Perceived common myths and unethical practices among Direct Marketing professionals

Two arcas of continuing interest to direct marketing professionals are the perceived myths and unethical practices in the field. Documentation of specific cases and more abstract discussion of these two points of interest frequently appear in the direct marketing literature (e.g. Gitlitz and Barton, 1983; Lewis, 1982; Pierce, 1985). Indeed, the Direct Marketing Association (DMA) has promulgated specific guidelines (DMA, 1985) for ethical business practices within the industry. Up to this point, however, there has been no attempt at a systematic evaluation of the perceptions of professionals in the field. Such an evaluation of these two areas of practice would appear to beg the following questions: (1) What are the major common myths which abound in direct marketing as perceived by professionals who come into direct contact with the operations of direct marketing organizations? (2) Which of these so-called myths are most requently mentioned? (3) What are the most commonly perceived unethical practices? (4) Which of these unethical practices are most frequently mentioned by direct marketing professionals? (5) To what extent do these perceived unethical practices coincide with the industry's own guidelines?     

Repetition, reputation, and raiding

I develop a multitarget takeover model with bid revisions, inwhich bidders desire a reputation for having low valuations.Such a reputation increases the likelihood that future targetswill accept low premium bids. Bidders develop reputation byusing low take-it-or-leave-it offers. Consequently, tender premiums,bid revision rates, and success rates are lower for continuingbidders than for those considering only a single target. Successrates vary within a series, and reputation building is morelikely with highly correlated target valuations. I provide anexploratory empirical analysis consistent with lower premiumsfrom continuing bidders and discuss some resulting implicationisregarding 'raiders', conglomerates, and resistance strategies.     

Is Higher Education Making Students Dumb and Dumber?

This article examines what colleges and universities have to do if they wish to remain relevant. Many students graduating college today lack critical thinking skills. One reason for this is that academic faculty themselves lack some important skills, which include: 1) an appreciation of uncertainty; 2) respect for other disciplines; and 3) an understanding of what true diversity is all about. All of these require humility, which is not valued enough in academe.     

Renegotiation and the impossibility of optimal investment

In a model with asymmetric information and external equity financingit is impossible to achieve socially optimal investment becauseof renegotiation possibilities. The contractual solution suggestedby Dybvig and Zender (1991) is not dynamically consistent -the manager's contract would be renegotiated, resulting in inefficientinvestment. Moreover, no other compensation contract that wouldinduce the manager to invest efficiently survives renegotiation.Contracts that pay the manager based on the stock price, whileproducing suboptimal investment as in Myers and Majluf (1984),are robust to renegotiation.     

Boom and bust patterns in the adoption of financial innovations

We develop a dynamic model of the adoption of financial innovations.Each period, firms decide whether or not to adopt an innovationof uncertain value, and the profitability of each period's adoptionsreveals information about the innovations's value. We show thatcharacteristics of financial innovation waves cited by criticsas evidence of irrational excess are, in fact, consistent withfully rational behavior. We also show that social welfare isenhanced when more firms adopt innovations of questionable valueand that financial intermediaries have an incentive to encouragesuch adoption.     

Label versus position in rating scales

The current study is important for two reasons: First, it demonstrates a procedure for isolating both the label and position effects in rating scales. In addition, it indicates that subjects seem to respond to the actual adjectives employed rather than to their positions relative to the endpoints. Further research should be conducted, in order to determine the relative importance of label and position effects in rating scales, using subjects other than students. Since much research involves the use of rating scales, this is certainly an important area that warrants considerably more investigation. Interpublic Group of Companies     

Ethical behavior in business: A hierarchical approach from the talmud

The Talmud, the compilation of Jewish oral law, is over 1500 years old and includes extensive discussions of business ethics. This paper presents four levels of ethical behavior in business gleaned from the words of the Talmud. At the lowest level, an individual is just barely inside the law; the highest level is the way of the pious. The author has attempted to relate the ethics in ancient business situations to business practices today. Hershey H. Friedman is Professor of Marketing at Fordham University. In 1983 he received the Community Appreciation Award. Most of his publications have appeared in Journal of Advertising Research, Journal of Marketing and Public Policy, Journal of Applied Psychology, Decision Sciences, Akron Business and Economic Review, Journal of Statistical Computation and Simulation, Journal of Communication, and the Journal of Social Psychology.     

Conflict of Interest and the Talmud

A core value of Judaism is leading an ethical life. The Talmud, an authoritative source on Jewish law and tradition, has a number of discussions that deal with honesty in business and decision-making. One motive that can cause individuals to be unscrupulous is the presence of a conflict of interest. This paper will define, discuss, and review five Talmudic concepts relevant to conflict of interest. They are (1) Nogea B’Davar (being an interested party), (2) V’hiyitem N’keyim (behaving to ensure that one is above suspicion) (3) Lifnei Iver (placing a stumbling block before the blind), (4) Shokhad (accepting a bribe), and (5) Geneivat Da’at (deception and undeserved goodwill). Case examples will be used to apply these Talmudic principles to contemporary business practice. This will include discussion of these Talmudic concepts as it applies to specific contemporary business examples relevant to the boardroom, accounting firms, investment banking, politics, and government. It may be impossible to eliminate all conflicts of interest. However, knowledge and awareness of these Talmudic principles can help individuals in business settings better address the ethical issues that they confront. Joshua Fogel, PhD, is an Assistant Professor in the Business Program of the Department of Economics at Brooklyn College. He is the Business Program’s behavioral scientist. He has an interest in the interface of religion and business ethics and can be contacted at joshua.fogel@gmail.com. Hershey H. Friedman, PhD, is a Professor in the Business Program of the Department of Economics at Brooklyn College. He has interest in business ethics and also the interface of religion and entrepreneurship. He currently is funded with a grant by the Kauffman Foundation to study religion and entrepreneurship.