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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 .