Download Managerial Incentives Henry Manne believed that companies

Managerial Incentives
Henry Manne believed that companies cannot become too incompetent or corrupt, as eventually their share price
would fall and they could be taken over by another firm that would get rid of incompetent management. Adolf Berle
and Gardiner Means believed that company managers have an incentive to feather their own nests and to undermine
shareholder wealth.
Can elements or parts of these theoretical perspectives have governmental applications? If so, which theory do you
think best describes the segment of American government known as the Congress and the Senate? Explain your
answer.
Which theory best fits your ethical perspective? Which theory best fits a particular group to which you currently
belong, or previously belonged?
In my opinion, Berle and Means' idea of government control being needed throughout the world of
business would have the most governmental applications. If such a theory did exist, and it was the
responsibility of the U.S. government to control all businesses, this would be very impractical. Trying to
develop a universal auditing principles and rules in itself would not work. Our Senate and Congress
should concentrate more on areas that affect all citizens, and not have to worry about the inner-workings
of all business. There is a time and place for government intervention, but to consider it for all businesses,
I find that almost a laughable task to try and take on.
My own personal theory belief lies with Manne's thinking. If one thinks of the major companies that have
gone bankrupt or been discovered to have major shady dealings, the number would be quite low. It is not
an everyday occurrence. Yes, innocent investors and customers can get hurt, but to think we would want
government regulation completely in the business world controlling everything that is done is not
something I consider necessary or even possible. It actually sounds somewhat scary.
Now, if I think about my years in the Marine Corps, this might be different. As a government entity, there
is total control over how things are run, what is spent, who we do business with, how much all servicemen
and women are paid, etc. I think this fits more of the thoughts Berle and Means had .