ABSTRACT
The socioeconomic approach to management (SEAM), first disseminated in 1974, has been elaborated in recent years (Savall & Zardet, 2011a, 2011b, 2012, 2013) to better address the dynamic cycle of value creation and destruction processes in capitalist societies as well as the cyclical resurgence of these phenomena. The founding hypotheses of socioeconomic theory are:
Human potential is the only active factor of value-added creation, with technical and/or financial capital being precious tools but still sterile until activated by human potential.
Imperfections of the classical accounting model can be reduced and the relevance of decision-making improved through socioeconomic dynamic modeling.
Organizations create visible costs needed for production (e.g., materials, labor) of goods and services.
Organizational productive activities also create dysfunctions (e.g., poor working conditions) that engender hidden or implicit costs (e.g., absenteeism, staff turnover) that produce financial consequences (e.g., excess salary, overtime costs).
Crises emerge at all levels of analysis (unit, organization, nation) when hidden costs are high and impede effective organizational development and change.
Hidden costs can be harnessed and hidden human potential can be released by identifying and overcoming dysfunctions.
