Plato's Statesman and the nature of business leadership: An analysis from an ethical point of view

Plato's paradigm for statesmanship in the Statesman, the “weaving” of temperate and courageous properties, provides the contemporary business ethics theorist with an aid for determining certain problems and solutions with regard to business leadership. The history of American business values manifests the destructive, and especially unethical, effects of deviating from this paradigm by over-emphasizing one or the other of the above types of qualities. However, with the aid of Plato's model for leadership in the Statesman and suggestions from Peters and Waterman's In Search of Excellence, progress can be made towards constructing an adequate model for corporate leadership, especially from an ethical standpoint.     

EC reform inch by inch

After ratification by member countries, the “Luxembourg reform package” worked out by the European Council at the end of 1985 is to provide the basis for the development of the European Community into the nineties. What are the challenges facing the EC? What opportunities do the Luxembourg reforms open up?     

Economic science and ethical neutrality II: The intransigence of evaluative concepts

This paper returns to a perennial controversy I examined in a previous paper in the Journal of Business Ethics (Vol. 2, 1983). Is economic theory an ethically neutral discipline or do its statements presuppose a commitment to moral values? Once again this issue is addressed via a case study of the neo-classical theory of rational choice. In the present paper I focus on behaviourist forms of “operationalist” attempts to short-circuit any argument that would seek to infer moral presuppositions from the use of evaluative discourse. In particular, I examine strategies that have sought to excise from economic theory the “mentalistic” vocabulary required to describe valuations per se. And I argue that such tactics are deficient since they i) impoverish the explanatory power of economic theory, (ii) fail to recover the normative usefulness of the theory of choice, and (iii) camouflage the continued presupposition of moral commitments within neo-classical theory.     

Making sure of survival

Early in 1980—well before the Special Session of the UN General Assembly in New York—the Independent Commission for International Development Issues chaired by Willy Brandt presented its Report: “North-South: A Programme for Survival”. The findings of the Commission which is better known as “North-South Commission” or “Brandt Commission” have met with agreement and approval but also with criticism. Which recommendations has the Commission made? Which points of the Report are being criticised?     

Islamic Corporate Governance: Risk-Sharing and Islamic Preferred Shares

The recent financial crises (including the Asian and subprime crises) indicated the need to reinforce corporate governance mechanisms in emerging and developing market economies. Corporate governance refers to all the factors that affect firm processes (including, among others, financing strategies). Firms must avoid debt financing instruments and adopt financing instruments that allow for “risk-sharing” rather than “risk-shifting” because all recent financial crises were, in essence, debt crises. The primary objective of this paper is to examine the principles of risk-sharing promoted by Islamic finance and study their implications for corporate governance. The secondary objective of this paper is to propose a pricing model for a new risk-sharing financial instrument (Islamic preferred shares, IPS) that was recently discussed by Zarka and Al-Suhaibani (Shariah-compatible preference shares: The Sharia Basis and Economic Rationale. Working paper, SABIC Chair for Islamic Financial Market Studies, 2012). We study the implications of this new instrument as a powerful tool for corporate governance in the case of Islamic markets. We explain the possible contribution of IPS to agency cost reduction, Sharia screening costs and ethical corporate governance.     

Periphery capitalism — Without question mark

This article is a rejoinder to Professor Marion Mushkat’s contribution “Pheripheric Capitalism?” which was published in INTERECONOMICS, No. 5, May 1975.     

The meaning of the tindemans report

In INTERECONOMICS No. 3, 1976, we published an Interview with Professor Dr Walter Hallstein, former President of the EEC Commission, on the Belgian Prime Minister’s, Leo Tindemans’, “Report on the European Union”. Meanwhile the Report has been discussed on occasion of the last European Council meeting in Luxembourg whose unfortunate outcome pointed out in a dramatic way the weakness of the political will of the Community. In the following article the President of the Council, Gaston Thorn, explains his views of the significance of the so-called “Tindemans Report”.     

Key countries in the Third World

Present classifications of the developing countries are of limited usefulness as a basis for determining development policy priorities in the industrialised countries, argue our authors. They define a group of “key countries” which are of strategical importance for the world economy and outline the development risks facing these countries.¹ They suggest that the OECD countries would be better advised to follow a policy of cooperation with these key countries rather than the “man mind thyself” policies which are presently gaining in popularity.     

A concept for an Open World Economy

One of the many new publications dealing with the reform of the International trade system is the report of the Trade Policy Research Centre “Towards an Open World Economy”. The following article analyses and criticlses the main proposals of the report.     

Aid and donor countries’ GNP

The authors try to test statistically whether the flow of resources between poor and rich countries has in fact conformed to the “1 per cent” target defined by the United Nations. Basis for testing several hypotheses are data published by the Development Assistance Committee (DAC) of the OECD.     

Critical analysis of the Barre-Plan

The Commission of the European Communities, in the spring of 1970, accepted “A Plan for the Phases Establishment of An Economic and Monetary Union”, based on the Barre-Memorandum of February 12, 1969, prepared by M. R. Barre, himself a former Commission member. This article deals with the still unanswered questions which according to the author were raised.     

International raw material policy in the agricultural and industrial sphere

The demands in the sphere of raw material policy are a cardinal element of the “New International Economic Order” on which the developing countries are insisting. Dr Hermes, Secretary of State in the Foreign Office of the Federal Republic of Germany, discusses the Common Fund and other issues concerning raw material policy from the German point of view.     

Customer equity: a creative tool for SMEs in the services industry

The creative use of “Customer Equity” (CE) can be of interest to SMEs in the services industry.CE concerns:

• “Customer Acquisition”: Which customer or prospect should be acquired for present profit and future retention?
• “Customer Retention”: How can customers be made customers for life?
• “Add-on Selling”: Why selling more to existing customers is more profitable than the quest for new business.

The SME can furthermore apply two boosters to its CE policy:

• “Strategic Alliances”: When interdependence is smarter than independence.
• “External Economy of Scale”: Competition: if you cannot beat them, join them.

     

A comparison of five business philosophies

While the media and public opinion polls suggest that the state of business ethics is declining, surveys of corporate managers on the subject are less than conclusive. This study presents results of a survey of 487 adult, MBA, and undergraduate business students on the business philosophies of Machiavellianism, Darwinism, Objectivism, Relativism, and Universalism. The findings were consistent with earlier research which showed prospective managers to be less ethical than practicing ones and that women and those reporting a strong religious conviction tend to be more ethical. Explanations and several recommendations for improving the situation are offered. ‘If you saw Atlas... trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down upon his shoulders — what would you tell him to do?’ ‘To shrug.’ —Ayn Rand, Atlas Shrugged     

Entrepreneurship,innovation, and human flourishing

This essay uses Edmund Phelps’ new book Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (Phelps 2013) as inspiration to discuss innovation and entrepreneurship. The book is laudable for its discussion of what constitutes a “good life”. Phelps argues that true life satisfaction cannot be achieved through a purposeless quest for wealth and material consumption, but rather through adventure, entrepreneurship, and creative endeavors. Weaknesses of the book include an overly glossy characterization of the period before World War II, a niggardly evaluation of European innovation, and the lack of convincing empirical evidence for the claim that the rate of innovation has slowed. These flaws are regrettable given the importance of the book’s main message: innovation and creative entrepreneurship are not merely the keys to economic growth, but to life satisfaction as well. This essay discusses topics in entrepreneurship research linked to the book, including the link between innovation and entrepreneurship, the role of institutions for entrepreneurship, and the tendency of national accounts to under-record the social value of innovation and entrepreneurship. If the measures used do not capture the full social value of innovation, we are likely to underestimate the genuine rate of innovation. Government policy may also be misguided. Finally, the challenge to entrepreneurial capitalism posed by the postmodernist research paradigm is discussed.     

The limits to growth — Malthus revived

The publication of “The Limits to Growth — A Report for the Club of Rome’s Project on the Predicament of Mankind” has resulted in a world-wide discussion of this vital issue. The following article reviews different aspects of the study.     

Training and women: Some thoughts from the grassroots

Current assumptions and values with respect to management training for women are examined. A number of suggestions for change are made. The thrust of the changes will move us toward ensuring that education for women does not remain “education for frustration”, that is, education which gives women the desire for change in a world that remains the same. Many women have paid their dues, even a premium, for a chance at a top position, only to find a glass ceiling between them and their goal. The glass ceiling is not simply a barrier for an individual, based on the person's inability to handle a higher-level job. Rather, the glass ceiling applies to women as a group who are kept from advancing higher because they are women. (Morrison, White and Velsor, 1987, p. 13). Breaking the Glass Ceiling Can Women Reach the Top of America's Largest Corporations?     

Limited paternalism and the Pontius Pilate Plight

Ebejer and Morden (‘Paternalism in the Marketplace: Should a Salesman Be His Buyer's Keeper?”, Journal of Business Ethics 7, 1988) propose ‘limited paternalism’ as a sufficient regulative condition for a professional ethic of sales. Although the principle is immediately appealing, its application can lead to a counter-productive ethical quandary I call the Pontius Pilate Plight. This quandary is the assumption that ethical agents' hands are clean in certain situations even if they have done something they condemn as immoral. Since limited paternalism can give rise to this queer conclusion in the salesperson/buyer relationship, the principle is suspect. It may be a necessary condition for ethical sales, but is not sufficient. This discussion concludes by suggesting two additional criteria which, when complemented by the limited paternalism principle, are jointly sufficient.     

The Foreign Corrupt Practices Act: Why It Fails to Deter Bribery as a Global Market Entry Strategy

Recent studies (Cragg and Woof, Bus Soc Rev 107(1):98–144, 2002; Weismann, J Bus Ethics 88:615–66, 2009) revealed that in the first 28 years of its existence, the Foreign Corrupt Practices Act was not enforced by the federal government. The Weismann study further concluded that the FCPA, designed by Congress as a self-regulatory model of corporate governance, failed to achieve the regulatory goal of deterring global bribery by U.S. companies. The current article addresses the reasons that the FCPA remains an ineffective measure to control bribery as a global market entry strategy despite the highly publicized 2006 Department of Justice initiative to increase prosecutions and tighten enforcement efforts. The failure arises out of both the increased use of informal dispositions of case prosecutions, (including non-prosecution and deferred prosecution agreements), which has made “getting caught” merely an increased “cost of doing business” and the failure to close the regulatory gaps in the statute that permit violators to slip through the enforcement net. The article updates and compiles the case prosecution data for every reported case prosecuted between 1977 and 2011. That data are then compared to the results of a 2010 integrity risk survey performed by Deloitte Financial Advisory Services and Forbes which reveal a widely held global business perception that compliance and integrity risks appear to be rising sharply and that the FCPA is ineffective in deterring bribery and corruption in foreign markets. The article aims to serve as a predictive tool for policy makers and business professionals in assessing risk in the global markets, particularly as commerce intensifies in the BRIC countries, notable for bribery and corruption.     

Rourkela-an example of co-operative development Aid

“The Observer”, London, reported last February to its readers on the Indian steel scenery the following: “The story of the three foreign steelworks in India is like an anecdote about a Russian, an Englishman and a German. At Bhilai, the Russians started with a roar of self-congratulation and are now a bit behind the times. The British at Durgapur were modest and their achievements are still modest. The Germans at Rourkela began in notorious muddle... and are now far and away the winners.” This is certainly a compliment to the achievements of the Rourkela steelworks for its now attained productivity and high profits. One should, however, not forget the many difficulties and shortcomings which the project had to face during its planning and construction phase. Mr. Klaus Röh has for one year personally studied the problems at the spot. His findings will shortly be published in a German monograph “Rourkela als Testfall”.