Corporate Ethics, Risk And Empirical Research Based On Chinese Enterprises

In recent years, many big companies in America and Europe are exposed to scandals one after another. Japanese Enterprise' s corruption problem is also worsened day by day. Scandals and discipline violation events also happened frequently in Chinese listed companies.These immoral behaviors, which appeared in both immature and mature market, caused serious social consequence. The public voice on corporation social responsibility becomes greater. Simultaneously the nature of new corporation competition is to capture stakeholders' attention. The radical change of the focus of competition requests enterprise to pay great attention to ethical orientation of their behavior.Therefore, discussions on business ethics become the focus of global academia and enterprises. In particular, the following questions worth discussing deeply: Are ethic ideas, which are summarized from the mature western market, suitable for Chinese Enterprise in the process of institutional transition? Is ethics a kind of luxury goods for developing countries such as China? Whether the enterprise should gain profit first, and then care about ethics?After making a comprehensive view of the existing research on business ethics and corporation social responsibility, we can find that there is great difference on whether enterprises can be a moral entity? Researchers fall into the danger of either replacing business ethics with individual moral quality or making unpractical expectation for social responsibility.Of course, the answer to this question forms the basic assumption of research on business ethics. This paper discusses how to govern ethical risk of Chinese enterprise from a risk management perspective. That is, whether enterprises can be regarded as a moral analysis unit? To what extent can be avoided or restricted the Chinese enterprises moral hazard behavior? Specifically, based on Frank-Hertz. H. Knight' s ideas of risk analysis, this paper argues that the relative research topics on effectively preventing and controlling Chinese enterprises ethical riskare as follows:First, to clarify the contention on "the enterprise is the moral entity" , then prove that enterprise and ethics can be combined at the level of business practice in order to specify that the analysis unit of business moral risk is an enterprise.Second, to combine normative theory and positive empirical method, adopt systematic research method to prove that enterprise moral risk is the co-working result of social construction and own business operation.Third, based on the empirical result of Chinese Enterprise, this paper seeks internal and external influence factors, then proposes the warning index and offers the system of governing moral risk encountered by Chinese enterprises.Based on the literature review, theory reasoning and expert interview, this research constructs a business moral risk influence model and develops measurement instruments. Based on the data of 2004 Chinese listed companies, this research uses SPSS11. 5 statistics software to test the relative hypothesis on Chinese enterprises. Research indicates that:Firstly, Enterprise is the moral entity and can be regarded as the analysis unit of enterprise moral risk behavior.The nature of business ethics fact is the ethical relationship between stakeholders and enterprise. During the exploration of this relationship we can form the conception of business ethics and enterprise can be the moral entity. The academic research of relationship among enterprises and stakeholders can be the initial theory supporting the conception that enterprise is the moral entity. Meta-analysis of morality and rationality also indicate that the key characteristics between morality and rationality are similar. Moreover the multi-dimension rationality and the enterprise strategy is isomorphic。 The business moral and enterprise can be conformed. Enterprise is the moral entity and can be regarded as research object of enterprise moral risk behavior.Secondly, normative and empirical research methodology of business moral can be accreted at the practical level.For the duel- characteristic of the business ethics research object, namely for one hand, we should seek both the fact of business ethicalbehavior and the fact about the origin and purpose of moral. For other hand, we should research the value of business ethics. This research summarizes that the research on business ethics is conformability and need merge normative and empirical research methodology. These two methodologies also can be accreted, but its accretion means the empirical and normative methodology coexist. The general manifestation of this relation is humanity and the most direct express is the special commitment, agreement and contract. The comprehensive social contract theory using two forms named "macro" and "micro" contract, realizes the coexistence and co-evolvement of normative and positive method. Simultaneously the relationism methodology can also be introduced to the research on business ethics. It can relax the opposition of two methodology used by business ethics research.Thirdly, empirical conclusion of Chinese enterprise moral risk is as follows:(1) The interior factors of enterprise, such as the nature of enterprise, the proportion of major stockholder, the proportion of top ten stockholders, the proportion difference between the biggest and second stockholder, board size, the size of supervisor board, the motive contract of senior manager, corporation social responsibility, influence enterprise moral risk behavior and there is remarkably negative correlation between them.(2) The exterior variables such as the degree of government intervene, the degree of law and regulations, local credit, the enterprise prestige variables (natural logarithm of company asset, current ratio, speed ratio, net profit per share) are remarkably negative related to social moral risk behavior.(3) The interior factors of enterprise, such as the nature of enterprise, the motive contract of senior manager and exterior variables such as, the degree of government intervene, the enterprise prestige variables and profit gaining ability synchronously enter the final business moral risk model. Moreover, the most important factor affecting business moral risk of listed company is the motive contract of senior manager, then following factor is the nature of enterprise, theenterprise prestige variables (natural logarithm of company asset, enterprise profits), the degree of government intervene and the degree of law and regulations.(4) Synthesizing (1), (2), (3), we draw the conclusion that the moral risk behavior of Chinese enterprise is the combined result of independent will reflected by interior factors and social constructs reflected by exterior variables.(5) There are different influence factors of moral risk behavior between different kinds of enterprises. In private Chinese enterprise, following variables are remarkable correlated to business moral risk behavior: the proportion of major stockholder, the proportion of top ten stockholders, the motive contract of senior manager, the index of corporation social responsibility, the degree of government intervene, the ability of paying and profit gaining. In state-owned enterprise, such variables as the proportion of top ten stockholders, members of board, the degree of government intervene, the degree of law and regulations, local credit, the enterprise prestige variables, financial solvency are remarkable correlated to business moral risk behavior. The business moral risk behavior mainly correlates to interior factors in private enterprise and business moral risk behavior remarkably correlate to external factors in state-owned enterprise.(6) The concentration degree of shareholder ownership is the internal authority arrangement, which restricts the moral behavior of listed company.This can be supported by the following results: the proportion of major stockholder and the proportion of top ten stockholders are negative correlated to enterprise moral risk in remarkable at the degree of 1%; the square of proportion of major stockholder and the square of proportion of top ten stockholders are remarkably negative correlated to enterprise moral risk. The proportion difference between the biggest and second stockholder is negative correlated to enterprise moral risk in remarkable at the degree of 5%. This result indicates that the balance among Chinese shareholders is not very good.(7) The interior motive system negatively correlates to enterprisemoral risk. Social credit and prestige mechanism works in Chinese enterprise during the transaction periods. The effect of business prestige mechanism is obvious but the effect is limited. External environments factors such as the degree of law and regulations and government interval have remarkable effect on business moral risk. Simultaneously, the more important is the list company' s profit closely correlated to business moral risk.Based on these conclusions and findings, this research offers the moral risk governance system of Chinese enterprise and points out the research limitations and possible developments.The innovations of this research mainly are four following points:1.The author proves that whether enterprise is a moral entity and why business ethics and enterprise practice can be combined beforehand and then explores how to combine. This operation broke through the predecessor' s limitation that explores combining business ethics and enterprise practice before having settled the premise that why two objects can be combined. This maybe an innovation of business ethic theoretical research.2. Another meaningful innovation is possibly the methodology innovation. Based on systemic inspection on two mainstream methodologies of enterprise ethics research, namely normative and positive, we prove that methodologies can be combined. That is, normative and positive method is interdependent when applies in respective concepts. Social relationship methodology manifests this kind of amalgamation.3.This research proposed that the enterprise moral risk is the co-result of social construct and enterprises' own works. Exploring factors which affecting business moral risk from two perspectives, namely external source and interior source, then make a positive proofing. It manifests the systematic inspection of this research. Moreover, according to the positive results, the author proposed corresponding governance solutions in view of different kinds of enterprises. This also manifests particular consideration under system inspection.4. The breakthrough of concrete research method. This research adopts deconstruct and relapse method, comparative analysis method, contentanalysis method. In particular, this thesis made an empirical research adopting logit regression model through utilizing the newest data of Chinese listed companies. It breaks through the limitation that the traditional business ethic research only uses theoretical logic reasoning.