Rational Managerial Decisions in Business Sector

Abstract

This article features managerial decisions in business area, where the state plays the role of an external regulator of public relations and the main influencer. The legal tools that affect decision-making in business depend on the social mechanisms of business regulations. The author describes the position of the rational regulator that evaluates the decisions made by a business entity. Positive law is an integral part of objective reality and is a set of codified principles of legally appropriate behavior. Imperative and dispositive regulations of public relations in business area imply that a business entity can choose a model of managerial and entrepreneurial behavior based on the rules provided by the legislator. The active role of the state as an external regulator of the social relations reflects the problem of dissonance between legal and social norms underlying managerial decision-making, which leads to additional economic and transaction costs. The paper also features the problem of frustration conflict between the regulator and the business environment in the context of applying the rationality proposed by the state in business activities and the problem of choosing the right managerial decision for its subjects. By refusing from a radical and negative assessment of the entrepreneur's management decisions, the state can solve this problem. The state needs to be more tolerant to business risks as an alternative rationality, without identifying them with deviant behavior. By preventing alienation of business from the state, one can eliminate the conflict between law and favorable climate in business area, i.e. maximal convergence of social and legal norms.