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Self-regulatory organizations (SROs) can be found in education, healthcare, and other not-for-profit sectors as well as in the accounting, financial, and legal professions. DeMarzo et al. (2005) show theoretically that SROs can create monopoly market power for their affiliated agents, but that governmental oversight, even if less efficient than oversight by the SRO, can largely offset such market power. We provide an experimental test of this conjecture. For carefully rationalized parameterizations and implementation details, we find that the predictions of DeMarzo et al. (2005) are borne out.

Recent corporate scandals such as WorldCom, Enron, and others suggest a failure of corporate governance, that is, of the allocation of power and its lawful use and accountability within the corporation.

This chapter presents a game theoretic model for analyzing the power dynamics among the three groups responsible for oversight in the Anglo-American corporate model – namely the Board of Directors through its audit committee, corporate management, and the external auditors.

The chapter shows, among other findings, that the current governance structure results in an extreme imbalance of power among the three groups that not only permits but even induces management to conceal necessary financial data and often to ignore the long-term interests of the firm.

The chapter also derives changes in principles of governance that can right such imbalances and prevent defalcations from taking place through institutionalizing effective ex-ante checks and balances of power in addition to the ex post measures that come into play only after a wrong has been committed and which are the case with recent exchange rules and Congressional enactments.

None.

No prior analysis along these lines.

This paper explores how firms within the audience measurement industry, specifically its radio and television markets, have navigated myriad market and nonmarket challenges. The market strategies and the nonmarket forces that constrain those strategies are largely defined by two features: the delineation of its geographic markets by political boundaries and markets that have natural monopoly characteristics. While the pre-monopoly stage or periods of competition may be comparatively short-lived, they are still telling. Monopolists undertake market strategies designed to ensure that they are not supplanted and nonmarket actions geared to avoiding undesirable constraints and reputational damage. Depending on their legal and regulatory environment, customers of the measurement services have used both market and nonmarket actions to mitigate the market power of the audience measurement firms. This paper focuses primarily on the U.S. radio and television audience measurement markets that Arbitron and Nielsen, respectively, have dominated for decades. Non-U.S. markets, which frequently feature America’s foremost firms, illustrate alternatives to America’s largely laissez-faire approach.

It is well-reported that financial and investment sectors of the economy have grown in recent years, but also that problems of corruption, both institutional and venal, are present. Within the sector, financial auditors and investment consultants have been entrusted to work with and for those for whom financial sector stability and adequate financial returns are crucial. However, these two professions have too often served as handmaidens of corruption. This chapter reviews the history of financial auditing and investment consulting and outlines areas in which corruption manifests. It argues for an end to corruption and it asserts that the two professions could and should be the core of an uncorrupted robust system of financial practice and regulation. Such an arrangement could safeguard a world in which investment business practices are sustainable, honest, and truly productive.

The purpose of this investigation is to add to the body of knowledge regarding consumer skepticism toward advertising in general, and toward pharmaceutical advertising in particular. The study was conducted in the U.S. and in Germany. Skepticism toward advertising for both prescription and non-prescription pharmaceuticals was analyzed. Additional variables explored include: health consciousness, product involvement with pharmaceuticals, satisfaction with information in pharmaceutical advertising, and the importance of pharmaceutical advertising as a source of information. Furthermore, differences in the cultural value of uncertainty avoidance between U.S. and German consumers were examined and related to skepticism toward pharmaceutical advertising. Three hundred and forty-one Americans and 447 Germans were surveyed. A significant finding of this research revealed that skepticism toward pharmaceutical advertising is lower than skepticism toward advertising in general. Results also indicated that consumers showed no difference in their level of skepticism toward advertising for prescription versus non-prescription drugs. This is a particularly relevant finding as it relates directly to the ongoing discussion in Europe regarding whether or not to lift the ban on advertising for prescription drugs. Skepticism toward pharmaceutical advertising was found to be significantly negatively related to involvement with pharmaceuticals, to satisfaction with the informational content of the advertisements, to satisfaction with the comprehensibility of the advertisements, and to the importance placed on advertising as a source of health information. Regarding cultural differences, U.S. consumers appear to be less skeptical toward advertising in general, and toward advertising for prescription and non-prescription drugs in particular, than German consumers. This may be due to the lower degree of uncertainty avoidance in the U.S. Differences between the two countries related to the additional variables examined in the study are addressed as well. Implications for consumer protection policies are discussed, and recommendations for advertisers of pharmaceutical products are provided. The authors provide a cultural explanation for differences in the degree of skepticism between U.S. and German audiences.

This chapter explores sustainable development of leadership strategies as a social framework in higher education to help with defining, implementing, and envisioning a sustainable future. Leaders need to develop a sustainable approach for higher education that involves all stakeholders who benefit from having educated citizens to develop common interests that develop and promote sustainable objectives that focus on shared values. An educationally sustainable approach extends beyond a current leader’s time at the institution to continue stable growth and long-term approaches around making decisions, fostering systemic innovation, developing an engaged workforce, and providing quality services and solutions. Leaders need to link sustainable strategies to the school’s mission, values, and finances to help gain consensus and align the decision-making process. In an effort to develop leaders and programs around educational sustainability, governmental organizations have been established to help develop policies and programs to create a sustainable future. Additionally, professional organizations have formed that allow leaders a chance to connect, grow skills, and lead sustainability initiatives. And, higher education institutions have created offices focused around sustainability on campus and educational programs around sustainability leadership to help develop future leaders that are able to take action based on sustainability values and creating an inclusive and reflective process for decision-making. Sustainable leadership has the power to transform society through reorienting the educational system to help people develop knowledge, skills, values, and behaviors for an ever-changing world.

Purpose – this chapter contrasts the ethical climates in government and nonprofit organizations (npos) in japan, a setting where the relationship between these two sectors has been recognized as close and long-lasting (estevez-abe, 2003; hirata, 2002; ritu, 2008). Yet, there has been little comparison of the value difference (or congruence) or discussion of how this may influence their interaction over time. This chapter explains why nonprofit partners may be more attractive partners for governmental contracts, notwithstanding the dangers of “mission drift” (young & denize, 2008) and/or high monitoring costs (malloy & agarwal, 2008).

Design/methodology/approach – Using survey data from matched samples of nonprofits (441, 86% response rate) and governmental organizations (321, 64%), the factor structure equivalence and measurement invariance of ethical climates in these two sectors were rigorously tested.

Findings – The findings extend prior typologies of ethical climate from for-profit and nonprofit organizations to governmental organizations. The chapter revisits the notion of opportunism, which continues to be pervasive and problematic in third-sector studies (Hawkins, Gravier, & Powley, 2011) to suggest that significant overlap in ethical climates between nonprofit and governmental organizations rules out value differences as a possible source of opportunism.

Originality/value – This study contributes a deeper awareness of the similarities and differences in ethical perceptions between nonprofit and governmental organizations that can inform policy makers in government to better understand the implications of using nonprofit partners to deliver services.