ABSTRACT:A key factor in the decision to convert a publicly owned company to private status is the expectation that value will be created, providing the firm with rent. These rents have implications regarding the property rights of the firm’s capital-contributing constituencies. We identify and analyze the types of rent associated with the newly private firm. Compared to public firms, going private allows owners the potential to partition part of the residual risk to bond holders and employees, rendering them to be (...) co-residual risk bearers with owners. We propose that new promotion-based contracts with bond holders and employees, reflecting their particular investments, be negotiated as the firm migrates from public to private status. These contracts should acknowledge the firm’s intent to maximize shareholder value and its need to take the risks necessary to do so, but support that the firm’s survival not be undermined due to its possibly opportunistic owners. (shrink)

Using 15 years of data (1995–2009) from literature reviews, survey questionnaires, personal interviews, and desktop research, the authors examine North American (Canada, Mexico, and the United States of America) regional trends in business ethics research, teaching and training. The patterns indicate that business ethics continues to flourish in North America with high levels of productivity in both quantity and quality of teaching, training and research publication outputs. Topics/themes that have been covered during the time period are treated with an acknowledgement (...) of the concomitant marginal impact on improving ethical business behavior and contexts—as recurring domestic and global scandals attest. Major North American business ethics challenges/issues to be addressed in the future are identified. (shrink)

There are at least four important, institutional obstacles to whistle-blowing to regulatory institutions. First, regulatory institutions are often systematically understaffed and do not have the resources needed to adequately process whistle-blowing cases. Second, regulators who process whistle-blowing cases are often systematically inexperienced and do not understand the strategic importance of whistle-blowing cases. Third, regulators are often under systemic pressure from the politicians who appoint them to ignore whistle-blowing cases relevant to their sources of financial and/or ideological political support. Fourth, there (...) are high systemic risks to whistle-blowers who blow the whistle to regulatory institutions. Nonetheless, understanding how the institutions and obstacles operate can help us understand what types of whistle-blowing methods can be used to navigate around the obstacles and within the regulatory institutions. In addition, sometimes whistle-blowing methods can help reform regulatory institutions. (shrink)

Organizational ethics and institutional theories are extended by recovering Weberian and Pre-Weberian theorizing that emphasized the joining of ethics and institutional theories. Understanding how ethics and institutional systems influence each other can advance our understanding of the nature and causes of structural organizational ethics issues and help guide potential reforms. We consider the interplay of these elements during the recession of 2008–2009, highlighting how structural ethics problems may have to be addressed at the institutional levels and not solely the individual (...) or organizational levels. (shrink)

This commentary proceeds as follows. First, it is argued from both ethical and legal perspectives through an analysis of Court precedents that Etzioni’s has improperly developed a too narrow First Amendment interpretation and conclusion that Apple should comply with the FBI’s demand to provide the FBI with a key to open iPhones. That is, broad First Amendment considerations and not solely narrow First Amendment “compelled speech” or only Fourth Amendment privacy issues are offered and analyzed from both ethical and legal (...) perspectives. A key point here is that broad First Amendment considerations protect, with exceptions, political and ethical discretion space for “Press” organizations to exercise, or not, ethical responsibilities, including rights to publish or not publish information and opinions, rather than compliance with government orders to publish or not publish. Further, Court cases are discussed from both legal and ethical perspectives where the Courts have established that social media organizations such as Facebook and Twitter do and should have broad First Amendment protection of free expression and peaceful assembly as traditional media such as newspapers have. It is suggested that Apple can and should be considered a social media organization. In addition, special First Amendment protection and limitations concerning national security are analyzed. Second, it is suggested that Etzioni’s point that Apple protected its clients soley for “business profitability” reasons is also a too narrow interpretation since there are more complex, mixed, and combined ethical and political-economic reasons for protecting clients and First Amendment protections. Third, the philosopher Paul Ricoeur’s ethics process responsibility framework concerning relationships between ethics and law and the need for an ethics responsibility rather than a compliance approach, which is similar to Brandeis’ legal ethics approach, is compared with and offered as an alternative to Etzioni’s compliance based “Liberal communitarian” approach. It is suggested that the difference between the Rocoeur and Etzioni approaches is similar to the difference between compliance and ethics responsibility process programs in organizations. (shrink)

Action research is combined research and practical action where the researcher joins with and acts with practitioners to help improve practice and theory building. Action research can be a form of Aristotelian critical, ethical praxis that developmentally changes the action researcher and the external world. Bernstein’s and Eikeland’s interpretations of Aristotelian ethics praxis are considered. The Argyris et al. “action-science” and the van de Ven “engaged scholarship” forms of action research with their differently nuanced interpretations of Aristotelian philosophy as foundations (...) for action research are considered and compared as examples of action research as an ethics praxis method with respect to a key similarity with respect to joining of critical ethics and actionable knowledge; another key similarity with respect to action research practice that can developmentally change the action researcher and the external world; and a key difference with respect to academic literature versus practitioner-based theory building is also considered. Examples in the cases of the political economist and action researcher, Hirschmann’s “Exit,Voice, Loyalty” approach and Greenleaf’s “Servant Leadership” approach to action research as forms of Aristotelian critical, ethical praxis are analyzed. (shrink)

The current economic and preceding financial crises seem to provide evidence in favour of the self-destruction thesis of capitalism. Responses to the crisis have been polarised. Some suggest that regulatory changes are all that is needed. Others suggest the need to change the economic system by developing a new global economic ethic. The first is too limited, the second too utopian. This article suggests that a MacIntyrean virtue ethics approach provides both a more convincing diagnosis of the problem and leads (...) to a more workable prescription. First, we need to understand the internal contradictions of the tradition that has developed of how to ‘do’ business. Then we need the virtues to be exercised inside practices and institutions. But virtue itself needs to be institutionalised; we need an appropriate governance of virtue in organizations. Even though governance is usually taken to ‘crowd out’ virtue, this article proposes an approach to governance that ‘crowds in’ virtue. (shrink)

This article analyzes in detail the virtue of practical wisdom as described by Thomas Aquinas, and on this basis it develops a comprehensive framework to enrich Authentic Leadership theory, establishing the virtue of practical wisdom as foundational for the authentic leader’s behavior and character development, and highlighting shortfalls that may stem from vices opposed to it. The goal of the article is twofold: First, it seeks to fill a void on the role of virtues –and in particular practical wisdom– in (...) leadership studies; second, it aims to show how cultivating the virtue of practical wisdom as described by Aquinas promotes the development of exactly those traits that are characteristic of an authentic leader, offering a set of propositions delineating these correlations. (shrink)

Business Ethics: A European Review, EarlyView.

A socioeconomic and demographic analysis of U.S. Google Trends for queries about Business Ethics and Greed is proposed in the context of the 2008 financial crisis. The framework is grounded in the ethical decision-making literature. Two models using micro and macro-type variables are tested using GLM and GEE regression techniques. The frequency of these Google queries varies positively with the ratio of females, educational attainment, younger adult age, some measures of economic hardship or inequalities, and the lesser the weight of (...) the finance industry represented in each State. The frequency of queries intensifies for these same socioeconomic and demographic categories, in the aftermath of the financial crisis. This article is the first to study the salience of business ethics as an issue in the empirical literature using a nationwide database. It also provides a first empirical study in the specialized literature on “ethics in a time of crisis”. This study lays a preliminary groundwork to identify pro-ethical reform segments of the population, with practical use for financial regulatory agencies. (shrink)

ABSTRACT:The ethics of high frequency trading are obscure, due in part to the complexity of the practice. This article contributes to the existing literature of ethics in financial markets by examining a recent trend in regulation in high frequency trading, the prohibition of deception. We argue that in the financial markets almost any regulation, other than the most basic, tends to create a moral hazard and increase information asymmetry. Since the market’s job is, at least in part, price discovery, we (...) argue that simplicity of regulation and restraint in regulation are virtues to a greater extent than in other areas of finance. This article proposes criteria for determining which high-frequency trading strategies should be regulated. (shrink)

Business schools have become implicated in the widespread demonisation of the financial classes. By educating those held most responsible for the crisis – financial traders and speculators – they are said to have produced ruthlessly talented graduates who have ambition in abundance but little sense for social responsibility or ethics. This ethical lack thrives upon the trading floor within a compelling critique of the complicity of the pedagogy of the business school with the financial crisis of the global economy. An (...) ethical turn within the curriculum is now widely encouraged as a counteractive force. Within this paper, however, we argue that taking this ethical turn is not enough. For business ethicists to learn from the financial crisis, the crisis' legacy needs to be taken account of, and financialisation needs to be taken seriously. Pedagogical reform cannot bracket itself off from the crisis as if it were coincidental with or separate from it. Post-crisis pedagogy must rather take the fact that it is requested now, in light of the crisis, as its very point of departure. The financial crisis must not be understood as something to be resisted in the name of Business Ethics. Instead, the financial crisis must be understood as the very foundation for contemporary Business Ethics in particular and for contemporary business and management education more generally. (shrink)

Business schools have become implicated in the widespread demonisation of the financial classes. By educating those held most responsible for the crisis – financial traders and speculators – they are said to have produced ruthlessly talented graduates who have ambition in abundance but little sense for social responsibility or ethics. This ethical lack thrives upon the trading floor within a compelling critique of the complicity of the pedagogy of the business school with the financial crisis of the global economy. An (...) ethical turn within the curriculum is now widely encouraged as a counteractive force. Within this paper, however, we argue that taking this ethical turn is not enough. For business ethicists to learn from the financial crisis, the crisis' legacy needs to be taken account of, and financialisation needs to be taken seriously. Pedagogical reform cannot bracket itself off from the crisis as if it were coincidental with or separate from it. Post‐crisis pedagogy must rather take the fact that it is requested now, in light of the crisis, as its very point of departure. The financial crisis must not be understood as something to be resisted in the name of Business Ethics. Instead, the financial crisis must be understood as the very foundation for contemporary Business Ethics in particular and for contemporary business and management education more generally. (shrink)