J. William Petty

Ethical Attitudes in Small Businesses and Large Corporations: Theory and Empirical Findings from a Tracking Study Spanning Three Decades

This study offers a theoretical framework of ethical behavior and a comparative analysis of ethical perceptions of managers of large, mostly publicly traded corporations (those with 1,000 or more employees) and the owners and managers of smaller companies (those with fewer than 100 employees) across 17 years. The primary research provides basic data on the changing standards of ethics as perceived by leaders of large and small businesses where the cultures frequently fall into sharp contrast. Our findings reveal the extent to which the message of business integrity is gaining or losing ground within large and small companies. It does this by means of respondents’ judgments of acceptable responses to 16 scenarios profiling common business situations with questionable ethical dimensions. Based on responses from over 5,000 managers and employees (from firms of all sizes) to our scenarios at three points in time (1985, 1993, 2001), we tested two research questions. First, for firms of all sizes, have business ethics improved or declined between the years 1985 and 2001? Second, comparing responses of large and small firm executives across the 1985–2001 time frame, is there a discernible difference in their ethical standards? Our results suggest that business leaders are making somewhat more ethical decisions in recent years. We also found that small business owner–managers offered less ethical responses to scenarios in 1993 but that no significant differences existed with large firm managers in 1985 and 2001. Implications of our findings are discussed.

An Analysis of the Performance of Publicly Traded Venture Capital Companies

Venture capital companies can be likened to mutual funds that make investments in small, new businesses. However, investments made by venture capitalists are unique in several ways [2]: (1) usually five or more years are required for a new firm to become well enough established that a venture capitalist can liquidate an investment; (2) during the early years of an investment, there is no organized secondary market for its shares; (3) the new firm characteristically faces a high risk of failure; and (4) several infusions of capital are usually required before the new enterprise becomes a going concern. Consequently, the investments made by the venture capital firm have long been considered to carry high risks as well as the potential for high returns. For this reason, venture capital firms actively diversify, investing in a portfolio of individual projects. Thus, the risk and return attributes of the venture capitalists diversified portfolio will not totally mirror those of its individual investments.

Optimal Transfer Pricing for the Multinational Firm

Dr. Petty is Assistant Professor of Finance at Texas Tech University. After receipt of his doctorate from the University of Texas at Austin, he taught at Virginia Polytechnic Institute and State University. His articles have appeared in The Journal of Business Research and the Proceedings of the Southwestern Finance Association. Dr. Walker is Professor of Finance at the University of Texas at Austin. He received his DBA from Indiana University. Presently he is the National Association of Credit Managements consulting economist and author of The Credit and Financial Newsletter. In addition to numerous articles, he is author of Essentials of Financial Management, coauthor of Case Problems in Financial Management, and coeditor of Monetary Issues of the 1960s.

Adjustable Rate Preferred Stock

Bernard J. Winger and Carl R. Chen are Professor and Associate Professor of Finance, respectively, at the University of Dayton; John D. Martin is Professor of Finance at the University of Texas; J. William Petty is Professor of Finance and Dean at Abilene Christian University; and Steven C. Hayden is Vice President, Kidder Peabody and Company. This paper represents a consolidation of two papers that were originally written separately by Winger and Chen and by Martin, Petty, and Hayden. The order in which the authors are listed reflects the order in which the two original papers were received. The Editor is grateful to Richard W. McEnally, who reviewed both papers and suggested a consolidation.