According to a widely credited model in the business ethics literature, ethical decisions are a function of two kinds of factors, personal(individual) and situational, and these factors interact with each other. According to a contrary view of decision making that is widely held in some areas of business research, individuals’ decisions about ethical issues (and subsequent actions) are purely a function of their self-interest.The laboratory experiment reported in this paper provides a test of the person-situation interactionist model, using the general (...) theoretical and experimental framework used in the experimental economics literature. One individual and two situational factors relating to moral intensity were examined which may influence decisions to misrepresent information in the course of business activities.The individual and one situational variable were significantly related to participants’ actions. The interactions among individual andsituation variables were not individually significant, although the model including interactions had a much higher level of statistical significance. Gender was significant, both directly and in interaction with moral development, suggesting that it may be worthy of further examination. (shrink)

According to a widely credited model in the business ethics literature, ethical decisions are a function of two kinds of factors, personal(individual) and situational, and these factors interact with each other. According to a contrary view of decision making that is widely held in some areas of business research, individuals’ decisions about ethical issues (and subsequent actions) are purely a function of their self-interest.The laboratory experiment reported in this paper provides a test of the person-situation interactionist model, using the general (...) theoretical and experimental framework used in the experimental economics literature. One individual and two situational factors relating to moral intensity were examined which may influence decisions to misrepresent information in the course of business activities.The individual and one situational variable were significantly related to participants’ actions. The interactions among individual andsituation variables were not individually significant, although the model including interactions had a much higher level of statistical significance. Gender was significant, both directly and in interaction with moral development, suggesting that it may be worthy of further examination. (shrink)

One of the fundamental principles of good corporate governance is transparency, i.e., the disclosure of private information to external stakeholders, so that they may make judgments and decisions relating to the corporation. Equally important, but less discussed, is the competing value that corporations need to protect legitimate secrets. Corporations thus need a communication strategy for dealing with external stakeholders which addresses the conflict between disclosure and secrecy. This article focuses on an important element of that communication strategy in the context (...) of financial reporting: the possibility that corporate insiders may consider it in their interest, or in the interest of specific stakeholders, to alter or manipulate the financial information that it discloses publicly. Using concepts from the corporate governance and financial reporting literatures, it addresses the ethical question of who (management or the board of directors) should be responsible for making the fundamental strategic choices whether and (if so) how the corporation alters or manipulates the financial information. This article argues that the board of directors is responsible for formulating (and monitoring) the corporation's communication strategy, and that management is responsible for carrying it out. (shrink)

Professions are granted autonomy by society, to regulate their own affairs. In return for the economic benefits autonomy grants to professions, society expects professions to act in a socially responsible manner. This paper presents a game-theoretic analysis of the relationship between society and professions, which shows that the relationship is unstable in the face of opportunities for professions to renege on the social contract. It also shows how periodic controversies regarding the degree to which professionals act in the public interest (...) are expected to occur periodically, and how they are resolved. (shrink)

The few extant arguments concerning the autonomy of science in the rational acceptance of hypotheses are examined. It is concluded that science is not morally autonomous, and that the attendant notion of rationality in science decisionmaking is inadequate. A more comprehensive notion of scientific rationality, which encompasses the old one, is proposed as a replacement. The general idea is that scientists qua scientist ought, in their acceptance decisions, to take into account the ethical consequences of acceptance as well as the (...) consequences with regard to the attainment of "purely scientific" or "epistemic" objectives. The result constitutes an argument for a (presumably cooperative) game theoretic treatment of inductive logic. (shrink)

An examination of earlier views yields an account of theoretic change on which changes in theory which do involve changes in meanings of terms are classified as a special (and by no means exhaustive) case of theoretic change which, latter, is construed as a more general phenomenon. Only the general problem is given detailed consideration here. The account given considers the problem of how replacement of intensional theories by extensional ones may be treated within the general framework provided. Among its (...) results is the conclusion that rational changes in a scientific theory may be cogently construed as determined by warranted decisions that a new theory is more adequate (than the old one it replaces) with regard to purposes for which a theory is sought. (shrink)

This special issue of Business Ethics Quarterly was organized for two reasons. First, the academic fields of business ethics and accounting ethics have developed without close theoretical or empirical connections. This is the case even though the profession of accounting is an important component of the organizational world. For this reason, it is important to foster attempts to build a bridge between the two fields, so that research in accounting ethics is more closely related to business ethics. Second, the recent (...) deluge of business scandals in which financial reporting and auditing were central elements suggests that a special issue on accounting ethics is timely.The original hope was that the special issue would contain a balance of papers from researchers in “accounting ethics” and those in “business ethics.” In line with the hope that the papers would be responsive to both fields, almost every paper submitted was reviewed by one person who is identified with business ethics and one person who is identified with accounting ethics. As it turns out, most of the papers in this issue were written by people whose academic home is the accounting department. The mix of papers reflects the emphasis in the accounting literature on empirical research on ethical behavior. (shrink)

This special issue of Business Ethics Quarterly was organized for two reasons. First, the academic fields of business ethics and accounting ethics have developed without close theoretical or empirical connections. This is the case even though the profession of accounting is an important component of the organizational world. For this reason, it is important to foster attempts to build a bridge between the two fields, so that research in accounting ethics is more closely related to business ethics. Second, the recent (...) deluge of business scandals in which financial reporting and auditing were central elements suggests that a special issue on accounting ethics is timely.The original hope was that the special issue would contain a balance of papers from researchers in “accounting ethics” and those in “business ethics.” In line with the hope that the papers would be responsive to both fields, almost every paper submitted was reviewed by one person who is identified with business ethics and one person who is identified with accounting ethics. As it turns out, most of the papers in this issue were written by people whose academic home is the accounting department. The mix of papers reflects the emphasis in the accounting literature on empirical research on ethical behavior. (shrink)

Policyholders and other claimants in insurance companies are interested in solidity, i.e., the ability of insurers to meet their claims obligations in both the short run and the long run. Insurance regulators exist in order to represent the interests of consumers. Great emphasis is placed by the regulators of the market on the mandatory and uniform disclosure of relevant financial and operating aspects of insurers. This paper employs simple gametheoretic techniques to address two aspects of the general issue of the (...) desirability of establishing a regulator to assess the solidity of insurers. First, why would uniform information about insurers be desirable? Given that uniformity is desirable, it could be achieved by voluntary agreement of insurers or via regulation. The second issue is how that uniformity is to be achieved; that is, what is the value of a regulator in achieving uniformity? Insurance provides an interesting instance of the general problem. A key determinant is the structure of costs and benefits of securing voluntary agreements across firms. (shrink)