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.     

The business of ethics and the ethics of business

This is an essay in personal business ethics of executives as distinguished from the institutional ethics of corporations. Its purpose is to give practical moral guidance to executives for the conduct of their lives both as corporate decision-makers and as human beings. The pivotal concept in this model of personal business ethics is a direct appeal to the self-interest of executives in their being moral. Our thesis is that generally there is a twofold return on investment in ethics (ROIE) for executives. The first one is related to employee output: by becoming a self-actualizing moral type, executives indicate commitment to excellence. Accordingly, they so manage employees that the latter can also live up to their full potential and excell. And that would increase corporate productivity and product or service quality. The second payback of morality is personal: fully developed, self-actualized managers are generally happier people than those whose growth has been arrested. In brief, moral self-actualization is the same as commitment to excellence and there is a payback in being the best. Return on investment in ethics and return on investment in excellence can both be abbreviated as ROIE. We accomplish the purpose and establish the thesis of this essay by seeking answers to the following questions: What business does ethics have in business? What business does business have in ethics? Is there a return on investment in ethics for executives? and Does being moral help executives become more effective managers? In sketching answers to these questions, we first show why executives need a personal business ethics especially in today's world. Then, we sketch the nature of ethics and of business. After these introductory materials, the body of the paper argues for a personal business ethics for executives by correlating elements of management theory with ethics. Specifically, it links a theory of employee motivation with a scale of values, management character types with moral types, and management leadership styles with morality. Then, the practical technique of life by objectives (LBO) is explained. It can help executives manage their lives more effectively in both the business and ethical sense. We conclude by explaining ideals of excellence which can guide executives in their work and development both as managers and as human beings.     

Housing wealth,business creation and dissolution,in the U.K. regions

A number of recent studies have suggested that access to collateral in the form of housing assets may be an important factor in the process of new firm formation. In particular, it has been suggested that variations in housing wealth may be able to account for a substantial proportion of the variation in rates of business creation within and between the U.K. regions. Re-examining this issue, the paper finds that once appropriate allowance is made for the presence of dynamics in the formation process, the evidence for a positive relationship between housing wealth and regional rates of new business creation disappears. However, there is evidence in favour of the proposition that access to external collateral in this form may help established firms to stay in business.I am grateful to David Keeble and Peter Johnson for their helpful and timely comments. The usual disclaimer applies.     

Does corporate philanthropy exist?: business giving to the arts in the U.K.

This paper addresses the question of the existence of corporate philanthropy. It proposes a framework for analysing corporate philanthropy along the dimensions of business/society interest and primary/secondary stakeholder focus. The framework is then applied in order to understand business involvement with the arts in the U.K. A unique dataset of 60 texts which describe different firms' involvement with the Arts is analysed using formal content analysis to uncover the motivations for business involvement. Cluster analysis is then used in order to identify motivational groupings. Two broad types of involvement are identified – advertisers and legitimators. Only in one case of the 60 is there the potential to observe pure altruism. The contribution of this paper is twofold. First, it provides a clear framework to understand the motivations for corporate giving and applies this using empirical data. Secondly, this research finds little evidence, if at all, of corporate philanthropy in the context of firms giving to the Arts in the U.K.     

The consequences of social responsibility for small business owners in small towns

This paper focuses on three under‐researched subjects in the corporate social responsibility literature: small businesses, small towns, and consequences of social responsibility for the business owner personally. Small businesses are the vast majority of businesses and make a significant contribution to national economic vitality. Their value to the survival of small towns, where they are often the only businesses, is even more important. Research indicates that the social performance of big and small businesses alike is dependent upon the values and disposition of the top decision maker. Therefore, insight into the owner's motivations for contributing to community betterment and the consequences of that behavior for the business and the owner will add to this literature. Equally important, this knowledge can inform policies aimed at increasing good citizenship for all sizes of businesses regardless of location.     

The Rise in Self-Employment Amongst U.K. Males

This paper uses time-series data to attempt to identify the factors responsible for the rise in self-employment amongst UK males, focusing in particular on the period of rapid growth which was experienced during the 1980s. The empirical results suggest that the most significant long-run influence on the growth of self-employment has been the rise in the real value of personal sector liquid wealth, though rising levels of GDP and, to a lesser extent, increases in the real value of housing wealth have also made a significant contribution. There is tentative support for the notion that Mrs Thatcher may have succeeded in ushering in an 'entrepreneurial renaissance' within the UK economy, though the evidence for this is rather crude. There is no evidence for the view that 'recession-push' effects have been significant in accounting for the rise in self-employment.     

The Buddhist perspective on business ethics: Experiential exercises for exploration and practice

While Buddhism focuses on the same ethical concerns as Western ethical traditions, it provides a distinct perspective and method for dealing with them. This paper outlines the basic Buddhist perspective and then provides some experiential exercises which offer insight for self-understanding and ethical practices in business. Implications for business and ethics research are provided.Dr. Gould is Assistant Professor of Marketing at Baruch College of the City University of New York. His articles have appeared in such journals as theJournal of Consumer Research, Journal of Public Policy and Marketing, Psychology and Marketing, theJournal of Consumer Affairs, Imagination, Cognition and Personality, theAmerican Journal of Preventive Medicine, Sex Roles and theJournal of Health Care Marketing, among others.     

The operation of the insolvency system in the U.K.: Some implications for entrepreneurialism

An inquiry of entrepreneurs in economic theory is followed by an overview of the insolvency system in the UK. The impact of the insolvency system upon entrepreneurs in the UK is then discussed. It is concluded that while there have been ostensible attempts at reforming insolvency law, these efforts have primarily benefitted large firms. Moreover, it is maintained that the current operation of insolvency law remains principally geared toward the protection of creditors. As a consequence, small entrepreneurial firms have little or no alternative to liquidation, irrespective of the best interests of the company or its creditors. The entrepreneurial founders of these failed firms are then faced with potential disqualification and long-term, if not permanent, financial obstacle to continued entrepreneurship. It is proposed that the severity of the regime discourages the re-entry of entrepreneurs into the market thereby depriving the UK economy of an experienced and potentially vital force for innovation.     

The Corporate Social Performance Content of Innovation in the U.K.

This article investigates the influence of innovation on the relationship between corporate strategy and social issues. Specifically, we employ firm-level data for a large sample of U.K. companies drawn from a diverse range of industrial sectors to investigate, given innovation, the determinants of both the probability that the innovation brings reduced environmental impacts and/or improved health and safety, and the strength of this effect. In this connection, we find evidence of a dichotomy between product and process innovations, and roles for firm size, industrial sector, a foreign market presence, access to various information sources (e.g. universities and government research organisations) and the extent to which activities are constrained by regulation. Furthermore, we find a tendency for the influences of many of these factors to vary between older and newer firms. Stephen Pavelin is a Reader in Economics at the University of Reading, UK. His current research agenda focuses upon the application of economic analysis to key issues relating to corporate social responsibility, such as the effect of corporate social performance on the reputation and financial performance of firms. Recent publications include articles in the Journal of Management Studies, the Journal of Business Research, the International Journal of Industrial Organisation, the Journal of Business Ethics, Financial Management, the Journal of Business Finance and Accounting, Business Ethics: A European Review and the European Management Journal. Lynda A. Porter is a Lecturer in Economics at the University of Reading, UK. Her current research agenda focuses upon public policy issues in international economics, including FDI promotion and international competition in corporate tax rates, but also encompasses corporate social responsibility- largely focussing upon CSR issues that pertain particularly to international business. Her most recent publication appeared in the Journal of Business Research.     

The institutional dimension of business ethics: An agenda for reflection research and action

The current discussion of business ethics is nothing new. In fact it has been a topic of common interest to both researchers and top managers since the mid fifties; the focus adjusting to issues and problems of the times. The authors of the article list four themes they believe to be of relevance for future discussion. First, ethics as an instrument of business behavior is entering a new dimension due to negative side effects of economic activities, which are even observed on a global scale and where it is doubtful that governments can adequately manage this complex environment. From this view, ethics becomes a decisive component of efficiency and requires a new way of thinking on the development of the market system and on a new delineation of responsibilities between government and markets. Second, in the process of transformation of the East-European states it seems to be all the more important to emphasize the ethical characteristics which are part of the concept of competition — the gains to the consumer due to the plurality of search and discovery procedures, the capability to correct and absorb wrong decisions, and the specific distributional ethics. Third, business ethics as an element of the firm's “guiding vision” has to be incorporated into its corporate culture, which will foster an institutional ethic of the firm — the joint effect of individual ethics within the history of the firm coupled with time and experience. Fourth, conflicting business philosophies must be judged with reference to the process of communication of business ethics. Summing up business ethics has a micro and macro component and is related to the individual firm as well as to the structure of the economic and social order. Ethics will, however, have a limited effect if it is not accompanied by the change in goals, structures and processes.     

The temporal relationship between derivatives trading and spot market volatility in the U.K.: Empirical analysis and Monte Carlo evidence

This article examines empirically the dynamic relationship between spot market volatility, futures trading, and options trading in the context of a trivariate simultaneous equations model. The empirical analysis provides strong evidence that significant simultaneity, in addition to feedback, characterizes the relationship between the proxy for time-varying spot market volatility and derivative trading. Also, futures trading and options trading are found to affect spot market volatility in opposite directions in the structural model proposed. The results, corroborated by Monte Carlo evidence, suggest that the failure to account for any contemporaneous interaction between the variables under consideration, as well as the omission of any of the two derivatives trading activities examined in this study, may generate serious misspecification and ultimately produce misleading estimation results and statistical inference. © 1999 John Wiley & Sons, Inc. Jrl Fut Mark 19: 245–270, 1999     

The Relationship Between U.K. Banks and Their Small Business Customers

Much emphasis is placed upon the benefits to both parties of a good relationship between banks and their small business customers. Having explained the significance of SMEs in the U.K. Economy, the papers goes on to consider, briefly, some of the arguments which underpin the rationale for these relationships. The roles of information and communication are discussed and the poor co-ordination between banks, SMEs and their accountants is highlighted. Evidence from over 6,000 small businesses in response to the Forum of Private Business survey in 1994 is then presented. This demonstrates the strong positive association between more participative relationships and more positive perceptions of their banks by firms. Finally it is suggested that a virtuous circle of information and communication could be established if the parties cooperate in a systematic process of risk assessment.     

Healthcare reform and its implications for the U.S. economy

U.S. healthcare is currently a poor value proposition in relation to its cost. This must change. Driven by the fundamental forces of financing, consumer preferences, and technology, the U.S. is heading for a profound revolution in healthcare, one that will affect not only the system itself but also the larger U.S. business community. This new healthcare system will create vast opportunities and commensurately large risks for healthcare innovators. The outcomes of the present healthcare reform debate will either liberate or further shackle these innovators. Reforms that depend on governmental controls are more likely to dampen innovation than those achieved through control by consumers, and given the profound ramifications of healthcare reform outcomes, policy makers would be well-advised to harness the forces of consumerism in fashioning reform.     

The Canadian Research Strategy For Applied Ethics: A new opportunity for research in business and professional ethics

InTowards a Canadian Research Strategy ForApplied Ethics, I put forward proposals to advance Canadian research in applied ethics. I focus on the assessment made of Canadian teaching, consulting, and research in business and professional ethics and then on the strategy proposed for advancing work in these areas. I argue for research which is [1] oriented to the ethical needs of those in business and the professions, [2] interdisciplinary, and [3] involves the creation of national and international networks. I then offer some preliminary observations on the first two years of the new research strategy's operation.Michael McDonald occupies the Maurice Young Chair of Applied Ethics at the University of British Columbia, where one of his principal roles is in the establishment of a university-wide Centre for Applied Ethics. He is currently President of the Canadian Philosophical Association and a past Editor of the Philosophical journalDialogue. He has published in ethics, philosophy of law, and political philosophy.     

Gross job flows and the evolution of size in U.K. establishments

This paper analyzes a relationship between establishment size and gross job creation and destruction in the U.K. during the 1980's. I find that the gross job creation rate is highest in small plants and lowest in large ones. In contrast, the gross job destruction rate is lowest in small plants and highest in large ones. In absolute numbers, however, large plants create, but also destroy most jobs. I test convergence in plant size by computing Markov transition matrices. The advantage of this approach is that it avoids Galton's fallacy of regression towards the mean and that it reflects job creation and destruction between size classes. I find no evidence of convergence, hence no regression towards the mean.This paper benefitted from seminars at the London School of Economics and Trinity College, Dublin. I thank A. Lamo, R. Koopmans, A. Manning, A. Oswald, C. Pissarides, D. Quah, H. Vandenbussche and an anonymous referee for helpful comments and discussions. All errors are mine.     

Competition and the Provision of Banking Services to SMEs in the U.K.

This paper examines the report produced by the Competition Commission on the provision of SME banking services in the U.K. The report is assessed in terms of underlying assumptions used to describe and assess how banks operate and perform. The Competition Commission suggested “remedies” are drawn from a specific economic model assumed to be representative of the U.K. banking industry. It is concluded the remedies proposed by the Competition Commission are misplaced and may impose a substantial future cost on both banks and SMEs receiving banking services. It is proposed that the ramifications of this case are substantial for the present system of allocating bank funding to SMEs, in both the U.K. and international economies where similar antitrust or competition guidelines are employed.