EDWARDS FACULTY

Reseearch

Research

My research over the years appears to be quite eclectic, but there is a strong thread or theme originally related to transportation that links all my research together.

My Background

I was born and raised on the campus of a university devoted to aeronautical engineering where my father was a laboratory engineer. What is now Cranfield University near Bedford in England used to be called Cranfield College of Aeronautics, located on a former World War II airfield.

I spent all my childhood there surrounded by engineers and by aircraft. It is ironic that I started my Grade 1 school education in a building that would turn out to be 50 meters from the building where I would later complete my Ph.D. dissertation.

It was hardly surprising then that I choose to study Engineering for my first degree. I went to the University of Sussex from 1967 to 1970, a period when it was extremely trendy to be at such a modern university. I subsequently completed a degree in Engineering with Social Studies there, an intriguing combination of subjects that was almost like a mini-MBA program.

I felt that I was not cut out to be a professional engineer as such, and so I entered the world of business as a graduate management trainee with De La Rue, the world's leading printers of banknotes.

I joined their Security Express division which transported banknotes on behalf of De La Rue itself, and on behalf of the major UK banks. I became a member of their sales force, and by age 24 I was appointed to be the Marketing Manager of their Courier Express division. This was an early version of Federal Express, which utilized the radio control facilities of the security side of the business to coordinate the collection and pick up of priority goods. The majority of this courier business comprised the delivery of pop records to retail stores - they had to have copies of the #1 hit record of the day in the stores as fast as possible!

Having worked for 4 years in the transport industry I then decided to further educate myself, and looked around for a suitable MBA program to enroll in.

All the UK programs except for one were 2-year programs. The exception was Cranfield School of Management, which offered an intensive 46-week course stuffed into one calendar year. I was admitted as the youngest ever Cranfield MBA student into the 1974 to 1975 MBA program, and coincidentally found myself back on the campus where I had been raised as a child.

During the MBA program I took a compulsory class in Business Strategy from Professor John Constable. This subject so intrigued me, and the case method fascinated me so much that I felt a vocation to become a case teacher, and I began to search around for the means to become a university lecturer.

I soon found out that a PhD was the key to such a career, and so I began to explore the best way of obtaining such a credential. I quickly decided that a good supervisor was the key to success, and selected Frank Fishwick, then a Reader in Managerial Economics at Cranfield as my supervisor. Under his guidance I completed a PhD in just 30 months from 1975 to 1978, a near world record as far as I can gather. The research that came from that PhD is described below.

When I graduated I searched for a teaching job at a UK university, but at those times the higher education system was under severe budgetary pressure, and there were no vacancies at all. Along with three other Cranfield Ph.D. graduates I emigrated to Canada in 1978.

I have held a full-time appointment at the University of Saskatchewan ever since that time, but while on various leaves of absence I have also taught at the London School of Business, the University of Melbourne, the University of Toronto and the University of British Columbia. I also developed the original entrepreneurship program teaching materials at the Open University in the UK.

My Doctoral Research

My PhD topic was in the field of transportation economics and policy, specifically investigating the changes that had been occurring in the UK bus passenger transportation industry since World War II.

In the 1960s the UK's National Prices and Incomes Board had spent more time investigating the bus industry than any other industry, and had made sweeping recommendations for reform of the industry. In simple terms, the Board had recommended that the bus industry become more labour-efficient by eliminating the need for the bus conductor, an employee who collected fares from passengers inside the bus after it had picked them up while on its route. The conductor's fare collection duties were to be taken over by the driver, resulting in the so-called "one-man operation" of buses, a description that seems sexist these days.

My thesis subsequently revealed that this seemingly simple recommendation was to have enormous ramifications, not just for the bus industry, but also for all road users in urban areas.

My thesis was entitled One-Man Operation of Urban Bus Routes: System Dynamics, Costs and Benefits, (Cranfield Institute of Technology, Bedford, England, 1979). My doctoral studies produced the following papers:

The latter paper is a seminal paper that is part of the educational core of most graduate transportation engineering programs in the world.

It describes the dynamic process behind the "pairing" of buses on a route, commonly experienced by customers who wait an excessive amount of time at a bus stop, only to see not one, but two buses arriving in a convoy at the stop. The same phenomenon applies to elevator systems in high-rise buildings, where prospective passengers may have a long frustrating wait in the lobby only to find that 2, 4 or even 6 elevators will arrive simultaneously. Because so many passengers now board each elevator it tends to halt to let off passengers at many more stops than it might otherwise have done. Hence a passenger who has had a long and frustrating wait for an elevator then tends to have the irritating experience of a longer than average journey time in the vehicle before arriving at the destination floor.

Research into Compliance

One spin-off of my research into the bus industry was an exploration of the operation of "honour" fare and ticket systems in public passenger transportation. This is where a passenger is trusted to self-cancel a ticket upon entering the system, or is expected to not travel any further within the transport system than is allowed by their ticket. Passenger compliance with these rules is enforced by random inspection and by the imposition of penalty fares or fines on fare evaders. How many inspectors should be employed in a given system? What should be the level of the penalty versus the level of the evaded fare?

My investigation of the dynamics of the interaction between inspection, penalty, and evasion led to the production of an article about the enforcement of tax compliance in which I suggest that there are multiple equilibrium points in any given tax inspection system. This phenomenon suggests that innovative one-off methods to stimulate compliance may improve long-term tax yields from a given population with no change in the long-term level of inspection resources.

With some colleagues from the University of Melbourne I subsequently developed an economic model of fare compliance in transportation systems.

These explorations of compliance led me into the fields of criminology, and the sociology, psychology and economics of crime. In exploring the concepts of punishment and deterrence of individual lawbreakers, I began to think more and more about the control of deviant corporate behaviour, and the whole field of Business Ethics.

Exploring Corporate Disasters

In teaching Business Strategy using the case method I was becoming increasingly aware that students were only being exposed to managerial situations that the managers involved in had agreed could be published. This results in a very biased set of case studies that would only tend to reflect circumstances the managers themselves were proud off. I always considered that perhaps more could be learnt from examples of bad management (which managers would never agree to have published) than from cases of good management.

The puzzle was to find examples of bad management that could be published.

The answer to me came from the field of transportation, and the inevitable consequences of major transportation disasters where there is a large death toll. Whenever there is a big plane, train, ship or road accident there is an inevitable call for a public enquiry to determine the causes of the accident. I became aware of the possibility that such a public enquiry may yield sufficient information about the workings of management inside the disaster-stricken transport firm as to enable the construction of a business case study.

The opportunity to write such a case study came with the calamitous sinking of the cross-channel ferry Herald of Free Enterprise off the Belgian port of Zeebrugge on March 6th, 1987 with the loss of 189 passengers and crew. I was particularly intrigued by the expression of political philosophy inherent in the ship's name, and the actual operation of free enterprise as represented by the practical management of the ferry company. I was correct in my suspicions that the case might illustrate abominable business practices that would provide excellent fodder for classroom debate and analysis.

Following the release of the official report of the enquiry on the accident in July 1987 I wrote a case study about the disaster. This case was to become one of the most widely used cases in the field of Business Ethics. The case was even published in the main Harvard Business School casebook on Business Strategy, the only non-Harvard case ever to be published in that text over 8 editions.

One reason why the case was so popular was the case's link between one of the 5 elements of Michael Porter's model of the dynamics of industry competition, specifically the threat of substitution, and morality in business.

In the case of the English Channel ferry industry, the threat of substitution came in the form of the announcement by the UK Government that it would allow the building of the Channel Tunnel. It would be seven years before the tunnel came into operation, which was just about the longest gestation period for a substitute product that there has ever been. In the interim before the tunnel was completed, what should have been the strategy of the ferry industry?

Logic would suggest diversification away from the ferry industry, the sucking of cash out of ferry operations to fund such diversification, and the running of the ferries at the lowest possible costs so as to generate the greatest amount of short-term cash. But what if the ferries needed cash to be spent on safety items in the meantime?

In the Zeebrugge disaster it turned out that the company had refused to spend even minimal sums on ferry safety while it went mad for diversification. This failure to spend cash on safety was a direct cause of the deaths of 189 people. Students are thus able to see that moral judgment is a relevant and essential variable in what would otherwise seem to be a straight technical question of managing cash flows and strategy in an industry threatened by substitution.

The case has been published as follows:

Later on I also wrote about the London Underground King's Cross Fire in which 38 people died. In the enquiry into that disaster it transpired that London Transport had never ever had an organization chart, implying that it had never known how it was organized internally. It was also found that in over 100 years of operation the London Underground had never had any manager who was responsible for passenger safety. Its past record of safety was thus shown to be a statistical fluke.

I also gave a couple of conference papers about the history of accidents on the BC Ferry system in British Columbia, Canada:

In addition I gave some papers about the patterns that were inherent in such disasters, and the ethical, legal and managerial implications:

Going Further into Business Ethics

My analysis of transportation accidents and their organizational antecedents directly led me into the broader world of business ethics. I began to write some other case studies related to business ethics.

My case study on Canadian Tire looked at the ethics of non-voting shares, and at the strife that was caused within this successful company by an attempt by the Canadian Tire Dealers to exploit a loophole in what was known as a "coat-tail" provision designed to protect the interests of non-voting shareholders in the event of a takeover bid.

My case study on Beech-Nut Nutrition examined the case of a baby food company that was eventually found to be selling bottles of "pure" Apple Juice for babies that in fact contained coloured sugar water. The case raises issues of advertising ethics, food purity, and the pressures put on managers in poor-performing divisions by corporate headquarters. The case teaching note points out a bizarre set of linkages between the Beech Nut case, its corporate owner Nestle, and most of the major business scandals of the 1980s.

The largest-ever industrial venture in Saskatchewan was the subject of another of my case studies, which examined the $800 million government project to attach a heavy-oil upgrader to the Regina oil refinery owned by Federated Co-operatives Ltd., the wholesale arm of Canada's retail co-operative movement. This project, funded almost entirely by debt guaranteed by the Saskatchewan and Canadian Federal Governments, had an operating structure which was completely dictated by the demands of Federated Co-operatives and which was riddled with conflicts of interest. The case describes the unusual governance structure of the enterprise, and the conflicting views of the two co-chairs of the Board of Newgrade Energy.

In addition to these various case studies I also published a variety of academic papers and textbook chapters related to Business Ethics, including the following:

My interest in Business Ethics also led me to spend a year at the University of British Columbia's Centre for Applied Ethics in 1993-94. Following that year I became the moderator of the Canadian Business and Professional Ethics Network, an Internet based communications network based out of UBC's Applied Ethics Centre.

Ethics, Strategy and the Accounting Profession

One of my latest interests is in the history of the evolution of the accounting profession. This was stimulated by a business strategy case study about one of the big accounting firms that I had read in the mid 1980s. That case study described how the accounting firm took in many more articling students than it could possibly eventually employ itself. The "excess" students eventually gained employment with the accounting firm's clients, with all parties being happy at the result. I was intrigued by this strategy because I knew from my experience with the students in the Edwards School of Business's renowned accounting program that most of them had the ambition to become partners in accounting firms they were about to start articling with.

How was it possible for such a substantial proportion of these students to be frustrated in their ambition to become accounting partners, and yet become happy via eventual placement in their accounting firm's clients? It seemed to me to be a very clever trick on the part of the accounting firms to have such eager articling students who did not complain when their ambitions were diverted. The cleverest trick was the fact that the accounting firms gained access to a large pool of cheap labour in the form of many more articling students than they could possibly ever employ themselves.

I began to study the accounting profession as a result, and eventually was able to see that this recruitment strategy was part of a grander design, which saw the leading firms in the accounting profession expanding geographically, and expanding their product lines way beyond the original core of accounting services. The accounting industry also became remarkably concentrated as a result of successive waves of mergers within the profession.

As a result of my study of the profession I provided strategic advice to the Certified General Accountants Association of Canada in the form of the following research reports:

As news of my familiarity with strategic developments in the accounting profession began to spread, I was approached by the Canadian Bar Association and was asked to write a research paper addressing the issue of the diversification of the major accounting firms into the field of business legal services. This form of diversification and linkage between different professions was considered to lead to the development of "Multi-Disciplinary Practices" (MDPs), which were outlawed by most country's legal professions.

I produced the following report for the Canadian Bar Association:

The above report is extensively cited in what in US legal circles is generically referred to as "The MacCrate Report", otherwise known as follows: Preserving the Core Values of the American Legal Profession: The Place of Multidisciplinary Practice In the Law Governing Lawyers, Report of the New York State Bar Association Special Committee on the Law Governing Firm Structure and Operation, Albany, New York, April 2000, 408 pp.

The MacCrate Report has guided all of the other US State Bar Associations and the American Bar Association in their responses to the problem of Multi-Disciplinary Practices.

My 10 year period of research into the way that the accounting profession had evolved in the 20th Century culminated with the publication of  my paper "The Structural Origins of Conflicts of Interest in the Accounting Profession", in a special edition of the journal Business Ethics Quarterly devoted to the topic of Accounting Ethics, and published in July 2004. This paper about the history of the accounting profession leading up to the collapse of Arthur Andersen in the aftermath of the Enron debacle has been named by the UK-based organization Emerald Management Reviews as being one of the top 50 management journal articles published in 2004.

That same special edition of Business Ethics Quarterly also included a 6,500 word review article that I have written entitled "The Last Straw", which reviews the book Final Accounting: Ambition, Greed and the Fall of Arthur Andersen written by Barbara Ley Toffler with Jennifer Reingold.

The above two papers were produced while I was on sabbatical leave at the University of Auckland Business School in New Zealand in 2003 - 2004. During that period of leave I also commenced research into the health and safety of commercial aviation flight crews, particularly flight attendants.Together with my colleague from the University of Auckland, Felicity Lamm, I presented the following paper:

I am continuing to work on this research topic.

I have been asked to provide a number of reviews in the field of Architectural Ethics, both of books published in the field, and of articles submitted to academic journals. One book review appeared as follows:

I have also branched out into another sector within the field of ethics in management, specifically the ethical management of romance in the workplace. My research into this topic has resulted in this recent publication:

My latest sole-authored publication looks back at the history of the Nestle infant formula scandal:

I am currently on an extended leave from the University of Saskatchewan.