Predicting business ethical tolerance in international markets: a concomitant clusterwise regression analysis

The literature proposes a number of models explaining ethical behaviours but these are seldom of the kind which can be used by marketers in their day-to-day decision making. In this study based on data collected from 166 firms operating in overseas markets, a concomitant clusterwise regression approach is used to define clusters that display good homogeneity both in traits and in models of ethical tolerance, thus allowing an ‘ethical diagnostic’ of firms. Based on readily available and objective variables, namely size, dependence on overseas markets and overseas experience, the paper demonstrates that it is possible to cluster firms into groups of which the ethical tolerance can be predicted. The managerial implications of these findings for international marketers and directions for future research are also discussed.     

Decision rules for an investor in forward exchange markets

This paper obtains decision rules for a risk-averse, expected-utility-maximizing investor in forward exchange markets who may simultaneously combine covered arbitrage, spot and forward speculation. The introduction of margin requirements makes rates of return on all alternatives directly comparable, and causes initial wealth to constrain investment in all alternative. It is shown that combinations involving more than two alternatives need not be considered, and that a comparison of (expected) rates of return alone is sufficient to choose between the relevant combinations. The inadequacy of the ‘functional’ approach for analyzing individual decision-making is demonstrated.     

An applied ethical analysis system in business

Much of the discussion on business ethics is philosophical in nature. There is no lack of theories and ideals on moral reasoning. What is missing is translating these moral theories and principles into specific, operational procedures that can indicate a proper course of action. Although most business actions are routine and do not raise serious ethical questions, many people experience difficulty in applying their personal moral principles to specific business decisions in ethically-dilemmatic situations.This study seeks to develop a framework that can be utilized to implement personal moral reasoning based on the teleological theory of Utilitarianism and the deontological theory of Ross's Prima Facie Duties in the business decision-making process. The central feature in the framework is a point-system that quantities the ethical worth of a proposed business action and determines whether the action would be ethically desirable if taken. It provides an objective element in an otherwise qualitative ethical inquiry process. This study also illustrates practical applications of the system by analyzing the ethical implications of a proposed action where foreign bribery is involved.Alan Wong is Assistant Professor of Finance, Indiana University Southeast. His areas of academic research are managerial ethics and financial options. He has published in theReview of Business and Economic Research.Eugene Beckman is the Director of the MBA Program at Indiana University Southeast. He was awarded the Faculty Excellence Award in 1989 and his primary areas of research are business ethics and marketing.     

An ethical analysis of deception in advertising

This paper examines several issues regarding deception in advertising. Some generally accepted definitions are considered and found to be inadequate. An alternative definition is proposed for legal/regulatory purposes and is related to a suggested definition of the term deception as it is used in everyday language. Based upon these definitions, suggestions are offered for detecting and regulating deception in advertising. This paper additionally considers the grounds for the generally held but largely unquestioned assumption that deceptive advertising is unethical. It is argued that deceptive advertising can be shown to be morally objectionable, on the weak assumption that it is prima facie wrong to harm others. Finally, the implications of this analysis with respect to current regulation of deceptive advertising by the FTC are considered. Thomas L. Carson is Assistant Professor of Philosophy at the Virginia Polytechnic Institute and State University. He was previously Lecturer at the University of California at Los Angeles and was holder of an NEH Fellowship for College Teachers. His most important publication is The Status of Morality, Reidel, Dordrecht, 1984. Forthcoming (in Philosophy and Public Affairs) is: Bribery, Extortion, and The Foreign Corrupt Practices Act.Richard E. Wokutch is Associate Professor of Management at the Virginia Polytechnic Institute and State University where he teaches in the social issues and policy areas. He previously held positions as Visiting Assistant Research Professor at the Values Center, University of Delaware, and as Visiting Fulbright Research Fellow, Science Center, Berlin, West Germany. He has published several recent articles in the areas of bluffing and deception in business and ethical/social investing. James E. Cox, Jr., is Assistant Professor of Management and Marketing at Illinois State University. Formerly, he was at the Virginia Polytechnic Institute and State University (from September 1979 until August 1983). He was a fellow at the 1979 American Marketing Association Ph. D. Consortium and his research has been published in the Journal of Forecasting, the Journal of Marketing Education, the Proceedings of the American Marketing Association, and the Proceedings of the National Council of Physical Distribution Management. He is also co-author of the book Sales Forecasting Methods: A Survey of Recent Developments.     

An analysis of illiquidity in commodity markets

We examine the liquidity and insurance premia demanded by hedgers and speculators in commodity markets. We find that hedgers and speculators demand a higher premium for illiquid commodities for providing insurance and liquidity, respectively. Decomposing illiquidity into turnover and size components, we find evidence of a size premium associated with the insurance premium such that speculators demand a larger insurance premium for smaller commodities. We also find that the liquidity premium demanded by hedgers for illiquid commodities varies across bullish and bearish markets with hedgers demanding a larger premium from speculators trading in illiquid commodities in bearish markets.     

Price jumps in Visegrad-country stock markets: An empirical analysis

We employ high frequency data to study extreme price changes (i.e., price jumps) in the Prague, Warsaw, Budapest, and Frankfurt stock market indexes from June 2003 to December 2010. We use the price jump index and normalized returns to analyze the distribution of extreme returns. The comparison of jump distributions across different frequencies, periods, up and down moves, and markets suggests a possible relationship with different market regulation and micro-structure. We also show that the recent financial crisis resulted in an overall increase in volatility; however, this was not translated into an increase in the absolute number of jumps.     

Personal religiousness and ethical judgements: An empirical analysis

It has been acknowledged on numerous occasions that personal religiousness is a potential source of ethical norms, and consequently, an influence in ethical evaluations. An extensive literature review provides little in the way of empirical investigation of this recognized affect. This investigation conceptualizes religiousness as a motivation for ethical action, and discovers significant differences in ethical judgements among respondents categorized by personal religious motivation. Suggestions as to the source of these differences, and the implications which they offer to managers are discussed and supported from the literature.James W. Clark is the Director of the Center for Retailing and assistant professor of marketing at James Madison University. His work has been published in The Journal of Advertising, and the proceedings of The Cutting Edge III and IV, the Southern Marketing Association, The Academy of Marketing Science, and The Decision Sciences Institute. Lyndon E. Dawson, Jr. is professor of marketing at Louisiana Tech University. His work has been published in the Journal of the Academy of Marketing Science, the Journal of Retailing, Psychology and Marketing, and Psychological Reports among others.     

The ethical leader: An ascetic construct

The way in which ethical standards are neglected or applied is a function of individual character. The best guarantee of ethical leadership, therefore, lies in the identification of those already predisposed to live according to high moral standards. The ascetic construct is offered as a type of personality with such a predisposition. The ascetic is self-controlled, purposeful, and mindful with regard to consequences. The character traits of the ascetic leader are predicted to increase ethical awareness and ethical accountability within his organization or hers. This will increase the probability of the organization's economic success because it will reduce uncertainty on the part of customers and investors. A better understanding of the ascetic personality may be helpful in identifying those with the potential for becoming highly ethical leaders.Harold Jones is a graduate of the University of Nebraska at Omaha and Garrett Theological Seminary. After eight years in the ministry, he worked for twelve years as a stockbroker and as a branch office manager for an affiliate of a New York Stock Exchange member firm. In 1992, he retired from business to begin working on his Ph.D.     

Risky short positions and investor sentiment: Evidence from the weekend effect in futures markets

This paper examines the weekend effect in futures markets and presents rational and behavioral reasons for its existence. Specifically, we document a weekend effect (Friday's return minus the following Monday's return) in futures markets. The weekend effect occurs partly because of asymmetric risk between long and short positions around weekends; the weekend effect increases when short positions are relatively more risky. In addition, we find that both lagged and contemporaneous changes in investor sentiment are related to the weekend effect. These results are consistent with the investor sentiment literature that finds that mood improves on Fridays but deteriorates on Mondays.     

Consumer ethical beliefs and personality traits: An exploratory analysis

The present study examines the relationships between consumers' ethical beliefs and personality traits. Based on a survey of 295 undergraduate business students, the authors found that individuals with high needs for autonomy, innovation, and aggression, as well as individuals with a high propensity for taking risks tend to have “less ethical” beliefs concerning possible consumer actions. Individuals with a high need for social desirability and individuals with a strong problem solving coping style tend to have “more ethical” beliefs concerning possible consumer actions. The needs for achievement, affiliation, complexity and an emotion solving coping style were not significantly correlated with consumer ethical beliefs.     

International codes of conduct: An analysis of ethical reasoning

Four international codes of conduct (those of the International Chamber of Commerce, the Organization for Economic Cooperation and Development, the International Labor Organization, and the United Nations Commission on Transnational Corporations) are analyzed to determine the ethical bases of the behaviors they prescribe for multinational enterprises (MNEs). Although the four codes emphasize different aspects of business behavior, there is substantial agreement regarding many of the moral duties of MNEs. It is suggested that MNEs are morally bound to recognize the codes and to take them into account when engaging in international business.Kathleen A. Getz is a doctoral candidate at the Katz Graduate School of Business of the University of Pittsburgh.For another interpretation, see William C. Frederick's current paper, Multilateral Compacts as a Source of Normative Corporate Guidelines: The Emergence of a Transcultural Corporate Ethic.     

The case against Microsoft: An ethical perspective

This paper discusses the complex Microsoft anti-trust trial and the company 's questionable behavior during the browser wars with Netscape.It reviews the essentials of the legal case against Microsoft along with the company 's efforts to refute the charges against it, including the presumption of monopoly power. After laying the groundwork by providing conceptual background on the notion of fair competition, the paper turns to an ethical analysis of Microsoft 's conduct. We conclude that Microsoft 's behavior was excessively opportunistic during the browser wars.The company did not compete constructively or positively, but instead sought to undermine the competitive process.It also developed biased software code that tilted the playing ?eld in its direction.These actions caused harm to the company 's stakeholders by obstructing consumer choice and impeding innovation.     

Derivatives trading,volatility spillover,and regulation: Evidence from the Korean securities markets

Unlike the U.S. and Japanese securities markets, we find new evidence of volatility spillover between index stocks and non‐index stocks following the introductions of index derivatives trading in the Korean securities markets. We further find that the degree of volatility spillover is closely related to the level of market deregulation; significant return volatility spills over from non‐index to index stocks during deregulation period but in the opposite direction during post‐deregulation period. Our empirical results show that the former volatility spillover from non‐index to index stocks can be explained by the transitory contagion effect associated with the 1997 Korean financial crisis and the subsequent market deregulation, whereas the latter volatility spillover from index to non‐index stocks is attributed to the permanent information spillover effect. This latter evidence suggests that the information regarding investors' expectations on the future common market factors is first reflected into the return volatility of index stocks and then transferred to the trading of non‐index stocks against which derivatives are not traded. Our results are robust to different estimation and sample construction methods. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:563–597, 2009     

Participation in the organization: An ethical analysis from the papal social tradition

How one structures an organization is not only important from the perspective of productivity and efficiency, but primarily how it affects the moral formation of those who are employed in that organization. Organizational structures whether in the manufacturing, service or non-profit sector have moral dimensions that cannot be escaped. Papal social tradition has been concerned about the moral formation of all workers within the organization. This tradition has maintained that an essential component to a humane organizational structure is participation of those involved in the organization, and consequently that participation must be understood primarily in terms of the formation of employees. This article explores the papal social tradition's understanding of participation and examines its significance in today's organizational environment, particularly in reference to work-teams.Michael Naughton is an assistant professor at the University of St. Thomas in St. Paul, MN. He holds a joint appointment in the theology and management departments. He received his Ph.D. in theology, where he studied social ethics and organizational theory. He is currently finishing his MBA at the University of St. Thomas. He is the author ofThe Good Stewards which examines the relationship between organizational issues and the Catholic social tradition. He has also published several articles and has delivered several papers, presentations, and workshops on organizational issues and the Christian social tradition.     

Specialist: The firm or the individual?: Empirical evidence from the options markets

This paper investigates the role of the individual specialist vis-à-vis that of the specialist firm on the quality of markets. While previous studies have not denied the importance of the individual, they have focused exclusively on the performance of the specialist firm. This study is the first empirical test of the specialist as an individual and his influence on market quality. By implication, it tests whether the firm is the appropriate level of analysis. Within specialist firms, we find significant differences in quoting behavior while the evidence on execution quality is mixed. Some firms are able to design an effective mechanism that enforces uniformity in goals of the members of the firm. Considering that exchanges are unable to impose such uniform performance, these firms appear to have better incentive or penalty systems in place. However, the existence of other firms where significant differences in execution quality exist, presents a challenge to policy makers, as differences in execution quality within a firm indicate that the disclosure of market quality needs to be at the post-level, not just at the firm level.     

The global financial crisis: An analysis of the spillover effects on African stock markets

This paper examines the relative importance of the global and regional markets for financial markets in developing countries, particularly during the US financial crisis and the European sovereign debt crisis. Specifically, we examine the way in which the degree of regional (seven African markets combined), global (China, France, Germany, Japan, the UK and the US), commodity (gold and petroleum), and nominal effective exchange rate (Euro and US dollar) spillovers to individual African countries evolved during the two crises through the econometric method introduced by Diebold and Yilmaz (2012). We find that African markets are most severely affected by spillovers from global markets and only modestly from commodity and currency markets. Conversely, regional spillovers within Africa are smaller than global ones, and hence, African markets are insulated from global crises. We also find that the aggregated spillover effects of European countries to the African markets exceeded the corresponding effects of the US, even in the wake of the US financial crisis.