The Effects of Managers’ Moral Philosophy on Project Decision Under Agency Problem Conditions

This study derives an improved model of managers’ decision-making behavior regarding possibly failing projects. Instead of adopting cognitive moral development used by Rutledge and Karim (Accounting, Organization and Society 24, 173–184, 1999) this investigation uses the agency theory framework to consider individual moral philosophy for the improvement of decisions regarding possibly failing projects. This research hypothesizes that a manager with low relativism has a stronger tendency to discontinue a possibly failing project than one with high relativism when agency problem are present or absent. Also, this study suggests that a manager with high idealism has a stronger tendency to discontinue a possibly failing project than one with low idealism. Through experiments this work finds that agency problem is a significant factor on decisions regarding possibly failing projects in all circumstances. This result is consistent with prior literature and shows agency problem universality. Next, the empirical evidence supports the hypothesis that a project manager with low relativism tends to discontinue a possibly failing project more than one with high relativism, showing that individual moral philosophy can partially mitigate the phenomenon of escalating managers’ commitment.     

Stakeholder-Defined Corporate Responsibility for a Pre-Credit-Crunch Financial Service Company: Lessons for How Good Reputations are Won and Lost

This paper presents a study that identifies a stakeholder-defined concept of Corporate Responsibility (CR) in the context of a UK financial service organisation in the immediate pre-credit crunch era. From qualitative analysis of interviews and focus groups with employees and customers, we identify, in a wide-ranging stakeholder-defined concept of CR, six themes that together imply two necessary conditions for a firm to be regarded as responsible—both corporate actions and character must be consonant with CR. This provides both empirical support for a notable, recent theoretical contribution by Godfrey (in Acad Manag Rev 30:777–798, 2005) and novel lessons for reputation management practice.     

The Diana Project: pioneering women studying pioneering women

The 2007 winner of the International Award for Entrepreneurship and Small Business Research is the Diana Project team (Candida Brush, Nancy Carter, Elizabeth Gatewood, Patricia Greene and Myra Hart). The Diana Project builds on the vast experience of the team in the field of entrepreneurship in general and women entrepreneurship, business growth and venture capital in particular. The Diana Project has investigated the supply and demand side of growth capital for women entrepreneurs. The research contributes to entrepreneurship theory as well as to practice, filling a void in knowledge on growth-oriented women entrepreneurship. In this article we present and discuss the research contribution of the Diana Project, in the areas of entrepreneurship, women entrepreneurship and venture capital. We specifically discuss the value of researching a specific group of women entrepreneurs, those who want to grow their businesses, that very clearly demonstrates the positive potential of female entrepreneurship. The Diana Project has also moved research on women’s entrepreneurship forward since its framework does not treat women entrepreneurs as “other,” i.e., the project does not presuppose that women’s entrepreneurship is similar to or different from men’s entrepreneurship. It assumes that women’s entrepreneurship is entrepreneurship and studies it from that point of view. Carin Holmquist is professor at Stockholm School of Economics and member of the Prize Committee for The International Award for Entrepreneurship and Small Business Research. Sara Carter is professor at University of Strathclyde. Both have written extensively in several of the areas covered by the Diana Project. The prize is awarded by the Swedish Foundation for Small Business Research (FSF) and the Swedish Board of Industrial and Technical Development (NUTEK). An important aim with this prize is to attract broader attention to this research field. A precondition for choosing the winner of the award is that the research for which the award has been granted is a significant contribution to the theory and empirical understanding of entrepreneurship and the importance of entrepreneurship, new firm formation and small businesses in economic development. Besides the honor, the prize consists of SEK 0.5 million (roughly USD 80,000). It has been awarded annually since 1996. More information about the prize and previous winners is available at .     

A polymorphism associated with entrepreneurship: evidence from dopamine receptor candidate genes

The tendency to be an entrepreneur may be influenced by genetic variation. Sensation seeking is more common among entrepreneurs than among the general population. Twin studies show that the tendency to be an entrepreneur is heritable and that common genes influence both sensation seeking and entrepreneurial tendency (Nicolaou et al. Manag Sci 54:167–179, 2008a; Strateg Entrep J 2:7–21, 2008b). Since dopamine receptor genes have been associated with novelty seeking/sensation seeking (Benjamin et al. Nat Genet 12:81–84, 1996; Ebstein et al. Nat Genet 12:78–80, 1996; Noblett and Coccaro Curr Psychiatry Rep 7:73–80, 2005), and attention deficit hyperactivity disorder (ADHD) has been reported to occur at greater rates among entrepreneurs, we examined the association between five dopamine receptor genes and four ADHD-associated genes, with the tendency to be an entrepreneur in a sample of 1,335 individuals from the UK. We found a single nucleotide polymorphism (rs1486011) of the DRD3 gene on chromosome 3 to be significantly associated with the tendency to be an entrepreneur. This result is the first evidence of the association of a specific gene with entrepreneurship. Further studies are needed to replicate this association.     

Linking international entrepreneurship to uncertainty,opportunity discovery,and cognition

In this paper, we suggest a model of international entrepreneurship that links cognition, noticing opportunities, absorbing uncertainty, and bearing uncertainty, to international entrepreneurial action, which is important because of the increased interest in international entrepreneurship. The ways in which cognition affects opportunity identification are discussed to show how international entrepreneurs’ cognitive processes work in terms of identifying opportunities. We also explore the role of cultural differences, with respect to tolerance for bearing uncertainty, on international entrepreneurship. Finally, the model is used to identify areas for future international entrepreneurship research.     

Evolution of entrepreneurship and organizational configurations at Zildjian, 1623�C2010

This work uses a case-based research approach and Siggelkow’s (Acad Manag J 47:125–159, 2002) four-phase organizational configuration model to analyze Zildjian’s evolutionary growth and entrepreneurial initiatives in the global music industry. Zildjian is a unique and well-respected cymbal manufacturer that originated out of Turkey in 1623 and continues to be a major force in the music instruments sector. Turkey was a growing market during the periods of 1700 and 1800 that helped Zildjian to become an increasingly successful company. This also led to creating 13 generations of a successful family business. The work discusses Zildjian’s 387-year family genealogy and its growth within the domains of entrepreneurship, organizational configurations, and strategic inertia. The work finds that behind Zildjian’s marvelous expansion and well-known cymbals, there is a tightly knit family firm that continues to operate like an entrepreneurial venture, dealing with thousands of artists, musicians, educators, orchestras, and bands worldwide. As of 2011, the company may not be a large multinational corporation but its business model is a classic addition to the international entrepreneurship literature. Staunchly traditional in its family business, Zildjian thrives as a privately held company and protects its closely guarded metallurgical formula. The significance of this work lies in its unique methodology within the evolution of Zildjian’s entrepreneurial growth and organizational configurations.     

Impact of founder experience on exit intentions

Entrepreneurial exit—the process by which the founders of privately held firms leave the firm they helped to create (DeTienne, J Bus Venturing, 2010)—is an important component of the entrepreneurial process, yet researchers know very little about it. We examine entrepreneurs’ intentions to exit by a range of possible exit paths [acquisition, initial public offering (IPO), family succession, employee buyout, independent sale, liquidation], building on Gimeno et al.’s (Adm Sci Q 42:750–783, 1997) notion of thresholds as they apply to a simple survival/exit dichotomy, and expanding this to include different intended paths of exit. Our results indicate that entrepreneurs intend to pursue different exit paths based on previous entrepreneurial experience, industry experience, age, and education level. Our findings provide preliminary evidence that differences between intended exit and failure are underspecified in the literature, since exit consists of many unique paths. Also, in support of threshold theory, we find that the intended exit path is driven by factors other than firm performance.     

Investigating the Relationship Between Protestant Work Ethic and Confucian Dynamism: An Empirical Test in Mainland China

This study examined the relationship between the Protestant Work Ethic (PWE) and Confucian Dynamism in a sample of 1,757 respondents from several provinces in mainland China. Mirels and Garrett’s (J Consult Clin Psychol 36:40–44, 1971) PWE Scale and Robertson’s (Manag Int Rev 40:253–268, 2000) Confucian Dynamism Scale were used to measure the work ethics. The 16 items of the PWE Scale and eight items of the Confucian Dynamism Scale were initially subjected to a principal components analysis. Factor analysis produced four factors of the PWE, which were labeled as follows: hard work, internal motive, admiration of work itself, and negative attitude to leisure; and three factors of the Confucian Dynamism, which were labeled: long-term orientation, short-term orientation, and guanxi orientation. The results of a multiple regression analysis indicated that all the dimensions of PWE were positively related to Confucian Dynamism, but negatively to guanxi orientation. The results also indicated that three PWE dimensions (“hard work,” “internal motive,” and “admiration of work itself”) were positively and significantly related to long-term orientation, but two of them were related negatively and significantly to the short-term orientation of Confucian Dynamism. In addition, the results showed that the dimension—admiration of work itself—of PWE was significantly and negatively associated with the guanxi orientation, but significantly and positively to the short-term orientation.     

Two Independent Value Orientations: Ideal and Counter-Ideal Leader Values and Their Impact on Followers’ Respect for and Identification with Their Leaders

Traditionally, conceptualizations of human values are based on the assumption that individuals possess a single integrated value system comprising those values that people are attracted by and strive for. Recently, however, van Quaquebeke et al. (in J Bus Ethics 93:293–305, 2010) proposed that a value system might consist of two largely independent value orientations—an orientation of ideal values and an orientation of counter-ideal values (values that individuals are repelled by), and that both orientations exhibit antithetic effects on people’s responses to the social world. Following a call for further research on this distinction, we conducted two studies to assess the independent effects of ideal and counter-ideal values in leadership settings. Study 1 (N = 131) finds both value orientations to explain unique variance in followers’ vertical respect for their leaders. Study 2 (N = 136) confirms these results and additionally shows an analogous effect for followers’ identification with their leaders. Most importantly, we find that both value orientations exhibit their effects only independently when the content of the two orientations pertain to different value types in Schwartz’s (in J Soc Issues 50:19–46, 1994) circumplex model. Implications for theory and practice are discussed.     

An Examination of the Structure of Executive Compensation and Corporate Social Responsibility: A Canadian Investigation

We explore the extent to which Boards use executive compensation to incite firms to act in accordance with social and environmental objectives (e.g., Johnson, R. and D. Greening: 1999, Academy of Management Journal 42(5), 564–578 ; Kane, E. J.: 2002, Journal of Banking and Finance 26, 1919–1933.). We examine the association between executive compensation and corporate social responsibility (CSR) for 77 Canadian firms using three key components of executives’ compensation structure: salary, bonus, and stock options. Similar to prior research (McGuire, J., S. Dow and K. Argheyd: 2003, Journal of Business Ethics 45(4), 341–359), we measure three different aspects of CSR, which include Total CSR as well as CSR Strengths and CSR Weaknesses. CSR Strengths and CSR Weaknesses capture the positive and negative aspects of CSR, respectively. We find significant positive relationships between: (1) Salary and CSR Weaknesses, (2) Bonus and CSR Strengths, (3) Stock Options and Total CSR; and (4) Stock Options and CSR Strengths. Our findings suggest the importance of the structure of executive compensation in encouraging socially responsible actions, particularly for larger Canadian firms. This in turn suggests that executive compensation can be an effective tool in aligning executives’ welfare with that of the “common good”, which results in more socially responsible firms (Bebchuk, L., J. Fried and D. Walker: 2002, The University of Chicago Law Review 69, 751–846; Zalewski, D.: 2003, Journal of Economic Issues 37(2), 503–509). In addition, our findings suggest the importance of institutional context in influencing the association between executive compensation and CSR. Further implications for practice and research are discussed.Lois. Mahoney is an Assistant Professor at Eastern Michigan University. Her research is focused in the areas of ethics and accounting information systems. She has published in ethics and accounting journals including Journal of Business Ethics, Business Ethics Quarterly, Research on Professional Responsibility and Ethics in Accounting, Information and Organization. Dr. Mahoney has received several research awards, including Best Paper award at the Seventh Symposium on Ethics Research in Accounting. Dr. Mahoney is also actively involved in the American Accounting Association.Linda Thorn is an Associate Professor at York University in Toronto Ontario. Her research focuses on ethical decision making, the ethics of accountants and accounting students and ethical aspects of accounting information. She has published in ethics and accounting journal including among others, Business Ethics Quarterly, Journal of Business Ethics, Contemporary Accounting Research, Behavioral Research in Accounting and Audit: A Journal of Practice in Theory.     

Franchising and the domain of entrepreneurship research

In this essay, we explore the relationship between franchising and entrepreneurship in general, and their research domains in particular. We begin by categorizing the focus of various representative definitions of entrepreneurship as: (1) traits, (2) processes, or (3) activities, and adopt the view that identifying the unique research domain of entrepreneurship is a more worthwhile endeavor than attempting to reach definitional consensus. We subsequently discuss the differences between entrepreneurship in the manufacturing and retailing contexts, and the particular features of franchising as it relates to the study of retailing entrepreneurship. Specifically, four areas are examined: the franchisor’s role in creating an innovative concept, the franchisee’s role in bringing the franchisor’s concept to new markets, the franchisee’s acceptance of risk, and the special issues surrounding the pervasive practice of multi-unit franchising. We conclude with a brief discussion of the reasons for including the study of franchising, franchisors, and franchisees as integral areas within the distinctive domain of entrepreneurship research, and similarly exhort franchising researchers to explore the implications of their work for the study of entrepreneurship.     

International issues in entrepreneurship

In recent decades, there has been a substantial increase in private and public investment in entrepreneurship. This trend has important managerial, financial, and public policy implications. There is also considerable interest in understanding the financial practices of early stage companies. The recent global resurgence of leveraged buyouts and the concomitant rise of “private equity” markets have also heightened interest in entrepreneurship (e.g., Cumming et al. 2007). In this essay, we provide focused summaries of the papers in this special issue, which address these issues.      

A new use of importance sampling to reduce computational burden in simulation estimation

Simulation estimators (Lerman and Manski 1981; McFadden, Econometrica 57(5):995–1026, 1989; Pakes and Pollard, Econometrica 57:1027–1057, 1989) have been of great use to applied economists and marketers. They are simple and relatively easy to use, even for very complicated empirical models. That said, they can be computationally demanding, since these complicated models often need to be solved numerically, and these models need to be solved many times within an estimation procedure. This paper suggests methods that combine importance sampling techniques with changes-of-variables to address this caveat. These methods can dramatically reduce the number of times a particular model needs to be solved in an estimation procedure, significantly decreasing computational burden. The methods have other advantages as well, e.g. they can smooth otherwise non-smooth objective functions and can allow one to compute derivatives analytically. There are also caveats—if one is not careful, they can magnify simulation error. We illustrate with examples and a small Monte-Carlo study.     

Scientific Paradigms,Entrepreneurial Opportunities and Cycles in Economic Growth

In this paper I present a model of economic growth that combines insights from endogenous growth theory, the field of entrepreneurship research and the philosophy and economics of science. The model is built on three relatively standard assumptions and a Kuhnian approach to scientific knowledge accumulation. I assume that innovation generates economic growth, that opportunity driven entrepreneurship is an important source of innovation, that entrepreneurial opportunities increasingly arise out of scientific knowledge creation and that science follows Kuhnian paradigm shifting dynamics. The model then generates opportunity driven cycles in entrepreneurial activity that in turn cause waves of innovation and cycles in economic growth. This result is highly relevant and fills a gap in all three literatures as ‚traditional’ endogenous growth models typically generate constant growth rates in the steady state, entrepreneurship research keeps the origin of entrepreneurial opportunity exogenous and the literatures on the philosophy and economics of science ignore the important downstream economic implications of the non-profit driven institutional framework that governs scientific knowledge accumulation. This paper contributes by identifying scientific institutions and entrepreneurial activity as prerequisites for economic growth and it offers a tentative explanation for the rise and fall in the levels of scientific, entrepreneurial and economic activity over the Kondratieff-cycle.      

Psychological Pathways to Fraud: Understanding and Preventing Fraud in Organizations

In response to calls for more research on how to prevent or detect fraud (ACAP, Final Report of the Advisory Committee on the Auditing Profession, United States Department of the Treasury, Washington, DC, 2008; AICPA, SAS No. 99: Consideration of Fraud in a Financial Statement Audit, New York, NY, 2002; Carcello et al., Working Paper, University of Tennessee, Bentley University and Kennesaw State University, 2008; Wells, Journal of Accountancy, 2004), we develop a framework that identifies three psychological pathways to fraud, supported by multiple theories relating to moral intuition and disengagement, rationalization, and the role played by negative affect. The purpose of developing the framework is twofold: (1) to draw attention to important yet under-researched aspects of ethical decision-making, and (2) to increase our understanding of the psychology of committing fraud. Our framework builds on the existing fraud triangle (PCAOB, Consideration of fraud in a financial statement audit. AU Section 316, , 2005) which is used by auditors to assess fraud risk. The fraud triangle is composed of three factors that, together, predict the likelihood of fraud within an organization: opportunity, incentive/pressure, and attitude/rationalization. We find that, when faced with the opportunity and incentive/pressure, there are three psychological pathways to fraud nestled within attitude/rationalization: (1) lack of awareness, (2) intuition coupled with rationalization, and (3) reasoning. These distinctions are important for fraud prevention because each of these paths is driven by a different psychological mechanism. This framework is useful in a number of ways. First, it identifies certain insidious situational factors in which individuals commit fraud without recognizing it. Second, it extends our knowledge of rationalization by theorizing that individuals use rationalization to avoid or reduce the negative affect that accompanies performing an unethical behavior. Negative affect is important because individuals wish to avoid it. Third, it identifies several other methods fraudsters use to reduce negative affect, each of which could serve as potential “psychological red flags” and helps predict future fraudulent behavior. Finally, our framework can be used as a theoretical foundation to explore several interventions designed to prevent fraud.     

Conceptualising Corporate Social Responsibility: ‘Relational Governance’ Assessed,Augmented, and Adapted

Academic interest in corporate social responsibility (CSR) can be traced back to the 1930s. Since then an impressive body of empirical data and theory-building has been amassed, mainly located in the fields of management studies and business ethics. One of the most noteworthy recent conceptual contributions to the scholarship is Midttun’s (Corporate Governance 5(3):159–174, 2005) CSR-oriented embedded relational model of societal governance. It re-conceptualises the relationships between the state, business, and civil society. Other scholars (In Albareda et al. Corporate Governance 6(4):386–400, 2006; Business Ethics: A European Review 17(4):347–363, 2008; Lozano et al., Governments and Corporate Social Responsibility, 2008) have recently successfully used the model as the basis for their analytical framework for researching CSR activities in a large number of western European countries. While this research offers valuable insights into how CSR is operationalised, it also suffers from a number of significant limitations. To develop a stronger analytical framework with which to explore CSR, this article draws more deeply on political science literature concerned with governance and public policy analysis. This represents the main purpose of this article. In addition, this article also addresses a second and more modest aim: to reflect on the ways in which relational governance-inspired frameworks could be adapted and applied to politico-economic systems where state-industry-third sector relations differ from those found in North America and Western Europe. Both lines of argument are illustrated using vignettes from a case study of the Evenkia Hydro-Electric Station building project in the Russian Federation.     

A theoretical grounding and test of the GEM model

The Global Entrepreneurship Monitor model combines insights on the allocation of effort into entrepreneurship at the national (adult working-age population) level with literature in the Austrian tradition. The model suggests that the relationship between national-level new business activity and the institutional environment, or Entrepreneurial Framework Conditions, is mediated by opportunity perception and the perception of start-up skills in the population. We provide a theory-grounded examination of this model and test the effect of one EFC, education and training for entrepreneurship, on the allocation of effort into new business activity. We find that in high-income countries, opportunity perception mediates fully the relationship between the level of post-secondary entrepreneurship education and training in a country and its rate of new business activity, including high-growth expectation new business activity. The mediating effect of skills perception is weaker. This result accords with the Kirznerian concept of alertness to opportunity stimulating action.

How Do Risk Attitudes Differ within the Group of Entrepreneurs? The Role of Motivation and Procedural Utility

Starting a business involves risk and, thus, requires a risk‐taking attitude. The concept of risk and entrepreneurship has been widely discussed in the entrepreneurship literature; most studies compare entrepreneurs with nonentrepreneurs such as managers or bankers. So far, little research exists on the risk attitudes of the different types of entrepreneurs—those who pursue a new business because of opportunity and those who do so through necessity. This study aims to fill this gap. Our particular focus is on individuals' motivations to start their businesses and the nonmonetary returns from entrepreneurship. The results show that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, those who are motivated by creativity are more risk tolerant than other entrepreneurs. The study contributes to the literature about both risk attitudes of entrepreneurs and necessity and opportunity entrepreneurship.     

Social Contracting in a Pluralist Process of Moral Sense Making: A Dialogic Twist on the ISCT

This paper applies Wempe’s (2005, Business Ethics Quarterly 15(1), 113–135) boundary conditions that define the external and internal logics for contractarian business ethics theory, as a system of argumentation for evaluating current or prospective institutional arrangements for arriving at the “good life,” based on the principles and practices of social justice. It does so by showing that a more dynamic, process-oriented, and pluralist ‘dialogic twist’ to Donaldson and Dunfee’s (2003, ‘Social Contracts: sic et non’, in P. Heugens, H. van Oosterhout and J. Vromen (eds.), The Social Institutions of Capitalism: Evolution and Design of Social Contracts (Cheltenham, UK, Edward Elgar Publishing, Ltd.) pp. 109–126; 1999, Ties that Bind: A Social Contracts Approach to Business Ethics (Boston, MA, Harvard Business School Press); 1995, Economics and Philosophy 11(1), 85–112; 1994, Academy of Management Review 19(2), 252–284.) integrated social contracting theory (ISCT) of economic ethics will further develop this promising and influential approach to moral reasoning, ethical decision-making, and stakeholder governance. This evolutionary, interactive learning-based model of ethical norm generation via dialogic stakeholder engagement is particularly appropriate within economic communities that are experiencing value conflict and pressures for institutional change.Jerry M. Calton is Professor of Management at the University of Hawaii at Hilo. His research interests encompass multi-stakeholder learning dialogue, trust-based network governance, and the social contracting approach to ethical decision-making. His publications have appeared in the Journal of Business Ethics, Business & Society, Business Ethics Quarterly, the Journal of Corporate Citizenship, and elsewhere.     

International entrepreneurship beyond individuals and firms: On the systemic nature of international opportunities

The present study approaches opportunities in international entrepreneurship from a systemic perspective. Based on research on the collectiveness of opportunities in international entrepreneurship and the concepts of activity and object from activity theory, we develop a systemic conceptualization of opportunity-oriented international entrepreneurship. Through an empirical study in Finland and Israel, we depict six collective opportunity beliefs, considered from the viewpoints of society, international venture, and outcome expectations. Furthermore, we induce three modalities for international opportunity as the object of collective activity and model systemic opportunity shaping as the core activity of international entrepreneurship.