in

ARTICLE LINK – Professionalism, Agency, and Market Failures

According to the market failures approach to business ethics, beyond-compliance duties can be derived by employing the same rationale and arguments that justify state regulation of economic conduct. Very roughly, the idea is that managers have a duty to behave as if they were complying with an ideal regulatory regime ensuring Pareto-optimal market outcomes. Proponents of the approach argue that managers have a professional duty not to undermine the institutional setting that defines their role, namely the competitive market. This answer is inadequate, however, for it is the hierarchical firm, rather than the competitive market, that defines the role of corporate managers and shapes their professional obligations. Thus, if the obligations that the market failures approach generates are to apply to managers, they must do so in an indirect way. I suggest that the obligations the market failures approach generates directly apply to shareholders. Managers, in turn, inherit these obligations as part of their duties as loyal agents.

https://www.cambridge.org/core/journals/business-ethics-quarterly/article/professionalism-agency-and-market-failures/596BBC3EB7F3578B09D6EFA80CE2BEC0

What do you think?

Written by Dylan Watson

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Comments

0 comments

ARTICLE LINK – Dressing up for Diffusion: Codes of Conduct in the German Textile and Apparel Industry, 1997–2010

ARTICLE LINK – Wealth Effects of Rare Earth Prices and China’s Rare Earth Elements Policy