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Dear All,

R:ETRO is about to start again! Please join us online on Monday, 16 January, at 4pm GMT, for the first seminar of this term, hosted by the Oxford University Centre for Corporate Reputation.

Santiago Mejia (Fordham University) will be giving a paper entitled "Abiding by morality within the neoclassical theory of the firm."

Abstract:

Neoclassical accounts of the theory of the firm have been valuable in helping us understand the economic principles that explain how various rights are assigned to the different constituencies of the firm. This neoclassical analysis starts from the assumption that all of the firm's constituencies are necessary for its success, and none has any prima facie priority over the others. The privileged status of the constituency granted formal ownership rights is explained by the fact that this is the most efficient allocation of rights, that this allocation of rights maximizes the aggregate net benefits that the firm provides to all of its constituents. It is natural to assume (and the scholarship has typically assumed it) that the constituency granted formal ownership rights should be responsible for what one may call the moral control of the firm, i.e., the power to ensure that the firm's activities conform with moral norms. As I show in this paper, a close examination of the neoclassical account of the theory of the firm shows that this conclusion is unwarranted. If we want our companies not merely to be efficient but also to abide by moral norms, the constituency with strategic control of the firm should not, in most cases, be also responsible for the moral control of the firm.

Click here to register.

I hope to see many of you there!

All the best,
Rita

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Rita Mota
Assistant Professor
ESADE Business School
Barcelona
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