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Political StandardsCorporate Interest, Ideology, and Leadership in the Shaping of Accounting Rules for the Market Economy$
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Karthik Ramanna

Print publication date: 2015

Print ISBN-13: 9780226210742

Published to Chicago Scholarship Online: May 2016

DOI: 10.7208/chicago/9780226210889.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 18 September 2021

Managers and Market Capitalism

Managers and Market Capitalism

Chapter:
(p.168) 9 Managers and Market Capitalism
Source:
Political Standards
Author(s):

Karthik Ramanna

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226210889.003.0009

This chapter considers the responsibilities of corporate managers in thin political markets. The standard assumption in a capitalist system is that corporate managers’ responsibilities are to increase shareholder profits. But, in their efforts to increase profits, is it acceptable for managers to manipulate the very definition of profit (by gaming accounting rules)? Arguing from the ethical principles that legitimize market capitalism, this chapter concludes that corporate managers have a responsibility to the system as a whole when lobbying in thin political markets. This responsibility trumps their duty to increase shareholder profits – a duty that only applies in competitive processes, which thin political markets are not. The chapter then offers ways in which corporate managers can be brought to act on their responsibilities to the system. These include tangible approaches such as developing accountability metrics for managerial leadership in political processes and intangible approaches such as changing norms around what constitutes acceptable managerial behaviour when lobbying.

Keywords:   agency responsibility, leadership, lobbying, market capitalism, Milton Friedman

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