Encouraging Entrepreneurship: Microfinance,Knowledge Support,and the Costs of Operating in Institutional Voids

This study focuses on the supplemented strategies of microfinance institutions (MFIs), in which the MFI offers nonfinancial services, such as entrepreneurship related knowledge, in addition to financial services to impoverished borrowers at the bottom of the pyramid (BoP). We examine two contextual factors–foreign direct investment (FDI) and loan defaults–to better understand the relationship between providing knowledge support to encourage entrepreneurship and costs of operating at the BoP for MFIs. In contexts where FDI is low and loan defaults are high, providing knowledge support to encourage entrepreneurship aggravates the MFI's costs of operating at the BoP. However, in contexts where FDI is high and loan defaults are low, providing knowledge support to encourage entrepreneurship among impoverished borrowers does not aggravate the MFI's costs of operating at the BoP. Hence, in emerging markets where governments welcome FDI and curb loan defaults, MFIs can viably support entrepreneurship among the poor. © 2013 Wiley Periodicals, Inc.     

From Voids to Sophistication: Institutional Environment and MNC CSR Crisis in Emerging Markets

Why do multinational corporations (MNCs) frequently encounter corporate social responsibility (CSR) crises in leading emerging markets in the new century? Existing research about institutional impacts on MNC CSR has developed a void-based account about how the flawed institutional system allows misdeeds to happen. But the fact that such misdeeds have turned into increasing CSR crises in the new century along with institutional change is rarely taken into account. This paper combines studies of institutional voids, institutional entrepreneurship, and stakeholder theory to develop a concept of institutional sophistication, which refers to both the top-down maturation of the regulatory system that standardizes firm behavior and the bottom-up diversification and intensification of grassroots initiatives that redefine stakeholder membership. Based on this concept, we developed a framework to comprehensively demonstrate how both institutional voids and sophistication drive the MNC CSR crisis in leading emerging markets. Empirically, we established an original database that includes 309 publicized CSR crises encountered by major foreign MNCs in China, India, and Russia, 2000–2011. Through a content analysis, the paper reveals six common sophistication processes that drive the MNC crisis across contexts and also specifies stakeholder strategies that make these processes happen and vary by social problems and national contexts. We also discussed the value of studying corporate social irresponsible behavior in understanding the institution–MNC relationship.     

The Only Solution to the Decline in Business Ethics: Ethical Managers

This paper defines business ethics as a seriesof behaviors that adhere to values held by theindividual manager, the manager's supervisorsand subordinates, general society and, mostimportantly, the manager's customers andclients. The concept of business ethics isexplored through several levels of businessorganizations and operating environments.The paper then examines recent evidence of thedecline in business ethics by noting a fewexamples involving Beech-Nut, Hertz, MichaelMilken, E.F. Hutton, Sears, Salomon Brothers,Dalkon Shield, Exxon Valdez, S&L scandal,brokerage analysts. Surveys are cited toindicate that the American public believes thatbusiness ethics are declining.To further analyze the topic, the authorreports on a series of structured interviewswith managers in a variety of organizations.Fourteen senior managers were interviewed: 4from large county government, 3 from stategovernment, 4 from large corporations, 3 fromsmall businesses. The managers were asked theiropinions concerning the decline of businessethics, and for their recommendations topossibly retard the decline. All managers saidthey believed that ethics are in decline andthat the public believes ethics are declining.The recommendations for retarding or reversingthe decline yielded several suggestions: teachethics in schools and business organizations,develop and enforce Codes of Ethical Conductwithin all organizations, establish bettermonitoring and reporting mechanisms, and hireethical managers.The paper builds on theinterview results by coupling the managers'remarks with admonitions from many authors:while teaching ethics and Codes of EthicalConduct are important, the most importantfactor is the ethical behavior of managers(leaders). Ethical leadership is fundamentalsince ethical behavior is an individual – not acorporate – matter. In practice, ethics is notsomething that a manager ``does'; it issomething that the manager ``is.'     

Positive Law as an Ethic: Illustrations of the Ascent of Positive Law to Ethical Status in the Commercial Sector

This article begins with four situations, the first three of which are common to many businesspeople and persons in the United States today and the fourth, unfortunately, is growing: Setting the minimum level at which workers are paid; going bankrupt to avoid paying for credit card purchases, claiming a questionable deduction in calculating one's federal income tax liability, and violating the law in every state by a major U.S. corporation.These cases support the idea that positive law is the operative ethic for persons in a commercial setting. Reasons advanced for this phenomenon are ethical ambiguity, lack of personal responsibility, increasing technicality of contemporary society, and the fact that the law is now seen as the most that is expected of businesspersons. In arriving at the paper's conclusions, positive law theory is discussed. Data are presented to explain why these illustrations are not mere anecdotal examples but represent broad contemporary occurrences in the U.S.     

Correction to: Developing Ethical Confidence: The Impact of Action-Oriented Ethics Instruction in an Accounting Curriculum

After the USSR collapsed, the Russian economy underwent serious changes from being plan-based to a market economy. These changes, together with political instability, created a business environment where no attention was paid to ethics. Russian managers have little experience operating in a market economy, which created many misunderstandings with foreign partners, especially regarding ethical issues of doing business. This study examined the factors influencing the ethical judgments of Russian employees to understand how they perceive ethical issues and make ethical or unethical decisions at work. The Ferrell and Gresham (J Mark 49:87–96, 1985) framework was employed in this study to understand the process of making ethical decision by an individual. Transparency was proposed as a moderator of the relationship between opportunity factors and employees’ ethical judgments. Findings of this study show that Russian employees tend to be more tolerant towards ethically questionable behaviors at a workplace. Moreover, the results also demonstrate that transparency moderates the influence of opportunity to behave unethically on ethical judgments.     

Enhancing the Ability of Business Students to Recognize Ethical Issues: An Empirical Assessment of the Effectiveness of a Course in Business Ethics

This paper presents the results of a study of the effect of a business ethics course in enhancing the ability of students to recognize ethical issues. The findings show that compared to students who do not complete such a course, students enrolled in a business ethics course experience substantial improvement in that ability.     

From an Implicit Christian Corporate Culture to a Structured Conception of Corporate Ethical Responsibility in a Retail Company: A Case-Study in Hermeneutic Ethics

This research investigates the impact of various factors on ethical behavior of 180 not-for-profit hospital employees. Ethical behavior of peers, ethical behavior of successful managers, and emotional intelligence had a significant positive impact on ethical behavior of respondents. Physicians and hospital employees with political connections within the organization were significantly less ethical than other employees. The results have many implications for researchers and healthcare practitioners.