Motives and Morals

We believe the arguments of Chapter 1 are sufficient to establish that, in the modern system, management has considerable freedom of action. Shareholders may impose minimum constraints on, for example, investment policy, but there is no evidence that general equilibrium of the system requires these minima to become maxima. Most of the relevant markets are imperfect, and in one case, that of the capital market, this is a critical factor in the intracorporate balance of power itself. In some cases, notably those of the markets for manual labour and for products, the resulting problems have been studied intensively by both economists and sociologists, but this work has not been matched by equivalent work in relation to management. Economists have investigated management attitudes to particular problems, such as price determination and, more recently, investment policy, but there exists not one comprehensive or rigorous study of the basic motivational forces determining business decisions in general.