The role of ethics in executive compensation: Toward a contractarian interpretation of the neoclassical theory of managerial renumeration

The topic of Chief Executive Officer (CEO) compensation has been a focus of interest for many years. The purpose of this article is to explore the ethical dimensions of various generally accepted theories of CEO renumeration. We argue that a contractarian approach, based on the Kantian ethical framework, can be used to augment the existing contingent pay models.While the neoclassical economic model of the firm views the maximization of the shareholders' wealth as the sole responsibility of top management, a contractarian approach regards the balancing of various stakeholders' interests as the primary task of top management. Ethical problems emerge when there are divergent, yet equally justifiable interests which compete in order to channel organizational resources to meet their own needs. In this situation, given the inherent ambiguities and ever present possibilities of multiple perspectives, it may not always be feasible to provide a categorical answer to the question of whether the CEO's decisions are ethical. We suggest that a broad interpretation of the neoclassical theory of the firm, one that is grounded in Kantian and contractarian ethics, can serve as a basis for a reconciliation of different theories of executive compensation.Linda L. Carr, a certified public accountant, has held positions as an auditor in public accounting and as a controller in industry. Her thesis examines the determinants of executive compensation in large and small firms.Moosa Valinezhad is assistant professor of economics in Western Kentucky University, where he teaches international economics, microeconomics, and statistics. Dr. Valinezhad has a deep interest in the interdisciplinary aspects of economics. His recent article in theJournal of Economic Issues explores the importance of sociopolitical forces for the monetary approach to the balance of payment.     

The role of ethics and social responsibility in achieving organizational effectiveness: Students versus managers

This paper investigates the differences in perceptions between business students and service-sector managers regarding the role that ethics and social responsibility serve in determining organizational effectiveness. An organizational effectiveness instrument containing business ethics and social responsibility items served as a questionnaire for a sample of 151 senior business undergraduates and 53 service-sector managers. The results indicated that while students acting as managers rate some social responsibility issues as more important than do managers, they also rate ethical conduct and a few dimensions of social responsibility lower than do managers. The findings have direct implications for both business practitioners and educators.Kenneth L. Kraft received his D.B.A. from the University of Maryland in 1982 and is currently an Associate Professor of Management at Old Dominion University in Norfolk, VA. His recent papers explore the relationships between strategy, structure, social responsibility, and organizational effectiveness in a variety of settings. Anusorn Singhapakdi is Assistant Professor of Marketing at Old Dominion University. His current research interests center on marketing/business ethics and selected public policy issues in marketing. He has published in Journal of Macromarketing, Journal of the Academy of Marketing Science, International Journal of Value Based Managementas well as other journals and proceedings.     

Foreign market entries,exits and re-entries: The role of knowledge,network relationships and decision-making logic

We focus on the following question: how are knowledge, network relationships and decision-making logic interrelated throughout the internationalization process – foreign market entries, exits and re-entries? We contribute to the internationalization literature, network approach and effectuation theory that have not examined these interrelationships during internationalization – especially de- and re-internationalization – in detail yet. Thereby, we provide a more complete view of internationalization. Based on a single punctuated longitudinal case study, we show that lack of knowledge results in mostly effectual (opportunity-driven) decision-making: finding customers via weak ties, trade fairs and unsolicited export orders and experiencing numerous market exits and re-entries due to “experimenting”. Knowledge acquisition leads to more causal (systematic, plan-driven) decision-making and stronger ties, but serendipitous (“by chance”) entries can still occur, and exiting and re-entering foreign markets may continue. We suggest that managers should network and acquire knowledge actively, use both decision-making logics and accept uncertainty as normal during internationalization.     

Making the most of group relationships: The role of gender and boundary effects in microcredit groups

Relationships and networks are important for a range of entrepreneurial outcomes. However, gender scholars' efforts to compare networks across genders rarely extend to provide empirical evidence for the link between networks and performance. Building on expectation states theory and network perspectives, we examine between- and within-gender differences in the network size–performance relationship, highlighting the conditions under which some females leverage their relationships for firm performance better than others. Using data collected from microcredit entrepreneurs in Kenya, we find that the number of within-group ties positively influences firm performance but more positively for male entrepreneurs. For female entrepreneurs, this relationship is contingent on both their individual and their group's characteristics. We discuss implications and future research directions for the gender, networks, and microcredit literatures.     

Passing the baton: The importance of sequence,timing, technique and communication in executive succession

The extensive literature on executive succession gives only scant attention to the actual process of succession. To better understand the dynamics of the succession process, the analogy of a relay race is suggested, where success is influenced by four factors: sequence, timing, baton-passing technique, and communication. These four factors are used as a framework for a longitudinal examination of a failed executive succession in a small, family-owned manufacturing firm. In-depth examination of the attempted succession showed that the four themes are helpful in working toward the development of a general theory of executive succession.     

The moderating role of managerial ties in market orientation and innovation: An Asian perspective

This empirical study contributes to the extant literature by investigating the relations among market orientation, managerial ties and innovation simultaneously and interactively, from an Asian perspective. Our findings reveal that customer orientation and interfunctional coordination have a positive impact on innovation. Moreover, managerial ties play a moderation role in the market orientation–innovation linkage. Business ties enhance the relation between customer orientation and interfunctional coordination and innovation. On the other hand, business ties and competitor orientation have a negative interaction effect on innovation. In addition, political ties also dampen the relation between interfunctional coordination and innovation. Such results add new insights to the extant literature and provide implications for future research and marketing practices in Asia.     

Innovativeness and business relationships in women‐owned firms: The role of gender stereotypes

This paper investigates the relationship between business contacts and innovativeness in women‐owned firms and how women entrepreneurs’ perception of gender stereotypes affects this relationship. Data were collected through a survey of 107 women entrepreneurs in Spain. The results show that maintaining close contacts with managers/entrepreneurs in different industries and with customers is significant in explaining innovativeness in women‐owned firms. The stronger the women entrepreneurs’ perception of stereotypes that deviate from the masculine profile of the entrepreneur, the stronger the influence of these two types of close contact on innovativeness. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

MNE performance during a crisis: An evolutionary perspective on the role of dynamic managerial capabilities and industry context

As the likelihood of worldwide crises increases due to globalization and the resulting economic contagion, understanding why some multinational enterprises (MNEs) prevail in such environments becomes ever more critical. Drawing from the concept of dynamic managerial capabilities, we posit that MNE in-crisis performance is associated with the pre-crisis development of asset management capabilities, or the capacity of managers to orchestrate assets so as to extract more value from the firm’s resource pool. Specifically, we argue that because dynamic managerial capabilities evolve as a response to a firm’s task environment, MNEs that operate in dynamic industries develop stronger asset management capabilities. However, we also posit that whether these capabilities contribute to in-crisis performance is contingent upon the munificence of the industry environment in which the capability evolves. Asset management capabilities that evolve in munificent environments would encompass a wider spectrum of routine-altering activities, and thus increase the ability of the MNE to react to more revolutionary events, such as global economic crises. Conversely, asset management capabilities that evolve in resource-scarce environments will result in more strategic lock-in due to firms' constrained ability to experiment with novel resource configurations, resulting in poorer in-crisis performance. We test our hypotheses using a sample of 854 MNEs in the context of the global financial crisis of 2008, and find support for our hypotheses. We discuss implications for the dynamic capabilities view and MNE resilience.     

The impact of salespeople's relational behaviors and organizational fairness on customer loyalty: An empirical study in B-to-B relationships

Although customer loyalty has proved to be a powerful determinant of firms' profits, the drivers of loyalty in B-to-B relationships are still unclear. Recognizing that both interpersonal and interorganizational level variables are needed to predict customer loyalty, the aim of this study is to investigate the combined effects of salespersons' relational behavior and organizational fairness in predicting customer satisfaction and loyalty. Results from a field survey in a B-to-B setting show that buyer loyalty is largely determined by the quality of the interpersonal relationship with the seller. Perceived fairness is central for building overall customer satisfaction and loyalty toward the supplier.     

An empirical analysis of the stage model of Business-to-Business relationships in South Korea: a longitudinal study

In this study, we develop and evaluate a framework for investigating the relationship between firm performance and exit intentions—that is, when the termination of Business-to-Business (B2B) relationships involves both conflict and cooperation. This study adds to extant research by demonstrating the importance of temporal changes; the proposed framework highlights the change processes in B2B relationship exit intentions. At time point T, the results suggest that the long-term relationship stage is stable. At time point T + 1, we find that the final relationship stage is dynamic. We demonstrate that several structural-temporal relationships among the investigated links (i.e. conflict-cooperation, conflict-firm performance, and cooperation-firm performance) decrease.     

Me,myself and I: The role of CEO narcissism in internationalization decisions

Internationalization decisions represent major objects of international business research; in this context, the respective role of decision-makers, i.e., strategic actors has been under study for now nearly 50 years. However, some important individual characteristics of strategic actors, which seem to influence individual decision-making in a significant way, have been – in contrast to general management research – widely disregarded. Among those characteristics, narcissism plays a decisive role. Trying to provide a first attempt to fill this research gap our paper aims at theorizing on as well as empirically analyzing potential relationships between narcissistic tendencies of CEOs and their internationalization decisions. The empirical study of major German manufacturing firms over the period 2004–2013 shows that CEOs with a high degree of narcissism tend to intensify business activities abroad in general while the expected effect on intensified activities in markets with a high psychic distance cannot be identified. These research results help to better understand the drivers of firms’ internationalization, stress the importance of recognizing managerial decision-making in the context of analyzing business activities abroad, and improve the prediction of CEOs’ decision-making behavior in general.     

The role and function of the chief marketing executive and the marketing department: A study of medium‐sized companies in the UK

The unification of “marketing” functions under the control of a chief marketing executive has long been regarded as central to implementing the marketing concept. While not accepting the logic that suggests that marketing orientation implies any particular set of organisational arrangements, this article examines new empirical data concerned with the role and status of the chief marketing executive and the marketing department, in a sample of manufacturing firms, to suggest that they function very differently in different companies.

Such distinctions have important implications for our understanding of how marketing operates in organisations, and the different ways in which it may be developed, both in manufacturing and in other sectors.     

市场导向、组织学习创新及组织绩效:基于珠江三角洲企业的实证研究

The purpose of this paper is to examine the relationships among market orientation, learning orientation, organizational innovation and organizational performance through a structural equation modeling approach. This study uses a sample of 143 companies in the Pearl River Delta region of China. Results show that (1) market orientation has no positive direct impact on organizational performance; (2) market orientation has a direct impact on learning orientation; (3) learning orientation has a direct impact on administrative and technical innovation; (4) market orientation has a direct impact on organizational innovation by learning orientation; (5) administrative innovation has a positive direct impact on organizational performance while technical innovation does not impact on organizational performance directly; (6) technical innovation has a positive impact on administrative innovation; (7) learning orientation has an indirect impact on organizational performance through influencing organizational innovation; (8) market orientation has impact on learning orientation, which has an impact on organizational innovation, which in turn has an impact on organizational performance. Managerial implications are discussed, along with suggestions for further research. Translated from Guanli Shijie 管理世界 (Management World), 2006, (2): 80–94, 143     

Students' perception of corporate social responsibility: Analyzing the influence of gender,academic status,and exposure to business ethics education

Studies on students' perception of corporate social responsibility (CSR) have been growing in western scholarship. For students in African countries, such as Nigeria, there is little that is known about how and whether gender, level of study, and being enrolled in business education courses impact their perception of and disposition towards CSR. This study explores the significance of gender, academic status or level of study, and exposure to business ethics education (BEE) on Nigerian students' perception of CSR as a veritable business ethic. Specifically, the effects of these factors on students' perception of CSR are examined using analysis of variance. The results show a significant effect of exposure to BEE and gender on CSR‐sensitivity, and a mild, but significant effect of academic status. This implies that male students and female students had different perspectives on CSR issues. Students who took ethics courses and those who did not would run businesses differently. However, age and experience on campus did not influence students' perception or position on CSR. The study recommends that more behavioral models be estimated with the inclusion of more demographic and socioeconomic variables to elicit more robust results.     

Costs,culture and life decisions: analysing the factors that influence enrolment in master's level education in Germany

Through evaluation of current literature and survey data, this exploratory study aimed to determine factors that influence enrolment in master's level education and attendant delay of life decisions. A total of 134 master's students at a German university were surveyed. The mean age was 25 years and respondents were nearly equal parts German and non‐German nationalities. Results show how cultural factors motivate enrolment in master's programmes and how enrolment influences the timing of other important life decisions. Respondents expected significant benefits to social status, job placement and income. While this small‐scale study does not include all decision factors and its findings are not fully generalizable, we hope it motivates further research in this area.     

Drivers of clothing disposal in the US: An exploration of the role of personal attributes and behaviours in frequent disposal

Clothing products remain important in today's consumer culture, but the sustainability of that consumption is questionable, as it often leads to excess waste. The purpose of this study was to explore the drivers of clothing waste, and to investigate the influence of demographic factors and personal attributes on disposal frequency. An online survey was conducted to over 500 men and women in the US from three different generational cohorts. The survey investigated fashion trend sensitivity, shopping frequency, quality and price consciousness as well as demographic factors, utilizing 5‐point Likert scales. On the basis of literature, seven hypotheses were developed. Correlational analysis, independent t‐test and one‐way analysis of variance were conducted to test the hypotheses. Results indicate that fashion trend sensitivity, fashion shopping frequency, higher incomes, younger age groups and being female are all positively correlated with frequent clothing disposal. Interestingly, quality consciousness was positively correlated to frequent clothing disposal, while price consciousness was negatively related to clothing disposal frequency. This study contributes to the literature by providing a more specific examination of the drivers of frequent clothing disposal and providing empirical evidence to support previous exploratory studies.     

Online value creation in small service businesses: the importance of experience valence and personal values

Perceived value is of great interest in current marketing research. However, in the area of Internet as a shopping channel of small businesses, there has been little analysis of customer perceived value and its determinants. This paper examines two little analysed aspects of value creation, experience valence and personal values. The analysis of data from a survey of tourism service purchase shows that experience valence, in terms of relevant information, ease of use and customer service, clearly influences perceived value after the online shopping experience. In contrast, only personal values of sense of security and sense of accomplishment influence perceived value.     

Evaluating the importance and performance of the human resources function: An examination of a medium sized Scottish retailer

With human capital reporting pending, and pressure to demonstrate high performance in all areas of business increasing, the human resources (HR) function at Scotmid (Scottish Midland Co-operative Society Limited) has been evaluated by operational managers and HR specialists. Results indicate that a sizeable majority of the HR portfolio is considered value-adding. However operational managers hold traditional views of the function and categorise operational HR activities of paramount importance. Also, there are mixed views on HR performance which have created a number of critical perceptual gaps. Consequently, the principal implications for Scotmid are identified.