The consumer scam: an agency-theoretic approach

Despite the extensive body of literature that aims to explain the phenomenon of consumer scams, the structure of information in scam relationships remains relatively understudied. The purpose of this article is to develop an agency-theoretical approach to the study of information in perpetrator-victim interactions. Drawing a distinction between failures of observation and failures of judgement in the pre-contract phase, we introduce a typology and a set of propositions that explain the severity of adverse selection problems in three classes of scam relationships. Our analysis provides a novel, systematic explanation of the structure of information that facilitates scam victimisation, while also enabling critical scrutiny of a core assumption in agency theory regarding contract design. We highlight the role of scam perpetrators as agents who have access to private information and exercise considerable control over the terms and design of scam relationships. Focusing on the consumer scam context, we question a theoretical assumption, largely taken for granted in the agency literature, that contact design is necessarily in the purview of the uninformed principal

The problem of unilateralism in agency theory: towards a bilateral formulation

Some business ethicists view agency theory as a cautionary tale – a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but its unilateral focus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for a bilateral cautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue that the norm of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our novel bilateral cautionary-tale formulation extends the normative boundaries of the asymmetric-information stream of agency theory, while leaving the fundamental economic assumptions of agency theory intact

The consumer scam: an agency-theoretic approach

Despite the extensive body of literature that aims to explain the phenomenon of consumer scams, the structure of information in scam relationships remains relatively understudied. The purpose of this article is to develop an agency-theoretical approach to the study of information in perpetrator-victim interactions. Drawing a distinction between failures of observation and failures of judgement in the pre-contract phase, we introduce a typology and a set of propositions that explain the severity of adverse selection problems in three classes of scam relationships. Our analysis provides a novel, systematic explanation of the structure of information that facilitates scam victimisation, while also enabling critical scrutiny of a core assumption in agency theory regarding contract design. We highlight the role of scam perpetrators as agents who have access to private information and exercise considerable control over the terms and design of scam relationships. Focusing on the consumer scam context, we question a theoretical assumption, largely taken for granted in the agency literature, that contact design is necessarily in the purview of the uninformed principal

Sharing vocabularies: towards horizontal alignment of values-driven business functions

This paper highlights the emergence of different ‘vocabularies’ that describe various values-driven business functions within large organisations and argues for improved horizontal alignment between them. We investigate two established functions that have long-standing organisational histories: Ethics and Compliance (E&C) and Corporate Social Responsibility (CSR). By drawing upon research on organisational alignment, we explain both the need for and the potential benefit of greater alignment between these values-driven functions. We then examine the structural and socio-cultural dimensions of organisational systems through which E&C and CSR horizontal alignment can be coordinated to improve synergies, address tensions, and generate insight to inform future research and practice in the field of Business and Society. The paper concludes with research questions that can inform future scholarly research and a practical model to guide organizations’ efforts towards inter-functional, horizontal alignment of values-driven organizational practice

Sustainability centres and fit: how centres work to integrate sustainability within business schools

For nearly as long as the topic of sustainable business has been taught and researched in business schools, proponents have warned about barriers to genuine integration in business school practices. This article examines how academic sustainability centres try to overcome barriers to integration by achieving technical, cultural and political fit with their environment (Ansari, Fiss, & Zajac, 2010). Based on survey and interview data, we theorise that technical, cultural and political fit are intricately related, and that these interrelations involve legitimacy, resources and collaboration effects. Our findings about sustainability centres offer novel insights on integrating sustainable business education given the interrelated nature of different types of fit and misfit. We further contribute to the literature on fit by highlighting that incompatibility between strategies to achieve different types of fit may act as a source of dynamism

A Normative Model of Professionalization: Implications for Business Ethics

To say that there is a lack of consensus on the essence of professionalization is an understatement. For almost a hundred years, scholars have disagreed about the traits, attributes, processes, temporal sequences, and socio-historical structures that fundamentally define professions. My dissertation draws on an information theoretic framework to provide a novel analysis of the role of professions in society. According to my normative model, professions are trust-creating and trust-preserving institutional structures, which respond to market failures that arise due to information asymmetries in the market for professional services. Given the limitations on market-based and governmental solutions to information asymmetries, I argue that norms should be viewed as a fundamental transaction-cost minimizing professional governance mechanism. What are the moral obligations of the professional? The implicit morality of the market for professional services involves achieving the end of economic efficiency. Accordingly, professional moral obligations involve a set of deontic constraints that promote Pareto-efficiency in response to information asymmetries. After providing a conceptual framework that outlines the relation between professional and ordinary morality, I argue that social institutional roles sometimes permit, to a limited extent, what would otherwise be forbidden. Given certain institutional structures and safeguards, professional roles can, thus, be sui-generis sources of moral obligation. The culmination of my arguments about professions and professional morality is a contribution to the business ethics literature. Since the early twentieth century, scholars have argued over whether the managerial role may be theorized using the normative and theoretical trappings of the professions. A survey of the management literature reveals that an adequately nuanced analysis of the professions and the normative nature of professionalization has yet to be put forward. To fill this gap, I provide a normative model of management professionalization that is sensitive to the socially beneficial nature of professional work while avoiding glorified altruistic characterizations. I argue that managers in private economic entities are professionals, properly understood, since in addition to external market-oriented incentives, they typically appeal to internal, trust-creating norms to promote Pareto-efficiency within the firm. Professionalism thus involves following efficiency imperatives despite the prevalent moral hazard problems surrounding the managerial role.Ph

Fit or Friction:The Role of Sustainability Centres in Integrating Sustainable Business Education

Our Panel Symposium is designed to address the question of how these can contribute to integrating sustainable business education, specifically by investigating different forms of ‘fit’ they can achieve with their ‘home’ business schools, as well as the strategic and substantive value of ‘non-fit’ or ‘friction’ with their home schools. It is designed and facilitated by the authors of a forthcoming paper on this topic (Slager, Pouryousefi, Moon & Schoolman d.o.i. 2018) and features leaders of well-known sustainability centres, including Mette Morsing (CBS/Stockholm School of Economics); Andy Hoffman (Stephen M. Ross School of Business and the School of Environment and Sustainability, University of Michigan) and Vasanthi Srinivasan (Indian Institute of Management Bangalore