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This paper attempts to resolve the conflicting results on sticky cost behavior in prior literature. Large sample studies find that selling, general, and administrative costs (SG&A) and cost of goods sold (CGS) are sticky, that is, costs are less likely to decrease when activity decreases than to increase when activity increases. In contrast, studies limited to one industry find little or no sticky cost behavior.

We investigate whether SG&A and CGS sticky cost behavior differ across/ four major industry groups (manufacturing, merchandising, financial, and services) characterized by different production, operational, and economic environments. In addition, we study whether sticky cost behavior arises for all changes in activity level (as measured by revenue changes) or for only large changes in activity level. Finally, we investigate whether determinants of sticky cost behavior vary across industries.

Our results suggest that costs in the manufacturing industry are the “stickiest,” while costs in the merchandising industry are the “least sticky,” with financial and service industries exhibiting some level of sticky cost behavior. Further, we find that sticky cost behavior is industry-specific, both in the magnitude of activity changes that give rise to sticky cost behavior and in the determinants that drive the behavior.

Our investigation of 20 distinct sub-industries within the “stickiest” manufacturing industry finds that while some sub-industry groupings show significant sticky behavior, most do not. This result may explain why, contrary to large sample studies, single industry studies find little or no sticky behavior in costs.

Our research is the first to try and reconcile the conflicting results on sticky cost behavior. Understanding the pervasiveness of stickiness is necessary to move research forward in this domain.

The purpose of this paper is to examine the ability of enterprise systems and embedded controls to prevent unethical behavior within organizations.

The authors use a case study to explore how the configuration of information technology (IT) controls within enterprise systems and their effectiveness in preventing unethical behavior is compromised by the tone at the top.

The study highlights the decisive role of cultural values and leadership in moderating the relationship between IT controls and unethical behavior and the realization that ethical environments are socially constructed not enforced.

The limitation of this research is that the authors conducted one case study in an institution of higher education to refute the theory that IT controls embedded within enterprise systems can prevent unethical, and thus, the results may not be generalizable to other industries.

An important implication of the research is that the configuration of information system controls is affected by the organizational culture and the ethical values embraced by top management. When the tone at the top does not emphasize the ethical code of conduct, the configuration of IT controls will be compromised leaving organizations vulnerable at all levels.

Although the authors have a wealth of knowledge on ethics and theories that explain why unethical decision-making continue to surface to the headlines, they have little explanation as to why enterprise systems fail to stop unethical behavior in organizations. This study explores technical, organizational and individual factors that contribute to unethical decision-making.