Risk Management for E-Cash Systems with Partial Real-Time Audit

We analyze coin-wallet and balance-wallet under partial real-time audit, and compute upper bounds on theft due to the fact that not all the transactions are audited in real time, assuming that everything else is perfect. In particular, we assume that the audit regime holds for innocent payees. Let v be the maximum allowed balance in a wallet, and 01 be the fraction of transactions that are audited in real time in an audit round. Assume one unit transactions. We show that the upper bound on expected theft for coin-wallet is lim₀^–2, while for plausible (similar) parameter choice the bound for a balance-wallet is O(exp(mv)), where 1<m. The former is nicely bounded for small transactions, however, the bound for balance-wallet can become huge in those cases where we require very small false alarm probability. We conclude that partial audit, may be suitable for coin-wallets with low denomination coins, and possibly for balance-wallet, when we may tolerate a relatively high false alarm rate, but it may be too risky for balance-wallet, where very low false alarm rate is required.     

Justice: The root of american business ideology and ethics

Although there are many conceptions of Justice, these different perceptions can provide many interesting insights into a business person's ethical standards as well as that person's decision-making processes. Using the Bishops' Pastoral Letter on the U.S. Economy as the basis for asking questions about justice, twenty-four business executives were interviewed about their conception of justice. An analysis of these interviews reveals that this group of businesspeople operated under very different conceptions of Justice at the Macroenvironmental and Microenvironmental levels. This result has some interesting implications not only for those scholars concerned with business ethics but for everyone who has a stake in business education.Men are called good, chiefly on account of their Justice. Cicero, 56 B.C. Ideology is applied philosophy. Lodge, 1986 Richard McGowan, S. J. is an Assistant Professor of Operations and Strategic Management at Boston College. His research focus involves examining both the rationale behind business and public policy decisions as well as determining the effectiveness of these policy measures. Some of his recent publications include Deciphering the Japanese Import Quota, Policy Studies Journal (1988) and Public Policy Measures and Cigarette Sales: An ARIMA Intervention Analysis Study JAI Social Issues Management Volume (1989).     

An Exercise in Moral Philosophy: Seeking to Understand “nobody”

The late Hannah Arendt proposed that many, perhaps most monstrous deeds are not committed by moral monsters but by individuals who do not think. However, understanding the significance of activity of thinking as such requires a moral philosophy that transcends rational actor assumptions and instrumental reason centering, instead, on the conditions of self-knowledge. The ubiquitous and often lethal phenomenon of information distortions provides a vehicle for expanding our understandings of individual moral response-abilities in our modern times.     

Beyond bean counting: Establishing high ethical standards in the public accounting profession

Business professions are increasingly faced with the question of how to best monitor the ethical behavior of their members. Conflicts could exist between a profession's desire to self-regulate and its accountability to the public at large. This study examines how members of one profession, public accounting, evaluate the relative effectiveness of various self-regulatory and externally imposed mechanisms for promoting a climate of high ethical behavior. Specifically, the roles of independent public accountants, regulatory and rule setting agencies, and undergraduate accounting education are investigated. Of 461 possible respondents, 230 questionnaires (a 49.6% response rate) indicated that the profession's own rule setting body (The American Institute of Certified Public Accountants) and the use of peer review were perceived as the most effective mechanisms, while government regulation was ranked least. Respondents also evaluated the extent to which ethics should be covered in the accounting curriculum. For every course, the CPAs believed a greater emphasis on ethics is appropriate than presently exists. Suggestions for more effectively integrating ethics into accounting courses are made. Finally, respondents were also asked whether in answering the questionnaire they used a definition of ethics as either the Professional Code of Conduct or a moral and philosphical framework for guiding beliefs. Those who viewed ethics as abiding by a professional code had more confidence in the mechanisms addressed in this study to aid the public accounting profession's ability to ensure high ethical standards of conduct. Methodological implications of this distinction for future studies in business ethics are discussed. Jeffrey R. Cohen is Assistant Professor of Accounting at Boston College. He received his Ph.D. from The University of Massachusetts at Amherst. He is a C.M.A. and a Peat Marwick Research Fellow. His articles have appeared in the Journal of Accounting Research, Decision Sciences and The Organizational Behavior Teaching Review. His work on Ethics has appeared in Issues in Accounting Education, Management Accounting, and The CPA Journal. Laurie W. Pant is Assistant Professor of Accounting at Boston College. She holds an M.B.A. and a D.B.A. from Boston University and an M.Ed. from Emory University. She serves on the editorial board of Issues in Accounting Education. Her articles on Ethics have appeared in Issues in Accounting Education, Management Accounting and The Organizational Behavior Teaching Review.An earlier version of this paper was presented at the 1989 American Accounting Association National Meeting.     

Believing that everyone else is less ethical: Implications for work behavior and ethics instruction

Studies consistently report that individuals believe they are far more ethical than co-workers, superiors, or managers in other firms. The present study confirms this finding when comparing undergraduate students' own ethical standards to their perceptions of the standards held by most managers or supervisors. By maintaining a holier than thou ethical perception, new and future managers might rationalize their unethical behavior as being necessary for success in an unethical world. A prisoner's dilemma type problem can be said to exist when choosing an unethical behavior becomes each player's dominant strategy and the interaction of dominant behaviors is Pareto inferior. Dispelling the holier than thou perception may encourage students to revise their personal behavior payoffs such that the collective benefits that emanate from ethical conduct are favored and the prisoner's dilemma problem is converted into a coordination problem. Thomas Tyson is Associate Professor of Accounting at St. John Fisher College. His articles have been published in a number of professional and academic accounting journals. Two of his Management Accounting publications received Certificate of Merit awards for outstanding character and excellence in contributing to the literature of management accounting.     

Comment on The Microsoft Antitrust Policy Case

This paper both responds to Economides analysis and attempts to address the Microsoft case from a broader than U.S. perspective. The importance of the roles played by disloyalty payments, compatibility requirements, information asymmetry and the rather static nature of market definition, particularly in the context of allegations of tying, in the Microsoft case are highlighted. In contrast to the position in the U.S., the European Commission acts for all EU member states and has its disposal the possibility of imposing large fines. However, structural remedies are not available to the European Commission. Comity procedures, by allowing for the inclusion of foreign surplus in domestic welfare functions, offer a model for international co-operation in the future application of competition laws.     

Integrating Religious Principles and Human Resource Management Activities

Many ethical problems faced by organizations concern human resource management. This paper shows how some religious principles can be integrated into a human resource management course. First, it presents a discussion of employee responsibilities and rights in Judaism, Christianity, and Islam. Next, it suggests how various principles can be applied to human resource management activities. Do to others as you would have them do to you is applied to equal opportunity. Thou shall not commit sexual impropriety (or in positive terms, respect and love) is the basis for no sexual harassment. Thou shall not steal (or in positive terms, deal fairly) is related to fair pay in exchange for excellent employee performance. Thou shall not lie (or in positive terms, be truthful) is needed for due process in employee disputes. Thou shall not kill (or in positive terms, respect life) is applied to employee safety and health, plus health care benefits. A list of potential readings is included for instructors to consider for their own courses.     

The Relationship of Communication, Ethical Work Climate, and Trust to Commitment and Innovation

Recently, Hosmer (1994a) proposed a model linking right, just, and fair treatment of extended stakeholders with trust and innovation in organizations. The current study tests this model by using Victor and Cullen's (1988) ethical work climate instrument to measure the perceptions of the right, just, and fair treatment of employee stakeholders.In addition, this study extends Hosmer's model to include the effect of right, just, and fair treatment on employee communication, also believed to be an underlying dynamic of trust.More specifically, the current study used a survey of 111 managers to test (1) whether right, just, and fair treatment influences trust, both directly as well as indirectly via communication, and (2) whether trust influences perceptions of commitment and innovation. Strong support for the study's hypotheses and Hosmer's (1994a) model was found. Such findings support those who argue that moral management may be good management.     

Brand and Quantity Choice Dynamics Under Price Uncertainty

We develop a model of household demand for frequently purchased consumer goods that are branded, storable and subject to stochastic price fluctuations. Our framework accounts for how inventories and expectations of future prices affect current period purchase decisions. We estimate our model using scanner data for the ketchup category. Our results indicate that price expectations and the nature of the price process have important effects on demand elasticities. Long-run cross price elasticities of demand are more than twice as great as short-run cross price elasticities. Temporary price cuts (or deals) primarily generate purchase acceleration and category expansion, rather than brand switching.     

Does Greater Amount of Information Always Bolster Attitudinal Resistance?

Previous research suggests that attitudinal resistance to information that challenges a prior evaluation increases with the amount of information underlying the prior evaluation. We revisit this proposition in a context in which a set of important claims about a target brand are presented either alone—a lower amount of isolated information—or along with other favorable, but less important claims—a higher amount of embedded information. Results from two experiments show that when the challenge occurs immediately after the initial evaluation, a greater amount of embedded initial information does produce greater attitudinal resistance. However, when the challenge occurs after a delay, a lesser amount of isolated information produces greater attitudinal resistance. The findings qualify previous assumptions about the role of prior information in attitudinal resistance, and support a constructive view of judgment revision and attitudinal resistance.     

Values in Decision-Making Processes: Systematic Structures of J. Habermas and N. Luhmann for the Appreciation of Responsibility in Leadership

"Ethical Leadership" in modern multicultural corporations is first the consideration of different personal and cultural value systems in decision-making processes. Second, it is the assignment of responsibility either to individual or organisational causalities. The task of this study is to set the stage for a distinction between rational entities and the arbitrary preferences of individuals in economic decision making processes.Defining rational aspects of behaviour in economics will lead to the formal structures of organisational systems, which are independent of concrete but varying values. Luhmann's Theory of systems of communication describes the internal dynamic forces of economic communication processes in terms of formal structures. On the other hand Habermas' Theory of discourse integrates the previous relationship between individual subjectivity and rational behaviour. Habermas gives an indication of how to separate subjective values and meaning from rational arguments in rational communication processes. The translation of these theoretical structures into practical applications for decision making processes and decision taking acts links the ethical, or value-oriented, context precisely to both individual and organisational areas of responsibility.     

The Effects of Monetary Magnitude and Level of Aggregation on the Temporal Framing of Price

Existing research has shown that the pennies-a-day strategy of reframing a large aggregate expense as a small daily expense helps to reduce the perceived cost of a transaction (Nagle and Holden, 1995; Price, 1995; Gourville, 1998, 1999). This paper builds on this research and explores the robustness of the phenomenon across two dimensions – (1) the level of temporal aggregation and (2) the dollar magnitude of the transaction. First, we show that the effectiveness of a pennies-a-day strategy is not limited to per-day framing. Rather, we find a more general phenomenon in which a less aggregate expense is preferred to a more aggregate expense, such that if a per-day framing is preferred to a per-year framing, than a per-month framing also will be preferred to a per-year framing. Second, we show that this effectiveness reverses with the magnitude of the underlying expense, such that while a framing of $1 per day is preferred to one of $365 per year, a framing of $4200 per year is preferred to one of $11.50 per day.     

Friedman fallacies

Milton Friedman's article, The Social Responsibility of Business Is To Increase Its Profits, owes its appeal to the rhetorical devices of simplicity, authority, and finality. More careful consideration reveals oversimplification and ambiguity that conceals empirical errors and logical fallacies. It is false that business does, or would, operate exclusively in economic terms, that managers concentrate obsessively on profitability, and that ethics can be marginalized. These errors reflect basic contradictions: an apolitical political base, altruistic agents of selfishness, and good deriving from greed. Colin Grant is a Professor in the Department of Religious Studies at Mount Allison University. He teaches an undergraduate course on The Ethics and Ethos of Business. His article Giving Ethics the Business appeared in JBE 7 (1988), pp. 489–495. Some of the journals in which he has published are: The Christian Century, The Dalhousie Review, Journal of the American Academy of Religion, Modern Theology, Religious Studies, Studies in Religion/Sciences Religieuses, The Toronto Journal of Theology.     

Effects of price uncertainty on consumer purchase budget and price thresholds

This article examines how uncertainty about prices affects: (1) the budget consumers allocate for purchasing a product and (2) consumer price thresholds (i.e., the prices that are considered too high or a good deal). In an experimental setting, the purchase budget as well as the absolute values of both thresholds for uncertain subjects were higher than those for certain subjects. Moreover, a relatively large decline from the budget was needed before a price was considered a good deal, whereas a relatively small increase from the budget was sufficient for a price to be considered too high. Price uncertainty widened the difference between the upper (i.e., too high) price threshold and the budget, making uncertain subjects more tolerant to prices exceeding the budget than certain subjects. However, price uncertainty did not have a significant effect on the difference between the budget and the lower (i.e., good deal) price threshold.We wish to thank the editor and anonymous reviewers for their helpful comments on an earlier draft. We also thank Professors S. P. Raj and Amiya Basu for their comments and suggestions at various stages of the study.     

Board-management relations in small firms: The paradox of simultaneous independence and interdependence

The author introduces constructs based on neo-classical and socio-economic assumptions, and argues that board-management relations should be characterized by both independence and interdependence. Interdependence is especially important in small firms. The article presents a model of directorates from research about directorates based on agency theory assumptions. This model is supplemented with constructs from the theory of contractual relations. Whilst traditional literature tends to focus upon independence from an agency theory perspective, this article argues that it is necessary to use more than one dimension of attributes regarding the board-management relations in order to understand the board's contribution to company performance, and that trust and solidarity is especially important in small firms. Board-management relations described by simultaneous independence and interdependence are proposed to give the highest contribution to company performance. The theoretical propositions are exemplified and supported by results of a field survey of directorates in small firms.     

The economics of open source software for a competitive firm

Large quantities of software, ranging from operating systems to web servers to games, are now available as open source software or free software. In many cases, this software is backed by large profit seeking corporations such as IBM. Traditional economic analysis is used to identify the costs and benefits to firms of using open source rather than proprietary solutions, particularly in the case of the firm releasing code to the world when not obliged to do so. Examples of large companies backing open source are examined in light of the profit motive. Additionally, open source is also analyzed as a quasi-public good.     

Individual and organizational characteristics of women in managerial leadership

Women are making a substantial impact on the employment market, both in terms of overall numbers as well as by appointment to male-dominated organizational roles. Research on women in leadership positions within organizations has concentrated on two main foci. Firstly, the identification of relevant individual and organizational characteristics and secondly, on the impact of these variables on the women in management roles. This paper presents the findings from a series of studies in relation to these broad dimensions. Dr. Rowney was the chairperson of the Management of Organizations and Human Resources Area from 1978 to 1980 and until recently held the position of Associate Dean of the Faculty of Graduate Studies. During 1988 she was a Visiting Professor to the Jiatong University in Xi'an and to the Australian Management College in Mount Eliza, Victoria, Australia. Commencing in January 1990 she will be at the International Management Center in Budapest, Hungary. Consultative activities have included such organizations as the Alberta Wheat Pool, Alberta Gas Ethylene, Gulf Canada and Technology Systems International. Research papers have been published in numerous journals including the Journal of Canadian Petroleum Technology, Canadian Personnel and Industrial Relations Journal, Canadian Psychological Review and Canadian Journal of Behavioural Science. Her more recent publications include A Comparison of Burnout Across Public/Private Sector Managers and The Relationships Between Risk Propensity, and Individual and Job Environment Variables, Journal of Health and Human Administration; and A Preliminary Investigation of Burnout Dimensions in Intact Work Groups, Proceedings XXIV International Congress of Psychology. Currently, Dr. Rowney is involved in a major cross-cultural study of the environmental context of management and personnel in several countries. This research is an extension of projects involving women in management, stress, burnout and the public/private sector. Dr. Rowney is also a registered O.D. consultant and member of the International Advisory Board of the O.D. Institute. Dr. Cahoon has published numerous articles in journals such as Academy of Management Review, Canadian Public Administration, Journal of Health and Human Resource Administration Organization Development Journal, Canadian Journal of Petroleum Technology, and Leadership and Organization Development Journal. He has served as a member of the National Executive of IPAC and on the editorial board of the International Journal of Public Administration. Dr. Cahoon was a member of the Directing Staff of the Australian Administrative Staff College in Mount Eliza, Victoria, Australia from September 1, 1986 to July 1987. Some of his more recent publications include the chapter Overcoming Resistance to Affirmative Action in R. Rentschler's, T. Tullock's and K. Cole's (Eds) Affirmative Action in Action: A Guide to Implementation, JPMA (Inc.), Melbourne, Australia, 1987; and the article Management Development: A Competency Based Approach, The Practicing Manager, Vol. 8, No. 3, April 1987. His conference papers include: The Interaction Between Worksite Variables and Personal Characteristics for Female Managers (with Julie Rowney, JIA), presented at the Third International Interdisciplinary Congress on Women, Dublin, Ireland, July 1987; and The Challenge of Human Resource Management: Maximizing the Human Asset Potential, presented at the Annual Conference of the Victoria Council for Educational Administration, Melbourne, Australia, June 1987. He is currently involved in a longitudinal study on the status of women as managers, stress and burnout. He is completing a text on Public Management in Canada and looking at the organizational and human resource implications of downsizing.     

Where Did They Go Wrong? An Analysis of the Failure of Knowledgeable Internet Consumers to Detect Deception Over the Internet

This paper uses an information-processing model of deception detection to understand the reasons underlying Internet consumers' success and failure at detecting forms of intentional deception that occur on the Internet. Eighty MBA students visited either a real commercial site or a deceptive copycat (page-jacking) site. The deceptive site was identical to the clean site except that it contained six deceptive manipulations (e.g., forged favorable quotes from authoritative sources). This study compares the information processing behavior of four groups of subjects: those who detected the deception, those who missed it, those who correctly identified the real site as non-deceptive, and those who incorrectly believed that the real site was deceptive. It was found that (1) priming subjects to generate the hypothesis of deception weakly facilitates detection success, (2) competence at evaluating the hypothesis of deception is a strong differentiator between successful and unsuccessful detectors, and (3) successful detectors rely on assurance cues and heavily discount trust cues. Unsuccessful detectors do the opposite.     

Rethinking Television Audience Measures: An Exploration into the Construct of Audience Connectedness

Seeking to extend the scope of current audience measurement methods, this paper qualitatively investigates audiences' relationships with television programs. A content analysis of viewers' discourse from focus groups, Internet fan forums and five phenomenological interviews suggests a construct we labelconnectedness. Transcending involvement, audience connectedness defines intense relationships between the audience and a television program that extend beyond the television watching experience into individuals' personal and social lives. Highly connected audiences were found to be more susceptible to the consumption images presented in television programs, hence illustrating the moderating effect of connectedness on television influence. Implications for audience measurement methods and marketing efforts are discussed.     

Investing in Socially Responsible Companies is a must for Public Pension Funds – Because there is no Better Alternative

>With assets of over US$1.0 trillion and growing, public pension funds in the United States have become a major force in the private sector through their holding of equity positions in large publicly traded corporations. More recently, these funds have been expanding their investment strategy by considering a corporations long-term risks on issues such as environmental protection, sustainability, and good corporate citizenship, and how these factors impact a companys long-term performance. Conventional wisdom argues that the fiduciary responsibility of the pension funds trustees must be solely focused on their beneficiaries and, therefore, their investment criteria must be based strictly on narrowly defined financial measures. It is also asserted that well-established financial measurements of corporate performance already include long-term risk assessment through discounted present value of future flow of earnings. Consequently, all other criteria are contrary to the best interest of the pension funds beneficiaries. In this paper, we assert that, contrary to conventional wisdom, pension funds, and for that matter other mutual funds, must be concerned with the long-term survival and growth of corporations. These measures are generally referred to socially responsible investing (SRI) and when applied to corporations, it is termed socially responsible corporate conduct (SRCC). We demonstrate that current measurement of future risk assessment invariably understates, and quite often completely overlooks, these long-term risks because of the inherent bias towards short-run on the part of financial intermediaries whose compensation depends greatly on short-term results. Furthermore, there is ample evidence to suggest that these intermediaries have been engaging in self-serving practices and thus failing in their duties to serve their clients, i.e. pension funds, best interests. Because of their large holdings in the total market as well as individual companies, these funds cannot easily divest from poorly performing companies without destabilizing the companies stock and overall markets. Hence, they must opt for a strategy of emphasizing investment criteria that encourage companies to take into account long-term aspects of their operations in terms of their impact on environment, sustainability, and community welfare, to name a few. We argue that an exclusionary, and even a primary, focus on short-term financial criteria is no longer a viable option. It also calls for the pension funds to encourage greater transparency and accountability of the entire corporate sector through improved corporate governance. Thus socially responsible investing practices are not merely discretionary and desirable activities; they are a necessary imperative, which both the corporations and public pension funds, and other large institutional holders, will ignore at serious peril to themselves. Finally, the paper considers some of the recent developments where corporations have been responding to these challenges and how their actions might be strengthened through greater disclosure and transparency of corporate activities. It also makes recommendations for the pension funds to support further research in creating new measurement standards that further refine the concept of socially responsible investing as a necessary ingredient of long-term corporate survival and growth in the context of a changing economic, environmental and socio-political dynamic.