Journal of Business Ethics

, Volume 54, Issue 3, pp 261–277 | Cite as

Conspicuous By Its Absence: Ethics and Managerial Economics

Article

Abstract

This paper gives prescriptions for introducing ethical concerns into the economic theory of the firm. Topics include social responsibility, corporate governance, profit maximization, competition barriers, collusion, the market system, and welfare economics. The need for such prescriptions is based on a content analysis of 21 managerial economics texts for their coverage of ethics. My analysis finds that substantive discussions of ethics are conspicuous by their absence. As ethical breaches can involve significant monetary damages to a firm – particularly through adverse market reactions – moral-reasoning abilities can complement analytical skills. Consequently, my analysis demonstrates how ethics figure into the opportunity costs of managerial decision making, which is central to the economic definition of profit.

Keywords

Social Responsibility Corporate Governance Opportunity Cost Managerial Decision Welfare Economic 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.Rhodes CollegeMemphisU.S.A.

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