A NEEDS THEORY OF GOVERNANCE: TAKING TRANSACTION COST THEORY BACK TO HUMANISTIC ECONOMICS AND SELF-ACTUALISATION

In this paper we seek to integrate human needs and self-actualisation into the design of organisa-tional governance. We problematise the assumptions that guide established justifications for gov-ernance, thus providing an opportunity for this type of theoretical approach. Drawing on Maslow's human psychology, we consider the potentially regressive features of the prescriptions of transac-tion cost theory, particularly the new institutionalist approach, and suggest inclusiveness as a mode of coordination that firms may wish to pursue to enhance self-actualisation. The main value added of this contribution is to highlight the need to discern among modes of governance design, using criteria of welfare maximisation by enabling opportunities for self-actualisation within the firm, different from the transaction cost theory focus on internal efficiency.