Is Guanxi Ethical? A Normative Analysis of Doing Business in China

This paper extends the discussion of guanxi beyond instrumental evaluations and advances a normative assessment of guanxi. Our discussion departs from previous analyses by not merely asking, “Does guanxi work?” but rather “Should corporations use guanxi?” The analysis begins with a review of traditional guanxi definitions and the changing economic and legal environment in China, both necessary precursors to understanding the role of guanxi in Chinese business transactions. This review leads us to suggest that there are distinct types of, and uses for guanxi. We identify the potentially problematic aspects of certain forms of guanxi from a normative perspective, noting among other things, the close association of particular types of guanxi with corruption and bribery. We conclude that there are many different forms of guanxi that may have distinct impacts on economic efficiency and the well-being of ordinary Chinese citizens. Consistent with Donaldson and Dunfee (1999), we advocate a particularistic analysis of the different forms of guanxi.     

Why Do Managers Leave Their Organization? Investigating the Role of Ethical Organizational Culture in Managerial Turnover

This study contributes to the corporate social responsibility, stakeholder theory, and executive succession literature by examining the effect of corporate social irresponsibility (CSiR) on strategic leadership turnover. We theorize that firms’ CSiR increases the likelihood of executive turnover. We also investigate the nature of succession (non-voluntary or voluntary succession) and successor origin (internal candidate or external candidate) following CSiR. We further examine how the CSiR–CEO succession relationship is moderated by firm visibility to stakeholders and industry dynamism. Our results, based on a dataset of 248 U.S. public firms between 2001 and 2008, provide evidence that firms’ CSiR affects what is conventionally seen as primarily a market-driven decision on executive turnover, especially when firms operate in a more dynamic industry. Research contributions and implications are discussed.     

Service Sector Development in the Netherlands: A Vision of the Post-Industrial Future?

With the decline in manufacturing employment the term ‘post- industrial society’, although not exactly entering the everyday vernacular, is one that is increasingly used widely to describe economically developed nations such as The Netherlands. This article looks at the framework for the post-industrial society developed by the American social theorist Daniel Bell and applies it to service sector developments in The Netherlands, with a particular concentration on the public sector. It is found that service sector developments in The Netherlands may not be in accord with Bell's vision of our post-industrial future.     

Does Ethical Leadership Lead to Happy Workers? A Study on the Impact of Ethical Leadership,Subjective Well-Being,and Life Happiness in the Chinese Culture

Business ethics has been emphasized throughout the past decade and organizations are aware of the influence it has on the organization’s performance. As a result, ethical leadership is important as it influences the employees profoundly. This study aims to address this issue and explore the influence ethical leadership has on employees by examining job satisfaction, subjective well-being at work, and life satisfaction. Two groups of independent data were collected and a multi-group analysis was conducted before pooling together for a two-step structural equation modeling test. The results revealed that ethical leadership has a negative direct effect on employee well-being which offers significant findings for the meaning of ethical leadership in the Chinese culture. Useful managerial implications are provided for managers and supervisors at the end of this study.     

Means or ends? Ethical decision frameworks in the Western Australian Public Service

The paper analyses results from a questionnaire-based survey of ethical behavior of members of the Western Australian Senior Executive Service. Relating to definitions of deontology (duty) and teleology (ends over means) the study examines the validity of three hypotheses on ethical behaviour/decision making frameworks. Longitudinal data is related to the 1983–90WA Inc period. The study establishes that SES managers apply ethical frameworks in order to understand the meaning of: ethical behaviour and that there are groups of managers with distinct understandings of what constitutes ethical behavior which is reflective of particular ethics theories. Three groups of managers are identified: (1) emphasises teleology (2) focuses on external influences (rules, standards and codes) and (3) encompasses both teleology and external influences and, to a lesser extent deontology. Only this latter group is regarded as having an appropriate repertoire of potential responses to any given ethical dilemma. There is no support for the view that those beginning employment in the public service post 1984 adversely affected the ethical decision making frameworks of other senior managers.Allan Peachment holds a doctorate from Lancaster University and is a National Fellow of the Royal Institute of Public Administration of Australia. For co-authors, Geoff Soutar, Margaret McNeil and Caron Molster, see other papers.     

Does the Ethical Culture of Organisations Promote Managers’ Occupational Well-Being? Investigating Indirect Links via Ethical Strain

The present study had two major aims: first, to examine the construct validity of the Finnish 58-item Corporate Ethical Virtues scale (CEV; Kaptein in J Org Behav 29:923–947, 2008) and second, to examine whether the associations between managers’ perceptions of ethical organisational culture and their occupational well-being (emotional exhaustion and work engagement) are indirectly linked by ethical strain, i.e. the tension which arises from the difference in the ethical values of the individual and the organisation he or she works for. The sample consisted of 902 managers from different organisations, in middle and upper management levels, aged 25–68 years. The results of the confirmatory factor analysis (CFA) provided support to the hypothesised eight-factor structure of the CEV scale; i.e. the scale contained the factors of clarity, congruency of supervisors, congruency of senior management, feasibility, supportability, transparency, discussability and sanctionability. In addition, it emerged from the CFAs that the high intercorrelations of these factors can be explained by the second-order factor of ethical culture. The managers’ perceptions of the ethical culture prevailing in their organisations were associated with their occupational well-being both directly (high-work engagement) and indirectly via a low level of ethical strain (low-emotional exhaustion). Thus, the findings indicated that the ethical culture of organisations plays a major role in managers’ occupational well-being.     

Are Ethical Banks Different? A Comparative Analysis Using the Radical Affinity Index

This article studies the differences between traditional financial intermediaries (commercial banks, savings banks and cooperative banks) and ethical banks based on property rights, in which the owner decides the ideology, principles, standards and objectives of the organisation. In ethical banking, affinity centres on positive social and ethical values. The article consequently focuses on an index proposed both to differentiate ethical banks from other types of banks, and also to pinpoint the differences between the various ethical banks themselves. This is the Radical Affinity Index (RAI), which groups banks together in terms of their stance on ethical commitment, concentrating on ethical ideology and principles (information transparency, placement of assets, guarantees and participation) and using a sample of 114 European banks. The evidence shows that transparency of information and placement of assets are factors that differentiate ethical banks from other financial intermediaries. Guarantees and participation are characteristics specific to ethical banks; these variables, however, do not offer clear evidence to our analysis.     

Distributional Consequences of Globalization: Is Organization of the Islamic Conference Countries Different?

This article investigates distributional effects of globalization using new comparable panel data for Organization of the Islamic Conference (OIC) and non-OIC developing countries from 1965 to 2010. The results show that the Kuznets Curve does not exist in OIC countries, while it holds in non-OIC countries. International trade tends to widen income inequality in OIC countries while it helps to ameliorate inequalities in non-OIC countries. Financial development decreases inequality only in OIC countries. The study concludes that OIC countries are different from non-OIC countries in their exposure to globalization.     

The Subjective Culture of Public Sector Women and Men Managers: A Common Instrumental/Expressive Value Orientation or,Two Different Worlds?

La logique du type associatif de 91 gestionnaires canadiens anglophones de sexe féminin et 92 gestionnaires canadiens anglophones de sexe masculin a été comparée au moyen d'une analyse du contenu des antécédents et conséquents (méthode Triandis et al.; 1972) relatifs à 11 valeurs de travail et 10 valeurs personnelles. Les échantillons de ces gestionnaires de la Fonction Publique du Canada étaient semblables pour l'ǎge, le statut socioéconomique et les années d'expérience en gestion. Une recension des écrits suggère qu'il n'y a pas de différence quant à leur orientation aux valeurs en ce qui concerne les catégories expressives vs. instrumentales. L'analyse du contenu dans ces catégories démontre que la connotation de ces concepts de valeurs étaient équivalents pour ces gestionnaires, quelque soit leur sexe. Le Rho = 0.91 pour les antécédents et 0.97 pour les conséquences pour les gestionnaires femmes vs. hommes, nous donnent une estimation de cette équivalence. Ces résultats sont interprétés comme reflétant un haut niveau de similitude de fonctionnement et une équivalence interne dans les schèmes de référence dans la culture subjective (la logique du type associatif) des hommes et des femmes gestionnaires à l'intérieur de la Fonction Publique.     

What’s in a Credo? A Critique of the Academy of Management’s Code of Ethical Conduct and Code of Ethics

The Academy of Management formally adopted a Code of Ethical Conduct in 1990. During the subsequent 15 years, almost nothing had been published about it and its value as a formal document meant to guide professional practice. Rather surprisingly then, in December 2005 an entirely new Code of Ethics was introduced by the Academy’s Board, to take effect in February 2006. Why was a new code promulgated? More broadly, what do the contents of these codes, the processes of their promulgation, and their expressed purposes, suggest about the value of such codes for similarly situated professional associations, in general? This article seeks to identify key strengths and weaknesses of the original code, begin an assessment of the potential value of the new code, and so stimulate debate. Further, not only is this a call to the members of the Academy to engage in some thoughtful debate and possible amendment of its new code, but also a caution to all such associations to take seriously the hurdles that must be jumped before any code can be developed and promulgated to worthwhile effect.     

Is There Any Change in the Public Service Values of Different Generations of Public Administrators? The Case of Turkish Governors and District Governors

In recent public administration literature, much attention is paid to changes in public service values, including ethical values, that guide public service. This paper reports on the results of an empirical survey conducted among a group of Turkish governors and district governors (including those in service and retired) who are from different generations. By focusing on the transformation of value preferences of Turkish governors and district governors, this study tries to identify variations in values, particularly about public service ethics, in accordance with the age and the length of tenure in public service. The findings of the research show a traditional and more or less consistent value pattern for Turkish governors and district governors. The most important public service values expressed by the respondents are consistent with often-mentioned crucial public service values in the literature. New or emerging values have not been present enough among the most important public service values. In brief, the results do not lend support to the often-assumed hypothesis that traditional public service values are devaluated or degraded by the emergence of businesslike values. In other words, new emerging values could not sneak into the public service culture in any convincing manner in spite of many years of NPM rhetoric and recipes.     

Assessing the Accountability of the Benefit Corporation: Will This New Gray Sector Organization Enhance Corporate Social Responsibility?

In recent years the benefit corporation has emerged as a new organizational form dedicated to legitimizing the pursuit of corporate social responsibility (CSR). Eschewing traditional governmental authority, the benefit corporation derives its moral legitimacy from the values of its owners and the oversight of a third party evaluator. This research identifies the benefit corporation as a new type of gray sector organization (GSO) and applies extant theory on GSOs to analyze its design. In particular, it shows how the theory of GSO accountability can be used to assess the potential of benefit corporations for enhancing CSR. This research first examines the statutes that have established benefit corporations in five states in the US, along with bills in other states, to show how legislation defines their specific public benefits and holds them accountable for delivering these benefits. It then compares the accountability of the benefit corporation with that of other corporate-centric GSOs, e.g., GSOs that closely resemble traditional corporations. It concludes with significant design-based concerns about the utility of the benefit corporation as an effective organization for implementing CSR.     

Were Small Producers the Engines of Growth in the Canadian Manufacturing Sector in the 1980s?

Small firms are often seen to be the engines of growth. There are two main sources of empirical evidence that are adduced to support this conclusion. The first is that job creation has been coming mainly from small firms. The second is that the share of employment accounted for by small firms has increased in the past two decades. Both of these sources rely on a simple metric-employment. This paper asks whether changes in this metric affect the view of the role that small firms play in the growth process.The first section of the paper maintains employment as the measure that is used to evaluate the importance of small firms but modifies the raw measure of employment to correct for the fact that small firms pay lower wages than large firms. When this is done, small producers are no longer found to outperform large producers in terms of job creation over the 1970s and 1980s in the Canadian manufacturing sector.The second section of the paper changes the metric used to evaluate relative performance by moving from employment to output and labour productivity. The paper demonstrates that while small producers have increased their employment share dramatically, they have barely changed their output share. Small firms have been falling behind large firms both with respect to wages paid and labour productivity.     

Is the Culture of Family Firms Really Different? A Value-based Model for Its Survival through Generations

The current work represents a piece of research on the family firm of the semasiological, interpretive or culture creation type. In it we carry out a comparative analysis of the organizational culture of this type of firm along with firms not considered to be family firms, using as theoretical framework generally accepted theories in business administration, such as the systems, neoinstitutional, transformational leadership, and social identity theories. Our findings confirm the existence of certain elements of culture, especially values and allow us to propose a value-based model to help family firms to survive through different family generations.     

Ethical Decision Making in the Public Accounting Profession: An Extension of Ajzen’s Theory of Planned Behavior

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical decisions is critical. An extension of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior (Springer, Heidelberg)], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct effects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct effect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals’ attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action offers a useful framework for exploring these issues.     

Is the Truth in Lending Being Told with the Annual Percentage Rate as the Measure of the Cost of Credit?

This paper demonstrates that the Annual Percentage Rate (APR) measure required under the Federal Reserve System's Regulation Z is not consistent with the mathematical procedures involved in calculating the interest charges on a loan. The APR is never a correct cardinal measure of the true cost of credit, and it is a correct ordinal measure only under specific restrictive conditions. Since the APR always understates the true cost of credit, and since a correct cardinal measure is already familiar to the finance profession, it is difficult to justify the required disclosure of the APR. The Annual Effective Rate should be required as the summary measure of the true cost of credit for all types of consumer loans.     

Linking Culture and Ethics: A Comparison of Accountants’ Ethical Belief Systems in the Individualism/Collectivism and Power Distance Contexts

This study uses accounting professionals from an international setting to test the individualism and power distance cultural dimensions developed by Hofstede [Culture’s Consequences (Sage Publications, Beverly Hills, CA) 1980]. Six countries, which appropriately represented high and low values on the Hofstede dimensions, were chosen for the survey of ethical beliefs. Respondents (n = 249) from the six countries were requested to supply their agreement/disagreement with eight questionable behaviors associated with the work environment. Each of these behaviors contained an individualism and/or power distance cultural component for the responding accountants to consider. The results of the cultural analysis indicated significance on five of the eight survey items. Results lend support for the presence of the individualism cultural element in the ethical responses of the accountants surveyed.     

How Large Is the Risk of Stagflation in the Eurozone?

The rapid recovery of demand combined with supply constraints has led to rising prices during the past months. This is evident in oil and gas markets, but also in international trade, which has been thrown out of step by bottlenecks at Asian ports. This situation creates a trade-off for the European Central Bank, because a more expansionary monetary policy cannot mitigate the supply bottlenecks and supply-side restrictions, while a more restrictive monetary policy would slow down the economic recovery. For this reason, key interest rate hikes in the eurozone are not to be expected for 2022. If the supply-side factors become persistent and wage policy tries to pass the price effects on, monetary policy will be forced to become restrictive.