An empirical and ethical analysis of factors motivating managers' merger decisions

This paper examines the role of managerial self-interest in the merger market. It looks at factors influencing managers' merger decisions by analyzing managerial expense preference factors on cross-sectional data employing non-parametric statistical methods. The same factors are examined for acquiring, acquired, and merging firms, and control groups used in each case. The results support the authors' contention that managerial discretion is a significant motivating factor for mergers. The changes in expense preference factors indicate management decisions which provide conditions allowing management to indulge in management preferred expenditures, while reducing risk to their career. The authors then provide a moral/philosophic framework of ethical analysis for examining manager's merger decisions, using teleological and deontological theories. They conclude that merger decisions motivated or influenced by self-interest are unethical and, in the process, provide managers facing a merger decision with a framework for making an ethical decision.Dr. Francis Achampong is a Professor of Business Law and Insurance at Norfolk State University, in Norfolk, Virginia. He is licensed to practice law in New York and Virginia. He has published in journals such as theJournal of Risk and Insurance, theInternational and Comparative Law Quarterly, Dickinson Law Review, and theAkron Law Review.Dr. Wold Zemedkun is an Associate Professor of Finance at Norfolk State University, In Norfolk, Virginia. He has published in journals such as theJournal of Business Strategies, theAkron Business and Economic Review,, theJournal of Financial Education, and theAtlantic Economic Journal.     

An empirical study of ethical predispositions

Using a two-part instrument consisting of eight vignettes and twenty character traits, the study sampled 141 employees of a mid-west financial firm regarding their predispositions to prefer utilitarian or formalist forms of ethical reasoning. In contrast with earlier studies, we found that these respondents did not prefer utilitarian reasoning. Several other hypotheses were tested involving the relationship between (1) people's preferences for certain types of solutions to issues and (2) the forms of reasoning they use to arrive at those solutions; the nature of the relationship between utilitarian and formalist categories; and the possibility of measuring ethical predispositions using different methods. F. Neil Brady is Professor of Public Management and Associate Director for the Center for the Study of Values in Organizations in the Marriott School of Management at Brigham Young University. He is the author of Ethical Managing: Rules and Resultsand has published numerous articles on business ethics, ethical theory, and moral reasoning.Gloria E. Wheeler is Associate Professor of Public Management and Associate Director of the Institute of Public Management at Brigham Young University. Her primary areas are research methodology and human resource management. She has extensive survey research experience in many substantive fields and has published articles in journals covering such diverse areas as taxation, teaching, marketing, and human behavior in organizations.     

Three ethical frames of reference: insights into Millennials' ethical judgements and intentions in the workplace

The paper investigates the ethical decisions of Millennials, who are not only part of an expanding cohort of the workforce, but also represent potential future managers with a growing influence on work practices and employment relationships. In the conceptual model, we propose that three ethical frames of reference, represented by perceived organisational ethics, perceived employee ethics and reflective moral attentiveness, antecede ethical judgements, which further influence the ethical intentions of Millennials. Using structural equation modelling, we test the model for three different business ethics scenarios: paying a consulting fee, dumping hazardous waste, and running an offensive advertising campaign. The findings confirm the link between ethical judgements and intentions across the board, while the influence of the ethical frames of reference varies among the scenarios. We propose that the differences in the predictive ability of the ethical frames of reference depend on the nature of the ethical issue, which holds important implications for today's managers in their attempts to encourage ethical behaviour of Millennial employees.     

Consumer ethics: An empirical investigation of the ethical beliefs of Austrian consumers

Business and Marketing ethics have come to the forefront in recent years. While consumers have been surveyed regarding their perceptions of ethical business and marketing practices, research has been minimal with regard to their ethical beliefs and ideologies. In addition, no study has examined the ethical beliefs of Austrian consumers even though Austria maintains a unique status of political neutrality, nonalignment, stability, economic prosperity and geographical proximity to the East- and West-European countries. This research investigates the relationship between Machiavellianism, ethical ideology and ethical beliefs of Austrian consumers. The results indicate that Austrian consumers are mostly situationists who, while rejecting moral rules, judge the ethics of a behavior by the consequences and outcomes of the situation. Mohammed Y.A. Rawwas is an Assistant Professor of Marketing at the University of Northern Iowa. His research has appeared in the Journal of Business Ethics, Marketing Educational Review, Advances in International Marketing, European Journal of Marketing, Journal of Hospital Marketing, Health Marketing Quarterly, Medical Marketing and Media,among other journals and proceedings.     

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.     

Risk diversity across restaurants: An empirical analysis

Particular financial characteristics of a restaurant firm may be used to predict whether that company is a good investment risk.     

Consumer ethics: An empirical investigation of factors influencing ethical judgments of the final consumer

Business and marketing ethics have come to the forefront in recent years. While consumers have been surveyed regarding their perceptions of ethical business and marketing practices, research has been minimal with regard to their ethical beliefs and ideologies. This research investigates general attitudes of consumers relative to business, government and people in general, and compares these attitudes to their beliefs concerning various questionable consumer practices. The results show that consumers' ethical beliefs are determined, in part, by who is at fault in the unethical behavior (the seller or the buyer). The results also indicate that those with a more positive attitude toward business are less likely to engage in questionable consumer practices, but one's attitudes toward salespeople, the government and people in general arenot related to the consumer's ethical beliefs.Scott J. Vitell is an Associate Professor and the Michael S. Starnes Professor of Marketing and Business Ethics at the University of Mississippi. His publications have appeared in theJournal of Macromarketing, theJournal of Business Ethics, theJournal of the Academy of Marketing Science, theJournal of Business Research, Research in Marketing and numerous other journals and proceedings.James A. Muncy is Assistant Professor of Marketing at Clemson University. His publications have appeared in theJournal of Marketing, Journal of Business Research, Journal of Current Issues and Research in Advertising, Journal of Marketing Education, andAdvances in Consumer Research. He has also published in the National Proceedings of the American Marketing Association and the American Psychological Association and has published five chapters in books. He is active in the Association for Consumer Research, acting as its Publications Director and Newsletter Coeditor.     

The impact of ethical climate types on facets of job satisfaction: An empirical investigation

This study examines the impact of ethical climate types (professionalism, caring, rules, instrumental, efficiency, and independence) on various facets of job satisfaction (pay, promotions, co-workers, supervisors, and work itself) in a large non-profit organization. Professionalism was the most reported and efficiency was the least reported ethical climate type in the organization. Among various facets of job satisfaction, respondents were most satisfied with their work and least satisfied with their pay. None of the climate types significantly influenced satisfaction with pay. A professional climate significantly influenced satisfaction with promotions, supervisors, and work. It also significantly influenced overall job satisfaction. Those respondents who believed that their organization had caring climate were more satisfied with their supervisors. An instrumental climate had a significant negative influence on overall job satisfaction and satisfaction with promotions, co-workers, and supervisors. Rules, efficiency, and independence climate types did not significantly affect any facets of job satisfaction. Satish Deshpande is an Associate Professor of Management at Haworth College of Business, Western Michigan University. He teaches human resource management courses. His current research interests include business ethics, managerial decision-making, and applied psychology in human resource issues. His publications include articles in the Academy of Management Journal, Compensation and Benefits Review, Human Relations, Journal of Small Business Management, and Organizational Behavior and Human Decision Processes.     

Personal values: Potential keys to ethical decision making

Personal values have long been associated with individual decision behavior. The role played by personal values in decision making within an organization is less clear. This study examines the relationship between personal values and the ethical dimension of indicated decisions utilizing discriminant analysis. Past research has found that managers tend to respond to ethical dilemmas situationally. The study examines personal values as they relate to four types of ethical dilemmas.David J. Fritzsche was a visiting professor at Florida International University when this article was written. His articles have appeared in numerous journals and books. He is also a co-author ofThe Business Policy Game, a strategic management simulation.     

International diffusion and intellectual property rights: An empirical analysis

Does a stronger intellectual property rights regime lead to the faster diffusion of new products and technology? While there is a presumption that this is the case, our analysis of data on the international release patterns of Hollywood movies suggests a more complex story: although moderate standards of IPR encourage the spread of movies, either very weak or very strong property rights tend to slow the speed with which American movies are released abroad. This empirical finding is robust to a wide variety of specifications. Overall, it appears that while some recognition of IPR may encourage diffusion, very strong IPR may actually retard the speed of diffusion.     

The individual investor in securities markets: An ethical analysis

In this paper we consider whether one type of individual investor, which we call at risk investors, should be denied access to securities markets to prevent them from suffering serious financial harm. We consider one kind of paternalistic justification for prohibiting at risk investors from participating in securities markets, and argue that it is not successful. We then argue that restricting access to markets is justified in some circumstances to protect the rights of at risk investors. We conclude with some suggestions about how this might be done.Robert E. Frederick is Assistant Professor of Philosophy at Bentley College and Assistant Director of the Center for Business Ethics. Before coming to Bentley College he worked at a large financial institution for nine years, where he was Vice President for Administrative Services. Dr. Frederick has authored or co-authored over fifteen articles and has co-edited four books. He has consulted on business ethics for several major corporations. W. Michael Hoffman is the founding Director of the Center for Business Ethics, and Professor and Chair of the Department of Philosophy at Bentley College, Waltham, MA. He was President of the Society for Business Ethics in 1989. He has authored or edited ten books, including Business Ethics: Readings and Cases in Corporate Morality (McGraw-Hill, 1984; 1990) and published over thirty articles. He has consulted on business ethics for many major corporations and institutions of higher learning, and he serves on the board of several journals.     

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.     

Personal strain and ethical standards of the self-employed

Using strain theory to examine the relationship between sources of personal strain and ethical standards, we study how variations in the self-employed's household income, educational level, associational membership, and trust in institutions link to the extent to which they maintain high ethical standards. We test our hypotheses using data from 3716 self-employed persons across 39 countries. The self-employed's ethical standards relate positively to their household income and trust in institutions but negatively to their educational level and associational membership. A supplementary exploratory analysis provides further insights into how broader cultural and institutional contexts in which the self-employed are embedded might influence the relationship between sources of personal strain and ethical standards.     

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.     

Ethical climate and the link between success and ethical behavior: An empirical investigation of a non-profit organization

This study examines the ethical climate and ethical practices of successful managers (n=206 managers) of a large non-profit organization. The influence of different dimensions of ethical climate on perceived ethical practices of successful managers were also investigated. Results show that a majority of the respondents perceive successful managers as ethical. Compared to previous research, managers in our sample were less optimistic about the relationship between success and ethical behavior. Those who believed that their organization had a caring climate perceived a strong positive link between success and ethical behavior. Those who believed that their organization had an instrumental climate perceived a strong negative link between success and ethical behavior. Satish Deshpande is an Associate Professor of Management at Haworth College of Business, Western Michigan University, Kalamazoo, Michigan, USA. He teaches human resource management courses. His current research interests include business ethics, managerial decision-making, and applied psychology in human resource issues. His publications include articles in the Academy of Management Journal, Compensation and Benefits Review, Human Relations, Journal of Small Business Management, and Organizational Behavior and Human Decision Processes.     

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.     

Interdependent preferential trade agreement memberships: An empirical analysis

The establishment of a new preferential trade agreement (PTA) or the expansion of an existing one alters the incentives of non-members to participate in a PTA. This can lead to a domino effect whereby non-members join an existing PTA. Or it can lead a pair of countries to establish a new PTA. We examine the determinants of why a pair of countries enters a bilateral PTA. Our emphasis is on (a) the impact of pre-existing PTAs and (b) whether this impact is larger when the members of pre-existing PTAs are on average geographically close to the pair of countries. Using data for 145 countries during 1955–2005, we find evidence that pre-existing PTAs increase the probability that a country-pair will enter a bilateral PTA and that this effect diminishes with distance. The analysis makes use of techniques drawn from spatial econometrics.     

Productive capabilities: An empirical analysis of their drivers

Recent contributions to the growth and trade literature have argued that the structure of an economy, as measured by its productive capabilities, is a key determinant for inter-country differences in development. Productive capabilities have been shown to be highly predictive of future economic growth, yet the country-level variables associated with them remain relatively unknown. In this paper, we empirically explore what variables are systematically associated with productive capabilities using a model averaging framework that can handle a very large number of potential explanatory variables without the need for arbitrary model selection. In order to estimate our dynamic panel specification, we propose a novel Bayesian averaging of classical estimates procedure based on the simple and efficient bias-corrected least squares dummy variable estimator. Our baseline and robustness analysis consider a large number of variables, sample periods and model priors. We find that there is persistence (as measured by the lagged dependent variable) and that variables, such as commodity terms of trade, energy availability, government consumption, capital per worker, arable land and capital inflows show a strong and robust association with capabilities.     

Ethics perceptions of American Farmers: An empirical analysis

A 123 item survey of ethics perceptions of Farmers had 796 respondents. Of these, 517 (64.9%) felt that farm ethics had gotten worse. A discriminant analysis employed to offer insight into the extent and nature of group differences produced 22 independent variables along with an adequate increase in classification results above expectations due to chance. These variables reflect a division between the outside business and political world and the concerns of farmers. The responses suggest an appreciation by the respondents of the interdependence of their business actions with their neighbors. The results are also suggestive of both an absolute and a relative ethics component. Further research on the relevance of communitarian ethics is suggested.Allen Rappaport is Professor of Finance at the University of Northern Iowa, Cedar Falls, IA. He is a former Managing Editor of the North American Journal of Economics and Finance and current Executive Director of the North American Economics and Finance Association. He has published extensively in Academic Journals.Robert A. Himschoot is currently Real Estate Specialist with the Bureau of Indian Affairs. He was Instructor in Law, Management Department, at the University of Northern Iowa when this paper was written. He has worked in the mediation of Legal Disputes. He resides in Bethel, Alaska.