If market transactions are optimal, why do so many transactions occur within firms themselves? Ronald H. Coase explains this phenomenon by arguing that market transaction costs differ from intra-company transaction costs and that clear intra-intra-firm property rights have the effect of reducing transaction costs. But what exactly are the relevant transaction costs, and what factors determine them? Oliver Hart argues that market contracts are incomplete, and that the key to improving efficiency is putting the power to deal with these unspecified circumstances into the hands of owners within the same entity.In this paper, I argued that, the development of the theory and practice of business ethics as well as China’s innovative practice in recent decades provide a new perspective, one that is especially relevant to the issues raised by Case and Hart and that bear directly on the reform of China’s state-owned enterprises.

Step therapy is an insurance company policy whereby patients must try a less costly treatment and fail-first before the insurer will cover another, more costly treatment. This article argues that (1) there are relevant and well-established principles of medical ethics—the duty to practice evidence-based medicine and the duty to consider cost-effectiveness when treating patients—that constrain and guide physician behavior with respect to step therapy; (2) clinical practice guidelines (CPGs) promulgated by authoritative physician groups attempt to incorporate and reconcile the competing demands of evidence-based and cost-effective medicine, although it is unclear whether they do so in a manner that appropriately considers all relevant ethical factors relating to cost-effectiveness; and (3) despite the potential shortcomings of CPGs, the ethical principles guiding and constraining physician behavior can help demarcate the ethical boundaries for other actors in the drug prescribing and reimbursement matrix, including insurance companies and benefit managers.

Firm innovation creates an informational asymmetry between the firm and outside stakeholders. Since CSR activities have been shown to reduce asymmetries and risk we surmise that firms use discretionary CSR activities to reduce the asymmetries from innovation. We study an innovation intense industry (technology) and find results that support the hypothesis that firms use CSR to signal long term viability of innovative activities.

The Schwartz Values Survey (SVS), developed by Shalom Schwartz, was used to explore the values and value priorities of undergraduate business students in a mid-sized Canadian university. These business students considered family security as their top individual value and ranked successful, healthy, and enjoying life among their top ten individual values. On the other hand, detachment, accepting my portion in life and social power were least valued. They regarded Benevolence and Achievement as their top two value types (cluster of related values), and ranked the higher order meta-value Self-Transcendence first followed by Openness to Change. The accounting and finance majors considered Hedonism as their top priority while the other business majors valued Benevolence most highly; however, overall, there were more similarities than differences between these two groups. When compared with the males, females valued the meta-value Self-Transcendence significantly more and exhibited values and value systems that have more of a social focus and less of a personal focus. First-year and fourth-year business students ranked the meta-values in the same order; however, Self-Transcendence was rated as significantly more important to the students in their first year compared to those in their fourth year.

In this article, we propose to comprehend the corruption mechanisms of tender bidding processes in terms of Human Resource Management (HRM) practices within informal networks. Taking the context of Kazakhstan, we analyze the behavior of individual actors as members of informal networks. Our analysis shows that both corruption and anti-corruption mechanisms can be explained in terms of HRM practices such as (camouflaged) recruitment (e.g., of powerful government officials via network ties), compensation (e.g., kickbacks for corruption; social recognition or shame for anti-corruption) and performance management (e.g., demonstrative punishment for corruption; extreme formalization, peer pressure or social sanctions for anti-corruption).

B Corporations are for-profit companies meeting specific social and environmental standards. This exploratory study into B Corporations aims to enhance the understanding of the certification on organizational performance. As previous research indicates that third party labels impact financial performance and that positive corporate social performance can lead to positive financial performance, this paper first seeks to determine whether B Corporation Certification positively impacts companies’ financial performance. Second, following previous B Corporation literature, this research tests whether certification leads to positive non-financial results in the form of strategic advantages. Finally, it asks whether Certification negatively impacts organizations’ plans to develop internationally and/or by going public. While this study’s results provide little support that B Corporation Certification impacts organizations’ financial performance or growth, they do indicate that B Corporations experience positive non-financial strategic results post certification. The results of this study may be used to infer or test conclusions about socially responsible labels more broadly in the future.

More than half of the S&P 500 and the Fortune 500 companies publish corporate social responsibility (CSR) reports. CSR is at the heart of a new form of corporation, the benefit corporation, which requires the pursuit of a social purpose as well as pursuit of profit. Thirty-four states, plus the District of Columbia, have enacted benefit corporation legislation. Most laws require that benefit corporations publish reports on their social purpose performance using a third-party assessment format. The purpose of this paper is to analyze 1,530 benefit corporations identified by B Lab and the state of Minnesota for proof of social purpose performance, as demonstrated in reports on their websites. The study found some companies with excellent reports, but those had had a CSR focus prior to becoming benefit corporations or had been Certified B Corporations. However, most benefit corporations in the study had no published reports; many have no websites.

This essay offers an interrogation of Leadership-as-Practice (LAP) in the context of MacIntyre’s Three Rival Versions of Moral Inquiry. LAP is a constructionist leadership approach that rationalizes leadership as the co-creation of embodied leadership practices in organizations, and we argue that its theoretical and philosophical foundations are best aligned with a genealogist version of moral enquiry. We contend that LAP’s theoretical assumptions and implications place it in opposition to traditionalist and encyclopaedist moral philosophies and that application of LAP without an appreciation for our argument poses challenges for practitioners as it diminishes their ability to learn from opposing perspectives. We argue for an appreciation of diverse moral viewpoints and discouragement of coercive moral practices from any competing perspective. While the philosophy undergirding LAP may encourage moral relativism and possible conflicts in principled beliefs, we offer LAP may strengthen organizational members cognitively and emotionally, bringing greater long-term benefit for the organization.

Here we provide an overview of some of the central ethical issues related to the use of surgical robots. Subsequently we introduce an anticipatory ethical analysis of possible consequences for the use of robotic surgery. Anticipatory ethics aims at identifying ethical problems with emerging technologies while they are at the introductory stages for a wide range of stakeholders. Robotic surgery presents a range of positive possibilities, which include treating patients more safely and effectively to caring for patients with telesurgery at remote locations. However, injuries and deaths caused by robotic surgical platforms (RSPs) pose roadblocks to full realization of this technology. Investment in RSPs by for-profits like hospitals requires a detailed stakeholder analysis that takes into account both institutional and patient perspectives. It will take carefully crafted policy and regulation based upon sound technical and ethical analysis to induce the widespread adoption of this surgical method.

Woiceshyn (2011) showed that leaders who exhibit rational egoistic behaviors not only make decisions that lead to organizational success, but that these decisions are also ethical. Woiceshyn’s ethical decision-making model consists of seven fundamental virtues associated with rational egoism: rationality, productiveness, justice, independence, honesty, integrity, and pride. In this paper, we define the rational egoism construct using a virtues-based ethical framework. We compare and contrast the seven virtues under rational egoism with alternative interpretations that arise under altruism, deontology, and teleology in order to further refine the construct. Based on this analysis, we conceptualize rational egoism as a Type II second-order formative model and develop a scale based on the seven underlying virtues. Through the use of partial least squares path modelling (PLS-PM), we validate this on a sample of 534 full-time American workers. We then demonstrate that this rational egoism construct has a strong, positive relationship to the transformational leadership construct. Implications for practice are discussed and areas for future study are suggested.

In this study, we investigate the impact of frequent service learning on the emotional, personal development, and leadership characteristics of business students at a Catholic university in the United States. We examine the aforementioned impact of frequent service learning through a novel panel data set provided by the University’s Institute for Leadership and Service, ranging from the years 2008 through 2015. Specifically, we conduct an empirical analysis across the emotional, personal development, and leadership dimensions, and examine the too-much-of-a-good-thing (TMGT) effect of Pierce and Aguinis (2013) in relation to service learning. Our results suggest that business students experience statistically significant increases in several emotional, personal development, and leadership dimensions as the number of service learning experiences increases. We provide mixed evidence of the TMGT effect when aggregating the emotion and personal development dimensions against the number of service-learning experiences via examination of cross-dimensional averages. Our study yields implications for the optimal number of service learning projects for business schools.

Conflicts of interest represent one of the defining problems of our time, and yet a clear definition of what constitutes a conflict of interest remains elusive. To move us closer to resolving this problem, this article first reviews and critiques attempts to define conflicts of interest, and, second, uses these critiques to ground a more conceptually consistent and practically useful definition. This definition builds on, but also breaks away from Michael Davis’s (1982) definition of conflicts of interest. Specifically, it articulates and defends defining conflicts of interest in terms of their threat to good judgment but does so in the broadest terms. Defining it in this way expands the domain of conflicts of interest, but also avoids unnecessary conceptual distractions and practical difficulties.

Many business and government institutions appear to have failed in meeting society’s expectations of them. Continuing scandals and failures, as well as an increasingly obvious lack of responsibility to customers, have caused communities to question the probity and operation of these organisations. Consequently, “social licence to operate” is becoming an increasingly common process and one which demands a change in management philosophy and behaviour in our institutions. Improving the quality of responsible management practice is a critical element in this new management philosophy, and which demands an intense focus on including ethical considerations in the core management competence of decision-making. We draw on a combined 100-plus years of international consulting experience, “C“ and senior executive work experience, and academic research to present a practical framework for responsible management practice which, we believe, can also form the foundation for the required organisational cultural transformation required of many existing organisations.

Regulation of gatekeepers of taxation has been so controversial and important that a review of ethical standards, professional responsibility and industry guidelines is examined. This paper explores whether gatekeepers of taxation need more ethics and enforcement to increase the compliance rate. In this paper we argue that an effective mixture of professional ethics and enforcement of gatekeepers can increase tax compliance. However, we question how much is optimal or reasonable? We theorize that ethics and enforcement should be proportionate to the ecosystem because too much of it can lead to unintended consequences such as increase costs and higher noncompliance. A friendlier tax authority with less complex laws can enhance the compliance process. This strategy, in amalgamation with professional ethics, enforcement policies, and effective reporting systems, could increase the compliance rate.

With rapid growth in Far Eastern economies (in particular China’s), it is becoming imperative to understand the culturally driven ethical-value underpinnings of the management processes in this region of the world. In this study, we propose a broadened version of Hofstede’s and others’ conception of Confucian dynamics anchored in his teachings preserved in the Lunyu (or Analects), which form the foundation of individual-social moral interactions. Based on a content analysis of these Analects via a qualitative software, NVivo, we identified six work-based values (Leadership Attributes, Appropriate Conduct, Authority Protocol, Governance Policies, Long term Orientation and Collegiality and Teamwork) and six life-based values (Virtuousness and Appropriate Behavior, Handling Life’s Emotions, Learning and Teaching, Parent/Elder Relationship, Friendship and Worship) of the society, prescribed by Confucius in his Analects. These factors are further analyzed and mapped in the context of the three Confucian ethical dimensions (Yi or Righteousness, Li or Propriety, and Ren or Benevolence and Unbounded). The business implications of the results and directions for future research are finally discussed.

This paper outlines the academic architecture of CityLab as graduate program course initiative and Principles of Responsible Management Education (PRME) capstone exemplar. When the United Nations launched the Millennium Goals in 2000 to focus global development on humanity rather than GDP, the Global Compact was launched as a collateral effort, challenging business, government, and social sector leaders to transform the global economic system. In 2007, the Six PRME focused on business schools, challenging them to reorient their curricula towards preparing students to lead the world in building “an inclusive and sustainable economy.” CityLab is an example of innovating the learning experience and challenging learners to take leadership roles in efforts to enhance the value of livable cities as the foundation of an inclusive and sustainable global economy for the Urban Century.