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Efficiency and Ethically Responsible Management

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  • Jeffery Smith

    (Seattle University)

Abstract

One common justification for the pursuit of profit by business firms within a market economy is that profit is not an end in itself but a means to more efficiently produce and allocate resources. Profit, in short, is a mechanism that serves the market’s purpose of producing Pareto superior outcomes for society. This discussion examines whether such a justification, if correct, requires business managers to remain attentive to how their firm’s operation impacts the market’s purpose. In particular, it is argued that the value of efficiency, despite views to the contrary, cannot be fully separated from the planning and intentions of business managers as long as those managers direct their firms in an ethically responsible fashion. This position is inspired by, and serves as a supportive clarification of Joseph Heath’s so-called “market failures approach” to business ethics.

Suggested Citation

  • Jeffery Smith, 2018. "Efficiency and Ethically Responsible Management," Journal of Business Ethics, Springer, vol. 150(3), pages 603-618, July.
    • Handle: RePEc:kap:jbuset:v:150:y:2018:i:3:d:10.1007_s10551-016-3175-x
    DOI: 10.1007/s10551-016-3175-x
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    References listed on IDEAS

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    Cited by:

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    2. Frooman, Jeff, 2021. "Where MLM Intersects MFA: Morally Suspect Goods and the Grounds for Regulatory Action," Business Ethics Quarterly, Cambridge University Press, vol. 31(1), pages 138-161, January.
    3. Jeffrey Moriarty, 2020. "On the Origin, Content, and Relevance of the Market Failures Approach," Journal of Business Ethics, Springer, vol. 165(1), pages 113-124, August.
    4. Samanthala Hettihewa & Lori S. Kopp & Christopher S. Wright, 2019. "Ethics/Virtues and Consequences: An Exploratory Study of Regional Small Businesses in Developed and Emerging Countries," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 18(1), pages 17-40, June.
    5. Almudena Martínez-Campillo & Mahinda Wijesiri & Peter Wanke, 2020. "Evaluating the Double Bottom-Line of Social Banking in an Emerging Country: How Efficient are Public Banks in Supporting Priority and Non-priority Sectors in India?," Journal of Business Ethics, Springer, vol. 162(2), pages 399-420, March.
    6. Michael A. Sartor & Paul W. Beamish, 2020. "Private Sector Corruption, Public Sector Corruption and the Organizational Structure of Foreign Subsidiaries," Journal of Business Ethics, Springer, vol. 167(4), pages 725-744, December.

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