Econometric Cost Structure Estimates for Cellular Telephony in the United States

This article estimates economies of scale for a sample of five cellular telephony firms in the United States. We reject constant returns to scale for all but the smallest firm studied; the remaining firms exhibit decreasing returns to scale. This finding suggests that scale economies cannot be used to justify the current regulated duopoly structure of United States cellular markets.     

Ownership structure and golden parachutes: Evidence of credible commitment or incentive alignment?

Using a sample of S & P 500 firms, we find that golden parachutes are associated with concentrated external ownership, less concentrated internal ownership, and non-Delaware incorporation. We find little support that concentrated external owners use golden parachutes as credible commitment devices. The general multivariate results support the incentive alignment hypothesis, and reaffirm the view that golden parachutes are a mechanism used to align managerial and shareholder interests when there is a separation between ownership and control. (JEL G32)     

Risk-based decision analysis in support of precautionary policies

A decision-analytic model for avoiding a risky activity is presented. The model considers the benefit and cost of avoiding the activity, the probability that the activity is unsafe, and scientific tests or studies that could be conducted to revise the probability that the activity is unsafe. For a single decision maker, thresholds are identified for his or her current subjective probability that the activity is unsafe. These thresholds indicate whether the preferred course of action is avoiding the activity without further study, engaging in the activity without further study, or conducting a test or research programme to obtain additional information and following the result. When these thresholds are low, precautionary action is more likely to be warranted. When there are multiple stakeholders, differences in their perceptions of the benefit and cost of avoidance and differences in their perceptions of the accuracy of the additional information provided by the test or research programme combine to create differences in their decision thresholds. Thus, the model allows for the rational expression of differences among parties in a way that highlights disagreements and possible paths to conflict resolution. The model is illustrated with an application to phytosanitary standards in international trade and examined in terms of recent empirical research on lay perceptions of risks, benefits, and trust. Further research is suggested to improve the elicitation of model components, as a way of fostering the legitimate application of risk-based decision analysis in precautionary policy making.     

Effects of the 1979 gasoline shortages on Philadelphia housing prices

Conventional theory predicts that transportation cost to a big-city central business district is an important determinant of housing prices. If this is true, the sudden rise in gasoline price following the Iranian revolution in 1979 could have caused a relative housing-price shift in central and peripheral neighborhoods. This paper looks for such an effect by fitting hedonic price functions in selected neighborhoods at varying distances from downtown Philadelphia, and testing for a relative shift at the time of the gasoline shortage. The results suggest that the energy shortage's effects may have been focused disproportionately on a few already revitalizing neighborhoods.     

Conjoining Ethical Theory and Practice: An Australian Study of Business,Accounting, and Police Service Organizations

The purpose of this study, which took place in Western Australia,was to identify situations where management practitioners and academics worked closely together to bridge the `theory-practice gap'in the field of business ethics. Four organizations, two in the accounting field, one a corporate secretaries institute and the Western Australia Police Service were asked if they would participatein a study to examine the extent to which their members made use ofethical theory in their day-to-day activities. A concomitant questionwas whether such theory had an impact on the way organizations carriedout their functions. Each organization was actively involved in teaching ethical theory to their members at an advanced level. The four organizations offered a range of teaching/learning strategies i.e. guest lectures, seminar and discussion groups, training videos and workbooks. The courses that were developed by these organisationswere equal to, and in some cases superior to, ethics courses offered in some business schools. This paper illustrates that by these innovative approaches the four organisations were taking a lead in re-defining ethical practice and teaching ethical theory in their respective organisations. The study illustrates that the programs were effective to the extent that they were instrumental in changingthe behavior and the culture of their members.     

Ethics in business and administration: An international and historical perspective

This is a study of ethical and moral behavior, or perhaps unethical behavior, in two different societies. One society, contemporary Australia and in particular the state of Western Australia, is currently undergoing an exhaustive Royal Commission into the shenanigans of a number of well-known business men and former leading politicians who seem to have been playing fast and loose with large amounts of other peoples' money. While this was initially the major focus of the paper, a secondary focus developed based on the interest shown in acquiring an historical background by a group of business policy students. The opportunity to acquire an appreciation of historical events and in particular, the development of a sense of history seems to be lacking in the curricula of modern day business students. The secondary focus of the paper therefore illustrated that malfeasance, misfeasance and other forms of malpractice in business and administration were just as common in Greco-Roman times as today. In this context, reference has been made to a selection of the writings of some of the more well-known writers of this period. The paper ends on a nonpositive note, raising the (rhetorical) question, that if, after two thousand years people are still continuing to engage in sharp business practices whenever the occasion arises is there any point in developing and offering courses in moral behavior and business ethics?     

Discerning competitive strategy through an assessment of competitive methods

This cross-sectional study of Portuguese service organizations seeks to determine the level of alignment of competitive methods with strategy typologies covered in the business literature. Surveyed firms were asked to indicate their level of utilization of several competitive methods. The results of factor analysis of the survey data indicate that 30 of the 33 competitive methods covered in this study represent seven underlying strategy dimensions. Further analysis revealed that there is some congruence between the derived strategy dimensions and established strategy typologies in the literature. Cluster analysis revealed that each of the responding firms could be classified into one of four hybrid or mixed strategy orientations. However, differences in strategy orientation were not statistically significant in explaining differences in the financial performance of these organizations. These findings are discussed in the light of their implications for strategy development, strategy choices and performance evaluation in the Portuguese service sector.     

Business ethics and commercial morality: Report of the Royal Commission into Commercial Activities

This section is focused on some areas of concern which were identified in The Report of the Royal Commission into Commercial Activities of Government and Other Matters (1990–1992). In the Report a number of situations were examined in which some individuals acted without recourse to any ethical guidelines. Most of the people mentioned in the Report held responsible positions in either Government or the private sector, and all were very well known in the community. The Report of the Royal Commission made a number of findings of serious impropriety on the part of several individuals, although there was comparatively little evidence of illegal or corrupt conduct. This section shows what happened to a governmental system in an Australian state when a number of Ministers and their advisors placed their personal or party advantage over their constitutional obligation to act in the community's interests.Those who cannot remember the past are condemned to repeat it.George Santayana (1863–1952)Michael Small is a Senior L1ecturer in the Curtin Business School, Western Australia. Earlier positions have included appointments with the Commonwealth Attorney-General's Department and more recently as Senior Lecturer in the Australian Police Staff College.