Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States

by Albert O. Hirschman

I read this book for my professional paper, the day before the paper was due, on the recommendation of my advisor. I wish I'd read it before I wrote the paper. In fact, I wish I'd read it before I went to Ethiopia. Ah well. But it's a great book. It's not often that you read a book for school or work that's supposed to be on a technical matter and it ends up articulating a framework for thoughts that had always been disconnected. What remains to be seen is if it will find its way into the paper at this late date.

The book is about how when people are dissatisfied with a situation, they can leave the situation (switch to another group, product, etc.) or they can work to change the situation to become more to their liking. Economic thought talks a lot more about leaving the situation (exiting the market, pursuing a substitute, etc.). Political thought is based on how to change the situtation (as leaving it could be considered, in the most extreme form, secession or treason), and activating stakeholders voices. According to the author, loyalty is one of the key factors that makes someone decide to stay within a system and try to change it (like people have to churches, families that they view as disfunctional). Made me think about the "America, love it or leave it" arguement in a new light. It's also a very readable (and short) book. I'd recommend it to anyone trying to think about the "should I stay or should I go" idea in a new light, though the book itself primarily uses the public/private school debate and public sector failure examples.

"Two principal determinants of the readiness to resort to voice when exit is possible were shown to be:
(1) the extent to which the customer-members are willing to trade off the certainty of exit against the uncertainties of an improvement in the deteriorated product; and
(2) the estimate customer-members have of their ability to influence the organization."

"The short-run interest of management in organizations is to increase its own freedome of movement; management will therefore strain to strip the member-customers of the weapons which they can wield, be they exit or voice, and convert, as it were, what should be a feedback into a safety valve. Thus voice can become mere "blowing off steam" as it is being emasculated by the instituionalization and domestication of dissent... and exit can similarly be blunted."

"Once members have a slight preference for, say, voice over exit, a cumulative movement sets in which makes exit look ever less attractive and more inconceivable. As a result, voice will be increasingly relied on by members at a time when management is working hard to make itself less vulnerable to it."