Do We Really Want More Leaders in Business?

In this article, we focus on the concept of leadership ethics and make observations about transformational, transactional and servant leadership. We consider differences in how each definition of leadership outlines what the leader is supposed to achieve, and how the leader treats people in the organization while striving to achieve the organization's goals. We also consider which leadership styles are likely to be more popular in organizations that strive to maximize short run profits. Our paper does not tout or degrade any of these leadership theories. Instead, it points out which theories allow reason to play more than a minimal role in ethical decision-making, as well as those that are most consistent with a firm's desire to achieve efficiency in the short run. We explain our view that the way leadership is practiced in large, bureaucratic organizations suggests that ethics is often absent from the leader's decision-making process. Consequently, we suggest that before we engage in a meaningful dialogue about what kind of leaders we might really want in business, we must consider how much short-run profit we are willing to forego in exchange for more ethical corporate cultures.     

International working capital practices in the UK

This paper reports the results of a survey on the international working capital management practices of the top 200 companies in the UK. The purpose of the survey was to obtain information on some international aspects of working capital management in major British firms.     

Credible Pensions*

One of the main problems in pension policy is to develop an institutional framework that guarantees that public and private pensions promises are kept. This paper discusses how the governance of public and private pensions is key to making such promises credible. It argues that credibility concerns undermine the case for earnings‐related pensions run by the state and private defined benefit plans.     

Corporate codes of ethics: necessary but not sufficient

While most large companies around the world now have a code of ethics, reported ethical malpractice among some of these does not appear to be abating. The reasons for this are explored, using academic studies, survey reports as well as insights gained from the Institute of Business Ethics' work with large corporations. These indicate that there is a gap between the existence of explicit ethical values and principles, often expressed in the form of a code, and the attitudes and behaviour of the organisation. The paper suggests that two basic reasons appear to be at the heart of the problem: ineffective ethics programmes and deficiencies in corporate culture. The paper concludes that successfully embedded corporate ethical values requires well‐designed ethics policies, sustained ethical leadership and incorporation of ethics in organisational processes and strategy as part of an ethical culture at all levels of the organisation. It makes some practical suggestions on how this can be achieved.     

On moral hazard and nonexclusive contracts

We study an economy where intermediaries compete over contracts in a nonexclusive insurance market affected by moral hazard. In this context, we show that, contrarily to what is commonly believed, market equilibria may fail to be efficient even if the planner is not allowed to enforce exclusivity of trades (third best inefficiency). Our setting is the same as that of Bisin and Guaitoli [Bisin, A., Guaitoli, D., 2004. Moral hazard with nonexclusive contracts. Rand Journal of Economics 2, 306–328]. We hence argue that some of the equilibrium conditions they imposed are not necessary, and we exhibit a set of equilibrium allocations which fail to satisfy them.     

Segmentation, advertising and prices

This paper explores the implications of market segmentation on firm competitiveness. In contrast to earlier work, here market segmentation is minimal in the sense that it is based on consumer attributes that are completely unrelated to tastes. We show that when the market is comprised by two consumer segments and when there is sufficient variation in the per-consumer costs firms need to incur to access the different consumer populations, then firms obtain positive profits in symmetric equilibrium. Otherwise, the equilibrium is characterized by zero profits. As a result, a minimal form of market segmentation combined with advertising cost asymmetries across consumer segments give firms an opportunity to generate positive rents in an otherwise Bertrand-like environment.     

The role of brand utilities: application to buying intention of fair trade products

The authors focus on the ethical consumption and propose a model of buying intention of fair trade products, including the utilities of the fair trade generic brand as direct determinants. The authors measure the functional and symbolic utilities provided by this brand, together with the attitude towards the commercialising organisations, consumer concern and perceived knowledge about fair trade issues. The model is tested through a structural equation model on a sample of members (students, lecturers and staff) of a ‘Fair trade University’. The results confirm that perceived functional utility is the most important antecedent of the buying intention, while the symbolic dimension has a significant but weaker explanatory power. Conversely, the consumer attitude towards the organisation has no influence. The authors also highlight the importance of communication and concern to stimulate consumer behaviour.     

A global database of domestic and international tourist numbers at national and subnational level

We present a new, global database on tourist destinations. The database differs from other databases in that it includes both domestic and international tourists; and it contains, for the most important destinations, data at national level as well as at lower administrative levels. Missing observations are interpolated using statistical models. The data are freely accessible on the internet. Copyright © 2007 John Wiley & Sons, Ltd.     

Net exports, consumption volatility and international business cycle models

Conventional two-country RBC models interpret countercyclical net exports as reflecting primarily the dynamics of capital. I show that, quantitatively, theoretical economies rely on counterfactual terms of trade effects: trade fluctuations, on the contrary, are driven by consumption smoothing, thus generating procyclical net trade in goods. I then consider a class of preferences that embeds home production in a reduced form: consumption volatility increases so that countercyclical net exports reflect primarily a strong relation between consumption and imports, as in the data. The major discrepancy between theory and data concerns the variability of international prices.