BEHAVIORAL THEORY


Finally, there is the theory that suggests that maybe neither profits nor anything else is being maximized in the modern corporation. The firm is not one body under a single direction, but at least four bodies, each contributing a required input, and each seeking a different reward. The basic four are the shareholders, executives, employees , and government. They cluster together as does a cloverleaf, four distinct parts joined at the center. That center is a shifting axis representing the economic profit of the business. Each group demands its share in the form of taxes, dividends , security, better working conditions, and the like. Each has the power to close down or sabotage the business.

If you accept this theory, then the task of management is not to maximize the shareholders' immediate profits but by satisfying all groups, to forge a cooperative effort (optimize resources) that will yield a bigger reward for each. It is rare when the various factions of a business pull together, but when they do the results are astonishing.




Six Sigma and Beyond. Design for Six Sigma (Vol. 6)
Six Sigma and Beyond: Design for Six Sigma, Volume VI
ISBN: 1574443151
EAN: 2147483647
Year: 2003
Pages: 235

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