An Investigation of the Degree of Market Power in the Greek Manufacturing and Service Industries

This paper investigates the degree of market power in the Greek manufacturing and service industries over the period 1970–2007. The markup model developed by Hall (1988) and Roeger (1995) is taken into consideration where market power is expressed as the difference between the selling price and the marginal cost of production. The analysis will be conducted in three steps; the first step estimates the price-cost margin of the manufacturing and services industries over 1970–2007; the second step applies the cross section specification under which the markup ratio is obtained for the 23 manufacturing and 26 service 2-digit ISIC sectors of the panel sample; and the third step estimates the price-cost margin of the manufacturing and services industries for each year over 1973–2007 by employing the Hall-Roeger time series specification. The empirical findings suggest that both industries exert a positive markup ratio; however, the service industry appears to be less competitive than the manufacturing industry.     

Measuring the Magnitude of Significant Market Power in the Manufacturing and Services Industries: A Cross Country Approach

This paper provides estimates of price-marginal cost ratios for manufacturing and services sectors in the Eurozone, the US and Japan over the period 1970–2007. The estimates are obtained applying τhe methodology developed by Hall (J Pol Econ 96:921-947 1988) and extended by Roeger (J Pol Econ 103:316-331 1995) on the EU KLEMS March 2011 database. The empirical findings show that sectors that are more open to internationalisation such as textiles, experience relatively the lowest mark up ratios, while policy makers should enhance their policy in fragmented industries in which profitability indicators of market players indicate evidence of imperfect competition. The major stylized facts that are emerged from the empirical results based on the Ordinary Least Squares, Two Step Least Squares and Bootstrap methods of estimation are a) there is no evidence of imperfect competition across the majority of industries in Eurozone, US and Japan, b) sectors that are more open to internationalisation, experience relatively lower mark up ratios than the ratios experienced in less open sectors to internationalisation and c) deregulated industries generally have lower mark – up ratios than regulated industries, while fragmented industries generally exhibit higher mark – up ratios than segmented ones.     

Editorial Essay: Mapping the Ethical in Neuroscientific Research

The unmanaged organization (Gabriel in Organ Stud 16:477–501, 1995) is moving from coffee corners to social networks. This means not only a change of media, but also a transformation in how organizations exert control over workers and how workers resist the commodification of emotions (Fineman, in: Fineman, Emotion in organizations, Sage, London, 2000; Lindebaum in J Manag Inq 21:262–277, 2012). After analyzing instances of the online publication of images and texts that escape organizational control, we identified three main ambiguities helpful in framing future studies about organizational control and resistance: ambiguity between private and public spheres, ambiguity between spontaneous and performed manifestations, and ambiguity between the distribution and control of power. Our main contribution is to understanding the Internet, particularly social networks, as a medium for employee resistance through distance (Collinson, in: Jermier et al., Resistance and power in organizations, Routledge, London, 1994), and in using the three aforementioned ambiguities to help analyze this phenomenon.     

A Fair Trade-off? Paradoxes in the Governance of Fair-trade Social Enterprises

This paper explores how fair trade social enterprises (FTSEs) manage paradoxes in stakeholder-oriented governance models. We use narrative accounts from board members, at governance events and board documents to report an exploratory study of paradoxes in three FTSEs which are partly farmer-owned. Having synthesized the key social enterprise governance literature and framed it alongside the broader paradox theory, we used narratives to explore how tensions are articulated, how they can be applied within an adapted paradox framework, and how governance actors seek to mitigate paradoxes. The paper contributes to current debates in social enterprise scholarship concerning hybridity (Pache and Santos, Acad Manag Rev 35(3):455–476, 2010; in Institutional logics in action, Part B (Research in the sociology of organizations), 2012), hybrid organizing (Battilana and Lee, Acad Manag Ann 8(1):397–441, 2014) and operational tensions (Smith et al., Bus Eth Q 23(3):407–442, 2013) by illustrating empirically how the central social/enterprise paradox manifests in FTSEs governance arrangements. We build on the paradox categories proposed by Lüscher and Lewis (Acad Manag J 51(2):221–240, 2008) and adapted in Smith et al. (Bus Eth Q 23(3):407–442, 2013) by developing a recursive model of legitimacy-seeking governance processes, conceptualizing how boards seek to mitigate, but not necessarily resolve, paradoxes.     

Sources of Stakeholder Salience in the Responsible Investment Movement: Why Do Investors Sign the Principles for Responsible Investment?

Since its inception in 2006, the United Nations-backed Principles for Responsible Investment (PRI) have grown to over 1300 signatories representing over $45 trillion. This growth is not slowing down. In this paper, we argue that there is a set of attributes which make the PRI salient as a stakeholder and its claim to sign the six PRI important to institutional investors. We use Mitchell et al.’s (Acad Manag Rev 22:853–886, 1997) theoretical framework of stakeholder salience, as extended by Gifford (J Bus Eth 92:79–97, 2010). We use as evidence confidential data from the annual survey of signatories carried out by the PRI in a 5-year period between 2007 and 2011. The findings highlight pragmatic and organizational legitimacy, normative and utilitarian power, and management values as the attributes that contribute most to the salience of the PRI as a stakeholder.     

Whistleblowing and Information Ethics: Facilitation,Entropy, and Ecopoiesis

The economic and moral defense of sweatshops given by Powell and Zwolinski (J Bus Ethics 107:449–472, 2012) has been criticized in two recent papers. Coakley and Kates (J Bus Ethics 117:553–558, 2013) focus on putative weaknesses in the logic of Powell’s and Zwolinski’s argument. Preiss (Bus Ethics Quart 24(1):55–82, 2014) argues that, even granting the validity of their economic argument, Powell’s and Zwolinski’s defense is without force when viewed from a Kantian republican viewpoint. We are concerned that sweatshop critics have misinterpreted the economic literature and overstated the conclusions that follow from their ethical premises. We show that the best understanding of the current economic literature supports Powell’s and Zwolinski’s conclusions about the negative effects of sweatshop wage regulation, and that it is unreasonable to reject economic analysis in moral argument against sweatshops even from a Kantian perspective. Additionally, we defend the theory of exploitation as unfairness given by Wertheimer (Exploitation, 1996), and show how economic analysis can be applied to that theory to identify cases of sweatshop exploitation.     

The Usefulness of Social Norm Theory in Empirical Business Ethics Research: A Review and Suggestions for Future Research

In response to recent calls to extend the underlying theories used in the literature (O’Fallon and Butterfield in J Bus Ethics 59(4):375–413, 2005; Craft in J Bus Ethics 117(2):221–259, 2013), we review the usefulness of social norm theory in empirical business ethics research. We begin by identifying the seeds of social norm theory in Adam Smith’s (in: Raphael and Macfie (eds) The Theory of Moral Sentiments, the Glasgow Edition, Oxford University Press, Oxford, 1759/1790) seminal work, The Theory of Moral Sentiments. Next, we introduce recent theory in social norm activation by Bicchieri (The grammar of society: The nature and dynamics of social norms, Cambridge University Press, New York, 2006) and compare the new theory to two theoretical frameworks found in the literature: Kohlberg’s (in: Goslin (ed) Handbook of socialization theory and research, Rand McNally, Chicago, IL, 1969; in: Lickona (ed) Moral development and behavior, Holt, Rinehart & Winston, New York, 1976) theory of moral development and Cialdini and Trost’s (in: Gilbert et al. (eds) The handbook of social psychology, Oxford University Press, Boston, 1998) taxonomy of social norms. We argue that the new theory provides useful insights by emphasizing the ability of situational cues and information to generate common expectations for social/moral norms. The theory is particularly useful for empirical research in business ethics because it gives both organizational and individual factors a role in motivating norm-based behavior. To demonstrate this usefulness, we present examples where the theory has been effectively applied in experimental accounting research to generate new insights. We conclude by citing specific examples where the theory may prove useful in empirical business ethics research.     

Action Research As an Ethics Praxis Method

Action research is combined research and practical action where the researcher joins with and acts with practitioners to help improve practice and theory building. Action research can be a form of Aristotelian critical, ethical praxis that developmentally changes the action researcher and the external world. Bernstein’s (Praxis and action, 1971) and Eikeland’s (The ways of Aristotle, 2008) interpretations of Aristotelian ethics praxis are considered. The Argyris et al. (Action science: concepts, methods, and skills for research and intervention, 1985) “action-science” and the van de Ven (Engaged scholarship: A guide for organizational and research knowledge, 2007) “engaged scholarship” forms of action research with their differently nuanced interpretations of Aristotelian philosophy as foundations for action research are considered and compared as examples of action research as an ethics praxis method with respect to (1) a key similarity with respect to joining of critical ethics and actionable knowledge; (2) another key similarity with respect to action research practice that can developmentally change the action researcher and the external world; and (3) a key difference with respect to academic literature versus practitioner-based theory building is also considered (Nielsen J Bus Ethics 93:401–406, 2010a). Examples in the cases of the political economist and action researcher, Hirschmann’s “Exit,Voice, Loyalty” approach and Greenleaf’s “Servant Leadership” approach to action research as forms of Aristotelian critical, ethical praxis are analyzed.     

Social Constructivism,Mental Models,and Problems of Obedience

There are important synergies for the next generation of ethical leaders based on the alignment of modified or adjusted mental models. This entails a synergistic application of moral imagination through collaborative input and critique, rather than “me too” obedience. In this article, we will analyze the Milgram results using frameworks relating to mental models (Werhane et al., Profitable partnerships for poverty alleviation, 2009), as well as work by Moberg on “ethics blind spots” (Organizational Studies 27(3):413–428, 2006), and by Bazerman and Chugh on “bounded awareness” (Harvard Business Review, 2006; Mind &; Society 6:1–18, 2007) Using these constructs to examine the Milgram experiment, we will argue that the ways in which the experiments are framed, the presence of an authority figure, the appeal to the authority of science, and the situation in which the naïve participant finds herself or himself, all create a bounded awareness, a narrow blind spot that encourages a climate for obedience, brackets out the opportunity to ask the moral question: “Am I hurting another fellow human being?” and may preclude the subject from utilizing moral imagination to opt out of the experiment. We will conclude that these forms of almost blind obedience to authority are correctable, but with difficulty. We will argue that linking the modification of mental models to an unbinding of awareness represents an important synergistic relationship and one that can build effectively on the lessons learned from our experience with moral imagination.     

Do Investors See Value in Ethically Sound CEO Apologies? Investigating Stock Market Reaction to CEO Apologies

Since the late 1990s, the number of apologies being offered by CEOs of large companies has exploded (Lindner in Austin American-Statesman, 2007; Adams in USA Today, 2000). Communication and management scholars have analyzed whether and why some of these apologies are more effective or more ethical than others (Souder in Sci Eng Ethics 16:175–184, 2010; Benoit in Accounts, excuses, and apologies: a theory of image restoration strategies, 1995a; Benoit and Czerwinski in Bus Commun Q 60:38–57, 1997). Most of these analyses, however, have remained at the anecdotal level. Moreover, the practical, economic consequences of apologies have not been examined. Almost no rigorous or systematic empirical work exists that examines whether stakeholders (1) reward firms whose CEOs give apologies that are more, rather than less, ethical; and (2) punish firms whose corporate apologies are not ethically sound. This lacuna is surprising given that the whole purpose of an apology is to restore trust between the apologizer and the recipients of the apology. It is also surprising, given that stock market participants do appear, in at least some cases, to evaluate and respond to apologies by CEOs. When Johnson and Johnson was hit by the Tylenol poisonings, its stock price plummeted. One day after CEO James Burke’s apology—an apology widely praised for being ethically sound—approximately a half billion dollars of its previously lost stock value was restored (The financial effect of Burke’s 1982 apology was calculated using Eventus data for a window ?1, +1 days around the date of the actual apology.). It appears, then, that a good CEO apology may lead to an increased stock value ceteris paribus. But is the Johnson and Johnson case representative of how the market responds in general to CEO apologies?     

International Marketing Ethics: A Literature Review and Research Agenda

Globalization has changed the nature of business in the twenty-first century (Doh et al. in Bus Ethics Q 20(3):481–502, 2010). With the increased internationalization of multinational corporations, the need to address international marketing ethics arises (Carrigan et al. in Int Market Rev 22(5):481–493, 2005). Given the diversity of environments and cultures, ethical issues are numerous and complicated (Iyer in J Bus Ethics 31(1):3–24, 2001). The understanding of international marketing ethics is critical to academics as well as practitioners. This paper is a literature review (1960s through 2013) of the study of ethics in international marketing. In order to develop a comprehensive review of articles, we review topics such as ethical problems, moral philosophies, and culture and ethics. We also discuss the methodological procedures that are used in international marketing ethics. Researchers and practitioners alike can use this research on international marketing ethics to discuss the phenomena and subsequently lead to future work research.     

International entrepreneurship in universities: Context,emergence and actors

This special issue presents an opportunity to explore the international aspects of academic and university based international entrepreneurship. Over the last decades much research attention has been focused on university spin-off firms (USOs) on issues such as, creation, risk, strategies and performance (see Druilhe and Garnsey, 2004; Link and Scott, 2005; Lockett and Wright, 2005; Walter et al, 2006; Wright et al., 2006). There has been a dearth of studies that have examined the international dimensions and aspects of university-based spin-off firms. The six articles presented in this special issue point towards interesting future research agendas at the interface between academic and international entrepreneurship. Three core themes emerge from this special issue: Context, Emergence and Actors. In sum, this special issue pinpoints: firstly, specific features of universities and research organizations as contexts for international technology entrepreneurship; secondly, the process of organizational emergence and entrepreneurial cognition; and thirdly, insight into learning processes of USOs and the role of non-academic actors. Our article concludes by identifying future avenues of research.     

Virtue Ethics and the Practice–Institution Schema: An Ethical Case of Excellent Business Practices

This paper aims to contribute to a greater understanding of the theory of virtue ethics and its applications in the business arena. In contrast to other prominent approaches to ethics, virtue ethics provides a useful perspective in making sense of various business ethics issues with an emphasis on the moral character of the individuals and its transformational influences in driving ethical business conduct. Building on Geoff Moore’s (Bus Ethics Q 12(1):19–32, 2002; Bus Ethics Q 15(2):237–255, 2005; Bus Ethics Q 18(4):483–511, 2008) treatment of Alasdair MacIntyre’s practice–institution schema, the paper discusses how individuals, as moral agents, can serve to promote virtuous business conduct and help foster a moral and ethical climate in the organization and in society at large. Using interview data from a broader study of the New Zealand wine industry as explanatory examples, the paper argues that while many companies’ sustainable practices are still largely market based, such excellent business practices are often driven by individuals’ moral and ethical pursuits.     

Internationalization of an academic invention through successive science-business networks: The case of TAVI

The aim of this paper is to explain how new technology ventures move, grow, and scale. Such ventures internationalize much faster than depicted by the traditional Uppsala model (Johanson and Vahlne, J Int Bus Stud 8:23–32, 1977; Johanson and Vahlne, Mark Rev 7(4), 1990; Johanson and Vahlne, J Int Entrep 1:83–101, 2003; Johanson and Vahlne, Manag Int Rev 46:165–178, 2006; Oviatt and McDougall, J Int Bus Stud 25:45–64, 1994). According to the Uppsala model, the main reason it takes time is that entrepreneurs need to build networks and learn. Many scholars have investigated how they may be able to learn faster and grow networks more effectively. While these explanations contribute to a better understanding of the process, they appear disturbingly insufficient. By means of an in-depth case study, we aim at identifying how learning and network-building constraints may be circumvented. We have investigated the internationalization process of an invention at a Danish university hospital that became a new technology within minimally invasive heart surgery. While the invention took place in the periphery of the international medical network, the venture circulated to the most competent international science-business networks to mobilize resources and competencies. We found that its ability to succeed resulted from its roots in international academic networks and its connecting to core nodes in these as well as in adequate business networks—including, in particular, Venture Capital firms that are in the business of developing and scaling such technology ventures. We also found that the innovation process evolved through phases that called for different resources and capabilities. It thereby offered opportunities for actors, networks, and companies that control such capabilities to move in to take control and pull the venture through the next phase. The process is less like a long distance run, and more like a relay race. This radically reduces the need to learn as the new venture expands and scales.     

Moral Vision: Iris Murdoch and Alasdair MacIntyre

This article explains Iris Murdoch’s notion of moral vision and its importance as a basic concept within applied ethics. It does so by exploring the influence of Iris Murdoch upon Alasdair MacIntyre whose ideas are frequently discussed by business ethicists. Arguably, the British philosopher Iris Murdoch (1919–1999) who wrote – amongst others – Metaphysics as a Guide to Morals (1992), along with her contemporaries, Philippa Foot and Elizabeth Anscombe, pioneered the resurgence of Aristotle’s virtue ethics. Furthermore, Iris Murdoch influenced Alasdair MacIntyre. Heather Widdows, in her biography of Iris Murdoch lists Alasdair MacIntyre amongst those ‘thinkers she inspired’ (Widdows, The moral vision of Iris Murdoch, Ashgate Publishing, Aldershot, 2005, p. 10). And in his writings MacIntyre does both examine Murdoch’s work and acknowledge that ‘Iris Murdoch has … put us all in her debt’ (MacIntyre, 1993, The New York Times on the Web, January 3, http://www.nytimes.com/books/98/12/20/specials/murdoch-metaphysics.html, p. 3). Murdoch was both an influential philosopher and a successful novelist. MacIntyre has stated that ‘Iris Murdoch’s novels are philosophy: but they are philosophy which casts doubt on all philosophy, including her own’ (London Review of Books, 3–16 June, 1982, p. 15). I therefore explore in this article the influence of Iris Murdoch’s literary work, where ‘true vision occasions right conduct’ upon Alasdair MacIntyre’s portrayal of us as ‘storytelling animals’ on a ‘narrative quest’.     

Appointing Women to Boards: Is There a Cultural Bias?

Companies that are serious about corporate governance and business ethics are turning their attention to gender diversity at the most senior levels of business (Institute of Business Ethics, Business Ethics Briefing 21:1, 2011). Board gender diversity has been the subject of several studies carried out by international organizations such as Catalyst (Increasing gender diversity on boards: Current index of formal approaches, 2012), the World Economic Forum (Hausmann et al., The global gender gap report, 2010), and the European Board Diversity Analysis (Is it getting easier to find women on European boards? 2010). They all lead to reports confirming the overall relatively low proportion of women on boards and the slow pace at which more women are being appointed. Furthermore, the proportion of women on corporate boards varies much across countries. Based on institutional theory, this study hypothesizes and tests whether this variation can be attributed to differences in cultural settings across countries. Our analysis of the representation of women on boards for 32 countries during 2010 reveals that two cultural characteristics are indeed associated with the observed differences. We use the cultural dimensions proposed by Hofstede (Culture’s consequences: International differences in work-related values, 1980) to measure this construct. Results show that countries which have the greatest tolerance for inequalities in the distribution of power and those that tend to value the role of men generally exhibit lower representations of women on boards.     

Contextualist Inquiry into Organizational Citizenship: Promoting Recycling Across Heterogeneous Organizational Actors

Although there is a significant amount of research on organizational citizenship behavior and its importance to individual and organizational outcomes (Podsakoff et al. 2000), relatively little research has explored the process by which such behavior emerges and is established within an organization. Against this backdrop, we combine the perspectives offered by contextualist inquiry (Pettigrew 1990) and actor–network theory (Latour 2005) to propose an integrative framework for investigating how organizational citizenship behavior develops in a large, heterogeneous organization. In order to illustrate the framework, we present a detailed case study of recycling at a large university. Like many other organizations, the university does not have a formal organizational structure to address sustainability concerns and the initiatives are therefore mainly voluntary and emerging in nature, and outcomes are, as a consequence, highly uncertain, and fragile. We argue that contextualist inquiry in combination with actor–network theory provides new and important insights into the emergence and establishment of organizational citizenship behaviors, and that outcomes are contingent upon interactions between the context, process, and content of the behaviors in question and the related networks of human and non-human actors.     

How Powerful CFOs Camouflage and Exploit Equity-Based Incentive Compensation

While numerous studies have examined the impact that powerful CEOs have on their compensation and overall firm decisions, relatively little is known about how powerful CFOs influence their compensation and important firm financial reporting and operational outcomes. This is somewhat surprising given the critical role CFOs play in the financial reporting process of a firm. Using managerial power theory (Bebchuk and Fried in J Econ Perspect 17:71–92, 2003) and the theory of power and self-focus (Pitesa and Thau in Acad Manag J 56(3):635–658, 2013), we predict that powerful CFOs employ a two-part strategy to camouflage excessive incentive compensation above what efficient contracting would dictate. First, powerful CFOs use their power and influence to negotiate shorter incentive pay duration to maximize the present value of their performance—based compensation. Second, when their incentive equity compensation vests, we suggest that CFOs manage earnings to further enhance their personal income. Consistent with our theoretical expectations, we find higher levels of income-increasing accrual-based earnings management and real transactions management, a potentially unethical practice, in firms with powerful CFOs who have short pay durations. We discuss the implications of our analysis in the context of mitigating CFO power and managing the ethical environment “tone at the top.”     

Forecasting European high-growth Firms - A Random Forest Approach

High-growth firms (HGFs) have aroused considerable interest both by researchers and policymakers mainly because of their substantial contribution to job creation and to the advancement of the surrounding economy (Acs et al., Small Bus Res Summ (328):1–92 2008, Schreyer 2000). Any initiative to foster HGFs requires the ability to reliably anticipate them. There seems to be a consensus in previous mainly regression-based studies on the impossibility of such a prediction (Coad, Doc Trav Centre d’Econ Sorbonne 24:1–72 2007b). Using a novel random forest (RF) based approach and a recent data set (2004–2014) covering 179970 unique firms from nine European countries, we show the potential of a true out-of-sample prediction: depending on the country, we were able to determine up to 39% of all HGFs by selecting only ten percent of all firms. The RF algorithm is both used to determine relevant predictors and for the actual prediction and pattern analysis. Both the selection of the best RF and the cross-country comparisons are based on a Receiver Operating Characteristic analysis. We find that most accurate HGF predictions are possible in GB, France, and Italy and largely confirm this ranking using Venkatraman’s unpaired test. Apart from the firm’s size, age, and past growth, the sales per employee, the fixed assets ratio, and the debt ratio are quite important. Our “typical” HGFs determined using RF prototypes have been older and bigger than the remaining firms, which is counterintuitive and atypical in literature. Based on our finding, typical HGFs are not start-ups, which questions current political funding strategies. Apart from that, our results do not support and rather refute the existence of a survivorship bias. Moreover, approximately every fourth HGF remains to be a HGF in the next period.     

Discussion of “Does the Accounting Profession Discipline Its Members Differently after Public Scrutiny?” by D. F. Mescall,F. Phillips,and R. N. Schmidt

The paper by Mescall et al. (J Bus Ethics, 2016) provides an opportunity to consider the meaning of “accounting professionalism” in the twenty-first century. To examine the paper, this discussion focuses on three areas, the research question Mescall et al. addresses, contributions of their paper, and what the paper tells us about accounting professionalism.