Ethics Audits and Corporate Governance: The Case of Public Sector Sports Organizations

The journal that I acquired from Proquest discusses about the audits of ethics and corporate governance in public sports organization. The main difference from the CRP is the subject of CRP is social audits while the Proquest journal has ethics audits as its subject. Below are the comparisons:

Title

CRP: Identification of Role of Social Audit by Stakeholders as Accountability Tool in Good Governance

Journal: Ethics Audits and Corporate Governance: The Case of Public Sector Sports Organizations

Topic

CRP: Social Audits and Good Corporate Governance

Journal: Ethics Audits and Good Corporate Governance

Theory used

CRP

• Accountability gives sanctity to power and makes it more meaningful and relevant in the scheme of governance. (Kumar, 2000)
• Accountability is a term that requires many specifications, namely whose accountability to whom and how. (Liberator, 2004)
• Social auditing provides an assessment of the impact of an organization’s non-financial objectives through systematically and regularly monitoring its performance and the views of its stakeholders. (Boys, 2005)
• Social audit is an exercise developed in response to this need and requirement where people are involved in assuring the performance and effectiveness. (Kessler et al., 1992)
• The guiding principles for local development are sustainability, a participatory approach, gender equity, good governance, decentralization, and human rights. (Jain S. P. and Wim Polman, 2003)

Journal

• Sports have provided a very fertile ground for the exploration of both the social scientific investigations of ethically problematic issues. (Tomlinson and Fleming, 1997)
• In sports, philosopher and social scientists have often been concerned with ethical discussion of individual behaviors such as the in/defensibility of “diving” in football or what rights children have in relation to coaches. (Brackenridge, 2001; Dubois, 1986)
• At a societal level there are other issues that shape the culture or moral atmosphere of sports – for instance, the un/acceptability of practices such as using performance enhancing supplements (Hoberman, 1992), the use of generic engineering (Miah, 2000), the intimidation of sports officials (Thomson, 1998), and harassment by coaches (Kirby et al., 2000)
• The institutions of sports that are charged with its governance have responsibilities for the good health of sports in moral and/or financial matters. (Houlihan, 1999)
• Ethics audit should be limited to an evaluation of the implementation of an organization’s code of conduct. (DuFrene, 2001; Gray, 1996)
• Individual or personal values shape the way that individuals experience the organization as employees. (DeSensi and Rosenberg, 1996)

Hypothesis

CRP: The social audit supports stability and reliability of ethical and environmental performance.

Journal: Ethics audit should proceed on a rational and relatively objective basis to create an effective corporate governance of a sports organization.

Variables used in research

CRP

• Reliability
• Validity
• Performance

Journal

• Respect
• Equity
• Responsibility

Method of analysis

CRP

• Test-Retest reliability
• Questionnaire
• Likert scale

Journal

• Interviews

Conclusion

CRP: High reliability and validity of the instrument developed on positive statement establishes the appropriateness of the tool designed for assessing the role of social audit and its likely benefits and utility to stakeholders.

Journal: In order to develop into a more ethically sound organizational culture, all personnel within sports organization must make a commitment to improvement in whatever particular form that takes.

Fears of Foreign Ownership: The Old Face of Economic Nationalism

The journal acquired from Proquest briefly explained about the pros and cons of foreign ownership in United States, Europe, and Asia including the reasons. It also discusses the strong protectionism that is followed with interesting arguments. Below are the comparisons:

Title

CRP: Foreign Ownership and Investment: Evidence from Korea

Journal: Fears of Foreign Ownership: The Old Face of Economic Nationalism

Topic

CRP: understanding the degree of foreign ownership to cash flow sensitivity

Journal: enhance the reasoning for protection and permitting the foreign ownership

Theory used

CRP

Cash flow sensitivity of investment is lower in firms with less constraint. (Fazzari et al., 1988)

The costs of external funds are higher than that of internal funds due to the asymmetry of information between borrowers and lender. Firms tend to rely on internal funds to carry out investment. (Stiglitz and Weiss, 1981; Myers and Majluf, 1984)

Managers who are not owners may pursue their own interest, not the stockholders’ interests. (Jensen and Meckling, 1976)

As managers’ ownership stakes in their firms increase, investment cash flow sensitivities also rise. However, cash flow sensitivities decrease slowly after a certain level of insider holding. (Hadlock, 1998)

Foreign ownership is inversely related to information asymmetry between firms and the market. (Jiang and Kim, 2004)

DFI eases credit constraints by bringing in capital, foreign firms were less credit constrained than domestic firms. (Harrison and McMillan, 2003)

Foreigners prefer large firms, firms paying low dividends, and firms with large cash positions. (Dahlquist and Robertsson, 2001)

Foreign investors have a tendency to demand better corporate governance in order to protect their investments. (Rajan and Zingales, 1998)

Journal (name of the theorists are not mentioned on the contents)

Many of the strongest economies of the world, including those traditionally at the forefront in advocating free and open investments, have been among those expressing vocal concerns about foreign ownership.

Countries are exploring the adoption of policies to protect domestic firms from foreign takeovers by professing security concerns, establishing barriers, and pushing defensive measures.

In US the apprehensions aroused by foreign ownership appear exaggerated.

French restrict their capital market from certain foreign ownership yet encourage their own companies to acquire foreign companies overseas, being criticized for “globalization a la carte”.

UK represents another end of the spectrum in their openness toward foreign investment even in areas heavily protected in other countries, benefits from the highest levels of foreign investment in the world.

China has been more of an exception in demonstrating protectionist tendencies and sensitivity toward foreign investment.

In South Korea, concerns exist that the criminal and regulatory investigations of foreign funds has chilled foreign investors’ confidence.

Globalization, multilateral trading regimes, and the sudden emergence of emerging economies such as China, India, and Russia as active investors in international markets have added a new dimension to the protectionist landscape.

As economic interdependence continues, greater demands for cross-border investment and mergers and acquisitions will occur. The economic imperative of growth will deter countries from pursuing nativist policies toward ownership.

Some special sectors might warrant different treatment such as protection from foreign ownership.

Economic nationalism stems from a combination of fears.

Privatization of former state-owned companies and deregulation of state-controlled industries helped spur a large portion of the recent FDI and mergers and acquisitions, particularly in Europe and Asia.

The global wave of foreign mergers and acquisitions largely proceeds unchallenged without facing public scrutiny.

Hypothesis

CRP: Cash flow sensitivity of investment tends to be lower in foreign owned firm rather than in domestically owned firm.

Journal: Developing countries would appear to be more prone to seek protection from foreign goods and services but ironically many view foreign acquisitions more positively relative to developed countries.

Variables used in research

CRP: K_t, I_t, Q_t, TA_t, B_t, E_t, CF_t, High_i, Low_i, Before_t, After_t

Journal: N/A

Method of analysis

CRP: OLS, GMM, q-model, Euler model

Journal: none

Conclusion

CRP: Cash flow sensitivity of investment decreases as foreign ownership increases, foreign ownership improves a firm’s accessibility to external finance.

Journal: Given the powerful incentives for economic growth, absent other compelling reasons, patriotism through protectionism will not be a sustainable alternative.