Critical Appraisal - Coursework Example

 Economics education and greed By Wang, L., Malhotra, D., & Murnighan, J. K. Critical appraisal Introduction The research by Wang, Malhotra and Muringhan (2011) addresses an important issue especially in the wake of the entrepreneurship trend in the world. The main reason for carrying out this research was to find contributing factors behind the financial crises and the frequent corporate fraud scandals in the recent history. Also, the angle of the ethical responsibility of business schools in educating students was missing from other studies. This work seeks to answer the question if these institutes are breeding a culture of greed. Also, economic-related courses are dominating the business school curricula. Therefore, two hypotheses have been assumed in this study. Rationale for the Study Hypothesis 1 explicitly tests this trend by gauging this concept mathematically. "Hypothesis 1: Increases in economics education will be associated with increasingly greedy action and decreasing concerns for fairness." (p. 647) From a pragmatic standpoint, this hypothesis is succinct and efficient in measuring the two elements (increasing greedy behavior and decreasing concern for fairness), as they relate to economics education. Theoretically, it makes sense to associate economics education with greedy actions. The research has been put together to answer if the business schools are fulfilling their ethical and moral responsibilities of instilling fairness among their students. The second hypothesis tests the perception of greed and greedy actions; "Hypothesis 2: Increases in economics education will be associated with increasingly positive perceptions of greed." (p. 647) Before stating the hypotheses, the research mentions the events that have led to this research. In the introduction part, it refers to Bernie Madoff's Ponzi scheme that robbed the investors of over $60 billion. Dennis Keselowski, who was the CEO of Tyco, stole over $600 million. The reason why the research is crucial is the 25 largest bankruptcies from 1999 to 2001 raked in $210 billion of the shareholder's money and cost over hundred thousand jobs, while the culprits did not officially break any law. Similarly, according to a report by Fortune the directors and executives of 1035 companies cashed in $66 billion despite the stock prices of their companies falling by a shocking margin. These facts give sufficient justification for carrying out this research. In fact, it becomes inevitable because if such behavior goes unpunished and unquestioned it is not difficult to predict more corporate frauds in the future. Managers and corporate leaders might engage in activities that are unfair. They might do it without truly pondering about their actions, feeling justified in carrying out greedy actions under the cloak of pursuing organizational goals. Or they might be explicitly doing injustice for their individual self-interest. The previous literary works have not been sufficient enough to clear the haze whether they commit fraud on purpose or in blind self-righteousness. Also, the contribution of business schools in such behavior is also a matter of concern. Other researchers have written cogent theoretical arguments that too much reliance on economics models can be dangerous. Therefore, it was justified for this research to test the prediction that the economics education can shift the orientation of common people in harboring positive views towards greed. Epistemological and Ontological Assumptions The epistemological assumptions that underpin the research questions mainly revolve around the frequent corporate frauds and the culprits being business school graduates. Epistemology requires answers to questions such as how the reality can be known. The realistic assumption that supports the hypothesis is that the ethical and moral obligations are fading away in the wake of cutthroat business competition. Business schools need to prepare their students for this economic antagonism. The epistemology governs the characteristics and those principles that monitor the process of knowing. It is a known fact that frequent occurrences of corporate frauds in the recent years indicate a perverse sense of fairness. Worshiping self-interests or committing fraud in the name of achieving corporate goals is the main reason for such a conduct. For instance, Study 1 discovered that economics majors and those students who enrolled in multiple economic related courses kept relatively more money in an assigned task related to money allocation, which is an indication of an embedded inclination towards hoarding money/ resources. An element of this research that makes it even more credible is that the epistemology of its subject does not stem from speculations. In fact, it arises from an attempt to approach the study of billions of dollars of fraud committed by higher management and the CEOs of financial institutes. Where a common shareholder and investor lost his hard earned money. When the share price of a company drops the management should suffer the negative consequences. But as has been described in many cases, the opposite was observed. The investor suffered huge losses while the higher management profited from this ‘slump’. This research oscillates between the behavior (fraudulent conduct) and its trigger (materialistic education in business schools). One cannot know people without the context they are in however, the same people cannot be known merrily through the context. This ontological condition is imperative to understanding the root of the problem. The ontological assumption here is that the context that the business school students are put through and taught to compete through acquiring more resources (tangible or intangible) is necessary to understand the behavior of corrupt CEOs. The focus of this study is not only to understand the individual but the context, the environment that shapes behaviors such as the disregard for fairness. The epistemology often known is mainly concerned with the identity as well as the type of identity, which is both essential and existential. The general perception (shaped by the reality) associated with "Wall Street" is the most vivid embodiment of greed and how it corrupts the society. In fact this matter is not so easy because differentiating between self-interest and greed is difficult. To beat the competition and to acquire market share can be very tempting for managers. The temptation is enough for them to push the boundaries of law and find loopholes to exploit. It is unjust to assume that if they are not breaking any law then they are also professionally, morally, and ethically clean.  Research design and its strengths and limitations The research tests the two hypotheses with three complementary studies. Study 1 tests the first hypothesis by analyzing the behavior of the participants in the Dictator Game. Study 2 tests the second hypothesis by evaluating the attitudes of people towards their own greedy actions, it also analyzes people's perception of greed. Study 3 is like a filter that eradicates the potential bias in the selection for the study. It tests that whether getting educated in the concepts of economics has an influence on what people consider a greedy behavior. From a research standpoint the three studies give an accurate picture of the relationships; between greedy behavior and business school education. The research design is strong as it carries the research in three well-structured phases. It is academically safe to conduct research in this manner so that the behavior of the participants can be evaluated in the first study. And then a self-check where people's perception or attitudes towards their own greedy action makes the research even stronger. And finally, the hallmark of any credible research is it should be free from bias. The research design is well structured in answering the research question as well as testing the hypotheses. For study 1, 112 students participated. Out of which 67 were studying in a macro or micro economics class and 45 students were from an introductory or intermediate level education class. All of the participants were from the same university. Although the number of participants were significant however, the difference in the level of education could have contributed a bias in the research. The intermediate or introductory level education cannot match with an expert macro or microeconomic class. In other words, the difference in the experience of education as well as the background or the prior inclination towards money could have contributed a bias. People that possess hoarding attitude towards resources could have been generally interested in studying economics. The key limitation the research design is it does not take into account the reason for keeping more money. The economic students kept an average of $7.76 out of $10 for themselves while the education students kept an average of $6.5 out of $10. The general perception of the research is that this attitude is an indication of greedy action. However, the concept of utility and what an economic student could do with the money as compared to the person to whom they were supposed to give the rest of the share is not the same. For education students this task could have been only a division of money while for the economic students it could mean rational or equitable distribution of resources. The participants were asked to report the reasons for their decisions. The term "fair" or any word associated with fair was given specific importance as it related to the concern for how a person associates one's actions that affect others. This seems like a very intelligent measure of people's perception of the concept of fairness. This factors makes the research more valid and reliable. The purpose here was to evaluate the behavior and not the intention such as rationality for keeping more money. For instance, a limitation for this design could have been that when the economic student kept more money from the $10, it could have been out of general self-interest instead of greed. Even though there is a strong likelihood of the element of greed present there, there is considerable doubt in this theory. Regardless of the true intentions, the research design comprehensively confirmed the hypothesis that the economic student kept more money for themselves. Sampling strategy  The theory behind greed considers many factors in the recent and old history. This source of data is the main driving force behind this research. Generally people have a repulsive attitude towards greed as long as it is concerned with other people's behavior. This concept has been the primary governing factor in selection of sources of data. The hypothesis is mainly concerned with the education of economics in modern times. To get the participants from a well reputed University with quality economics education was imperative. The sampling strategy had been strictly geared towards testing the hypothesis. All the participants were from a Midwestern university. For the first study a total of 112 students took part. The sampling was not very strict in terms of the divisions between education class students and economics class students. A total of 67 students were from the economics class with 45 from the education class. The sampling and the invitation to participate was ethical and fulfilled all the confidentiality requirements. All of the participants volunteered after their respective class sessions. In addition, it was important to invite those students who had spent a significant time in the University. In this case a reasonable average of 2.5 years served as having sufficient exposure to either the concepts of economics or other education. The rationale behind choosing this sample relates with the hypothesis. All the students should be from the same institute, and of relatively same age. The rationale for study 2 participants can be related to the same factor; the hypotheses or the research question. The participants were 166 undergraduates from a Midwestern University. The male to female ratio was 40- 60. This study specifically mentions that gender effect was not significant. An average age of 20 years with 34% economics majors makes the number of participants and the source fairly homogeneous. Hypothesis 1 was tested under the Study 1 as an initial behavioral test. This test was to measure if taking economics classes leads the students to disregard fairness toward more money in the task. Qualitative research design was used where 112 students participated. The majority (28%) of economic students were male while most (18%) education students were females. Research methods The strength of this research method is the sample size is sufficient considering the sample universe of a university. Stratified random sampling has been used in this research design. The sample selection can also be termed as the judgement sample; where the researcher selects the most productive sample for the research (Marshal, 1996). In this case the selection of Midwestern University is the selection of the researchers. It complements the process of finding the answer to the research question. The debate can be strong about the gender proportion in the sample size where the majority of the participants in the economics section belonged to the male gender. The limitation of this design was that this technique was only limited to one university. More credible and a general approach would have been including samples from all major universities across the globe. This method would have eradicated any bias related to the specific curricula followed in one country. Maybe one country has different economic conditions that promote such behavior that compels the students to keep more money for themselves and deem it fair. The Study 2 also had focused research design to test the hypothesis. The second study made a minor however very crucial adjustment. It tested the hypothesis without imposing the definition of greed. The research design was specifically oriented towards evaluating the correlation between economics education and the people's perception or the concept of a greedy action. In a similar fashion, a considerable number of participants (166) took part in the research. This design was a mix of qualitative and quantitative research methodology. The participants were to fill an online questionnaire when they were offered $5 for participating. There can be issues regarding the procedure of the research. Initially it was determined that the definition of greed was not to be imposed. However, the instructions vividly mentioned that the research was focused on understanding greed. Even though the participants had the option of withdrawing any time, none of them did. But there can be a little bias when the students knew that the research is oriented towards evaluating the concept of greed. It would naturally make them conscious of their thoughts and their actions. They could unknowingly craft a more acceptable version of greed and greedy actions. The design that uses both the qualitative and quantitative aspects of the research makes study 2 more reliable. The aim is to test the hypothesis that relates with the perception of greed. It only makes sense that the questionnaire should include open-ended questions where the participants explain the definition of greed or greedy actions according to their belief. Moreover, the research design also measured the negative and positive system of thinking. Where the participants were asked to rate their behavior where they once gave in the temptation to greed, and when they resisted. This approach makes it easier for participants to express their behavior in numerical values. Analytical strategies used for Analysis and Evaluation Study 1 The analytical strategy used for this study was to find the mean dollar amounts kept by economics and education student playing the role of a dictator. The mean value determined indicated the general behavior of the sample. The strategy was purely mathematical the research design was qualitative. The mean value for the economic students was $7.76. It is the amount that the students kept for themselves, while the education students kept an average or a mean of $6.5 for themselves. This experiment used a 2 x 2 mixed design. Where the course was economics for education, and the task was restricted and unrestricted. This analytical method is ‘fair’ in measuring such a behavior. Study 2 The main concern was to keep away any biases in the research. The sample for this study included non-economics majors studying multiple economics courses. 62.5% had more than one and 18% with three or more than three economics courses. Considering the nature of study 2, where the perception of greed was measured, this distribution of participants seems justified. Therefore, the analysis included measuring the effects of having completed more economics courses as compared to having a single economics major. The perception or definition of greed was measured through 3 categories. 1) How people feel about their own greedy actions 2) Measuring their general views on greed regarding morality and 3) measuring their actual definition of what constitutes as greed. The analytical process had to be without any subjectivity except for the open-ended questions included in the questionnaire. The factor analysis showed that single factor had a weightage of over 60% in the variance when they told their "succumbed to greed" stories, while 63% variance showed when the participants "resisted greed". This type of data could not have been analyzed by averaging the output. Therefore, a single post hoc feeling index that averaged the 8 ratings was used. Evaluating the general answers on greed based questionnaire showed one factor 77.68% variance. These two were the main reason for forming an index moral view of greed that averaged the three items. It is the requirement of qualitative research to have dependent and independent variables. The three dependent variables were; 1) “post hoc feeling index” (p. 651) 2) “moral view of greed” (p. 651) and 3) if their definition of greed’s negative impact had relevance to others. Table 2 explains the result; (Wang, Malhotra and Murnighan, 2011, p. 651) Study 3 This study needed to analyze the positive and negative perceptions on self-interest. It required measurement of people's perception about self-interest and greed. Such an analytical design difficult in the sense that there is a fine line between self-interest and greed. Therefore, statements that endorsed self-interest from a singular economic perspective would somehow justify greed. The responses could have been wayward therefore, two indices were formed to better evaluate the responses. The first category was encompassing the five items on functional benefits of greed, when the second category had three items enveloping the general morality. Positive correlation was found between the two indexes. This analytical design was highly reliable as it endorsed the hypothesis by proving that perceptions of morality and economic benefits are the two faces of the same coin. The following table explains the correlation. (Wang, Malhotra and Murnighan, 2011, p. 654) Biases can be removed to a certain extent by introducing informants in the study but they defeat the purpose of the research deplete the special characteristics of the research technique (Campbell, 1955). In this research there were no informants to keep the essence of the research intact. Even though the sample size was confined to only a few hundreds, the research did give valuable insight into the relationship between economics education and people's perception of greed. It clearly determined that the economic education is having an impact on people's attitudes about greedy actions. The consistency found in the research proved that students with economic educational backgrounds harbored positive attitudes towards grief. Interestingly the study 3, showed how people can justify greed through self-interest. Which indicates that sometimes people would purely pursue self-interest and would not be committing a moral wrong that bears heavy on their conscience. Contribution of research to existing knowledge  Considering the limitations of the study this research is not conclusive and cannot be applied the world over. The insights it gives into the relationship between greed and the concept of economics is very intriguing in terms of carrying out broader research in future. Another limitation of the study is that its purpose was to specifically quantify the greedy behavior or the perceptions however, the confusion created between differentiating greed from self-interest compromised conclusiveness of the results of the study. Despite the limitations it is an invaluable research into the existing knowledge of greed. Educators and the people who determine the orientation of financial studies need to highlight the ethical and moral obligations when operating in the finance and economics world. Another impact that this research can have on the policy formation is the stress that the economics courses put on empirical and numerical analysis. The study showed a trend in habit formation on disregarding fairness or an inclination to give more money to another person. A student or a professional merely concerned with numerical analysis can become ignorant of the social consequences of purely financial decisions. The general impact of this research on the education policy can be including exams or chapters in economics books that specifically test the moral and ethical obligations of economist and financial analysts. By making arrangements that make it imperative for students to pass exams that test how well they score in understanding the social consequences of their financial decisions can be a step forward in formulating better education policies. References Campbell, D. T. (1955). The informant in quantitative research. American Journal of sociology, 339-342. Marshall, M. N. (1996). Sampling for qualitative research. Family practice, 13(6), 522-526. Wang, L., Malhotra, D., & Murnighan, J. K. (2011). Economics education and greed. Academy of Management Learning & Education, 10(4), 643-660. Read More