J. Brooke Hamilton

The effect of published reports of unethical conduct on stock prices

This study adds to the empirical evidence supporting a significant connection between ethics and profitability by examining the connection between published reports of unethical behaviour by publicly traded U.S. and multinational firms and the performance of their stock. Using reports of unethical behaviour published in the Wall Street Journal from 1989 to 1993, the analysis shows that the actual stock performance for those companies was lower than the expected market adjusted returns. Unethical conduct by firms which is discovered and publicized does impact on the shareholders by lowering the value of their stock for an appreciable period of time. Whatever their views on whether ethical behaviour is profitable, managers should be able to see a definite connection between unethical behaviour and the worth of their firms stock. Stockholders, the press and regulators should find this information important in pressing for greater corporate and managerial accountability.

Ethical Standards for Business Lobbying: Some Practical Suggestions

Rather than being inherently evil, business lobbying is a socially responsible activity which needs to be restrained by ethical standards. To be effective in a business environment, traditional ethical standards need to be translated into language which business persons can speak comfortably. Economical explanations must also be available to explain why ethical standards are appropriate in business. Eight such standards and their validating arguments are proposed with examples showing their use. Internal dialogues regarding the ethics of lobbying objectives and tactics will plausibly occur only in businesses which recognize social responsibility mandates. Public interest stakeholders could hasten this recognition by making use of information made available by the Lobbying Disclosure Act of 1995 to institute external dialogues regarding lobbying by specific businesses and industry groups . Given practical ethical standards and the information on business lobbying provided by the law, the press, corporate activists, consumers, pension fund managers and the public can apply pressure for ethical lobbying practices.

Curves in the high road

Purpose – The purpose of this paper is to trace a history of American codes of business ethics as they evolved from religious bases to legalistic bases to an international emphasis.Design/methodology/approach – The paper describes the evolution of business codes of ethics over the twentieth century in relation to the development of social issues.Findings – It is found that ethical codes are influenced by the prevailing ideology of the time regarding the social responsibility of business. The earlier part of the twentieth century emphasized religious values governing the treatment of customers and competitors and the responsibility of businesses for the well‐being of their employees by directing their private as well as business conduct. The latter part of the twentieth century stressed legal compliance as government regulation sought to control business behaviors that were harmful to society and to the environment. Entering into the twenty‐first century, we are seeing an increase in international emphases...

Swift: A Software Program for the Analysis of Written Comments

Abstract This article describes a flexible, user-friendly, menu-driven content analysis program called SWIFT for use on any IBM-compatible personal computer. It was developed for the analysis of student comments. SWIFT produces an analysis of word and phrase usage by categories and subcategories based on either inductively or deductively derived models. It provides a useful alternative or supplement to structured questionnaires. The program has special functions to aid in the selection of key words and allows for their inspection in context. An example of its functionality and accuracy is presented.

An essay on when to fully disclose in sales relationships: Applying two practical guidelines for addressing truth-telling problems

Salespeople have a moral obligation to prospect/customer, company and self. As such, they continually encounter truth-telling dilemmas. lgnorance and conflict often block the path to morally correct sales behaviors. Academics and practitioners agree that adoption of ethical codes is the most effective measure for encouraging ethical sales behaviors. Yet no ethical code has been offered which can be conveniently used to overcome the unique circumstances that contribute to the moral dilemmas often encountered in personal selling. An ethical code is developed that charts ethical paths across a variety of sales settings (addressing ignorance) while illustrating why the cost associated with acting morally is generally reasonable (addressing conflict). The code applies the universal transactional notions of customer expectations and salesperson reputation to illustrate why and when salespeople are morally required to tell the truth. In doing so, the code tackles head-on the vexing question of how best to juggle mixed motives - involving self-interests, corporate-concerns, cus-tomer-needs and other influences such as the nature of the transaction. The issue of how mixed motives can be dealt with through moral means is one that ethicists have previously sidestepped (Stark, 1993).

And all who jumped died: the Triangle Shirtwaist factory fire

Suggests that the Triangle Shirtwaist factory fire in New York City in 1911 was the veritable genesis of laws safeguarding workers. The events of the 18‐minute inferno which killed 146 young, immigrant garment workers are summarized, as are the factory owners’ responses to the fire, along with the rationalizations they used to defend their lethal actions, which included moral justification, accusing the accuser, blaming the victim, advantageous comparison, responsibility displacement, responsibility diffusion, dehumanization, and blame attribution. Reviews workplace reforms initiated as a direct result of this fire and discusses why such historical disasters are unlikely to re‐occur if three simple lessons are heeded: first, it is unfortunate that it has required major trauma or carnage to awaken the public to the realities of existing dangers; second, mere compliance with existing statutes is often insufficient for protecting workers; and third, organizations which fail to self‐monitor will often be subjected to external control and regulation.

Exxon at Grand Bois, Louisiana: A Three-Level Analysis of Management Decision Making and Corporate Conduct

In the early 1990s, managers at Exxon decided to seek lower cost disposal in Louisiana for oil-field wastes declared hazardous in Alabama. This decision resulted in injuries to the residents of Grand Bois, Louisiana; the disposal company; Exxon; and the oil industry in the state. Given the need for business and society to manage business operations for mutual benefit, it is essential to understand why businesses injure the public so that similar incidents do not happen again. The authors use three analytical perspectives to suggest how corporations may make unethical decisions without purposefully setting out to do so: their managers may fail to understand changing social expectations for corporate behavior; they may adopt organizational structures, policies, and procedures that block ethical action in the name of efficiency; and they may follow unwritten rules of behavior for career success that exclude ethics. These perspectives suggest that individual Exxon managers may not have been making greed-based decisions, weighing corporate gains against harms to others. The situation more likely involved a failure, for the reasons discussed, to raise ethics questions in making business decisions. This explanation does not make much difference to those injured nor does it absolve those who made the decisions. It does make a difference to society and to companies seeking to understand factors that have to be overcome in any large corporation that wishes to prevent such events from occurring.

Two practical guidelines for resolving truth-telling problems

The news reminds us almost daily that the “truth” is apparently not highly valued by many in business. This paper develops two prescriptive standards — the Expectation and Reputation guidelines — that may help businesspeople avoid violating clearly accepted truth standards. The guidelines also assist in determining whether truth is required in circumstances where honesty seems in conflict with the practical demands of business. A discussion of why, when and how these guidelines may be applied to facilitate truth-telling by business organizations follows, along with illustrative examples.

The Hope and Limits of Legal Optimism: A Comment on the Theories of Orts and Nesteruk regarding the Impact of Law on Corporate Ethics

loining the dialogue on the relationship between the law and business ethics, Jeffrey Nesteruk and Eric W. Orts have offered conceptions of the law as a positive influence rather than a negative curb on corporate behavior. While these legal optimists pursue a noble end in promoting higher ethical standards for corporations through the law, they may be overly optimistic in their suggestion that these more skillfully wielded legal models will influence corporate behavior for the better. Reviewing the basic tenets of their two approaches, this paper uses corporate responses to environmental statutes to suggest that while legal optimism may offer hope for promoting corporate ethics, it has definite limitations in its current stage of development. While both authors pursue a noble end in promoting a higher ethic through the law, they may be overly optimistic in their suggestion that more skillfully wielded legal models will influence corporate behavior for the better. Looking at the basic tenets of these two concepts, which could collectively be called legal optimism, this paper uses corporate responses to environmental statutes to suggest that while legal optimism may provide another promising method for promoting corporate ethics, it is not yet time to abandon negative limits in the law as a restraining mechanism.