Abstract
Although McMahon offers a potentially valuable extension of Joseph Raz's conceptualization of authority by distinguishing three different kinds of authority, this paper argues, first, that his account of the conditions and considerations that would justify managerial authority is problematic because it relies on a conception of reasons for action that excludes precisely the kind of rationality that plays an important role in the␣explanation and justification of authority in economic␣organization. This paper explains, second, why McMahon's thesis of the justificatory similarity of authority in governments and nongovernmental organizations can also be seen to hold for corporate governance of publicly owned firms more specifically. Finally, this paper raises some critical objections against McMahon's presumption of democratic governance in governments and NGO's alike. The thrust of these objections is that democratic corporate governance does not make sense in the publicly owned firms because: (1) it will not produce results that are fair or welfare maximizing, and (2) it will undermine the legitimacy of managerial authority in such firms.
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Acknowledgements
This paper was written for a Society for Business Ethics Group Meeting of the 2005 annual meeting of the American Philosophical Association in San Francisco, entitled: “The Political Theory of Organizations – A Retrospective Examination of Christopher McMahon’s Authority and Democracy: A General Theory of Government and Management” which was organized and chaired by Jeffery Smith. The author thanks Marvin Brown, Nien-he Hsieh, Christopher McMahon, Ben Wempe and a very helpful anonymous reviewer for useful comments and suggestions, and Jeffery Smith both for organizing the special session and for his editorial work on this issue. The usual disclaimer applies. The Erasmus Institute for Research in Management (ERIM) is acknowledged for its support.
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J. (Hans) van Oosterhout holds an M.A. in political science from Leiden University and a PhD in organization theory from RSM Erasmus University, where he is currently an associate professor. His research involves the positive and normative theory of organizations and institutions, with a current emphasis on corporate governance and comparative economic and political organization. Earlier publications have appeared in: Academy of Management Review, Organization Studies, Journal of Business Ethics and Futures.
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(Hans) van Oosterhout, J. Authority and Democracy in Corporate Governance?. J Bus Ethics 71, 359–370 (2007). https://doi.org/10.1007/s10551-006-9146-x
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DOI: https://doi.org/10.1007/s10551-006-9146-x