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Corporate governance based on the behavior of human decision-making mechanism

Author: DingYueNan From: www.yourpaper.net Posted: 2009-08-02 06:34:01 Read:
Abstract: At present, the focus of research on corporate governance issues of corporate governance structure, the main body of this question - "people" while ignoring ethical research; selected system areas as well as the decision behavior combined with personal expectations on the understanding of the content limitations, which together constitute the reason why the current corporate governance research troubled. As the need to play the role of moral restraint from self-restraint and external pressure, this article by of reconstruction "people" behavioral decision model their behavior type division, pointed out that the main problems facing the current corporate governance, and draw corresponding conclusions.
Keywords: corporate governance system of ethical behavior decision

A long time, it will be the focus of corporate governance (corporate governance) on the corporate governance structure that reasonable corporate governance structure from the incentives and constraints of two aspects of the solution due to the separation of the two rights (ownership and management) principal - agent problem, and checks and balances between the managers, the board of directors (supervisory board), and shareholders will.
Corporate governance structure has undergone several major innovation since the outbreak of the revolution manager and solve some of the major issues facing the different stages of corporate governance. However, these innovations largely indirect exaggerated role in addressing corporate governance issues in the system as a physical presence, that the system is almost the only way to solve this problem. Exactly what factors led to today's corporate public crisis of confidence? The existing system connotation of what can not be specific evolutionary mechanism to achieve the purpose of the regulation on the fundamental human behavior? Where is the breakthrough point of innovation to the corporate governance structure, and how to break through? This series has become the focus of this article.

The
decision-making mechanism of the anomie behavior

In order to facilitate the representation, corporate governance issues, the behavior of people for self-serving reasons, the interests of the other interests of the company related to a substantial (immediate or potential) hazards (including explicit and implicit) behavior, known as "anomic behavior. Therefore, the the "Anomie behavior" has become the focus of the study of corporate governance issues from the point of view of the actors. So as to solve the issue of corporate governance must first figure out anomie behavior how.
Since corporate governance issues can, in essence boils down to the question of the relations of production, that is to address the relationship between people an incentive regulation and prevention mechanisms. Previous studies the behavior of people as "economic man", thereby ignoring the other attributes of the person as a social existence. The fact is, people's economic activities and social activities have always been intertwined, and influence each other and promote each other. Rational analysis of the results for the "economic man" hypothesis eventually led to the prisoner's dilemma, and also shows the need to address the economic activities of the perpetrator's moral attributes. In this sense, corporate governance crisis can be stated as the problem of moral hazard behavior.
Based on the above analysis, I believe that the decision anomie behavior mechanism lies: in the case of the presence of opportunistic behavior people found the former short-term profits to be much larger than the latter may, in the selection of economic interests or moral reputation The long-term benefits; implementation mechanism lies: the moral mechanism as a soft bound and immediate role can not occur with the force of effect, and can only rely on the individual's moral self-discipline and social supervision by public opinion.
This means that, as previously revealed, between intrapersonal constraint mechanism and external social binding, it is precisely the neglect of the former (not only theoretical research, but also contains the practical operation), the latter The weakening effect of cumulative lead a modern corporate governance crisis. Therefore, it is necessary to the moral mechanism incorporated into the framework of corporate governance, and establish a reasonable correlation between the two.

The moral mechanism connotation

Due to the inherent moral factors difficult to measure the characteristics of, resulting in it as the aspects of corporate governance concerns. We realized, with the rigid characteristics of the system itself as an external mechanism. According to the theory of incomplete contracts, as the system of specific contractual arrangements, there are intrinsic defects: it is impossible to advance anticipate all future possible scenarios; or even anticipated, it is impossible to write out;, or even write out the , but also because the court could not be confirmed and supervision costs are too high and can not be executed. Therefore, traditionally, the system is always in its relatively fixed and defective response to changing external, and here there are important logic normalized speech fallacy.
More importantly, such a changing external body corporate governance problems in individuals. As basic productivity, the most active elements, but also the most unstable elements. Only full moral constraints and effective external oversight of this complex body combination of and adapt to external changes to achieve a soft constraint to shift hard constraints in order to grasp this fundamental contradiction.

We also fully aware of the moral is not only a starting point and an important content of the mechanisms of self-restraint, and to be able to create significant social value is to use the words of Adam Smith, "The reason is amiable and praiseworthy quality, not because it is the object of self-love and gratitude, but because it is in someone else's mind aroused those passion ". Implied logic is that: First of all, the people living in specific groups; Second, the members of this group a total set of informal, allowing them between the values ??of cooperation or guidelines; Again, if the group members have come to expect the behavior of the other members will be legitimate and reliable, then they will trust each other, and thus morality, trust just as lubricant, which enables the operation of any group or organization to become more effective. That is, individuals may be because moral behavior can not be achieved to maximize their own interests, but this sacrifice is not unconditional, and to do so results will form the institutional environment benefit everyone.

Moral mechanisms assumptions and model

(A) the assumption
Depth consideration, we made the following assumptions: the behavior discussed in this article refers to "personal" in corporate governance issues; behavior by the company and the social constraints of the dual system; behavior with optimal decision-making ability, and the ability to bear responsibility for the consequences for their own select; focused on the long-term activities, rather than short-term behavior; create moral hazards "anomie behavior.
(B) model
The study found that people's behavior selection decisions decided by its own expected. The traditional view is that, when the perceived benefits of anomic behavior is greater than the compliance management revenue when anomie behavior occurs. However, that is not entirely true. System areas of the Central African formal constraints introduced means that the enterprises, but also the existence of social rewards and punishments for individuals, that is, the compliance incentives and opportunities for moral hazard losses. Decision-making mechanism thereby misconducts into:
Excess profits due to anomie acts produced - because of the moral hazard caused by the loss of the opportunity to> compliance incentives
And on this premise, this paper based on compliance, anomie behavior whether or not to grant the appropriate reward and punishment, the behavior of the people choose to be by type (see Figure 1), so that the need for in-depth analysis (Note: X-point to the left, said the people compliance activities did not get any reward, compliance activities began to be rewarded by the X-point to the right; Similarly, Y point indicates that the illegal activities of people did not get any penalties, Y points or more, the illegal activities of the people began to be punished).
In region 1, anomie behavior will occur. In the case of lack of reward and punishment mechanism, anomie behavior will not get any punishment the compliance behavior also do not get any reward the sincere honest by disadvantage hypocritical treacherous by himself clever, anomie behavior with them excess profits, and do not need to be held responsible for any risk. Thus inevitably lead to adverse selection. Corresponding to this is a corruption, disorder, lack of social vitality.
In region 2, anomie behavior does not occur. Anomie behavior must be severely punished, and not get any reward compliance, anomie behavior does not occur, but the lack of aggressive driving force. This corresponds to a lack of social development force.
In region 3, the coexistence of anomie behavior and compliance management. In this case, the anomie behavior will not be punished, and compliance behavior will be rewarded. If the actual profits of anomie behavior is greater than the reward of compliance anomie behavior; Conversely, compliance management. This corresponds to an opportunist prevalence of polarization serious social. Due to external mechanisms tend to be comprehensive, regional program is divided into two parts. 4.1, anomic behavior to a breach of contract by the actual profits to be greater than the reward of compliance anomie behavior persists; while in 4.2, the situation is the opposite, the internal governance and external governance incentive mechanisms to get the optimal configuration compliance for all business, so it is the pursuit of the ideal state.
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