Journal of Business Ethics

, Volume 101, Issue 1, pp 49–60 | Cite as

Profits, Layoffs, and Priorities

  • Daniel G. Arce
  • Sherry Xin Li


This study examines the deliberations of professional MBA students when presented with a dilemma that weighs the difference between commitments to profit- maximization against concerns for fired workers who would need to seek a new job during a recession. Using content analysis, accounting, economic, and ethically based rationales that differ from the profit-maximizing recommendation are categorized. Results also show that those who make non-profit-maximizing recommendations consider, but ultimately reject the profit-maximizing approach to layoffs.


behavioral economics business ethics content analysis downsizing experimental economics layoffs profits recession self-interest unemployment 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Arce, D.G.: 2004, ‘Conspicuous By Its Absence: Ethics and Managerial Economics’, Journal of Business Ethics 54(3), 261-277.CrossRefGoogle Scholar
  2. Bewley, T.F.: 1999, Why Wages Don’t Fall During a Recession, (Harvard University Press, Cambridge, MA).Google Scholar
  3. Croson, R. and U. Gneezy: 2009, ‘Gender Differences in Preferences’, Journal of Economic Literature 47(2), 1-27.CrossRefGoogle Scholar
  4. Eckel, C. C. and P. J. Grossman: 2008, ‘Differences in the Economic Decisions of Men and Women: Experimental Evidence’, in C. Plott and V. Smith (eds.), Handbook of Experimental Economics Results, Vol. 1 (Elsevier, New York), pp. 509–519.Google Scholar
  5. Economist: 2009, ‘The Experience Curve’, The Economist, 14 September.Google Scholar
  6. Ferraro, F., J. Pfeffer and R.I. Sutton: 2005, ‘Economic Language and Assumptions: How Theories Can Become Self-Fulfilling’, Academy of Management Review 30(1), 8-24.CrossRefGoogle Scholar
  7. Ferraro, P. J. and L. O. Taylor: 2005, ‘Do Economists Recognize an Opportunity Cost When They See One? A Dismal Performance for the Dismal Science’, Contributions to Economic Analysis and Policy 4(1), Article 7.Google Scholar
  8. Fitzgerald, F. S.: 1936, The Crack-Up (Esquire, New York), February, March, April.Google Scholar
  9. Friedman, M.: 1970, ‘The Social Responsibility of the Firm is to Increase Its Profits’, New York Times, Sunday Magazine, 13 September, pp. 32, 33, 122, 124, 126.Google Scholar
  10. Gentile, M.: 2010, Giving Voice to Values: How to Speak Your Mind When You Know What’s Right (Yale University Press, New Haven, CT).Google Scholar
  11. Gottfredson, M., S. Schaubert and H. Saenz: 2008, ‘The New Leader’s Guide to Diagnosing the Business’, Harvard Business Review 86(2), 62-73.Google Scholar
  12. Krippendorff K.: 2004: Content Analysis. An Introduction to its Methodology, Second Edition (Sage, Thousand Oaks, CA).Google Scholar
  13. Krippendorff, K.: 2007, ‘Computing Krippendorff’s Alpha Reliability’, Departmental Papers, Annenberg School for Communication, University of Pennsylvania,
  14. Maital, S.: 1994, Executive Economics (The Free Press: New York).Google Scholar
  15. Miller, D.T.: 1999, ‘The Norm of Self-Interest’, American Psychologist 54(12), 1053-1063.CrossRefGoogle Scholar
  16. Power, S.J. and L.L. Lundsten: 2005, ‘Managerial and Other White-Collar Employees’ Perceptions of Ethical Issues in Their Workplaces’, Journal of Business Ethics 60(2), 185-193.CrossRefGoogle Scholar
  17. Rest, J.R.: 1988, ‘Can Ethics be Taught in Professional Schools? The Psychological Research’, Ethics: Easier Said Than Done 1(1), 22-26.Google Scholar
  18. Rubinstein, A.: 2006, ‘A Sceptic’s Comment on the Study of Economics’, The Economic Journal 116(510), C1-C9.CrossRefGoogle Scholar
  19. Welch, J.: 2005, Winning (HarperCollins, New York).Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  1. 1.Economics Program, GR 31, School of Economic, Political and Policy SciencesUniversity of Texas at DallasRichardsonU.S.A.

Personalised recommendations