Professionalism, Agency, and Market Failures

Business Ethics Quarterly 26 (4):445-464 (2016)
Download Edit this record How to cite View on PhilPapers
Abstract
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.
Categories
PhilPapers/Archive ID
VONPAA-4
Upload history
First archival date: 2017-03-27
Latest version: 4 (2019-06-26)
View other versions
Added to PP index
2017-03-27

Total views
408 ( #16,298 of 64,146 )

Recent downloads (6 months)
46 ( #16,805 of 64,146 )

How can I increase my downloads?

Downloads since first upload
This graph includes both downloads from PhilArchive and clicks on external links on PhilPapers.