Purchasing practices in a hospital environment: an ethical analysis

The critical state of the hospital industry, as previously described, generates a difficult decision environment for the materiel manager and those in the purchasing function. The unique life- and death circumstances of hospitals impose a further onus on those who manage them. In the name of saving lives, they can find a convenient excuse to disregard all moral principles, forgetting the Socratic dictum "it is not enough that one lives, but that one lives well." Without the moral "right stuff," they can easily give in to the seductions of momentary gains and glory through ethical short-cuts. There is wisdom and consolation in the words that "nice guys may appear to finish last, but usually they're running in a different race." Studies have established a direct relationship between corporate excellence and ethical values. The reality of competition in the hospital industry dictates that the integration of ethics into the life of the organization should happen by design and not by accident. This is what is meant by strategy. If hospitals would strive for excellence to survive and grow, they should have a strategy with a mission statement that also embodies its moral values and moral agenda. Such an approach does not guarantee that an organization will become immune to moral contamination, but it does provide an antidote.     

Galton's fallacy and economic convergence

Friedman (1992) argues that regressing cross-country incomechanges on their final levels can be informative about -convergence(the tendency for the dispersion of income levels to narrow)whereas a similar regression on initial levels of income cannotbe. In this note we show that Bliss's (1999) dismissal of thisargument is in error.     

Education and the natural rate of unemployment

We show how changes in the educational composition of the labourforce affect both the level and the behaviour over time of aggregateunemployment series. We also demonstrate that if it had notbeen for such changes, the US unemployment series would look'European' since the within-group unemployment series all havethat same appearance. We derive a natural-rate model of unemploymentfor two education groups, providing microfoundations for inter-groupdifferences in wages and unemployment, and evaluate its plausibilityin light of microeconomic evidence.     

Sticky Price Models,Durable Goods,and Real Wage Rigidities

The standard two‐sector New Keynesian model with durable goods is at odds with conventional wisdom and vector autoregression (VAR) evidence: Following a monetary shock, the model generates (i) either negative or no comovement across sectoral outputs and (ii) aggregate neutrality of money when durable goods' prices are flexible. We reconcile theory with evidence by incorporating real wage rigidities into the standard model: As long as durable goods' prices are more flexible than nondurable goods' prices, we obtain positive sectoral comovement and, thus, aggregate nonneutrality of money.     

An ethical argument for host country workforce training and development in the expatriate management assignment

This paper seeks to establish the ethical foundation of MNCs' responsibility for providing host country workforce (HCW) preparation and training attendant to the new expatriate management assignment. It argues that such moral responsibility arises from a set of correlative duties which MNCs acquire as business institutions. They include duties involving the expatriate manager, the HCW, and the host nation to (1) assist all employees, including the expatriate manager, in the successful execution of their assignments; (2) avoid the semblance of discriminatory treatment; (3) encourage full status integration into a global economy; (4) foster personal enlightenment and self-enrichment; (5) help individuals develop useful, marketable skills; (6) contribute to the development of a greater and more functional national labor skill base; and (7) encourage a long-term focus on creating enduring value for a maximum number of stakeholders, rather than upon short-term and shortsighted profit for only a few. Some important cautions and considerations related to HCW training implementation are then discussed.Charles M. Vance, associate professor of management at Loyola Marymount University in Los Angeles, has both a domestic and international focus on human resource management and learning system design to enhance organizational performance. He has several publications, and his new book,Mastering Management Education (Sage Publications), is to be published in 1993.Eduardo S. Paderon is the Associate Dean of the Hagan School of Business of Iona College in New Rochelle, New York. He teaches graduate courses on Business Policy and Business and Society. His writings and other scholarly activities, including presentations at national and international conferences, focus on business ethics and cross-cultural value studies.     

Valuation of bankrupt firms

This study compares the market value of firms that reorganizein bankruptcy with estimates of value based on management'spublished cash flow projections. We estimate firm values usingmodels that have been shown in other contexts to generate relativelyprecise estimates of value. We find that these methods generallyyield unbiased estimates of value, but the dispersion of valuationerrors is very wide - the sample ratio of estimated value tomarket value varies from less than 20% to greater than 250%.Cross-sectional analysis indicates that the variation in theseerrors is related to empirical proxies for claimholders' incentivesto overstate or understate the firm's value.     

Valuing American options by simulation: a simple least-squares approach

This article presents a simple yet powerful new approach forapproximating the value of American options by simulation. Thekey to this approach is the use of least squares to estimatethe conditional expected payoff to the optionholder from continuation.This makes this approach readily applicable in path-dependentand multifactor situations where traditional finite differencetechniques cannot be used. We illustrate this technique withseveral realistic examples including valuing an option whenthe underlying asset follows a jump-diffusion process and valuingan American swaption in a 20-factor string model of the termstructure.