-governance that is driven by an economic logic needs to be cultivated in organizations. This presumably will not only change how we cooperate but will also influence how and when we compete as individuals, as groups and as groups of groups. In addition to the economic rationale for pursuing the prosocial paradigm, evolutionary science reveals that prosocial groups form more easily in emergency situations (Wilson et al., 2013). Looking at the economic, social, geopolitical, environmental and other significant crises the world currently faces, it is apparent that this emergency is already here – and that the time for a shift towards a prosocial market economy has come.

Figures

Figure 1.

A framework for studying the prosocial paradigm of performance management and management control systems

Table 1.

The core design principles of prosocial groups

	Core design principles of prosocial groups	Description	Function
1	Clear group identity and shared sense of purpose	Group members perceive a sense of belonging and a shared sense of purpose within the group that is worthwhile and aligns with sustainability. This group identity and purpose guide and coordinate shared values and social norms and help in understanding who is in or out of the group	Defines group
2	Equitable distribution of contributions and benefits	Group members perceive the demands (effort, workload) and benefits (rewards) of participating in the group to be distributed acceptably and equitably among its members	Ensures effectiveness by balancing individual and collective interests
3	Fair and inclusive decision making	Group members perceive the decision-making processes as fair and are involved in those decisions that affect them
4	Transparency of behaviour	Group members have the means to monitor agreed-upon behaviours and/or outcomes, and misbehaviours are quickly detected at a low cost to the group (based on peer monitoring rather than (coercive) top-down monitoring)
5	Graduated responding to helpful and unhelpful behaviour	Group members encourage helpful and cooperative behaviour in the group and respond appropriately to unhelpful and disruptive behaviour, which can lead to exclusion from the group
6	Fast and fair conflict resolution	While conflicts among authentically acting group members are expected (especially given they might have different interests and information), the group resolves conflicts in a fast and fair manner
7	Autonomy and authority to implement the previous core design principles	The group can take responsibility for managing its own affairs and has established processes to protect itself from outside influence that might constrain its ability to govern itself and implement principles 1–6	Ensures effectiveness while supporting engagement
8	Appropriate relations with other groups according to principles 1–7	The group has purposeful, equitable, inclusive, transparent, responsive, harmonious and autonomy-supportive relations with other groups; this allows all the other principles to be scaled and implemented in collaboration, cooperation and competition with other groups	Ensures graduated collaboration, cooperation and/or competition with other groups

Sources: Adapted from Ostrom (1990) and Atkins et al. (2019). See Atkins et al. (2019) for a detailed description of the CDPs

Table 2.

Comparison of performance management paradigms

	Performance management
	Traditional paradigm (old)	Prosocial paradigm (new)
Economic behaviour and performance
Premise	Aligning self-interested behaviour with the organizational objectives creates competitive groups and performance outcomes	Self-interested behaviour outperforms prosocial behaviour within groups, but prosocial groups outperform groups dominated by self-interest
		Prosocial groups are more productive, creative, innovative and act more sustainably than groups dominated by self-interest
Management control systems
Purpose	Combining MC practices to align the behaviour of self-interested individuals with the organizational objectives	Combining MC practices to cultivate prosocial behaviour and build prosocial groups (aligned with the CDPs) in the pursuit of organizational objectives
Role of self-interest
Rationale	Mechanisms that exploit individual self-interest are crucial	Establishing and maintaining prosociality is crucial. This leads to win-win situations where benefiting others simultaneously serves self-interest (in the long run) or involves doing good for others without any reciprocal expectation
Opportunism	Normalizes opportunism from an economic rationale by tolerating selfish and antisocial behaviours to some extent and in some contexts	Disqualifies opportunism from an economic rationale by managing and socially sanctioning selfish and antisocial behaviours
Competition and cooperation across groups	Competition and cooperation as they serve self-interest, sometimes through selfish and antisocial behaviours	Competition and cooperation among groups in a graduated manner, based on the CDPs
Performance logic
Primary aspiration	Personal and organizational achievements	Serving others
High performance	Aspiring to be the best as an individual, team or organization compared to the others	Aspiring to be the best self as an individual, team or organization for the others
Primary reward (other than financial)	Ego-gratification	Experience of making a positive difference in the lives of others through one’s work
Sustainable behaviour
Multi-level view	Self-interested trade-offs among levels that harm the future of humanity and nature	A multi-level approach that protects the future of humanity and nature
Premise	Groups dominated by self-interest tend to harm the protection of humanity and nature for the short-term benefit of the organization	Prosocial groups cultivate behaviour and decisions considering “the other,” thereby aspiring to balance the interests of the individual, team, organization and the protection of humanity and nature
Human-nature relationship	Humans are separate entities from one another and from nature (“identifying the self as a separate entity”)	Humans bear responsibility for one another and are connected and an integrated part of nature (“identifying the self as part of something larger”)
Societal long-term impact
Cultivation of values and social norms	Cultivates a narrative where opportunistic behaviour is seen as normal, and in some contexts even expected, aspired to and celebrated	Systematically cultivates a narrative where prosocial behaviour is seen as normal, expected, aspired to and celebrated
Assumptions about markets	Markets have always been relatively insensitive to environmental damage caused by organizations because of the self-interest of the actors involved	Markets will become more sensitive to environmental damage caused by organizations because the values and social norms in society shift towards more prosociality
Governance	Falls into the trap of the tragedy of the commons because neither regulation nor privatization alone can protect the common	Ingrains principles of self-governance and self-responsibility into the performance cultures of organizations to protect the common

Source: Authors’ own work

Notes

1. The term “economic man” (“homo economicus”) is generally credited to John Stuart Mill (1874) in his writing on the political economy in the 19^th century, while some of his critics first used the term. The term “man” in this context reflects neutral gender yet also the historical androcentric bias in economic theory (Bee and Desmarais-Tremblay, 2023; Ferber and Nelson, 2009).

2. In this article, opportunism is understood in its negative connotation, referring to exploiting situations or individuals for immediate or strategic advantage. However, we acknowledge that the term opportunism can also be interpreted as the ability to recognize and capitalize on opportunities that present themselves, without necessarily involving unethical behaviour.

3. In this article, we primarily use the broad terms ‘performance management’ and ‘management control systems’ (MCSs), which encompass closely related or narrower concepts used in the literature, such as performance management systems, performance measurement and management, and performance measurement systems.

4. Field statement examples are taken from field research projects by the first author.

5. Economic theory influenced MCS research, for example, by its branches of agency theory (e.g. Jensen and Meckling, 1976; Ross, 1973) and transaction cost theory (e.g. Coase, 1960; Williamson, 1975).

6. Altruism denotes self-sacrifice and helping others at the expense of oneself (Wilson, 2015).

7. While Hardin preferred regulation, the regulator remains inefficient and ineffective in facilitating the most engaging conditions for individual action, in determining the specific amounts of a resource, and in monitoring and appropriately reacting to non-compliance. Privatization, as a second option, cannot address some common-pool resources, such as air, and private property rights need to be allocated to owners who take care of the resources and do not over-exploit them, yet otherwise owners deplete the resources (Atkins et al., 2019).

8. The adaptation of CDPs 1–7 means that the focal group maintains relationships to other groups (even if in competition with them) that are in alignment with a sustainable future (CDP 1), have a perceived balance between effort and benefit (CDP 2), incorporate inclusive decision-making (CDP 3), supply transparency (CDP 4), provide graduated responses to (un-)helpful behaviour (CDP 5), exhibit fast conflict resolution (CDP 6), and have the autonomy and authority to maintain such relationships with other groups (CDP 7).

9. The measures tend to reduce multi-dimensionality and create performance conformance because their underlying performance measures often rely on selected dimensions of the performance only. They also shift the attention from substance and content to the socially constructed ranking identities. As a result, the objectivity of the measures tends to become taken for granted over time, and the underlying measurement limitations are ignored. To address measurement dysfunctions, Goretzki and Pfister (2023) report the emergence of performance narratives.

10. In evolutionary theory, the evolutionary process towards a more prosocial market economy can be studied through the Darwinian triad of variation, selection and replication (Wilson et al., 2023).

11. The academic and public discourse indicates an increasing awareness for sustainability (Baker et al., 2023; Bebbington et al., 2021; Cho et al., 2015; Dillard and Vinnari, 2019; Gray, 1992; Laine, 2010) and there is also early evidence that, for example, ESG disclosure is positively associated with firm performance under certain circumstances (Carnini Pulino et al., 2022; Fatemi et al., 2015).

12. Surveillance capitalism is an economic system and market form characterized by the collection and commodification of personal data to predict and influence behaviour for profit. It operates as a logic in action with unique economic imperatives that necessitate the presence of the digital environment (Zuboff, 2019).

13. Psychopolitics examines how political systems use psychological techniques and digital technologies to manipulate and control individuals’ emotions and behaviours, building on the Foucauldian notion of biopolitics by extending control into the realm of the psyche with the aid of contemporary technologies (Han, 2017).