LR Drill Set 11, Question 1
Nakagawa: When making business decisions, we who manage(48 more words not shown)
Nakagawa's and Gauldin's remarks provide(18 more words not shown)
- AManagers usually try(8 more words not shown)
- BManagers should always(9 more words not shown)
- CManagers should choose(15 more words not shown)
- DManagers should never(8 more words not shown)
- EManagers should give(12 more words not shown)
Reading the argument
Does the public interest get a place in the decision at all? Nakagawa says it must. Managers should consider the public alongside efficiency, expense, and other business concerns. That doesn't say the public always wins or that every concern receives the same weight. It says public consequences must be part of the decision.
Gauldin says legal profitability decides it. Managers must choose the most profitable legal course without regard for the public interest. That excludes the extra consideration Nakagawa insists on.
What we’re looking for
For the disagreement question, I'd look for a case that makes that difference matter. The speakers are giving standards for what managers should do, not describing how managers usually behave. We should be able to place the same proposed decision before both speakers and see their standards point in different directions.
Working the answers
- A
This says what managers usually do. Neither speaker describes usual behavior. They disagree about managers' obligations, so both could think current managers behave this way while disagreeing about whether they should.
- B
Gauldin requires legal profit maximization, not obedience to every stockholder wish. Stockholders might ask for something less profitable, or even something illegal. Nothing here says managers must comply in those cases. We don't have the needed endorsement from Gauldin.
- CCorrect
For Gauldin, legality and greater profit are enough to require choosing the polluting option. Public harm gets no weight. Nakagawa's view rejects deciding the question on those two facts alone: the effect on the public must also be considered.
This doesn't mean Nakagawa says pollution is never permissible. After considering every relevant concern, Nakagawa might approve some polluting activities. The disagreement is with C's blanket prescription: if it's legal and more profitable, managers should choose it. That leaves no role for the public-interest consideration Nakagawa requires.
- D
Ignoring the public's wishes as a decision rule isn't the same as always doing the opposite of what the public wants. The most profitable legal option might also be popular and beneficial. Gauldin could choose it for its profit, so Gauldin doesn't endorse this 'never' rule.
- E
Taking a concern into account doesn't mean assigning it equal weight. Nakagawa never says profit and public interest must count equally in every decision. Gauldin rejects giving the public independent weight, but we need Nakagawa to affirm E before it can describe their disagreement.
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