SBANC Newsletter
December 13, 2005
Issue 402-2005
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QUOTE
"The greatest glory in living lies not in never falling, but in rising every
time we fall."
--
Nelson Mandela
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FEATURE PAPER
The Effect of Punishment on Ethical Behavior When Personal Gain is Involved
This paper was presented by Kathleen Gurley, Paula Wood, and Inder Nijhawan of
Fayetteville State University at the 2005 Allied Academies Conference in Las
Vegas, Nevada.
Abstract
With the recent onslaught
of accounting frauds, the nature of unethical decision making in
organizations has shifted from the lack of sensitivity
for the ethical aspects of decisions to one where executives have
used their positional power for personal gain. Congress reacted
with stiffer laws and punishments, raising the question of the
role of punishment in deterring corporate crime. This study investigates
the effect of four variables, valence of the outcome, probability
of getting caught, severity of punishment, and moral values, on
ethical decision making. A survey with six ethical scenarios was
administered in three different classes resulting in 115 completed
surveys. Students were asked to select the scenario option they
would actually do in the situation and to rate how significant
the four variables were in their decision. The responses for the
six scenarios were combined and analyzed using linear regression.
Three of the four variables were significant in explaining the
variance in selection of the ethical option. Moral values explained
the
most variance with severity of punishment being second and valence
of the outcome third. This study contributes to the ethics literature
by demonstrating the importance of punishment in supporting a person’s
choice of the ethical option.
Introduction
The corporate problems with unethical decision making have changed
in nature over the years from issues related to product safety,
environmental impact, and misleading marketing to more obvious
uses of corporate power for personal gain. In the last six months
we have seen two CEOs prosecuted and sentenced to jail terms
for misuse of corporate funds, misleading investors, and misrepresenting
financial results. Prior to these prosecutions, examples of unethical
decision making at Enron, Tyco, WorldCom, and others have been
attributed to a climate where executives have come to believe
they are above the law (Bianco, Symonds, & Byrnes,
2002).
In
response to the continuing corporate scandals, Congress passed
the Sarbanes-Oxley Act, which was signed by President Bush in the
summer of 1992. This act, along with the US Sentencing Guideline
Amendments and the Department of Justice Principles of Federal
Prosecution of Business Organizations, was passed to foster greater
financial accuracy and curb corporate malfeasance. These actions
demonstrate the first attempt to govern corporate conduct by imposing
criminal liability directly on executives for investor fraud. These
steps by the government are based on the belief that greater apprehension,
prosecution, and punishment will deter these acts of unethical
behavior (Imperato, 2005).
Much
of the previous research on ethical behavior has taken the perspective
of increasing cognitive moral development, raising sensitivity
to ethical issues,
and improving moral judgment; but much less attention has been
paid to the impact that punishment and prosecution has on moral motivation.
Read the Entire Paper...
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CONFERENCES
International Business
and Economy
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Who:
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International Business and Economy |
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What:
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Fifth International Business and Economy Conference
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Where: |
Sheraton
Waikiki Beach Resort Hotel in Honolulu, Hawaii |
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When:
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January 5-8, 2006 |
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IPSI 2006 - CALIFORNIA
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| Who: |
Internet, Processing, Systems, and Interdisciplinary
(Research) |
| What: |
IPSI 2006 - CALIFORNIA
|
| Where: |
Hotel Stanford Terrace in Palo Alto, California |
| When: |
January 8-11, 2006 |
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Common Ground
|
| Who: |
Common Ground |
| What: |
The Second International Conference on Environmental,
Cultural, Economic and Social Sustainability
|
| Where: |
Hanoi and Ha Long Bay, Vietnam |
| When: |
January 9-12, 2006 |
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USASBE/SBI
|
| Who: |
United States Association for Small
Business and Entrepreneurship/Small Business Institute |
| What: |
USASBE/SBI 2006 Joint Conference
|
| Where: |
USASBE/SBI 2006 Joint Conference |
| When: |
January 12-15, 2006 |
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IBM
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| Who: |
IBM |
| What: |
Lotusphere 2006
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| Where: |
Walt
Disney World Swan & Dolphin Resorts Orlando,
Florida |
| When: |
January 22-26, 2006 |
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CALLS FOR PAPERS
Institute
for Entrepreneurship and Small Business Management
|
| Who: |
Institute for Entrepreneurship and
Small Business Management |
| What: |
8th
International Conference, "STIQE"
|
| Where: |
Maribor, Slovenia |
| When: |
June 28-30, 2006 |
Submission
Deadline:
January 10, 2006
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|
|
International
Council for Small Business
|
| Who: |
International Council for Small Business (ICSB) |
| What: |
51st World Conference
|
| Where: |
Melbourne, Australia |
| When: |
June 18-21, 2006 |
Submission
Deadline:
January 15, 2006
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|
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6th
Annual Hawaii International Conference on Business
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| Who: |
-- |
| What: |
6th Annual Hawaii International Conference on
Business
|
| Where: |
Waikiki Beach Marriott Hotel in Honolulu, Hawaii |
| When: |
May 25-28, 2006 |
Submission
Deadline:
January 19, 2006
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|
|
Schlegel
Center for Entrepreneurship
|
| Who: |
Schlegel Center for
Entrepreneurship |
| What: |
2006 Family Enterprise Research Conference (FERC)
|
| Where: |
Sheraton on the Falls in Niagara Falls, Ontario,
Canada |
| When: |
April 28-30, 2006 |
Submission
Deadline:
January 31, 2006
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|
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Institute
for Business and Finance Research (IBFR)
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| Who: |
Institute for Business and Finance
Research (IBFR) |
| What: |
The 2006 Global Conference on Business and Finance
(GCBF)
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| Where: |
Hotel Herradura: Golf Resort and Conference Center
in San Jose, Costa Rica |
| When: |
May 31-June 3, 2006 |
Submission
Deadline:
March 17, 2006
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TIP OF THE WEEK
The
Use of Lawyers: Executive Summary
- Despite frequent
policy disputes with parts of the legal profession, 69 percent of
small-business owners say that they have trust and confidence in
lawyers and the legal profession compared to 31 percent who do not.
- Most small-business owners use lawyers in a given year. Sixty-five
(65) percent of small employers (defined as employing 5 to 250 people)
sought advice or other assistance from a lawyer in the last year. The
figure for those seeking legal help rises to 78 percent when the reference
period is the last three years.
- Median legal expenses, of those who incurred them
in the last year, were between $4,000 and $5,000. However, 10 percent
(6-7 percent of the population) incurred expenses of $25,000 or more.
Legal costs in the last year appear to be atypically high.
- Seventy-eight
(78) percent claim to have an on-going relationship with a lawyer
or law firm. Those relationships appear reasonably stable over time.
Just 13 percent changed their primary lawyer/law firm in the last
three years. The most frequently cited reason for changing is the
need for expertise followed by a lack of legal competence.
- Fifty-five
(55) percent of those who consulted a lawyer in the last year asked
him/her to prepare one or more legal
documents. The most frequent documents prepared
include a letter(s), contract(s), and papers surrounding the filing
of, or response to,
an actual or potential lawsuit.
- Forty-one
(41) percent of those seeking a lawyer's help or over one in four
in the population were involved in at least
one legal dispute during the last three years.
The median number of disputes involved in was between one and two.
- Overwhelmingly,
most disputes are resolved informally out-of-court. A less frequent,
but common method of out-of-court settlement is more formal arbitration/mediation.
Only 12 percent of legal disputes between small-business owners and
other parties are resolved in court, the least frequent method of
dispute resolution.
- A
substantial portion of legal disputes appear to have modest stakes.
The most frequent topics are debtor/creditor relations and/or debt
collection (21%), and contracts (19%). The most frequent party to these
disputes are customers (47%) followed by suppliers (25%). The median
total legal cost to settle a dispute is about $5,000. Two-thirds of
resolved disputes result in no money or anything of monetary value
exchanging hands.
- Legal disputes often require considerable time to resolve. The median
time between engagement of a lawyer to handle a dispute and its resolution
is four to five months. However, 30 percent took more than one year
to settle while 16 percent took more than two years.
- Twice as many small-business owners are satisfied with the resolution
of a legal dispute as are dissatisfied suggesting that small-business
owners are on balance pleased with the performances of their lawyers.
| "Executive
Summary." Ed. William J. Dennis. National Small
Business Poll 5.1 (2005): 1. |
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ANNOUNCEMENTS
Winter Break
at SBANC
This is the last
SBANC Newsletter of 2005. You will receive our next newsletter on
Tuesday, January 10, 2006.
SBANC will be closed from December 17,
2005 to January 8, 2006. The
center
will
open again on Monday,
January 9, 2006.
We wish you and your family a safe and happy holiday
season.
The
SBANC Newsletter is provided as a service to the members of our affiliates:
Academy of Collegiate Marketing Educators (ACME), Association for
Small Business & Entrepreneurship (ASBE), Decision Sciences Institute
(DSI), Federation of Business Disciplines (FBD), International Council
for Small Business Congress (ICSBC), Institute for Supply Management,
The International Small Business Congress (ISBC), Marketing Management
Association (MMA), Small Business Administration (SBA), Service Corps
of Retired Executives, Small Business Institute (SBI), Society for
Marketing Advances (SMA), United States Association for Small Business & Entrepreneurship
(USASBE), U.S. Department of Veterans Affairs and Western Decision
Sciences Institute (WDSI). If you are interested in membership or
would like further information on one of our affiliates, please see
our web
site at http://www.sbaer.uca.edu
SBANC STAFF
Main Office Phone: (501) 450-5300
Dr.
Don B. Bradley III, Executive Director of SBANC &
Professor of Marketing;
Direct Phone: (501) 450-5345
Esther
Mead, Graduate Research
Ashley
Ford, Development Intern
Olivia
Johnson, Development Intern
Garion
McCoy, Development Intern
Brandon
Tabor, Development Intern
To subscribe or
unsubscribe to the SBANC Newsletter, please E-mail SBANC at sbanc@uca.edu |
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