Responsibility, Taint, and Ethical Distance in Business Ethics

Much light can be shed on events which characterize or underlie scandals at firms such as Enron, Arthur Andersen, Worldcom, ImClone, and Tyco by appealing to the notion of ethical distance. Various inquiries have highlighted the difficulties in finding or identifying particular individuals to blame for particular events, and in the context of situations as complex as these it can sometimes be helpful to investigate the comparative ethical distance of various participants in these events. In this essay I offer a characterization of ethical distance in terms of moral responsibility, and in doing so I describe and illustrate the rough inverse correlation between moral distance and degrees of moral responsibility. I urge that the concept of ethical distance is capable of shedding light upon situations in which several people are involved in bringing about a state of affairs. I then argue that moral responsibility cannot do justice to all situations involving ethical distance. When the distance between a person and a state of affairs grows sufficiently large, a different type of treatment is called for, and I introduce the notion of moral taint to describe the moral status of agents in these situations.     

Policy Issues Raised by For-Profit Spinoffs from Professional Associations: An Evaluation of a Recent AICPA Initiative

This paper provides an evaluation of the spinoff of a for-profit company from the American Institute of Certified Public Accountants (AICPA), a nonprofit professional association. The evaluation is based on a review of the literature on public policy issues surrounding organizational conversions from nonprofit to for-profit legal status. Many criticisms of this for-profit spinoff were voiced by professional leaders and accounting regulators, and we demonstrate that these criticisms are grounded in widely recognized policy principles relating to nonprofit conversions. The public policy issues raised by this study have implications for the governance of professional associations in all disciplines.     

Where have all the traditional classroom settings gone?—The use of large scale, public sector projects to illustrate a multidisciplinary approach to problem solving

This work describes the evolution and potential of an elective course for students who have already been exposed to the standard techniques of problem solving as presented in traditional courses. Students apply these techniques to large scale problems in directed mullidisciplinary project teams. In doing so, they are provided with a unique learning experience allowing them to serve as a resource to the community. Course projects described here include the promotion of a railing retail district; the formulation, implementation and monitoring of litter reduction strategies; the economic evaluation of using inmate labor to clean public areas; and economic comparisons of recycling strategies for used tires.     

THE DETERMINANTS OF AUDIT FEES: SOME EMPIRICAL MODELS

This paper proposes a model of audit fee determination based upon size and other characteristics of the auditee and the auditor, and upon whether there has been a recent change of auditor (which might lead to a low-balling effect). A novel feature of the model is that auditee size is measured in two dimensions, sales and assets, and is allowed to have a quadratic relationship with audit fee. The model was estimated for a sample of large listed UK companies for the years 1981 to 1988. The results support the low-balling hypothesis and also provide insights into the distinctive role of the Big 8 firms in the audit market.     

Herd on the Street: Informational Inefficiencies in a Market with Short-Term Speculation

Standard models of informed speculation suggest that traders try to learn information that others do not have. This result implicitly relies on the assumption that speculators have long horizons, i.e., can hold the asset forever. By contrast, we show that if speculators have short horizons, they may herd on the same information, trying to learn what other informed traders also know. There can be multiple herding equilibria, and herding speculators may even choose to study information that is completely unrelated to fundamentals.     

Corporate moral agency: A case from literature

I analyze a well-known and moving passage from John Steinbeck's novelThe Grapes of Wrath. This passage provides an excellent illustration of one of the central questions about corporate moral agency: Is corporate moral agency anything over and above the agency of individual human beings? The passage in question is a debate about whether or not the actions of a particular company are anything over and above the actions of individual human beings.     

The welfare effects of disclosure under cognitive dissonance

Atlantic Economic Journal -