Cultural and Organizational Antecedents of <Emphasis Type="Italic">Guanxi</Emphasis>: The Chinese Cases

Being different from the Western concept of “relationship,” Chinese concept of “relationship,” that is, guanxi profoundly influences Chinese society in commercial activities, business ethics, and organizational behaviors. Moreover, firms can develop their networks of guanxi to gain competitive advantages. Highlighting the cultural and organizational antecedents of guanxi, namely Confucianism and organizational ethical climate, this study examines the influence of these two antecedents on guanxi and makes comparisons of guanxi, Confucianism and organizational ethical climate between Taiwan and Mainland China. The results show that Taiwan, where preserves more Confucian culture, tends to put much emphasis on guanxi than Mainland China, especially with respect to mianzi. Concerning ethical climate, Taiwan tends to have instrumental, and law and code ethical climate.     

<Emphasis Type="Italic">Guanxi</Emphasis> and Business Ethics in Confucian Society Today: An Empirical Case Study in Taiwan

Guanxi, or social networks common in Confucian cultures, has long been recognized as one of the major factors for success when doing business in China. However, insider networks in business are certainly not confined to Asian cultures, nor is the attendant possibility for corruption. This study obtained original data to investigate current Taiwanese perceptions of (1) how guanxi is established and cultivated; (2) how guanxi actually is practiced now and people’s acceptance of it; and (3) the effects of guanxi on business operations, employment/promotion, and social justice and fairness. The researchers also hope to (4) verify some arguments made by pioneering researchers. The authors speculate on how these attitudes may affect behavior in business transactions in hopes of making readers more aware of differing cultural values that may create unexpected ethical dilemmas. They suggest that professional ethical codes should provide guidance on the practice of guanxi in a Confucian society and that special emphasis or training in interpreting those codes may be required.     

<Emphasis Type="Italic">Guanxi</Emphasis> Management as Complex Adaptive Systems: a Case Study of Taiwanese ODI in China

In China, guanxi is the basis on which Chinese exchange a lifetime of favors, resources, and business leverage. Guanxi is considered a unique construct and a product of Confucian values and the contemporary political and socioeconomic system in Chinese society. With its cultural embeddings guanxi, as the social norm of conduct, functions as complex adaptive systems that expand and interconnect to become well-knit social networks; meanwhile the functions of well-fixing and self-reinforcement of the guanxi networks (chuens) are synergetically activated internally, externally, and interactively, which shows their extreme flexibility of adaptation. Taking as a case study an outside direct investment (ODI) Taiwanese firm in China, we address and conduct a survey to examine the effect of guanxi on management. Results of the research suggest that guanxi is not limited to interpersonal links; it is also the switch that activates social networks and that reconciles interpersonal and internetwork mismatches to influence management efficacy.     

The Italian <Emphasis Type="Italic">Economia Aziendale</Emphasis> and Catholic Social Teaching: How to Apply the Common Good Principle at the Managerial Level

The ongoing global economic and financial crisis has exposed the risks of considering market and business organizations only as instruments for creating economic wealth while paying little heed to their role in ethics and values. Catholic Social Teaching (CST) could provide a useful contribution in rethinking the role of values in business organizations and markets because CST puts forward an anthropological view that involves thinking of the marketplace as a community of persons with the aim of participating in the Common Good (CG) of society. In the light of the CST tradition, and in particular Caritas in Veritate, this article investigates the thinking of some of the historical scholars of the Italian Economia Aziendale (EA), by focusing on the concept of azienda, in order to reinterpret in a more humanistic way the role of business organizations in society. By linking CST and EA, the dichotomy between for-profit and not-for-profit organizations and the stereotype of the so-called business amorality that has, for a long time, driven business managers can be transcended. The conclusions imply a forward-looking application of the ethical concepts embedded in the Italian science of EA.     

The First 50 Years of <Emphasis Type="Italic">Business Economics</Emphasis>

This article traces the history of Business Economics, focusing first on its institutional history—its beginnings, key contributors, debates on its content, and shifts in editorial policy. It then turns to discussion of particular articles that are distinguished either by the judgment of Business Economics’ Editorial Board or whose authors have been honored by the National Association for Business Economics for their outstanding service. The article also presents trends in the sources and content of Business Economics over its 50-year history.     

A Modular Approach to Business Ethics Integration: At the Intersection of the <Emphasis Type="Italic">Stand-Alone</Emphasis> and the <Emphasis Type="Italic">Integrated</Emphasis> Approaches

While no one seems to believe that business schools or their faculties bear entire responsibility for the ethical decision-making processes of their students, these same institutions do have some burden of accountability for educating students surrounding these skills. To that end, the standards promulgated by the Association to Advance Collegiate School of Business (AACSB), their global accrediting body, require that students learn ethics as part of a business degree. However, since the AACSB does not require the inclusion of a specific course to achieve this objective, it may be satisfied by establishing a stand-alone course in ethical decision-making, by integrating ethical decision-making into the existing curricula, by some combination of the two strategies, or through some alternative mechanism. Notwithstanding the choice of delivery process, though, the institution must ensure that it is able to demonstrate the students’ achievement of learning with regard to ethics, a bar that was raised, or arguably simply modified, in 2003. With learning objectives designed precisely to measure the student delta based on content, process and engagement in a particular class, those programs that have opted for stand-alone ethics courses may be (though not necessarily are) more prepared to respond to assessment-related inquiries regarding their programs or satisfaction of the standards. The relevance of the AACSB standards modification to the current efforts at ethics integration in business programs is instead a re-examination of how to create a program of integration that is designed to ensure the most effective learning results possible, while responding to the challenges presented by the integrated approach. The purpose of this article is to explore some of those challenges that may be somewhat universal to business school programs implementing the integrated approach, and to share one large university’s response to those challenges, along with lessons learned.     

Business Ethics versus Economic Incentives:<Emphasis Type="Italic">Contemporary Issues and Dilemmas</Emphasis>

Contemporary economic thought presumes that individuals in a society always act according to their self-interest or private economic incentives, while important ethical motivations for action, such as a concern for others and public interest, are largely ignored. This paper is based on my experience of teaching an undergraduate course that highlighted the divergence between economic incentives and ethical motives for action in present-day life and business. Teaching tools such as lectures, case and group discussions were employed to address important ethical dilemmas of individuals and managers in contemporary societies. Readings underscored the evolving relationship of business ethics and economic incentives, and the relevance of ancient ethical principles (e.g., Ethics of Interdependence, and Ethics of Prudence and Self-Development) to present-day business ethics. The course emphasized the imminent need in contemporary societies to reduce the divergence between economic incentives and ethical motives for action, and called for a greater understanding of business ethics today, given the complex ethical concerns that managers confront in the current global environment.     

Revenue implication of auction value in <Emphasis Type="Italic">k</Emphasis>-price sealed-bid auctions: An experimental study

In this paper, we show that in a heterogeneous bidding community with predominantly risk-seeking bidders, third-price sealed-bid auctions yield higher revenue for the seller than first-price sealed-bid auctions when the auction value is low. Conversely, when the value of the auction is high, first-price sealed-bid auctions yield higher revenue for the seller than third-price sealed-bid auctions. Existing theoretical findings for a homogeneous group of risk-seeking individuals imply that third-price sealed-bid auctions should generate higher revenues for the seller than first-price sealed-bid auctions. Our results for low-value auctions agree but our results for high-value auctions do not agree with the existing findings. We discuss the implications of this discrepancy as a function of the shift in goal orientation from a win-focus to a value-focus as the value of the auction increases.

Understanding Japanese <Emphasis Type="Italic">CSR</Emphasis>: The Reflections of Managers in the Field of Global Operations

The education of students and professionals in business ethics is an increasingly important goal on the agenda of business schools and corporations. The present study provides a meta-analysis of 25 previously conducted business ethics instructional programs. The role of criteria, study design, participant characteristics, quality of instruction, instructional content, instructional program characteristics, and characteristics of instructional methods as moderators of the effectiveness of business ethics instruction were examined. Overall, results indicate that business ethics instructional programs have a minimal␣impact on increasing outcomes related to ethical perceptions, behavior, or awareness. However, specific criteria, content, and methodological moderators of effectiveness shed light on potential recommendations for␣improving business ethics instruction. Implications for␣future research and practice in business ethics are discussed.     

The Joint Effects of Formal Institutions and Business Characteristics on Interfirm Guanxi in China: A Fuzzy Set Analysis

ABSTRACT

Purpose: This research intends to investigate the effects of formal market institutions on managers’ willingness to use personal networks, such as guanxi in China, for business success.

Methodology: We collect data from a major cellular phone manufacturer and its 277 retailers across China. We employ Fuzzy set Qualitative Comparative Analysis (FsQCA) to identify necessary conditions and causal recipes (combinations of antecedent conditions) for three elements of guanxi between boundary spanners (i.e., ganqing, information favor, and business support) and a firm’s operational performance.

Findings: We find that formal market institutions are not the sole factor influencing managers’ decisions on exercising guanxi practices and, in turn, achieving interfirm collaboration. We also find that there exists more than one causal recipe leading to each key element of guanxi between boundary spanners. The results also suggest that well-established formal market institutions would never be able to completely eliminate guanxi practices in China.

Originality: This paper is among the first to examine the joint effects of formal market institutions and key characteristics of interfirm relationships on the use of guanxi practices.     

On the Credibility Determinants of a Quality Label: a Quasi-Natural Experiment Using the Example of <Emphasis Type="Italic">Stiftung Warentest</Emphasis>

In 2013, Stiftung Warentest, which is one of the most important consumer organizations in Germany, tested hazelnut chocolate for their leading magazine called test. The hazelnut chocolate of Ritter Sport, which is a high-quality producer of chocolate in Germany, failed the test and received the grade “unsatisfactory.” Stiftung Warentest accused Ritter Sport of labelling an artificial flavouring as a natural flavouring. Ritter Sport rejected the accusation, went to court, and won the trial. Stiftung Warentest had to withdraw the issue in question of test magazine. The affair received broad media coverage from December 2013 to September 2014. Using the case Ritter Sport versus Stiftung Warentest, it is analysed whether negative headlines really undermine the credibility of a quality label by examining Stiftung Warentest and their quality label called test. In addition, it is examined what can be done to restore or, more generally, increase the credibility of a quality label. Based on a quasi-natural experiment, it is found that the negative headlines regarding Stiftung Warentest have undermined the credibility of the test label. It is also found that the credibility of the test label can be increased by providing reference values to the tests, strengthening the independence of Stiftung Warentest, and using laboratory methods for the tests. For the most part, the same holds true for any quality label. High-quality producers, quality-conscious consumers, and the awarding organization of the quality label can benefit from an increased credibility of a quality label.     

Social Responsibility and Social Security: The Foundation of <Emphasis Type="Italic">Caja de Pensiones para la Vejez y de Ahorros</Emphasis>

The concept of corporate social responsibility (CSR) is not new. Many entrepreneurs created and developed companies along the time, with a strong sense of ethical and social responsibility. This article presents an example of how CSR was conceived and put into practice when Caja de Pensiones para la Vejez y de Ahorros was created in Barcelona in 1905, following the life and ideas of its founder, Francesc Moragas, a lawyer with a deep commitment for social action and a successful conception of the technical and economic dimensions of a financial and social institution.     

Ethical Thinking in Traditional Italian <Emphasis Type="Italic">Economia Aziendale</Emphasis> and the Stakeholder Management Theory: The Search for Possible Interactions

Over the last few years, there has been an exaggeratedly widespread and frequently confused use of the concepts of ‘stakeholder’ and ‘corporate social responsibility’. However, some interesting insights of both these notions can be found in traditional European business administration studies. In this article, the Italian view will be examined. In particular, this paper investigates the teachings of some of the historical masters of the Italian Economia Aziendale (EA), with particular attention to the concept of the azienda, its finalism and its essential characteristics, in order to verify some consistencies with the more recent Stakeholder Management Theory (SMT). Principles and considerations seem to emerge from EA scholars’ seminal works that unequivocally connect ethics with business decisions. EA fits in with SMT in many ways, and the former (EA) seems, moreover, to suggest a specific normative point of view from which the role of ethics in business activities can be approached.     

No Show Paradox in Condorcet <Emphasis Type="Italic">k</Emphasis>-voting Procedures

In this paper we extend the negative known results about No Show Paradox in Condorcet voting functions and correspondences to the contexts of k-functions and k-correspondences, in which the outcome of the voting process is a unique k-committee (set of k candidates) or a family of k-committees. The main result of the paper states that for every Condorcet k-function and for every Condorcet k-correspondence, there are situations in which every optimistic or pessimistic voter with some specific preferences could manipulate the election by abstaining.     

Offensive Advertising,Public Policy,and the Law: The Rulings on the <Emphasis Type="Italic">Zagorka </Emphasis>Case

This paper examines the case of a controversial beer advertisement which was promulgated in Bulgaria in 2001, and which provoked eight lawsuits against the brewery, its advertising agency, and the Bulgarian National Television. The case set a precedent in Bulgaria and generated considerable public interest and debate. To the best of the authors knowledge this is the first case in Eastern Europe when individuals have challenged companies in the courts of law because of offence caused by an advertisement. The present study discusses how the public bodies responsible for protecting consumer interests and the courts of first instance assessed the advertisement in the context of Bulgarian public policy regarding offensive advertising.     

Wise Up: Creating Organizational Wisdom Through an Ethic of <Emphasis Type="Italic">Kaitiakitanga</Emphasis>

Organizations are searching for innovative business approaches that deliver profits and create shared value for all stakeholders. We show what can be learned from the relational wisdom approach of Indigenous Māori and reframe the prevailing economic argument that has seen companies profit and prosper at the expense of communities and ecologies. We develop an ethic of kaitiakitanga model premised on Māori values which holds the potential to enrich and further humanize our understanding of business. The Māori economy is a globally connected, prosperous, and profitable sector of the New Zealand economy. By drawing on Māori values, we present a wisdom position through an ethic of kaitiakitanga or stewardship to emphasize and illustrate the interconnectedness of life in a woven universe. Through practicing kaitiakitanga, organizations can build businesses where wisdom is consciously created through reciprocal relationships. In this worldview of business, humans are stewards endowed with a mandate to use the agency of their mana (spiritual power, authority, and sovereignty) to create mauri ora (conscious well-being) for humans and ecosystems—and this commitment extends to organizations.     

<Emphasis Type="Italic">The Man Who Knew: The Life and Times of Alan Greenspan</Emphasis> by Sebastian Mallaby

I agree that Sebastian Mallaby’s detailed and well-sourced The Man Who Knew: The Life and Times of Alan Greenspan, will be essential for every future economic historian studying the Greenspan era. That said, Mallaby does not convey to his readers a sound understanding of monetary policy. I disagree with Mallaby’s claim that Greenspan could and should have done something about the housing and subprime mortgage bubbles. Peter Wallison makes a strong case that the affordable housing quotas did not just “encourage” but forced the GSEs to buy subprime mortgages. Information available in real time on aggregate subprime mortgage issuance was seriously flawed because the GSEs did not report accurately. Greenspan cannot be held responsible for the GSEs hiding the subprime debt on their balance sheets. These mortgages were central to the crisis. It seems improbable that any monetary policy mistake of 2001–05 was large enough to create the crisis. Mallaby could have written a final chapter emphasizing the Maestro resisting the power of a malign and evil pair of GSEs and the power of the President and Congress of the United States pursuing a disastrous housing policy. Despite the Maestro’s best efforts, Leviathan triumphed and brought ruin upon the Nation.     

In good company: The role of personal and inter-firm networks for new-venture internationalization in a transition economy

Although personal and inter-firm networks are critical for the survival and growth of entrepreneurial ventures in transition economies, their role in new-venture internationalization has been understudied. Exploring the internationalization of entrepreneurial ventures (n = 623) in Bulgaria, we find that domestic personal networks have a positive effect on internationalization. Firm age negatively moderates the effect of inter-firm networks: the earlier the new venture engages in inter-firm collaboration, the higher the degree of its internationalization. Internationalization is positively associated with new venture size and varies by industry. Implications for managerial practice and public policy are discussed.     

Anderson and Escher’s <Emphasis Type="Italic">The MBA Oath</Emphasis>: Review Essay

Max Anderson and Peter Escher’s The MBA Oath addresses the need for a set of ethical standards to provide guidance to MBA graduates as they go about their everyday professional business. Their oath is relevant to the concerns of others in business but clearly was inspired by the special problems they encountered in the classroom as members of the Harvard MBA class of 2009. The oath and the book itself evolved from the financial meltdown of 2008 for which MBAs often felt that they were being held accountable. Our review begins with the oath itself. Then we turn to the rest of the book in which we have organized our comments around its strengths and weaknesses.