Play fair! Innovating internal self-regulation in the market for profit

Regulation imposes compliance demands on business, but these controls by no means ensure that corporations will act ethically. Externally imposed controls by government or industry are prompts intended to move organizations to engage in a moral minimum. Such efforts are typically reactionary corrective measures, often crafted and applied after an ethical scandal occurs, and thereby offer limited effectiveness in providing systemic change. To provide insight on internally driven controls, this article examines how a newer form of monetized self-regulation, referred to as inverted moral markets, might be leveraged to motivate corporate ethical behavior. Inverted moral market (IMM) operations target firms suspected of unethical action, providing a type of market whistleblowing. Such activities are monetized through the sale of information to investors and by short selling. Rather than a desire to build moral strength, IMM firms are motivated by self-interest and profit. They can potentially ‘do good’ by imposing self-correction within the market, but without virtuous intent. We explore IMMs and the varied impacts their activities may have on the functioning of the overall market. We argue that a more balanced approach between internal and external regulation may enhance the environment for moral balance in a capitalist market system.     

Economic creativity and innovation implementation: the entrepreneurial drivers of growth? Evidence from 63 countries

This paper examines the effect of culture on national innovation and prosperity. Because culture shapes the way people think about and behave in regard to risk, opportunities, and rewards, it should influence the nature of entrepreneurial activity and, by extension, economic outcomes. Using structural equation modeling on a sample of 63 countries, we propose and test a comprehensive explanation of how culture as an umbrella construct (as opposed to an analysis of its constituent parts) affects innovation and national prosperity. We propose a two-stage model of innovation, and find support for our hypothesized relationship that “economic creativity” influences “innovation implementation.” At the national level, we find that culture does indeed influence economic creativity. We also find that innovation implementation explained some of the variation in prosperity across countries. By establishing that “big picture” culture matters to innovation, the door has opened for researchers to evaluate this relationship using data from any one of a number of rival culture frameworks. Moreover, these empirical finding buttress the theoretical arguments that culture powerfully shapes the character of national innovation.     

The Effects of Outside Directors and Board Shareholdings on the Relation Between Chief Executive Compensation and Firm Performance

Critics of corporate governance have suggested that improvements in board monitoring will arise from more independent boards consisting of outside directors and from increased stock ownership by directors. Presumably these changes should result in more rational, more defensible compensation decisions in which pay is clearly tied to results. In this paper, we test the premise that boards with a relatively higher proportion of outsiders and boards with significant shareholdings maintain a closer link between corporate performance and executive pay than do boards with fewer outsiders and boards holding little stock. The results of the study, based on a sample of 268 large corporations, are mixed. As expected, boards with significant shareholdings maintain a stronger linkage between compensation and firm-level performance. This finding persists even after controls are included for CEO and outsider shareholdings. Contrary to expectations, however, evidence was not found that firms with a higher proportion of outsiders on the board of directors relate compensation more strongly to firm results.     

Designing loyalty programs that matter to customers

This study explores a model proposing a customer loyalty program as an identity marketing tool that evokes customer's identity salience (one's perception that a loyalty program membership is important to his/her identity). The results of a Web-based experiment indicate that identity salience is heightened by (1) the uniqueness and exclusiveness of a loyalty program (distinctiveness), and (2) by the fit between the function of the program's rewards and the customer's identity goal (identity congruence). The heightened identity salience, in turn, positively influences the customer's attitude toward the retailer, satisfaction with the loyalty program and the perceived quality of his/her relationship with the retailer.     

Introduction: Special issue on advances in brand management

This special issue of the Journal of Business Research contains 13 articles presented at the Spring 2007 Thought Leaders International Conference on Brand Management. Following a blind reviewing process 69 papers were presented at the conference then authors were invited to revise their papers for inclusion consideration for this special issue. A further round of blind reviewing resulted in the selection of those 13 articles. This introduction presents a review of the research into brand management.     

Perceptual difference of dependence and its impact on conflict in marketing channels in China: An empirical study with two-sided data

Although many firms have adopted the relational exchange or relationship marketing philosophy for developing long-term inter-firm relationships in marketing channels, the issues pertaining to channel conflict still deserve further investigation. The purpose of this paper is to examine the possible impact of perceptual difference of dependence between members in channel dyads on perceived channel conflict. By analyzing paired data collected from both sides of supplier-retailer dyads in China, we test two hypotheses about perceptual difference of dependence and its impact on conflict. We found that there was considerable perceptual difference of dependence between both sides of the dyads, and that the perceptual difference of dependence asymmetry between the two was positively associated with channel conflict perceived by the supplier side. Both researchers and practitioners should be aware of such differences when confronted with channel conflict issues, especially in international channel settings.     

Characteristics and practices of “Christian-based” companies

There is a sizeable group of self-described Christian companies which have declared their belief in the successful merging of biblical principles with business activities. As these companies have become more visible, an increasing number of anecdotal newspaper and magazine articles about these companies have appeared. Surprisingly, no rigorous research has been conducted prior to our recent study. This article provides national estimates of the size and predominant characteristics of self-identified Christian companies. In addition, the study investigated the types of relationships these companies maintained with their employees, customers, communities, and suppliers.Nabil Ibrahim is an Assistant Professor of Business Administration at Augusta College, Augusta, Georgia. He has published articles, case studies, and professional papers in the areas of business policy and strategy.Dr. Leslie W. Rue is Professor of Management in the College of Business Administration at Georgia State University. He is the author of over forty articles, cases, and papers that have appeared in academic and practitioner journals. He has coauthored eight textbooks in the field of management.Dr. Patricia P. McDougall is an Assistant Professor of Management at Georgia State University. Her research focuses primarily on new venture strategies and international entrepreneurship and has been published in several academic journals. Dr. G. Robert Grenne is an Associate Professor of Management at Old Dominion University, Norfolk, Virginia where he teaches strategic management and entrepreneurship. He is a Contributing Editor to Spiritual Fitness in Business and has published articles in various academic and practitioner journals.