Ethical Decision-Making in Family Firms: The Role of Employee Identification

Journal of Business Ethics - The ethical behavior prevalent in an organization often determines business success or failure. Much research in the business context has scrutinized ethical behavior,...     

Calibrating spatial models of trade

Empirical spatial models of trade that are based on a mathematical programming specification often exhibit a large discrepancy between the equilibrium solution and the observed demand, supply and levels of trade flows among countries. This discrepancy may be due to several causes. Assuming, however, that a trade model is not misspecified – in the sense that behavior of the economic agents involved in the specific commodity markets has been included in the study and that the relevant policy instruments have been properly taken into account – the cause of discrepancy may be traced either to imprecision of unit transaction costs or to imprecision in the measurement of the demand and supply functions' parameters, or both. Policy assessments based on this type of imprecise models are distorted. This paper presents a methodology for calibrating mathematical programming spatial trade models of increasing complexity, from the one-commodity case to a multi-commodity model with asymmetric slope matrices of demand and supply functions. The proposed calibration procedure identifies corrections of imperfectly measured parameters. The calibrated models generate solutions that exactly reproduce quantities produced and consumed in all countries, as well as trade flows among all pairs of countries, observed in a given base year. Such models may then serve as a springboard for assessing the impact of various policy changes on economic agents in the countries under study.     

Agriculture production versus biodiversity protection: The impact of North-South unconditional transfers

The purpose of this paper is to explore whether international income transfers can improve or worsen the global level of biodiversity and global social welfare by changing the relative contributions to biodiversity protection and to agricultural production. Because of the public good nature of biodiversity, Warr's neutrality theorem suggests that such transfers may have no effects at all (Warr, 1983). A model is developed, based on the simplifying assumption that northern countries have little biodiversity whereas southern countries are endowed with natural capital in the form of (generally unspoilt) biodiversity-rich land. Southern countries allocate optimally land and capital to two competing productive activities, agriculture and eco-tourism. When transfers are organized from the North to the South, we show that Warr's neutrality theorem collapses. Transfers can either reduce or increase the natural capital in the South, depending on some empirically verifiable hypotheses concerning the characteristics of the eco-tourism and agricultural production functions. In addition, we demonstrate that welfare improvements can be obtained even with reductions in the level of biodiversity.     

Bargained Equality: The Strengths and Weaknesses of Workplace Gender Equality Agreements and Plans in France

‘Bargained equality’ reflects wider characteristics of French employment relations whereby state‐driven collective bargaining is a major mode of regulation but is based on weak workplace bargaining cultures outside the largest firms. This article focuses on duties on French employers to bargain on gender equality. It presents findings of a project evaluating workplace agreements and plans on gender equality, based on a sample of 186 agreements submitted in 2014–2015, in 10 sectors, and in‐depth interviews in 20 companies. Despite a rise in formal compliance due to stronger enforcement since 2012, our analysis shows that most companies submitting plans or agreements do not systematically address quantitative measurement of pay or other gender gaps. As well as sectoral differences, the analysis also identifies ‘generational effects’: processes of change which occur as collective agreements expire and are replaced are dependent on local dynamics of bargaining. Based on this analysis, we argue that attention should be paid to the resources available to local bargaining actors, in order to promote an equality agenda.     

Linking Ethics and Risk Management in Taxation: Evidence from an Exploratory Study in Ireland and the UK

Ethical dilemmas involving tax issues were identified by members of the American Institute of Certified Public Accountants as posing the most difficult ethical problem for them (Finn et al., Journal of Business Ethics 7(8), pp. 607–609, 1988). The KPMG tax shelter fraud case proves that the tax profession has not gone untainted in the age of numerous accounting and corporate scandals, such as the Enron débacle (Sikka and Hampton, Accounting Forum 29(3), 325–343, 2005). High-profile scandals serve to highlight the problems caused by differences in ethical judgement among accountants and tax practitioners and the issue of ethics has been brought publicly to the forefront of the profession. Nevertheless, the nature and dimension of ethical issues in tax practice have been largely unexplored (Erard, Journal of Public Economics 52(2), 163–197, 1993; Marshall et al., Journal of Business Ethics 17(12), 1265–1279, 1998; Frecknall Hughes, Unpublished PhD Thesis, The University of Leeds, 2002). This research aims to contribute to the debate on ethics in tax practice by reporting interview data on tax practitioners’ perceptions of ethics in the jurisdictions of Ireland and the United Kingdom and exploring the link or equation of ethics with risk management.     

HRM implementation by line managers: explaining the discrepancy in HR-line perceptions of HR devolution

Previous studies already established the idea of a partnership in which HR professionals and line managers share an organisation’s HRM responsibility. Yet, this relationship is often plagued by conflicts and other obstacles. As such, a perceptual discrepancy is likely to exist between both parties on the degree of HR devolution, which may eventually lead to bad performance. Using survey data, we empirically analyse which factors may explain a perceptual discrepancy between HR professionals and line managers on the latter group’s role in HRM. Results show that the HR-line discrepancy on the degree of HR devolution is rooted in differences in perception on several other factors, including organisational support, (personnel) red tape, the line’s individual capacity and age. Overall, though, it is a matter of understanding both HR’s expectations and the line’s experiences in all aspects of their partnership.     

A conceptual development of Simons’ Levers of Control framework

The management control literature has been criticised for having concepts that are ill-defined. This causes mixed empirical results and makes it difficult to build a coherent body of knowledge. The paper addresses this issue by developing an important framework, that of Simons’ Levers of Control, which has been criticised in the past for its vague and ambiguous definitions. Using methods of concept analysis, the paper analyses prior literature to identify ambiguities with the different levers of control and uses examples from prior field studies to illustrate these ambiguities. The paper also analyses the positive and negative dimensions of controls, which, although part of Simons’ framework, have remained unexplored. For each ambiguity identified, the paper proposes a solution to improve concept definitions or to clarify the relationship between concepts. The result is a revised framework that explicitly separates managerial intentions for controls and employee perceptions of controls. Managerial intentions are comprised of three levels: 1) types of controls (social and technical) 2) which are organised as four control systems (strategic performance, operational performance, strategic boundaries and operational boundaries) and 3) which can be used diagnostically or interactively, have an enabling or constraining role and can lead to either reward or punishment. Finally, after defining the framework's concepts and explaining how they interact, the paper concludes by offering avenues for future research.     

Pecking order and debt capacity considerations for high-growth companies seeking financing

This paper examines incremental financing decisions within high-growth businesses. A large longitudinal dataset, free of survivorship bias, to cover financing events of high-growth businesses for up to 8 years is analyzed. The empirical evidence shows that profitable businesses prefer to finance investments with retained earnings, even if they have unused debt capacity. External equity is particularly important for unprofitable businesses with high debt levels, limited cash flows, high risk of failure or significant investments in intangible assets. These findings are consistent with the extended pecking order theory controlling for constraints imposed by debt capacity. It suggests that new equity issues are particularly important to allow high-growth businesses to grow beyond their debt capacity.