1.5

It has been argued that profit maximization is an unrealistic description of the organizational behavior of

large, publicly-held corporations. The modern corporation, so the argument goes, is too complex to admit

to such a simple explanation of the managerial behavior. One alternative argument depicts the manager as

an agent for the corporation's shareholders. Managers, so the argument goes, exhibit "satisficing" behavi

or

in that they maximize something other than profit, such as market share or executive perquisites subject to

the shareholders'

minimum acceptable return on investment. Do you believe that this assessment of

managerial behavior is realistic? Do you believe that the above description of shareholder expectations is

essentially correct?