John Dobson

Women, Ethics, and MBAs

We argue that the declining female enrollment in graduate business schools is a manifestation of gender bias in business education. The extant conceptual foundation of business education is one which views business activity in terms of a game with fixed and wholly material objectives. This concept betrays an underlying value system that reflects a male orientation. Business education is not merely amoral, therefore, but is gender biased. We suggest that business educators adopt a broadened behavioral rubric. Virtue-ethics theory provides such a rubric.

Theory of the Firm

I carved a massive cake of beeswax into bits and rolled them in my hands until they softened … Going forward I carried wax along the line, and laid it thick on their ears. They tied me up, then, plumb amidships, back to the mast, lashed to the mast, and took themselves again to rowing. Soon, as we came smartly within hailing distance, the two Sirens, noting our fast ship off their point, made ready, and they sang … The lovely voices in ardor appealing over the water made me crave to listen, and I tried to say ‘Untie me!’ to the crew, jerking my brows; but they bent steady to the oars. (Homer, c. –900, pp. 227–28)

The impacts of U.S. presidential elections on international security-markets

Extant studies of U.S. presidential elections focus solely on the U.S. equity markets and usually attempt to develop profitable trading rules from election result regularities (see, for example, Riley and Luksetich [7], and Huang [4]). The general consensus is that the U.S. equity market does react to U.S. presidential elections. However the magnitude, timing, and direction of such changes are unclear. This paper expands previous research by testing for any change in the comovement between U.S. markets and overseas markets around U.S. presidential elections. Specifically, this study focusses on the relationship between the New York, London, Toronto, and Tokyo equity markets. The results indicate that these four markets tend to move more in unison (i.e. their movements are more highly correlated) during the election month. In addition, the extent of this ‘international election effect’ appears to be a function of the level of uncertainty preceding the election outcome. When the election result was relatively certain for several weeks prior to voting day, no significant changes in the relationship between the SP markets anticipate the outcome of the election and any news released within the election period is not priced by market participants. The primary implication of these findings concerns the riskreduction benefits to be obtained from international diversification. The higher correlation of returns between these markets during the presidential election month will compromise the benefits of an international portfolio. Specifically, portfolio managers who endeavor to attain a high degree of diversification through ownership of

Ethics in the transnational corporation; the “moral buck” stops where?

This paper addresses two issues. The first issue relates directly to transnational corporations, while the second issue is broader and relates to all diversely held companies. To address the first issue I cite three representative instances where wanton environmental damage has signalled a lack of moral judgment on the part of a transnational corporation. I conclude from these instances that ethical considerations are not given adequate weight in corporate investment decisions.This leads to the second issue. Who should be making ethical decisions within the corporate milieu? I conclude that neither management nor the typical shareholder should be expected to exercise moral judgment because they are not free agents. They have fiduciary responsibilities that must override personal moral suasion.

Reputation, Information and Project Termination in Capital Budgeting

ABSTRACT The Net Present Value (NPV) rule of financial theory gives management a decisive criterion for choosing between abandonment versus continuation of capital projects. There is extensive evidence, however, that management chooses to delay the abandonment of unprofitable projects. This paper attempts to explain managements reluctance to abide by the NPV criterion. The concept of a Reputation Adjusted Net Present Value is introduced in an environment where management knows more about the true value of a project than do stakeholders. The model indicates that, in such an environment, the continuation of a negative NPV project may maximize firm value.

TNCs and the corruption of GATT: Free trade versus fair trade

In order to enrich global corporate culture, a distinction must be made between the economic ideology of free trade and the moral ideology of fair trade. GATT has failed to make this distinction. Its sole ethos of free trade is only applicable among developmentally equivalent nations, and has been used by TNCs as a means for attaining their commercial ends in the third world. GATTs lack of commitment to an objective of fair trade necessitates its replacement. This article suggests a replacement in the form of a network of trade organizations. The network takes the form of a “hub-and-spoke” arrangement, in which the hub would be the Global Trade Organization, and the spokes would each represent Regional Trade Organizations.

The pricing of dividend consistency

This study investigates the pricing of dividend consistency. The approach used is to study the announcement effects around significant dividend changes; specifically dividend omissions, resumptions, and increases or decreases of 25% or more. We focus on the relation between the magnitude of the announcement effect and the firms history of dividend payment consistency using an ARIMA model. We find that dividend consistency is not priced.

An Aesthetic Theory of the Firm

All the firm’s a stage. On this institutional stage, many plays are performed simultaneously. The common theme of the plays is human desire: the desire for personal material gain, the desire to bond socially and to achieve status, the desire to do good, the desire to create and experience beauty, etc. When correctly designed, firms are institutional stages that facilitate human flourishing. This correct design has three dimensions: the stage must nurture—and treat as equally valuable—plays in the dimensions of the economic, the moral, and the aesthetic. These dimensions are ontologically fluid and interlaced in the sense that each inevitably rests on the others for ultimate vindication and justification. So, on the institutional stage that is the firm, the play of material gain is only fully justified—in the sense of fostering human flourishing—if its performance is also morally good and aesthetically beautiful. The morality play is only fully justified if it is economically sound and aesthetically beautiful. The challenge humans face in designing firms, therefore, is to design a three dimensional stage that is balanced when viewed from all three dimensions. Sculpturally, the firm should be a perfect sphere: three dimensions of infinite symmetry.