Power, Self-regulation and the Moralization of Behavior

The perception of behavior as a moral or conventional concern can be influenced by contextual variables, including status and power differences. We propose that social processes and in particular social role enactment through the exercise of power will psychologically motivate moralization. Punishing or rewarding others creates a moral dilemma that can be resolved by externalizing causation to incontrovertible moral rules. Legitimate power related to structure and position can carry moral weight but may not influence the power holder’s perceptions of rules and general norms of behavior. Social identity theory suggests moralization could be promoted by a concern for shared, defining values. However, the tendency to moralize another’s behavior can be injurious to shared identity. We explored white-collar employees’ perceptions of several categories of noxious or deviant workplace behaviors and regressed these perceptions on the tendency to use legitimate, referent, or reward and punish power; social identity; and the interaction of social identity and power, in particular legitimate power. Only the tendency to influence others through punishment or reward predicted moralization. Alternative causal explanations for the findings were addressed through the absence of any relationships between punishment and reward power and perceptions of deviant behaviors as wrong, upsetting, or requiring punishment. We discuss these results in the context of self and social processes, the social construction of morals and power, and the impact of managers’ behavior on group or organizational ethics.     

Moderating Effects of Entrepreneurial Orientation on Market Orientation‐Performance Linkage: Evidence from Chinese Small Firms*

Literature revealed that an appropriate alignment between firm strategic orientation and market positioning is critical because of its impact on firm performance. The alignment is especially crucial for small businesses as a result of their limited resource base. However, studies have not adequately accounted for the joint effect of entrepreneurial orientation (EO) and market orientation (MO) on firm performance in different institutional environments, such as transitional economies. In this study, we examine the moderating effect of EO on the linkage between MO and firm performance among small enterprises in China. We have found that MO, alone and in conjunction with certain EO dimensions, is positively related to firm performance. More specifically, innovativeness and proactiveness have positively moderated the relationship between MO and performance. We discuss managerial implications and offer suggestions for future research.     

The financial crisis and its impacts on global agriculture

The financial crisis arose in the industrial countries, but has affected developing countries through higher interest rates, sharp changes in commodity prices, and reductions in investment, trade, migration, and remittances. For most low‐income countries, shocks that affect food prices or wage rates for unskilled workers seem likely to have the biggest impact on poverty, with the declines in key food prices associated with the crisis helping to reduce poverty. Policies to address the crisis must include measures to deal with: financial sector problems; the resulting reductions in aggregate demand; and the particular vulnerabilities of poor people.     

Raising the bar (7)

This editorial summarises the papers published in issue 13.1 so as to raise the bar in applied spatial economic research and highlight new trends. The first paper adopts a scale neutral approach to investigate the spatial mechanisms that cause regional innovation and growth. The second paper claims that population-weighting when calculating indices of regional inequality might lead to inconsistent outcomes. The third paper estimates the effect of distance between family residence and higher education institution on a student's academic performance, thereby accounting for endogenous regressors. The fourth paper shows an inverted U-shaped relationship between economic development at region of origin and the propensity to migrate using a multilevel approach. The fifth paper provides spatial econometric evidence of price competition between sellers of used books on Amazon.com. The last paper estimates a hedonic housing price equation and parameterizes the spatial weight matrix to determine how far back in time buyers, sellers and realtors are looking at the housing market.     

Impact of individual market orientation on selling and customer orientation

ABSTRACT

We analyze the direct effect of individual market orientation on selling orientation-customer orientation of corporate insurance agents licensed in an emerging market based on the data collected using a random survey of corporate insurance agents in the Life Insurance sector in India. The results indicated that individual market orientation had a significant relationship with selling orientation, but the intensity was weak. However, causal relationship between individual market orientation and customer orientation was moderate. Future research should focus on analyzing the influence of the dimensions of individual market orientation on employee commitment, loyalty and should analyze the moderating effects of various associated variables. The findings indicate that efforts should be made to generate market-oriented behavior among individuals to propel selling orientation and customer orientation.     

Raising the bar (11)

This editorial summarizes the papers published in issue 14(2) so as to raise the bar in applied spatial economic research and highlight new trends. The first paper deals with past and current challenges for regional science research. The second paper investigates whether people living in deprived neighbourhoods have less chance of succeeding in a job application. The third paper finds evidence that real estate firms can avoid price competition when market shares of their allies increase in the vicinity. The fourth paper is methodological: it considers a spatial autoregressive (SAR) model with heterogeneous coefficients and extensively analyzes the impact of this extension on the direct and indirect effects estimates. The fifth paper proposes an innovative method to estimate the elements of the spatial weight matrix in a spatial econometric model. The final paper is econometric–theoretical: it proposes a new generalized method of moments (GMM) estimator of the coefficients of a SAR model if the error terms are heteroskedastic of an unknown form.     

Economic policy uncertainty and firm tax avoidance

We find strong evidence that firms reduce cash effective tax rate when economic policy uncertainty heightens. Firms also engage in more aggressive forms of tax avoidance including long-term tax planning or shelters. Cash holdings attenuate the negative effect of policy uncertainty on cash effective tax rate, especially for financially constrained firms. The cash tax savings are retained for reinvestments rather than dividend payouts. Our findings suggest that policy uncertainty exacerbates external financing frictions, which in turn induces precautionary motives of tax avoidance.     

THE ART OF STRATEGIC DIVESTMENT

Divestiture makes sense only as part of a sound, long-term strategy. Before simply shedding business units, companies must consider all the options, and be willing to constantly review, replenish, and trim portfolios as markets change and evolve. In so doing, a company increases not only its flexibility but also its chances of adding shareholder value.
This article examines the corporate restructuring "big picture," in which divestments are only one alternative. It reviews additional measures besides divestments, such as outsourcing, joint ventures, asset swaps, and using new technologies to cut costs, and provides case studies of each. It also raises some interesting issues regarding divestiture, such as ways to sell a business unit without strengthening a competitor's hand, as well as strategies for improving a business unit's valuation in preparation for sale. The authors, who are M&A advisors at Accenture, conclude that "a carefully planned and well-executed restructuring that involves divestiture can be as significant a victory for management and shareholders as a successful acquisition."     

Rural Informal Taxation in China： Historical Evolution and an Analytic Framework

The present paper examines the historical evolution of China's rural taxation system from the pre-reform period to the late 1990s. We propose that because of information asymmetry between the upper-level and the lower-level governments, local governments had to be granted some informal tax autonomy to fulfill the upper-level policy mandates. This easily led to excessive local informal taxation on farmers. As market liberalization of the grain sector progressed, the low-cost tax instruments implemented through the traditional approach of implicit taxation gradually eroded. Local governments in agricultural regions had to resort to informal fees collected directly from individual rural households while the more industrialized regions shifted to non-agricultural taxes that are less costly in terms of tax collection. Hence, political tension between farmers and local governments in agriculture- based regions emerged and rural tax reform became necessary.     

Management priorities and management ethics

The management process affects the level of ethical performance in organizational life. As one part of this process, managers establish priorities which give direction to an organization. In business firms, management typically stresses the attainment of profits and other related economic and technical factors. Since little explicit recognition is given to ethics, the resulting climate makes it easy to ignore ethical factors. Changing this situation by making ethics a significant part of the corporate culture is difficult and requires a combination of management communication and management example. However, managers who choose to emphasize ethics and who skillfully articulate their importance can improve the integration of ethics into the day-to-day operating decisions of the firm. Justin G. Longenecker is Chavanne Professor of Christian Ethics in Business at Hankamer School of Business, Baylor University, Waco, Texas 76798, U.S.A. His most important publications are: Management, 6th ed. (Charles E. Merrill Publ. C., Columbus 1984), co-authored with Charles D. Pringle; Small Business Management, 6th ed. (South-Western Publ. Co., Cincinnati 1983), co-authored with H. N. Broom and Carlos W. Moore; and numerous journal articles, including: The Ethics of MBO, Academy of Management Review (April, 1982), pp. 305–312, co-authored with Charles D. Pringle.