MakeDecisOther4layoutss - Making Decisions on Behalf of...

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Making Decisions on Behalf of Others Who or What Do I Select as a Guide? - My boss - The shareholders - Other stakeholders - Basic principles about conduct and its impacts - What is good for me - What is good for society A Dilemma: - If I believe that markets produce the best outcomes, all my decisions should be based on consumer sovereignty -- what is best for market participants, e.g., buyers and sellers. - If I believe that benefit to owners, i.e., shareholders, is the primary criterion, then I may make decisions that maximize profit but which may not be best for consumers of my product (e.g., the Rezulin case). Hence the conclusion: When owners have sovereignty, consumers may not. - If I choose any other stakeholder to serve (e.g., workers, environmentalists, the local community, etc.), then the same logic will apply -- free market choice, which we call consumer sovereignty, fails. - Conclusion: Firms under owner or other sovereignty violate the values of the market, i.e., consumer sovereignty. Thus market ideology is a poor guide for behavior in firms. What should I do? 1724-1804 Immanuel Kant The Categorical Imperative - No exceptions; binding demand to be moral - How tell a moral principle: - Universalizability : It applies to and is moral for every person. - People are ends not means : Rational beings - people - must be treated as ends not tools to achieve one’s self- interest. - People must be able to choose what to do freely ; they have autonomy. Moral choice is not imposed by others. Notice that the categorical imperative does not tell you what to
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This note was uploaded on 10/22/2009 for the course BUSENV 0060 taught by Professor Barrymitnick during the Fall '09 term at Pittsburgh.

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MakeDecisOther4layoutss - Making Decisions on Behalf of...

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