Business Law, Public Responsibility, and Ethics Commons^™

Faith-Based Entrepreneurship, M. Yaqub Mirza, Miles K. Davis

New England Journal of Entrepreneurship

Interview of M. Yaqub Mirza by Miles K. Davis. Dr. Mirza attributes both his personal and business success to following Islamic principles.This interview outlines the Islamic principles he uses to guide his investment in new ventures and how those same principles shape his management style and attitude toward corporate social responsibility.

Backdated Stock Options Ownership Impact On The Corporation, Management, & Shareholders, Karen Cascini, Alan Delfavero

WCBT Faculty Publications

In the post-Sarbanes-Oxley Act (SOx) world, there has been an unprecedented crackdown on fraudulent activity occurring within corporate America. During recent years, many companies have granted stock options to their executives and employees as part of compensation packages. While the issuance of stock options as a component of compensation is considered to be a legal practice, corruption has taken this corporate resource to unlawful heights. Recently, numerous corporations have been in the news for potentially backdating stock options. Accordingly, the purpose of this paper is to distinguish between legal and illegal aspects of backdating stock options, and to examine the …

Giving Voice To Values: How To Speak Your Mind When You Know What's Right (Book Review), Andra Gumbus

WCBT Faculty Publications

Book review by Andra Gumbus.

Gentile, Mary. Giving Voice to Values: How to Speak Your Mind When You Know What's Right. New Haven: Yale University Press, c2010.

ISBN 9780300161182

Social Networking And The Perception Of Privacy Within The Millennial Generation, Andra Gumbus, Frances S. Grodzinsky, Stephen J. Lilley

WCBT Faculty Publications

Has technology caused a generational divide between current college age users (Millennial Generation) who have no problems posting intimate details of their personal life on the Web and more traditional older users who seem to value privacy? This paper presents the results of a survey of 251 university students and follow-up focus groups on the topic of the perceptions of social networking and privacy. We will use Facebook as an example of social networking, and review attitudes about privacy and control over personal information among traditional and non-traditional college age users and light and heavy users of social networking sites.

Should Individual Investors Use Technical Trading Rules To Attempt To Beat The Market?, Thomas S. Coe, Kittipong Laosethakul

WCBT Faculty Publications

Problem statement: Despite widespread academic acceptance of the Efficient Markets Hypothesis, some stock traders still use technical trading rules in an attempt to beat the market. Approach: This study looked at four trading rules, namely, the arithmetic moving average, the relative strength index, a stochastic oscillator and its moving average. These trading rules compare the relationship of current prices to past price patterns to generate a signal when to buy and sell stocks. The trading rules were tested over the years 2000-2009, a period of time that exhibited bull and bear markets, to determine if traders could actively …

Regulation Of The Otc Derivatives Market: A Regulatory Proposal Of Cds, Erik Welin

WCBT Undergraduate Publications

According to many commentators the credit derivatives and especially CDS have been a leading cause to the development of the current financial crisis. During the last year, policy makers, regulators, and other commentators around the world have therefore focused their attention on how to regulate OTC derivatives and especially CDS.

The purpose of this paper is to analyze some of the proposed regulatory responses to OTC derivatives and especially CDS from an economic point of view. The paper proposes a twofold regulatory response. First it proposes that we return to the old common law rule of "rule against difference contracts". …

Taxing Under The Influence? : Corruption And U.S. State Beer Taxes, Per G. Fredriksson, Stephan Gohmann, Khawaja Mamun

WCBT Faculty Publications

This article examines the effect of state level corruption on state beer taxes in the United States. Our lobby group model predicts that corruption reduces the beer tax, but this effect is conditional on the level of alcohol-related vehicle deaths. Using a panel of state level data from 1982 to 2001, we find that increased corruption is associated with lower state beer tax rates. The magnitude of the effect, however, declines with increases in alcohol-related traffic deaths. Our findings suggest that future empirical work estimating the effect of alcohol taxes on alcohol-related traffic fatalities should treat alcohol taxes as endogenous.

The Impact Of Terrorism On Business, Michael D. Larobina, Richard L. Pate

WCBT Faculty Publications

Terrorism has in one form or another been a part of society throughout history. Since the September 11, 2001 attacks in New York, the world community has been more focused on terrorism than ever before in most recent modern history. Terrorism has impacted multiple levels of society across the world community. One of those levels is the business environment. A specific aim of terrorism is to disrupt and destroy ongoing businesses. Therefore, the ability of governments to disrupt and destroy terrorism is essential to the continued growth and expansion of the world economy. Terrorism will directly impact a country's ability …

Tobacco Politics And Electoral Accountability In The United States, Per G. Fredriksson, Khawaja Mamun

WCBT Working Papers

This paper investigates whether reputation-building strategies guide U.S. governors’ state cigarette tax choices, and whether the federal cigarette tax influences such behavior. Using 1975-2000 data, we find evidence that governors in states with relatively important agricultural tobacco production and tobacco manufacturing, and which are densely populated by smokers, appear prone to reputation-building. Moreover, lame ducks are more prone to raise the state cigarette tax the lower the federal tax.

Gubernatorial Reputation And Vertical Tax Externalities: All Smoke, No Fire?, Per G. Fredriksson, Khawaja Mamun

WCBT Working Papers

This paper investigates whether reputation-building strategies guide U.S. governors’ responses to changes in federal cigarette taxes (i.e. vertical tax interactions). Using 1975-2000 state cigarette tax data, we find that reputation-building strategies affect the nature of vertical tax externalities. Lame duck governors exhibit a more negative response to changes in the federal cigarette tax. Thus, by reducing the state tax base and by causing a decline in the state tax, an increase in the federal tax rate reduces state tax revenues in states headed by lame ducks.

How A Plane Crash Changed My Life, Ted Leonsis, Miles K. Davis

New England Journal of Entrepreneurship

In 1983 Ted Leonsis survived a crash landing of a plane he was on.This fateful event proved to be a pivotal point in his life. One of the byproducts of that near-death experiences is Leonsis’ list of 101 things to do before he died—a "bucket list” before the movie of that title came out. Leonsis has managed to accomplish more than two-thirds of the things on his list including owning a sports franchise (the Washington Capitals), changing someone’s life via a charity, sailing the Caribbean, and being on the cover of a magazine. As impressive as these accomplishments are, they …

Ethical Compliance Behavior In Small And Young Firms: The Role Of Employee Identification With The Firm, Susan Houghton, Mark Simon, Ph.D.

New England Journal of Entrepreneurship

We explored whether employees in smaller, younger firms would be more ethically compromised, and whether employee identification moderates this relationship.We collected survey data from 154 working professionals enrolled in an MBA program in the southeastern United States. We found that employees of smaller, younger firms selected more compromised ethical choices than employees of larger, older firms. Contrary to our expectations, employee identification had no effect in smaller, younger, firms, yet in larger, older firms, identification actually reduced ethical compliance, suggesting that there is not a simple relationship between identification and ethical compliance.

After Ten Years: Tracing The 1997 Vatican Statements Regarding Ethics In Advertising In Today's Advertising Textbooks, Anca C. Micu

Presidential Seminar on the Catholic Intellectual Tradition

One responsibility of all educators, especially those in marketing and advertising, is to provide students with a proper perspective regarding professional ethics. In other words, it is to guide future managers in developing an ethical conscience as they perfect their decision-making competence. Today, the 1997 Pontifical Council’s statements on ethics in advertising are the top result of a Google search for “ethics and advertising.” The amount of scriptural reference contained in the statements is considerably less than that found in most Papal social encyclicals (i.e., social writings of the Catholic Church). This approach made the document more accessible to thoughtful …

The Green Entrepreneur: How Important Are They To The Growth Of The Eu, Enda Mcgovern

WCBT Faculty Publications

This paper looks at the role of the entrepreneur in the European Union which has now expanded to include 25 nation states with a population of $450 million citizens. How important is the evolution of the Green Entrepreneur to the EU as they make every effort to promote the concept of Entrepreneurship across the various markets. The evidence would suggest that the emphasis by the EU is primarily focused on the development of the entrepreneurial mindset and skills rather than any specific effort to develop the Green or Responsible entrepreneur of the future. A number of green entrepreneurial companies from …

Integrity And Values: Interview With Dr. Jim Sinegal, Costco Wholesale Corporation, Miles K. Davis, James D. Sinegal

New England Journal of Entrepreneurship

In describing his success, Sinegal attributes it to “just good business practices.” And while he was born into a Catholic family and supports Catholic causes, he does not necessarily tie his faith to the way he approaches business. That approach, he says, is based in learning how to do business with integrity and high values from an early mentor. The following interview outlines how Sinegal approaches business and how he works to establish integrity and high values throughout Costco Wholesale Corporation.

Ethical And Managerial Implications Of Internet Monitoring, Andra Gumbus, Frances Grodzinsky

WCBT Faculty Publications

As Internet use pervades our personal and professional lives, organizations have become increasingly concerned about employee use of the Internet for personal reasons while at work. This has prompted the restriction of the Internet or the limitation of the Internet during work hours. Monitoring of employee Internet and email is another result of this trend. Legitimate business functions such as employee performance appraisal and progress toward goals are served by monitoring. However, poorly designed and communicated monitoring practices can be negative and have perverse effects on employee morale and productivity. Monitoring of employees erodes trust and may be considered an …

An Assessment Of The Impact Of The Sarbanes-Oxley Act On The Investigation Violations Of The Foreign Corrupt Practices Act, Karen Cascini, Alan L. Delfavero

WCBT Faculty Publications

During the late 1990s and early 2000s, a plethora of corporate scandals occurred. Due to these corporate debacles, corporate executives have been placed under fire. In response to such unethical conduct with regard to internal practices and financial reporting, legislation has been passed in order to ensure that corporations conduct their business in an ethical manner. The purpose of this paper is to assess the connection between the Foreign Corrupt Practices Act of 1977 (FCPA) and the Sarbanes-Oxley Act of 2002 (SOx), to determine whether SOx has influenced the FCPA’s investigative violation activities by examining the number of such investigations …

Dynamic Leadership: Toolbox For The Value-Based Entrepreneurship, Chun (Grace) Guo, Sinead G. Ruane, Alexandra Galli-Debicella, Phuong Anh Nguyen, Charles C. Manz

WCBT Faculty Publications

Four entrepreneurship models are proposed which lend guidance in the development of a business, from birth to exit, each examining ways to maintain the business founder’s initial vision and to continue to infuse values and ethical decision-making at each stage of development.

Examining The Performance Of Competition Policy Enforcement Agencies: A Cross-Country Comparison, A. E. Rodriguez, Lesley A. Denardis

Political Science & Global Affairs Faculty Publications

An examination of a cross-section of 102 nations reveals marked differences in the performance of their competition policy enforcement agencies. Likely explanatory factors considered include gross domestic product per capita, the intensity of competition, physical size, the level of corruption, national experience with a modern antitrust law and whether the common law prevails. Competition policy agencies operate poorly in jurisdictions characterized by corruption and poor competitive intensity. In fact, differences in levels of corruption and variations in the intensity of competition account for approximately 78 percent of the observed variance in agency performance. Group characteristics, however, vary by region and …

Owens Sawmill: A Family Business Facing A Social Responsibility Dilemma, Dianne H. Welsh, David Rawlings

New England Journal of Entrepreneurship

This is a real case involving an SME that produces southern hardwood finished lumber. The family business faces a social responsibility dilemma in terms of displaced workers and limited job opportunities in the surrounding labor market if they purchase a new saw that would modernize production, improve profitability, and eliminate 50 percent of their labor costs. The most logical employment for these workers would be a cutter, loader, or hauler of logs, which have been determined to be some of the most dangerous jobs in the United States. This case requires students to examine the decision-making process of a modest …

Entrepreneurial Selection And Use Of Legal Counsel, Stephen J. Schanz

New England Journal of Entrepreneurship

Entrepreneurs starting new ventures will encounter a host of legal issues requiring consultation with an attorney on an episodic or ongoing basis. It is critical that careful attention be given to the attorney selection process to properly match the needs of the company with the credentials of the attorney. Additionally, options should be explored regarding the billing and payment methodologies the attorney is willing to entertain. The financial resources and cash flow of young companies will likely have a direct impact on the financial agreements entered into with legal counsel. Further, companies desirous of offering the attorney a stake in …

Transparency In Financial Markets And Institutions: A Catholic Social Thought Perspective, Bridget Lyons, Lucjan T. Orlowski

WCBT Faculty Publications

We argue that transparency, or information disclosure by public and private sector institutions should be viewed as an important component of the Catholic Social Thought process. A higher degree of transparency by a single institution denotes revealing a greater magnitude of truthful information that leads to optimization of actions by other individuals and institutions, thus ultimately, to maximization of social welfare. Based on the precepts of Catholic Social Thought, more detailed and unbiased information allows individuals to make more truthful observations of reality that subsequently rationalize their judgment and actions. This is particularly relevant for financial markets and institutions that …

Transparency In Financial Markets And Institutions: A Catholic Social Thought Perspecitve, Bridget Lyons, Lucjan T. Orlowski

Presidential Seminar on the Catholic Intellectual Tradition

We argue that transparency, or information disclosure by public and private sector institutions should be viewed as an important component of the Catholic Social Thought process. A higher degree of transparency by a single institution denotes revealing a greater magnitude of truthful information that leads to optimization of actions by other individuals and institutions, thus ultimately, to maximization of social welfare. Based on the precepts of Catholic Social Thought, more detailed and unbiased information allows individuals to make more truthful observations of reality that subsequently rationalize their judgment and actions. This is particularly relevant for financial markets and institutions that …

Corporate Governance, Public Accounting Firm And Multinational Corporation: The Us Sox Act Perspective, Marc Massoud, Eunsup Daniel Shim

WCBT Faculty Publications

The purpose of this paper is to review US corporate governance systems and to highlight the mandated roles of audit committee and external auditor within the SOX Act. In addition, it discusses requirements and implications of the SOX Act for the foreign accounting firms and multinational corporations. Finally this paper provides a perspective on improvement of corporate governance and financial integrity. In order to regain trust from the financial market, the SOX Act mandates (1) to improve auditor’s independence by reducing conflicts of interest; (2) to increase corporate financial reporting responsibility by requiring a CEO or a CFO certify accuracy …

Ethical And Managerial Implications Of Internet Monitoring, Andra Gumbus, Frances Grodzinsky

WCBT Faculty Publications

As Internet use pervades our personal and professional lives, organizations have become increasingly concerned about employee use of the Internet for personal reasons while at work. This has prompted the restriction of the Internet or the limitation of the Internet during work hours. Monitoring of employee Internet and email is another result of this trend. Legitimate business functions such as employee performance appraisal and progress toward goals are served by monitoring. However, poorly designed and communicated monitoring practices can be negative and have perverse effects on employee morale and productivity. Monitoring of employees erodes trust and may be considered an …

Ethical Reflections On Cyberstalking, Frances Grodzinsky, Herman T. Tavani

School of Computer Science & Engineering Faculty Publications

This essay examines some ethical aspects of stalking behavior in cyberspace. We have argued elsewhere that recent online stalking incidents raise a wide range of ethical concerns, including issues affecting gender (Grodzinsky and Tavani, 2001), personal privacy (Tavani and Grodzinsky, 2002), and physical vs. virtual harm (Grodzinsky and Tavani, 2002). The primary axis of discussion in this essay has to do with implications that cyberstalking has for our notion of moral responsibility, both at the collective (or group) and individual levels. For example, do collectivities and organizations such as Internet service providers (ISPs) have any moral obligations to cyberstalking victims, …

Julia's Dilemma, Andra Gumbus, Jill Woodilla

WCBT Faculty Publications

Julia, a professional woman in her mid-thirties, has had relapsing-remitting multiple sclerosis as a part of her life for the last five years. Now she must decide whether to disclose her hidden illness at work. Julia disclosed her illness to her manager in a prior employment, when her MS was first diagnosed, and experienced a supportive response. But she was always mindful that her performance would likely be carefully scrutinized since she was in a job that required strict deadlines. Julia made a career change about a year ago, and did not tell anyone in her new organization that she …

Sfas 143 On Asset Retirement Obligations, Cheri Mazza, Robert H. Colson

WCBT Faculty Publications

Discusses an accounting legislation provision in the U.S. which concerns accounting for asset retirement obligations that requires the recognition of a liability for certain obligation associated with retirement of long-lived assets. Asset retirement obligations; Recognition of a liability for an asset retirement obligation in a certain period; Discussion on a subsequent-period accounting.

Ethical Issues In Open Source Software, Frances Grodzinsky, Keith W. Miller, Marty J. Wolf

School of Computer Science & Engineering Faculty Publications

In this essay we argue that the current social and ethical structure in the Open Source Software (OSS) Community stem from its roots in academia. The individual developers experience a level of autonomy similar to that of a faculty member. Furthermore, we assert that the Open Source Software Community's social structure demands benevolent leadership. We argue that it is difficult to pass off low quality open source software as high quality software and that the Open Source development model offers strong accountability. Finally, we argue that Open Source Software introduces ethical challenges for universities and the software development community.

Cyberstalking, Personal Privacy, And Moral Responsibility, Herman T. Tavani, Frances Grodzinsky

School of Computer Science & Engineering Faculty Publications

This essay examines some ethical aspects of stalking incidents in cyberspace. Particular attention is focused on the Amy Boyer/Liam Youens case of cyberstalking, which has raised a number of controversial ethical questions. We limit our analysis to three issues involving this particular case. First, we suggest that the privacy of stalking victims is threatened because of the unrestricted access to on-line personal information, including on-line public records, currently available to stalkers. Second, we consider issues involving moral responsibility and legal liability for Internet service providers (ISPs) when stalking crimes occur in their `space' on the Internet. Finally, we examine issues …