ABSTRACT
By the mid-1960s, the profit levels of American manufacturing industry started to decline, and in the 1970s the global economy, burdened by the first oil crisis, sank into a severe recession. In comparison to the 1960s, at least its first half-the profit rates started to wane after 1966, being the earliest indications of the decline of managerial capitalism-was characterized by a comfortable consensus regarding how to organize businesses. Vogel argues that in the 1970s, the business community found itself fighting its political battles primarily on terrain defined by those who wanted to reduce its prerogatives. Corporate law relies on the idea of fiduciary duties, giving directors and defined for their managers specific responsibilities vis-à-vis the constituencies affected by the business charter granted by the state, and court rulings have persistently emphasized the business judgement rule to reinforce managerial discretion in cases of disputes.
