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PHL 295 - Interlude: Accounting

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Joseph Heath

Larkin Building #204 Tuesday October 30th TA Office Hours - Hasko 9 - 11 John Pablo 11 - 1 Sareh 1 - 3 Accounting both argue that ethics within bureaucratic organizations are a response to agency costs hierarchy of business: Owners C-Level Managers VP's defines what agency cost is: transaction cost by using a hierarchy the sum total of agency cost is monitoring cost + bonding expenditures of the agent(investments to make you look credible) + dead weight costs(invisible to accountants) First Order Agency Risks: 1. Inefficient Use of Resources 2. Misappropriation of Resources (taking office supplies) 3. Moral Substitution (time stealing aka. playing solitaire at work) 4. Passive Opposition (not getting around to it) 5. Shirking 6. Expertise Imperialism (mastery of a tool makes it look like it can solve any problem, law can solve anything. People claim they can solve problems that they can't solve) the higher you are, the easier it is to take advantage Buchanan thinks that bureaucratic ethics is a response to agency risks principle of stewardship: thought that company property is not yours, you are looking after someone else property addresses 1 and 2 principle of separation of powers: people develop strong views on who does what. response to 3 and 6 meritocratic principle: promotion based on merit response to 4 and 5 Second Order Agency Problems 1. Appeal to Authority (taking things in exact wording) 2. Failure to Document (no keeping of records) 3. Failure to Assign Duties Clearly () Destroying recor
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