ABSTRACT

Good discretion contributes to the economic success of an enterprise. Bad discretion expresses itself in the concrete terms of calculable loss. Giving someone a job, therefore, means nothing less than handing over to him a part of the resources of an organization. These resources stand to be pre­ served or increased in value, or else diminished in value or lost, depending upon the adequacy of the authorized discre­ tion or judgment exercised by the person employed. To the extent to which a firm calls for exercise of discretion by its members (and, as we have seen, every job of work calls for exercise of discretion in particular respects), it is entrusting its resources to its members, to the extent of the discretion and judgment authorized. By the same token it is relying upon

those members to take care of the resources entrusted to them. Hence the premium put upon reliability. And hence also the nature of the employment contract. It is an agreement in which a person contracts to discharge his prescribed duties and to exercise due discretion in handling those resources put under his discretionary control, in return for an agreed pay­ ment.