Exit Voice And Loyalty

Exit, Voice, and Loyalty by Albert O Hirschman ISBN:0674276604

He makes a basic distinction between alternative ways of reacting to deterioration in business firms and, in general, to dissatisfaction with organizations: one-exit-is for the member to quit the organization or for the customer to switch to the competing product, and the other-voice-is for members or customers to agitate and exert influence for change "from within." The efficiency of the competitive mechanism, with its total reliance on exit, is questioned for certain important situations. As exit often undercuts voice while being unable to counteract decline, loyalty is seen in the function of retarding exit and of permitting voice to play its proper role.

short summary

Hirschman seems to say that an increase in the availability of "exit" options decreases the use/pressure of "voice". In this case of monopolies (public schools, railways, other government operations) this results in those organizations becoming worse over time.

  • One implication is that it's bad to create/allow more exit options. But bad for whom?

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