The Effects of Monetary Magnitude and Level of Aggregation on the Temporal Framing of Price

Existing research has shown that the pennies-a-day strategy of reframing a large aggregate expense as a small daily expense helps to reduce the perceived cost of a transaction (Nagle and Holden, 1995; Price, 1995; Gourville, 1998, 1999). This paper builds on this research and explores the robustness of the phenomenon across two dimensions – (1) the level of temporal aggregation and (2) the dollar magnitude of the transaction. First, we show that the effectiveness of a pennies-a-day strategy is not limited to per-day framing. Rather, we find a more general phenomenon in which a less aggregate expense is preferred to a more aggregate expense, such that if a per-day framing is preferred to a per-year framing, than a per-month framing also will be preferred to a per-year framing. Second, we show that this effectiveness reverses with the magnitude of the underlying expense, such that while a framing of $1 per day is preferred to one of $365 per year, a framing of $4200 per year is preferred to one of $11.50 per day.     

Justice: The root of american business ideology and ethics

Although there are many conceptions of Justice, these different perceptions can provide many interesting insights into a business person's ethical standards as well as that person's decision-making processes. Using the Bishops' Pastoral Letter on the U.S. Economy as the basis for asking questions about justice, twenty-four business executives were interviewed about their conception of justice. An analysis of these interviews reveals that this group of businesspeople operated under very different conceptions of Justice at the Macroenvironmental and Microenvironmental levels. This result has some interesting implications not only for those scholars concerned with business ethics but for everyone who has a stake in business education.Men are called good, chiefly on account of their Justice. Cicero, 56 B.C. Ideology is applied philosophy. Lodge, 1986 Richard McGowan, S. J. is an Assistant Professor of Operations and Strategic Management at Boston College. His research focus involves examining both the rationale behind business and public policy decisions as well as determining the effectiveness of these policy measures. Some of his recent publications include Deciphering the Japanese Import Quota, Policy Studies Journal (1988) and Public Policy Measures and Cigarette Sales: An ARIMA Intervention Analysis Study JAI Social Issues Management Volume (1989).     

The Relationship of Communication, Ethical Work Climate, and Trust to Commitment and Innovation

Recently, Hosmer (1994a) proposed a model linking right, just, and fair treatment of extended stakeholders with trust and innovation in organizations. The current study tests this model by using Victor and Cullen's (1988) ethical work climate instrument to measure the perceptions of the right, just, and fair treatment of employee stakeholders.In addition, this study extends Hosmer's model to include the effect of right, just, and fair treatment on employee communication, also believed to be an underlying dynamic of trust.More specifically, the current study used a survey of 111 managers to test (1) whether right, just, and fair treatment influences trust, both directly as well as indirectly via communication, and (2) whether trust influences perceptions of commitment and innovation. Strong support for the study's hypotheses and Hosmer's (1994a) model was found. Such findings support those who argue that moral management may be good management.     

Integrating Religious Principles and Human Resource Management Activities

Many ethical problems faced by organizations concern human resource management. This paper shows how some religious principles can be integrated into a human resource management course. First, it presents a discussion of employee responsibilities and rights in Judaism, Christianity, and Islam. Next, it suggests how various principles can be applied to human resource management activities. Do to others as you would have them do to you is applied to equal opportunity. Thou shall not commit sexual impropriety (or in positive terms, respect and love) is the basis for no sexual harassment. Thou shall not steal (or in positive terms, deal fairly) is related to fair pay in exchange for excellent employee performance. Thou shall not lie (or in positive terms, be truthful) is needed for due process in employee disputes. Thou shall not kill (or in positive terms, respect life) is applied to employee safety and health, plus health care benefits. A list of potential readings is included for instructors to consider for their own courses.     

The Methods Used to Implement an Ethical Code of Conduct and Employee Attitudes

In the process of implementing an ethical code of conduct, a business organization uses formal methods. Of these, training, courses and means of enforcement are common and are also suitable for self-regulation. The USA is encouraging business corporations to self regulate with the Federal Sentencing Guidelines (FSG). The Guidelines prescribe similar formal methods and specify that, unless such methods are used, the process of implementation will be considered ineffective, and the business will therefore not be considered to have complied with the guidelines. Business organizations invest enormous funds on formal methods. However, recent events indicate that these are not, by themselves, yielding the desired results. Our study, based on a sample of 812 employees and conducted in an Israeli subsidiary of a leading multinational High-Tech corporation headquartered in the US, indicates that, of the methods used in the process of implementation, one of the informal methods (namely, the social norms of the organization) is perceived by employees to have the most influence on their conduct. This result, when examined against employee tenure, remains relatively stable over the years, and stands in contradistinction to the formalistic approach embedded in the FSG. We indirectly measure the effectiveness of the percieved most influential implementation process methods by analyzing their impact on employee attitudes (namely, personal ethical commitment and employees' commitment to organizational values). Our results indicate that the informal methods (manager sets an example or social norms of the organization) are likely to yield greater commitment with respect to both employee attitudes than the formal method (training and courses on the subject of ethics). The personal control method (my own personal values) differs significantly from all the other methods in that it yields the highest degree of personal ethical commitment and the lowest degree of employees' commitment to organizational values.     

Does Greater Amount of Information Always Bolster Attitudinal Resistance?

Previous research suggests that attitudinal resistance to information that challenges a prior evaluation increases with the amount of information underlying the prior evaluation. We revisit this proposition in a context in which a set of important claims about a target brand are presented either alone—a lower amount of isolated information—or along with other favorable, but less important claims—a higher amount of embedded information. Results from two experiments show that when the challenge occurs immediately after the initial evaluation, a greater amount of embedded initial information does produce greater attitudinal resistance. However, when the challenge occurs after a delay, a lesser amount of isolated information produces greater attitudinal resistance. The findings qualify previous assumptions about the role of prior information in attitudinal resistance, and support a constructive view of judgment revision and attitudinal resistance.     

Effects of price uncertainty on consumer purchase budget and price thresholds

This article examines how uncertainty about prices affects: (1) the budget consumers allocate for purchasing a product and (2) consumer price thresholds (i.e., the prices that are considered too high or a good deal). In an experimental setting, the purchase budget as well as the absolute values of both thresholds for uncertain subjects were higher than those for certain subjects. Moreover, a relatively large decline from the budget was needed before a price was considered a good deal, whereas a relatively small increase from the budget was sufficient for a price to be considered too high. Price uncertainty widened the difference between the upper (i.e., too high) price threshold and the budget, making uncertain subjects more tolerant to prices exceeding the budget than certain subjects. However, price uncertainty did not have a significant effect on the difference between the budget and the lower (i.e., good deal) price threshold.We wish to thank the editor and anonymous reviewers for their helpful comments on an earlier draft. We also thank Professors S. P. Raj and Amiya Basu for their comments and suggestions at various stages of the study.     

Board-management relations in small firms: The paradox of simultaneous independence and interdependence

The author introduces constructs based on neo-classical and socio-economic assumptions, and argues that board-management relations should be characterized by both independence and interdependence. Interdependence is especially important in small firms. The article presents a model of directorates from research about directorates based on agency theory assumptions. This model is supplemented with constructs from the theory of contractual relations. Whilst traditional literature tends to focus upon independence from an agency theory perspective, this article argues that it is necessary to use more than one dimension of attributes regarding the board-management relations in order to understand the board's contribution to company performance, and that trust and solidarity is especially important in small firms. Board-management relations described by simultaneous independence and interdependence are proposed to give the highest contribution to company performance. The theoretical propositions are exemplified and supported by results of a field survey of directorates in small firms.     

On Creating and Claiming Value in Negotiations

This paper presents a negotiation model that includes value creation. It shows that creative negotiation efforts tend to intensify toward the deadline, and that the deadline is determined endogenously by the tension between two motives, creating more value and claiming from existing value. When the parties can present misleading offers in order to claim rather than create value, the outcome in early negotiation rounds may display an impasse where any proposal is rejected without inspection, while negotiation activities such as value creation through sincere offers and inspection of clauses intensify toward the deadline.     

Sudden change in a model of small firm growth

A catastrophe theory model of small firm growth allows for an abrupt change in small firm size. The model permits only smooth changes in the endogenous independent variables, turnover and profitability, yet allows sudden changes in the level of assets, the size variable. But not all growth paths suggested by the mathematics are likely to be met in the real world. Nevertheless, there are feasible phases of steady growth as well as feasible phases during which jumps occur.     

Common knowledge of the second kind

Although most of us know that human beings cannot and should not be replaced by computers, we have great difficulties saying why this is so. This paradox is largely the result of institutionalizing several fundamental misconceptions as to the nature of both trustworthy objective and moral knowledge. Unless we transcend this paradox, we run the increasing risks of becoming very good at counting without being able to say what is worth counting and why. The degree to which this is occurring is the degree to which the computer revolution is already over — and the degree to which we human beings have lost.I think that Aristotle was profoundly right in holding that ethics is concerned with how to live and with human happiness, and also profoundly right in holding that this sort of knowledge (practical knowledge) is different from theoretical knowledge. A view of knowledge that acknowledges that the sphere of knowledge is wider than the sphere of science seems to me to be a cultural necessity if we are to arrive at a sane and human view of ourselves or of science. (Hilary Putnam, Meaning and the Moral Sciences, 1981) David A. Bella is Professor of Civil Engineering at the College of Engineering at Oregon State University. He received his B.S. in Civil Engineering from Virginia Military Institute (1961), his M.S. and his Ph.D. in Environmental Engineering from New York University. His primary research interest is in the philosophy and sociology of technology, technological impact assessment, and moral philosophy. His most important publications are Engineering and Erosion of Trust and Organizations and Systemic Distortion of Information, Journal of Professional Issues in Engineering (1987), and Strategic Defense: Catastrophic Loss of Control, Journal of Peace Research (1989). Jonathan B. King is Associate Professor of Management at the College of Business at Oregon State University. He received his B.A. in philosophy from Antioch College (1965) and his M.B.A. in Finance (1975) and Ph.D. in Business, Government and Society (1980) from the University of Washington. His primary research interests are in the areas of moral philosophy, the philosophy of science, and critical thinking. His most important publications are The Three Face of Thinking, Journal of Higher Education (1986), Prisoner's Paradoxes, Journal of Business Ethics (1988), and Confronting Chaos, Journal of Business Ethics (1989).     

Corporate Communication and Impression Management – New Perspectives Why Companies Engage in Corporate Social Reporting

This paper addresses the theoretical framework on corporate social reporting. Although that corporate social reporting has been analysed from different perspectives, legitmacy theory currently is the dominating perspective. Authors employing this framework suggest that social and environmental disclosures are responses to both public pressure and increased media attention resulting from major social incidents such as the Exxon Valdez oil spill and the chemical leak in Bhopal (India). More specifically, those authors argue that the increase in social disclosures represent a strategy to alter the public's perception about the legitimacy of the organisation. Therefore, we suggest using corporate communication as an overarching framework to study corporate social reporting in which corporate image and corporate identity are central.     

Corporate democracy and the rights of shareholders

Some have argued that because of weaknesses in corporate democracy, there is widespread abuse of shareholders' rights in American securities markets. I describe a number of horror stories that shareholders might tell to support this claim. Then I argue that despite appearances to the contrary, there is not widespread abuse of shareholders' rights in American securities markets. This is because (i) corporations, when doing things that look abusive, are generally violating neither the legal rights nor the charter rights of shareholders and (ii) shareholders — in their role as shareholders — have no other rights than these. William B. Irvine is Assistant Professor of Philosophy at Wright State University. He is the author of The Ethics of Investing, Journal of Business Ethics, vol. 6, no. 3.     

Individual strategies in a market entry game

Quantitatively trained Ph.D. students participated in three replications of a 20-trial market entry game in which each agent has two pure strategies—to enter the market or stay out of the market—and the individual payoff depends on the size of the set of active agents entering the market. With experience, subjects adhered more strictly to pure strategies, which although markedly different from one to the other combined to form distributions supporting a Nash equilibrium solution to the game.     

Student Ethical Perceptions and Ethical Action Propensities: An Analysis of Situation Familiarity

Recently McCuddy and Peery (1996) have suggested that business students may not respond the same way to unfamiliar business ethical dilemmas as they would to more familiar academic ethical dilemmas. The purpose of this study was to present the same students with both unfamiliar business dilemmas as well as possibly more familiar academic dilemmas in order to examine this issue.Findings of the study revealed that students did not exhibit different perceptions of the unethical actions performed in the academic and accounting/business ethical vignettes. However, the students indicated that both they and their peers would be more likely to act unethically to resolve the dilemmas in the accounting/business cases than in the academic cases. This finding is troubling in that it suggests that students either feel less compelled to act ethically in business, or that they perceive that ethical standards in the business world are generally low when compared to their current educational environment. In addition, the students in the study maintained the same halo effect (i.e., the difference between an individual's perception of their likelihood of performing an unethical action compared to their perception of their peers' likelihood to perform the same unethical action) across the two types of ethical dilemma.     

From Adam Smith to the American Catholic bishops: Debating visions of economic life

Considerable controversy was stirred by the contrast between the specific approaches to public policy contained in the first draft of the Catholic bishops' letter on the U.S. economy and the policies favored by the Reagan administration. However, a much more basic contrast actually existed between the bishops' underlying vision of economic life and contemporary capitalism. The pastoral challenges a separation between moral criteria and economic activity that is deeply embedded in modernity itself. Indeed, the splitting off of economic life from its moral-religious matrix is seen by the bishops' critics as a positive, defining feature of democratic capitalism. The critics see the separate economic and moral-religious spheres related by due balance; the bishops, while acknowledging an autonomy to economic life, emphasize that its fundamental choices remain moral. The bishops (and, for different reasons, their critics) have preferred to minimize the contrast between the letter's vision and the contemporary economy. They avoid any clearcut judgment on the economic system by stressing pragmatism and reforms; but implicitly they are granting a strictly conditioned acceptance of reformist capitalism, the condition being the system's openness to questioning and change. Peter Steinfels is Editor of Commonweal Magazine and he is the author of The Neoconservatives (Simon and Schuster, 1979).     

Wisdom Paradigms for the Enhancement of Ethical and Profitable Business Practices

Many organizations continually search for new business models and ways to conduct business ethically, yet profitably. Kirk Cheyfitz (2003) proclaims that organizations should not waste time trying to create new business models because the rules of commerce never change. Instead of searching for new business models, organizations can improve business practices by looking at different paradigms or mental models for seeing how to build practices that lead to long-term success. The employment elements of wisdom as paradigms for developing sound structures and practices that will encourage management behaviors that are ethical and lead to profitability. First, a theory of wisdom is developed. Then, the elements of wisdom are applied to the design of a general business structure and to refocusing some basic business practices.     

Management development and business ethics: A view from the U.K.

This article is written in the context of current British interest in management training and development, in which an emphasis on competency is viewed critically, as technically oriented, with little attention paid to ethics and moral values. It is suggested that a concern for ethics in management development can be expressed in terms of four requisite management attributes or qualities: theoretical knowledge and understanding; affective qualities; personal and interpersonal skills; and self-knowledge. Following Kohlberg's work on moral development, the cultivation of these attributes is viewed as a life-span process involving three broadly defined forms of management development practice, each appropriate to different circumstances and stages in a learner's career. It is concluded that the conventional teaching of theory, learning from experience and counselling/mentoring, are equally important in the contribution which management development can make to the resolution of ethical dilemmas in business practice.Patrick Maclagan is a lecturer in organisational behaviour and managerial ethics at the School of Management, University of Hull, U.K., where he is also on the Steering Committee of the Social Values Research Centre, His current research concerns the relationship between management development and ethics in organisations.     

General causal models in business ethics: An essay on colliding research traditions

The construction of causal models for research in business ethics has become fashionable in recent years. This paper explores four recent proposals, comparing and contrasting their views. The primary purpose of this paper is to expose several confusions inherent in such models and to account for these errors in terms of a failure to distinguish between models as theories and models as representing a research tradition. We conclude with a brief set of recommendations for linking two major research traditions in business ethics: empiricism and ethical theory.F. Neil Brady is Professor of Management at San Diego State University. He is the author ofEthical Managing: Rules and Results (Macmillan, 1990) and numerous articles on business ethics. His research focuses on the application of ethical theory to business decision making.Mary Jo Hatch is an Associate Professor at San Diego State University and visiting Associate Professor at the Copenhagen Business School in Denmark. Her research interests include the link between business ethics and organizational culture, and humor in management teams. She has published articles on organizational culture and the behavioral and symbolic aspects of organizations as physical structures.     

A positive approach to organized consumer action: The “buycott” as an alternative to the boycott

A survey of the consumer research literature revealed few instances of consumer buycotts, i.e., efforts by consumer activists to induce shoppers to buy the products or services of selected companies in order to reward these firms for behavior consistent with the goals of the activists. The few cases did however prompt some thoughts on the development of a conceptual framework for understanding the place of buycotts on a consumer activist agenda. The framework is briefly described and examples presented of prospective uses to be made of buycotts by consumer groups. Also presented is a set of basic research questions concerning buycotts which should be of interest to scholars as well as practitioners.

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Kollektive Konsumentenaktion als positive Rückmeldung: der Buycott als Alternative zum Boycott

Zusammenfassung Eine Durchsicht der Literatur zur Verbraucherforschung zeigt einige wenige Beispiele eines Verbraucher-Buycotts, also der Bemühung von Verbraucheraktivisten, Konsumenten zum Kauf von Produkten solcher Unternehmungen zu bewegen, deren Verhalten den Zielvorstellungen der Aktivisten entspricht und die deswegen belohnt werden sollen. Diese wenigen Fälle geben Anlaß für einige grundsätzliche Überlegungen zur Entwicklung eines konzeptionellen Rahmens für das Verständnis des Buycotts und seiner Bedeutung als möglicher Aktionsparameter der Aktivisten. Der Beitrag skizziert einen solchen Bezugsrahmen und lefert Beispiele für künftige Einsatzmöglichkeiten des Buycotts als Instrument von Verbraucherverbänden. Schließlich werden einige Forschungsfragen formuliert, deren Antwort sowohl für Wissenschaftler wie auch für Praktiker von Interesse sein dürfte.

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Monroe Friedman is a Professor of Psychology at Eastern Michigan University, Ypsilanti, MI 48197, USA.