Maximization, Incomparability, and Managerial Choice

2007 ◽  
Vol 17 (03) ◽  
pp. 497-513 ◽  
Author(s):  
Nien-hê Hsieh
Keyword(s):  
Decision Making ◽  
Stakeholder Theory ◽  
Market Value ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Single Measure ◽  
Long Run ◽  
Managerial Choice ◽  
Managerial Responsibility

ABSTRACT:According to one prominent view of rationality, for the choice of alternative to be justified, it must be at least as good as other alternatives. Michael Jensen has recently invoked this view to argue that managers should act exclusively to maximize the long-run market value of economic enterprises. According to Jensen, alternative accounts of managerial responsibility, such as stakeholder theory, are to be rejected because they lack a single measure to compare alternatives as better or worse. Against Jensen's account, this paper argues that choosing the alternative that is at least as good as other alternatives need not preclude managers from respecting considerations in addition to long-run market value. The paper argues that such considerations may be incorporated into managerial decision-making by introducing constraints and priorities into the process of maximizing long-run market value and by allowing for “clumpy” values.

scholarly journals Application of the theory of decision making under risk and uncertainty at modelling of costs

2010 ◽  
Vol 56 (No. 5) ◽  
pp. 201-208 ◽  
Author(s):  
M. Beranová ◽  
D. Martinovičová
Keyword(s):  
Decision Making ◽  
Financial Accounting ◽  
Cost Functions ◽  
Risk And Uncertainty ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Bayesian Theorem ◽  
Long Run ◽  
Short Run ◽  
The Cost

The costs functions are mentioned mostly in the relation to the Break-even Analysis where they are presented in the linear form. But there exist several different types and forms of cost functions. Fist of all, it is necessary to distinguish between the short-run and long-run cost function that are both very important tools of the managerial decision making even if each one is used on a different level of management. Also several methods of estimation of the cost function's parameters are elaborated in the literature. But all these methods are based on the past data taken from the financial accounting while the financial accounting is not able to separate the fixed and variable costs and it is also strongly adjusted to taxation in the many companies. As a tool of the managerial decision making support, the cost functions should provide a vision to the future where many factors of risk and uncertainty influence economic results. Consequently, these random factors should be considered in the construction of cost functions, especially in the long-run. In order to quantify the influences of these risks and uncertainties, the authors submit the application of the Bayesian Theorem.

Stakeholder Legitimacy

2003 ◽  
Vol 13 (1) ◽  
pp. 25-41 ◽  
Author(s):  
Robert Phillips
Keyword(s):  
Decision Making ◽  
Stakeholder Theory ◽  
Moral Obligation ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Preliminary Attempt

Abstract:This paper is a preliminary attempt to better understand the concept of legitimacy in stakeholder theory. The normative component of stakeholder theory plays a central role in the concept of legitimacy. Though the elaboration of legitimacy contained herein applies generally to all “normative cores” this paper relies on Phillips’s principle of stakeholder fairness and therefore begins with a brief description of this work. This is followed by a discussion of the importance of legitimacy to stakeholder theory as well as the general ambiguity of the term. A distinction is then drawn between normative and derivative legitimacy. Reference to this distinction helps distinguish between a relationship with the organization based on direct moral obligation and one based on the power to help or harm the organization. It is concluded that stakeholders who retain the ability to affect the organization are legitimate (derivatively), but that this legitimacy is derived from the moral obligation owed other (normative) stakeholders and that the two sorts of legitimacy are importantly different from one another. An example of the normative/derivative distinction at work in managerial decision making is elaborated upon and managerial and research implications are then suggested.

scholarly journals Leadership Styles for Foreign Operations

2005 ◽  
Vol 25 (2) ◽  
pp. 256-267
Author(s):  
Arthur Elliott Carlisle
Keyword(s):  
Decision Making ◽  
Leadership Styles ◽  
Foreign Country ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Long Run ◽  
Foreign Operations

The author discusses on the criteria to follow in choosing a style of leadership which is to be applied to foreign operations. In a country which is colonial in tradition, the authoritarian job-centered approach may be preferable. On the long run nonetheless, an organization wishing to be accepted in a foreign country can benefit enormously by using a democratic people-centered style in managerial decision making.

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