Corporate Ethics, Agency, and the Theory of the Firm

Journal of Business and Technology Law, Vol. 3, 2008

U of Maryland Legal Studies Research Paper No. 2008-2

25 Pages Posted: 16 Jan 2008 Last revised: 22 Sep 2015

See all articles by Robert J. Rhee

Robert J. Rhee

University of Florida Levin College of Law

Abstract

This conference paper suggests that the problem of corporate ethics cannot be reduced to the autonomous person. Although the greatest influence on action and choice is one's moral constitution, it does not follow that the agent's behavior is the same within or without the firm. Ethics is a function of corporate form. The theory of agency cannot dismiss the firm as a fiction or metaphorical shorthand since that which does not exist should not be able to cause ethical breakdowns in corporate action. Thus, the theory of the firm, which emphasizes profit and wealth maximization, should incorporate a richer, more realistic account of the economics and ethics of agency.

Keywords: corporate ethics, agency, profit maximization, ethical dilemma, theory of the firm, theory of agency, ethics, nexus of contracts, organizational behavior

JEL Classification: D2, D6, K00, K10, K11, K13, K20, K22, L2, M1

Suggested Citation

Rhee, Robert J., Corporate Ethics, Agency, and the Theory of the Firm. Journal of Business and Technology Law, Vol. 3, 2008 , U of Maryland Legal Studies Research Paper No. 2008-2, Available at SSRN: https://ssrn.com/abstract=1083478

Robert J. Rhee (Contact Author)

University of Florida Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States

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