Profit maximization: The ethical mandate of business

The authors propose a model for business ethics which arises directly from business practice. This model is based on a behavioral definition of the economic theory of profit maximization and situates business ethics within opportunity costs. Within that context, they argue that good business and good ethics are synonymous, that ethics is at the heart and center of business, that profits and ethics are intrinsically related.Marist Father Pat Primeaux is a Professor of Theology at Saint John's University, (New York). John Stieber is a Professor of Finance and Economics at Southern Methodist University's Edwin L. Cox School of Business (Dallas). They have collaborated on several articles on the behavioral dimension of economic efficiency. They have also designed and taught courses in business ethics at both the graduate and undergraduate level.     

Forecasting first births

This study is concerned with one aspect of the family cycle, namely, the transition from young married to young married with small children. The focus is on developing models to forecast entries into this latter stage for the purpose of marketing research. "Using ordinary least squares, forecasting models were estimated for (1) total number of first births, (2) number of white first births, and (3) number of nonwhite first births." Models are estimated for both the United States and California using data from official sources.     

When MR = MC: Ethical Efficiencies in Valuing and Pricing

How do we determine value? What are the ethical implications of valuing goods and services with respect to economic profit maximization? To answer those questions, Primeaux and Stieber move their discussion of the ethical principles inherent to economic profit maximization from production to distribution, from internal costs to external pricing and consumer demand.     

Rate-base valuation methods and firm efficiency

The economic performance of public utilities under different rate-base valuation methods is examined in this paper. A unique procedure, involving Ordinary Least Squares regression analysis, examined data for all usable firms in states which have changed rate-base methods since World War II. The sample consists of 20 electric firms extending over 30 years of time-series data. Equations for individual firms were run to capture the effects of changes on rate-base methods on capital intensity and capacity utilization on each separate business. Contrary to expectations, there was no clear pattern indicating that firms in the sample increased the rate of capital intensity when their rate-base method was changed to fair value from original cost. Similarly, expected excess capacity was not found under fair-value regulation. The general conclusion is that there is no reason to believe that different rate-base valuation methods induce allocative inefficiency. Nevertheless, inefficiency may already exist in regulated monopolies in the form of X-inefficiency.     

Double Bookkeeping: Hierarchical Obedience and Participative Cooperation

Rather than eliciting behavioral expectations of individuals for an appreciation of organizational ethics, we are focusing on the organization itself and the manner in which distinctive organizational structures assume their own respective behavioral expectations. The hierarchical organizational structure emphasizes obedience while the participative organizational structure emphasizes cooperation. Imposing the ethical virtues of one organizational structure onto another leads to conflict, and that conflict is reflective of a basic injustice which is (indirectly) organizational in cause but (directly) personal in effect. This more conceptual argument is readily identified in the difficulties encountered by pastoral ministers in Catholic hospitals, especially by women chaplains.     

Introduction

Teaching Business Ethics -