We examine market reactions to publicly held multinational firms announcing their affiliation with the United Nations Global Compact (UNGC). The UNGC is a voluntary initiative to support four areas of United Nations viz. Human Rights, Labor, Environmental, and Anti-Corruption. Because firms must file annual Communication on Progress (COP) reports toward these initiatives, we argue this creates a differentiating transparency of interest to stakeholders. Using a sample of 175 global firms, we find support to the theory for joining the UNGC. Returns (...) differ markedly, however, between multinational firms headquartered in the United States (negative) and Europe (positive). We also find that failing to complete the annual COP generates a negative market reaction. (shrink)

We examine market reactions to the stock options backdating scandal in a slightly unusual way, but focusing on firms who were not perceived to have had a backdating concern, but were instead linked to firms who did have a backdating concern. These linkages can be found via board interlocks and the roles those directors perform. In addition we examine the linkages which occur from shared professional services firms, such as auditors and outside legal counsel. That these potential conduits are available (...) is not in question, but rather, do investors perceive the conduits are used to pass along information about backdating stock options? We then ask if affiliation with dominant audit and legal services firms ameliorates or exacerbates those investor market reactions. We find that firms linked to the scandalized firms also face negative reactions, which are worsened when they also are serviced by professional services firms who are themselves are also linked to the managerial practice. (shrink)

This study examines events at the conclusion of the 2006 stock option backdating scandal: the departures of C-level executives from firms implicated in backdating. The authors ask whether removing executives brings closure to the scandal, or if executive turnover creates greater uncertainty. Using a sample of 236 executive departures, the authors find that although overall market reaction to executive departures is negative, those departures involving a firm’s CEO or CFO ameliorate the market reaction. The authors also find that market reaction (...) worsens when the CEO “resigns,” versus being terminated, and when the firm involved has been previously identified as socially responsible. Results suggest that firms, by shaping who and how executives depart, may amplify or dampen the damage of existing scandalizing events. (shrink)

Stakeholder theory provides a framework for investigating the relationship between corporate social performance (CSP) and corporate financial performance. This relationship is investigated by examining how change in CSP is related to change in financial accounting measures. The findings provide some support for a tenet in stakeholder theory which asserts that the dominant stakeholder group, shareholders, financially benefit when management meets the demands of multiple stakeholders. Specifically, change in CSP was positively associated with growth in sales for the current and subsequent (...) year. This indicates that there are short-term benefits from improving CSP. Return on sales was significantly positively related to change in CSP for the third financial period, indicating that long-term financial benefits may exist when CSP is improved. (shrink)

The current study uses a sensemaking model and thinking strategies identified in earlier research to examine ethical decision making. Using a sample of 163 undergraduates, a low-fidelity simulation approach is used to study the effects personal involvement (in causing the problem and personal involvement in experiencing the outcomes of the problem) could have on the use of cognitive reasoning strategies that have been shown to promote ethical decision making. A mediated model is presented which suggests that environmental factors influence reasoning (...) strategies, reasoning strategies influence sensemaking, and sensemaking in turn influences ethical decision making. Findings were mixed but generally supported the hypothesized model. It is interesting to note that framing the outcomes of ethically charged situations in terms of more global organizational outcomes rather than personal outcomes was found to promote the use of pro-ethical cognitive reasoning strategies. (shrink)

The authors respond to a recent consensus statement on maternal–fetal vital conflicts. Sound ethical analysis must depend on accurate medical facts, but there appear to be inconsistencies in the medical analysis. The consensus statement says that the specific threat to the health of the mother immediately subsides following detachment of the placenta from the uterus. The authors refute this assertion, since death from peripartum cardiomyopathy may occur months to years following delivery of the neonate or following termination. The authors assert (...) further that the placenta is an organ of the fetus and that any act on the placenta is a direct act on the fetus itself. National Catholic Bioethics Quarterly 15.1 : 31–37. (shrink)

After 1807, Hegel contrasts microhistorical chaos with macrohistorical order, the "cunning of reason." Agents interact blindly, but reason integrates all interactions, and this is the development and expression of rationality. No particular state dictates or precludes any subsequent outcomes; to allow the cunning of reason is to deny that causal relations are decisive for historical events. Ends are extraneous to objects, which suffer violence in achieving them. Consequently historical progress must also be regarded as extraneous to the objective social world, (...) and this world must be assumed to suffer violence as progress is achieved. If anyone was fooled by the "cunning of reason," it was Hegel. (shrink)

In this commentary, we offer an additional function of rationalization. Namely, in certain social contexts, the proximal and ultimate function of beliefs and desires is social inclusion. In such contexts, rationalization often facilitates distortion of rather than approximation to truth. Understanding the role of social identity is not only timely and important, but also critical to fully understand the function of rationalization.

We argue that how players perceive the attack-defense game might matter far more than its actual underlying structure in determining the outcomes of intergroup conflict. Leaders can use various tactics to dynamically modify these perceptions, from collective victimization to the distortion of the perceived payoffs, with some followers being more receptive than others to such leadership tactics.

System-level change is crucial for solving society's most pressing problems. However, individual-level interventions may be useful for creating behavioral change before system-level change is in place and for increasing necessary public support for system-level solutions. Participating in individual-level solutions may increase support for system-level solutions – especially if the individual-level solutions are internalized as part of one's social identity.

Discovering the taxonomies that best describe emotional experience has been surprisingly challenging. Clore and Huntsinger propose that by exploring the objects of emotion, such as standards or actions, we may better understand differences in emotion that emerge for similarly valenced reactions. We are sympathetic to this idea, although we suggest here that greater attention should be given to the computations that accompany affective processing, such as the discrepancy between different hedonic states, rather than the object per se.

The Business Roundtable's “Purpose of a Corporation” letter announced a shift from stockholder primacy to stakeholder primacy. Interestingly, we contend the letter's language employed a technical efficiency emphasis, suggesting a firm's executives chose to make this shift because they believed doing so would improve the firm's financial performance, via improved corporate governance. We examine whether investors actually accepted the technical efficiency arguments at face value, or in contrast believed the announcements were merely a “rational myth,” what management thought investors would (...) want to hear. We employ a 2-day cumulative abnormal return (CAR) event study for 140 publicly-held firms. Overall, we find investor support for the announcement. In addition, we found how returns to firms with prior similar announcements were negative at the time of the announcement. Also, the returns for firms having multiple signatories were positive and significant. (shrink)

The aim of the social and behavioral sciences is to understand human behavior across a wide array of contexts. Our theories often make sweeping claims about human nature, assuming that our ancestors or offspring will be prone to the same biases and preferences. Yet we gloss over the fact that our research is often based in a single temporal context with a limited set of stimuli. Political and moral psychology are domains in which the context and stimuli are likely to (...) matter a great deal (Van Bavel, Mende-Siedlecki, Brady, & Reinero, 2016). In response to Yarkoni (see BBS issue), we delve into topics related to political and moral psychology that likely depend on features of the research. These topics include understanding differences between liberals and conservatives, when people are willing to sacrifice someone to save others, the behavior of political leaders, and the dynamics of intergroup conflict. (shrink)

Alfred North Whitehead and Emmanuel Levinas are not often considered together in the contemporary philosophical literature. There are clearly sensible reasons for this. While Whitehead is a systematic thinker who explicitly engages in metaphysical philosophy within the tradition of process thought and who does not focus primarily on ethics, Levinas is resistant to systematic metaphysics and works within the phenomenological tradition in order to argue that ethics is first philosophy. Despite these significant points of contrast between Whitehead and Levinas, in (...) this paper we argue that the two might stand as resources for each other in various ways. Since this paper is meant to be explorative and suggestive rather than comprehensive and conclusive, we argue for just two possible points of resonance between these important philosophers: (1) Both Levinas and Whitehead develop an account of selfhood that is intrinsically relational and concerned with responsibility—we term this account “Ethical Subjectivity;” and (2) Both Levinas and Whitehead operate according to what we call a “Hermeneutics of the Other” that stresses epistemic humility and dialogical openness. (shrink)