Abstract

Political theorists frequently utilize the ‘firm–state analogy’ (FSA) to support the arguments for democratic governance in firms. This article presents the FSA as an analogy with both justificatory and epistemic functions. Its justificatory function provides valid justificatory strategies for workplace democracy, while its epistemic function offers models that shape the understanding of corporate power. In this article, four limitations of the justificatory function of the FSA are identified: (i) the problem of ambiguity, (ii) the boundary problem, (iii) the issue of normative redundancy, and (iv) the universality problem. Furthermore, the article argues that the epistemic function of the FSA fails to adequately address some of the most concerning forms of corporate power wielded by large, particularly multinational, corporations in the realm of international trade. As a result, the FSA misses crucial reasons for the normative desirability of democracy in corporate governance.