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The impact of economic prosperity on CEO ethics

Prior research suggests that economic booms are associated with overconfidence and risk-taking. In a new paper, Emily Bianchi, assistant professor of organization & management, and coauthor Aharon Mohliver (London Business School) build on that research by showing that prosperous times are also associated with more ethical lapses. The authors examined whether CEOs were more likely to backdate their stock options during prosperous economic times. Backdating stock options was relatively common during the late 1990s to early 2000s. It was also unethical. A backdating CEO would receive a stock option grant on one day but report that the options were assigned on an earlier date when the stock price was lower. This would allow the CEO to realize greater gains when he or she sold the stock. Also, it required lying to the SEC and came at the expense of company profits. To test their theory, Bianchi and Mohliver looked at the backdating patterns of 2,139 CEOs of US publically traded companies between 1996 and 2005. They found that CEOs were more likely to backdate in good economic times. They also found that “CEOs who began their careers in prosperous times were more likely to backdate stock option grants later in their careers.” The findings indicate that economic prosperity influences the likelihood of corporate misconduct. Source:

Misreporting in securitized loans

Nonagency mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) derived from MBSs and their role in the recent financial and housing crisis remain a subject of discussion. An MBS is an asset-backed security secured by a mortgage or grouping of mortgages. Non-agency MBSs are not guaranteed by any government-sponsored organization, such as Freddie Mac or Fannie Mae, or the federal government. According to research from Gonzalo Maturana, assistant professor of finance, and John Griffin (U of Texas), the complexity of these structured products made it difficult to learn the true value of the underlying assets. They analyzed “apparent fraud among securitized nonagency loans, looking at unreported second liens, owner occupancy misreporting, and appraisal overstatements.” The study data comes from Lewtan’s ABSNet Loan and HomeVal data sets, along with DataQuick’s Assessor and History files, for the time period between January 2002 and December 2011. The researchers discovered that “48% of loans exhibited at least one indicator of misrepresentation.” The level of misreporting was similar for low- and full-documentation loans. Also, loans with a misreporting were 51% more likely to be delinquent. Maturana and Griffin’s research points to apparent fraud by loan originators and MBS underwriters, and it also suggest that MBS underwriting banks were aware of some of the MBS representations at issuance. Source:

The impact of corporate vs. independent foundations

Debate continues as to whether corporate or independent foundations are more impactful, despite the shared interest in supporting charitable services. In research from Justin Koushyar, doctoral candidate in organization and management (2017), Wesley Longhofer, assistant professor of organization and management, and Peter Roberts, professor of organization and management, the trio determines that the answer is mixed. They used data from a matched random sample of corporate and independent foundations that operated across the United States in 2005 and 2009. With deeper pockets, corporate foundations were able to raise more funds than their nonprofit counterparts. Company sponsorship of a philanthropic foundation also meant that they could operate with lower overhead. However, Koushyar, Longhofer, and Roberts found that corporate foundations are “more dispersed and less relational, and they tend to be governed by more ephemeral groups of officers and trustees.” Simply put, corporate foundations have fewer longterm attachments to the charitable organizations they support. Additionally, “market-based motivations” may influence how they give. Corporate foundations do tend to provide smaller individual grant amounts than independent foundations. These “stakeholder effects” are even more dramatic for the foundations linked to larger publicly traded companies. Source:

Why negotiations fail

For business leaders engaged in negotiations, it’s essential to constantly analyze and revisit their negotiation strategy to avoid many of the errors typically made in the process. In the Handbook of Conflict Management Research, Erika Hall, assistant professor of organization & management, and coauthors Brian Lucas (U of Chicago) and Leigh Thompson (Northwestern U) offer a window into negotiation methods and some of the mistakes negotiators make along the way. The trio discovered and defined three specific errors that occur in negotiations, including what they label as domain myopia, the self-preoccupation effect, and the script hijack effect. Domain myopia is described as the “tendency for negotiators to fail to see meaningful parallels across negotiation situations that might appear different on the surface, but have meaningful underlying similarities.” Hall and her coauthors also describe the self-preoccupation effect, where negotiators let their emotions win the day and subsequently lose perspective. The third scenario that they define is the script hijack effect, which they describe as “the tendency for negotiators to feel compelled to follow a script, often based on stereotypes.” According to the authors, the problems they document apply across a variety of industries. Source:

Understanding self-serving behavior in leaders

In a new research paper, Melissa Williams, assistant professor of organization & management, developed a framework to better understand when and why leaders use their power for personal gain. She discovered that a variety of traits, characteristics, and values, such as feeling less of a sense of guilt, made leaders more likely to exhibit self-interested behaviors. Individuals who were more narcissistic, less humble and honest, and generally less agreeable also had an increased chance of abusing their power. Leaders with an individualistic and competitive streak as well as those with a lower sense of morality were also more likely to act on self-interest. Threats to power especially increased self-serving behavior for those with a propensity for it. Williams added that “because positions of leadership are desirable and hedonically pleasurable, leaders facing threats to their power will prioritize self-interested actions that secure their own power over behaviors that serve shared goals.” Interestingly, for the individuals who did not have self-interested traits and values, power actually decreased the likelihood that they would become self-interested. Source:

Understanding economic development and its environmental impact

While fears about the environmental impact of economic development remains under discussion, the number of proenvironmental international non-governmental organizations (INGOs) continues to grow. But little is known about their influence on countries to create more eco-friendly industrial processes and technologies. In new research from Wesley Longhofer, assistant professor of organization & management, and coauthor Andrew Jorgenson (Boston College), the pair determined which nations they believed were “more embedded in the proenvironmental world society,” determining the level of influence of INGOs, as well as global treaties and professionals, on the countries they studied. The data took into account GDP per capita to find the effect of economic development on carbon emissions. The research examined whether countries that were more likely to feel this global pressure to “enact pro-environmental policies or invest in cleaner technologies” subsequently experienced a drop in rates of carbon emissions. Longhofer and Jorgenson created a measure to analyze the effects of development over time on carbon emissions in 79 countries, using data from 1970 to 2009. They found that “nations that are the most embedded in the environmental world society experienced a moderate decrease” in the impact of economic development on carbon emissions. Essentially, larger and more developed nations were more likely to feel the influence of proenvironmental INGOs than less developed countries, ultimately showing a small drop in carbon emissions. Source:

U.S. isn't equipped to bust fake news - but Europe is

The U.S. has been rocked over the last two years by claims that the Russian government directly attempted to meddle in the 2016 presidential election. Thomas Holt argues the current campaign being waged against the U.S. is serious. He says it merits a response from a trusted source. Although there are fact-checking websites in the U.S. like Snopes, a threat of this magnitude requires more than just citizen-run or private organization-operated programs. "A government effort to combat fake news would provide citizens with information about the scope of information warfare. It would also create a clearinghouse about fake news that can inform not only the public, but also government agencies and policy-makers. There is no current effort of this sort in the United States." "It may seem odd to propose that the government run its own campaign to clarify what is real and fake online. But I believe it is necessary in an era where individuals may not be able to fully separate fact from fiction, and legitimate news sources from the disreputable. An effort like this is not government censorship of the news – or even of fake news. It is government fighting false information by providing context, analysis and facts." Source:

The Struggle for DREAMers in Utah - Explore DACA

On Tuesday, April 24, 2018, a third federal judge ruled against the Trump administration’s push to end Deferred Action for Childhood Arrivals (DACA). U.S. District Judge John Bates called the administration’s attempts to end DACA “arbitrary,” “virtually unexplained,” and “unlawful.” He put a hold on the decision, allowing the Department of Homeland Security 90 days to give better reasoning to cancel the program or it would be fully reinstated. Dr. Stephen Allen, associate provost of International Affairs at Southern Utah University and expert on American immigration policy, sees the struggle for “DREAMers” in Utah and across the nation. “In March, the Supreme Court refused to hear a challenge to DACA,” said Dr. Allen. “That decision, along with the April 24 federal court ruling, has taken pressure off of Congress to act on the issue. The result is a great deal of uncertainty for DREAMers, families, and employers.” Originally enacted by President Obama, DACA is an immigration policy that shields undocumented immigrants that were brought to the United States as children. The youth apply to obtain a renewable two-year deferred action from deportation and to be eligible for a work permit. DACA has helped hundreds of thousands obtain driver’s licenses, social security numbers and attend school. Steps to eliminate DACA were initiated by the Trump administration in late 2017, but previous federal rulings have stalled the efforts. “Rescinding DACA would have a tremendous impact on Utah,” said Dr. Allen. “The program has allowed nearly 10,000 young people in Utah to come forward and pass background checks and live legally in the United States. There is strong evidence that the majority of these young people are productive citizens who are gainfully employed and/or enrolled in school. According to the non-profit and non-partisan organization Interfaith Worker Justice (IWJ), ending DACA would cost Utah alone nearly $476.5 million in annual GDP losses.” Dr. Allen believes that in general, Utahan’s have a strong commitment to keeping families together. “The United States is the only country most DREAMers have known. Deporting nearly 700,000 individuals would result in separation from families and losing the ability to legally work in the United States.” Dr. Allen specializes in international enrollment and admissions, developing global partnerships, and international education. He is familiar with the media and available for an interview. Source:

#NeverAgain - Students Taking Matters Into Their Own Hands

On April 20, 2018, the 19th anniversary of the Columbine High School shooting, students across the nation will walk out of their classrooms in protest of their leaders’ failure to pass laws protecting them from gun violence. Just last month, hundreds of thousands of students, teachers, and supporters rallied in Washington DC, for March for Our Lives, led by a group of students from Marjory Stoneman Douglas High School. These students, some of the latest to be affected by gun violence in schools, are using their voices to inspire change. John Meisner, Assistant Professor of Education at Southern Utah University and advocate for students on and off campus, recently voiced his concerns and support. “As a voting adult, I’m horrified that this problem has only been getting worse since the Columbine High School tragedy, and our elected leaders pretend that there is nothing that can be done. We have countless laws that have been enacted regarding public safety, and yet for this one, we do nothing.” Meisner recommends that as parents, mentors, and peers, we should support the efforts of these students. “I’m hugely proud of these students for refusing to accept this inaction and taking matters into their own hands. I don’t know that we’ve ever seen such organization and movement by high school and junior high school students. They’re often disrespected as ‘entitled’ and ‘lazy,’ but this latest tragedy has mobilized this population into action. We’re seeing youthfulness and enthusiasm combined with a social media savvy that is a powerful force. I think that as adults we should be proud of these efforts and support them fully.” Students crave relevance in their school work and lives. According to Meisner, the walkout is a perfect example of this. “I’m hopeful that they will not relent on the pressure until something is done. Maybe with this new movement, the Parkland tragedy will be the last.” “As educators, we should not only be concerned about the physical well-being of our students but should also see that their academic wellbeing is important too. They will be fully invested in topics that matter to them.” John Meisner has a deep love of education and a passion for teaching. Meisner also serves on the Allies on Campus committee working to support LBGTQ+ students and faculty through social events and educational outreach. He is familiar with the media and available for an interview. Simply visit his profile. Source:

How serious is the sabre-rattling over Syria?

Last Saturday, though not ‘officially confirmed,’ a poisonous gas attack happened in the besieged Syrian town of Douma. The World Health Organization has confirmed that 500 people showed symptoms of being exposed to "toxic chemicals". This act of aggression supposedly by the Assad government has opened a Pandora’s Box. President Donald Trump is threatening missile strikes. Russian officials are threatening retaliation for any American aggression. Many world leaders are on edge and watching closely – Syria has become a powder keg and what happens next could have global implications. What are President Trump’s options? What could happen if the Russians counter? Is there a diplomatic option? There is an enormous amount at stake and a lot of scenarios to consider. That’s where experts from Missouri State University can help. Dr. David Romano, political science professor at Missouri State University, researches Middle Eastern politics and government. He's an expert in theories of peace and conflict, and foreign policy. He's available to speak about the escalating tensions, potential outcomes and consequences regarding any action in Syria. Click on his icon to arrange an interview. Source: