The “I quit” syndrome

Managements, unions, and arbitrators have been plagued by a very simple but long-standing problem involving what might be termed a routine human resource action. The problem stated simply is: When is a quit a quit? Where employees are represented by a bargaining agent, the company cannot always be sure that a “quit is a quit.” It is clear that employers who do not understand the “I quit” syndrome are in an uncertain position with respect to handling such problems. The authors have also discovered that unions do not understand the “I quit” syndrome either and at times go to arbitration with all of its attendant costs when the employee has actually “quit.” The purposes of this article are to study how arbitrators have ruled, to establish the principles involved in this little-known area of union/management relations and to provide parties to such cases with information to guide them. Arbitrators have upheld grievances and reversed company actions often enough that there is a need to clarify what is a “quit” as well as a need to clarify what the rights are of both parties under the collective bargaining agreement. The authors found that many managements use the “I quit” syndrome as a substitute for disciplinary action. It is clear from arbitral decisions that it is best from the company point of view to allow the disciplinary system to handle problem employees. The authors also found that reasonable resignations by employees were upheld by arbitrators. If employers carefully handle and document employee resignations, the resignations will stand. Further, it is clear that employers must issue clear policy statements concerning resignations; this includes avoiding resignations under duress. Finally, parties to collective bargaining agreements need contract language defining a quit.     

Economic returns to cowpea research,extension, and input distribution in Senegal

This paper calculates the rate of return to a set of cowpea research, extension and distribution projects in Senegal to be between 31% and 92%. The results show that a modestly funded program on a secondary crop can be successful. They also indicate that programs may increase their effectiveness by addressing specific household needs – in this case, by focusing on short-cycle varieties that provide food during the hunger season prior to the traditional harvest.     

Women as a business imperative

In 1989, Felice N. Schwartz's HBR article "Management Women and the New Facts of Life" generated a huge debate over the rules established by corporations in their handling of women executives. Now in "Women as a Business Imperative," Schwartz follows up with practical insights about the costs companies incur in passing over qualified businesswomen. In the form of a memo to a fictional CEO, Schwartz describes how the atmosphere within most companies is corrosive to women and must change. Preconceptions harbored by male senior managers about women are so deeply ingrained that many men are not even aware of them. Yet senior managers must help women advance. Those companies that accept their responsibility to make radical change--both in women's treatment and in family support--can improve their bottom lines enormously. Treating women as a business imperative is the equivalent of creating a unique R&D product for which there is great demand. Most companies ignore child care and other family concerns. Many companies hire women to ensure mere adequacy and avoid litigation. Women's ambitions and energies are stifled by such businesses at the same time that women have demonstrated their competence and potential in the best business schools. High turnover results. However, the restraints that now hold women back can be loosened easily. CEOs and other senior managers must support their female employees by (1) acknowledging the fundamental difference between women and men--the biological fact of maternity; (2) allowing flexibility for women and men who need it; (3) providing training that takes advantage of women's leadership potential; and (4) eliminating the corrosive atmosphere and the barriers that exist for women in the workplace.     

“Wilderness” – A designation for Central European landscapes?

The concept of “wilderness” has been intensively discussed as an approach for nature protection in Central Europe among managers of protected areas, decision makers, natural and social scientists. This paper discusses the various attempts for physical definitions for Central Europe. It examines, if “wilderness” a suitable expression for communicating different types of places designated “wilderness”, especially in the context of rising awareness and acceptance in all parts of society of the demands of the national strategies for protecting biodiversity. Literature surveys were carried out in order to find expert quotes on the physical definitions, spatial characteristics, and attributes of “wilderness”. For the analytical perception of the general public, a survey using opinion polls among visitors in the Müritz National Park in north-eastern Germany was carried out. A quantitative approach was chosen, and interviewees were selected on an objective, systematic basis. The paper demonstrates, that the wilderness discussion among experts in Central Europe lacks a common physical and spatial definition. It can be shown that there are strong ethical and religious, educational and cultural motifs in the demand for wilderness. For a broad range of laypersons interviewed in Müritz National Park, “wilderness” seems to be a suitable, positive label for wetlands, shorelines, large forests and remote mountain areas. Important key factors, aside from natural features, are few human traces, little infrastructure and few persons using an area, so that visitors experience a feeling of solitude.     

Tone at the Top: An Ethics Code for Directors?

Recent corporate scandals have focused the attention of a broad set of constituencies on reforming corporate governance. Boards of directors play a leading role in corporate governance and any significant reforms must encompass their role. To date, most reform proposals have targeted the legal, rather than the ethical obligations of directors. Legal reforms without proper attention to ethical obligations will likely prove ineffectual. The ethical role of directors is critical. Directors have overall responsibility for the ethics and compliance programs of the corporation. The tone at the top that they set by example and action is central to the overall ethical environment of their firms. This role is reinforced by their legal responsibilities to provide oversight of the financial performance of the firm. Underlying this analysis is the critical assumption that ethical behavior, especially on the part of corporate leaders, leads to the best long-term interests of the corporation. We describe key components of a framework for a code of ethics for corporate boards and individual directors. The proposed code framework is based on six universal core ethical values: (1) honesty; (2) integrity; (3) loyalty; (4) responsibility; (5) fairness; and (6) citizenship. The paper concludes by suggesting critical issues that need to be dealt with in firm-based codes of ethics for directors.     

Are Investors Misled by “Pro Forma” Earnings?*

This paper uses stock market data to investigate the popular claim that investors are misled by the “pro forma” earnings numbers conspicuously featured in the press releases of some U.S. firms. We first document the frequency and magnitude of pro forma earnings in press releases issued during June through August 2000, and describe the 433 firms that engaged in this financial disclosure strategy. Our test period predates public expressions of concern by trade associations and regulators that pro forma earnings may mislead investors and the subsequent issuance of guidelines and rules on the disclosure of pro forma earnings numbers. We use two complementary approaches to determine whether the share prices that investors assign to pro forma firms are systematically higher than the prices assigned to other firms. Our market‐multiples tests for differences in price levels find some evidence suggesting that pro forma firms may be priced higher than firms that do not use the disclosure strategy. This apparent overpricing is not, however, related to the pro forma earnings numbers themselves. Our narrow‐window stock returns tests reveal no evidence of a stock return premium for pro forma firms at the quarterly earnings announcement date. Collectively, the results cast doubt on the notion that investors are, on average, misled by pro forma earnings disclosures despite the widespread concern expressed in the financial press and by regulators.     

Auditors' Liability, Vague Due Care, and Auditing Standards

This paper expands the set of previously considered liability rules to include a negligence liability rule with a vague specification of due care. Auditors who are negligent in conducting their audit are liable for losses that result from reliance on misstated financial statements. However, what constitutes negligence for auditors is not clearly specified in the law. Consequently, courts often resort to Generally Accepted Auditing Standards (GAAS) and Statements on Auditing Standards (SAS) as benchmarks for determining due care. A liability regime that consists of a vague negligence rule supports and amplifies the credibility of auditing standards. While auditing standards alleviate some of the vagueness that is inherent in the legal standard, they also form a lower bound on due care, since an audit of a quality that is lower than the quality that auditing standards require would be considered negligent. Thus, the vague specification of due care enables auditors to commit to audit quality as pronounced in auditing standards. This paper explores this link between professional standards and auditors' legal liability. It establishes that the commitment to auditing standards could not have been as credible as it is, if auditors' liability was determined based on the strict liability rule, or based on a negligence rule with a clearly specified due care, since under these two liability rules courts would not need to refer to auditing standards to establish fault. The paper also demonstrates that a legal regime where audit standards are used as a benchmark to evaluate negligence is not the same as a legal regime where due care is defined clearly. Therefore, previous studies that assumed a negligence regime with clear due care may have overstated the effort level that is induced by legal liability.     

Urban air pollution progress despite sprawl: The “greening” of the vehicle fleet

Growing cities, featuring more people with higher incomes who live and work in the suburbs and commute by private vehicle, should be a recipe for increased air pollution. Instead, California's major polluted urban areas have experienced sharp improvements in air quality. Technological advance has helped to “green” the average vehicle. Such quality effects have offset the rising quantity of miles driven. This paper uses several vehicle data sets to investigate how California's major cities have enjoyed air pollution gains over the last 20 years.