Business Students' Perception of Ethics and Moral Judgment: A Cross-Cultural Study

Business relations rely on shared perceptions of what is acceptable/expected norms of behavior. Immense expansion in transnational business made rudimentary consensus on acceptable business practices across cultural boundaries particularly important. Nonetheless, as more and more nations with different cultural and historical experiences interact in the global economy, the potential for misunderstandings based on different expectations is magnified. Such misunderstandings emerge in a growing literature on "improper" business practices – articulated from a narrow cultural perspective. This paper reports an ongoing research on the cultural and contextual aspects of business ethics. The objective is to investigate how the perception/attitudes of business students towards the ethical dimension of doing business varies in different countries; Whether there are socio-cultural factors that influence the perception of ethicality in business practices. Research findings among business students in six countries: China, Egypt, Finland, Korea, Russia, and the U.S.A. are reported. While all groups had basic agreement on what constitutes ethical business practices, differences are found in the respondents' tolerance to damage resulting from "unethical" behavior. Without underestimating the role of national culture, variations in research results also point to the importance of current socio-political developments in the relevant countries. Implications for business teaching and management development are discussed.     

Regulative Distance,Cultural Distance,Host Country Risk,and the Choice of Subsidiary Activity: Evidence from Brazilian Multinationals

This study examines the relationship between regulative distance, cultural distance, and host country risk, as well as the choice of production or distribution activities by emerging country multinationals when establishing a subsidiary abroad. The study uses a sample of 280 subsidiaries of 133 Brazilian firms in 39 countries. Binary logistic regression was used to test the research hypotheses. The impact of regulative distance on the decision on subsidiary activity follows the predictions in the literature. However, findings on cultural distance and host country risk showed an inverted sign, suggesting that Brazilian firms tend to establish production facilities in countries with higher cultural distance and higher cultural risk.     

The Effect of Business Regulations on Nascent and Young Business Entrepreneurship

We examine the relationship, across 39 countries, between regulation and entrepreneurship using a new two-equation model. We find the minimum capital requirement required to start a business lowers entrepreneurship rates across countries, as do labour market regulations. However the administrative considerations of starting a business – such as the time, the cost, or the number of procedures required – are unrelated to the formation rate of either nascent or young businesses. Given the explicit link made by Djankov et al. [Djankov et al. 2002, ‹The Regulation of Entry’, Quarterly Journal of Economics 117(1), 1–37] between the speed and ease with which businesses may be established in a country and its economic performance – and the enthusiasm with which this link has been grasped by European Union policy makers – our findings imply this link needs reconsidering. Prepared for: Small Business Economics (2007), Special issue GEM conference 2005     

Bribery in International Business Transactions

Globalization leads to cross-border business transactions between societies with very different norms and regulations regarding bribery. Bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries, but the supply, or willingness to provide bribes by multinational firms and their representatives. This study addresses the propensity of firms from 30 different countries to engage in international bribery. The study incorporates both domestic (economic development, culture, and domestic corruption in the supplying country) and international factors (those countries’ patterns of trade and involvement in international accords) in explaining the willingness to bribe abroad. The propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms’ home countries, when the firms’ countries were signatories of the Organization for Economic Cooperation and Development (OECD) anti-bribery convention, and when those countries traded heavily with wealthier nations. Further, these findings are maintained when controlling for levels of economic development and cultural values in the supplying country. In terms of culture, firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less-developed nations.     

Cultural Crossvergence and Social Desirability Bias: Ethical Evaluations by Chinese and Canadian Business Students

The purpose of this study is to determine whether there are cross-cultural differences between Chinese and Canadian business students with respect to their assessment of the ethicality of various business behaviors. Using a sample of 147 business students, the results indicate cultural crossvergence; the Chinese (72 students) and Canadians (75 students) exhibit different ethical attitudes toward questionable business practices at the individual level but not at the corporate level. A social desirability bias (a tendency to deny socially unacceptable actions and to admit to socially desirable ones) is also found to be a cross-cultural phenomenon, with the Canadians demonstrating a greater bias than the Chinese. Finally, this bias causes respondents to increase their assessment of the un-ethicality of questionable business activities.

Managing Cross Cultural Business Ethics

The Trompenaars database (1993) updated with Hampden-Turner (1998) has been assembled to help managers structure their cross cultural experiences in order to develop their competence for doing business and managing across the world. The database comprises more than 50,000 cases from over 100 countries and is one of the world's richest sources of social constructs. Woolliams and Trompenaars (1998) review the analysis undertaken by the authors in the last five years to develop the methodological approach underpinning the work. Recently Trompenaars with Hampden-Turner (Trompenaars and Woolliams, 1999) have extended the concepts into a new model on dilemma reconciliation of cultural differences. This paper reviews these latest updates in relation to dilemmas of cross-cultural business ethics. The paper asserts that knowledge in relation to business ethics is culturally specific; and that ethnocentrism is not easy to avoid. Too great an emphasis on rational-analytic conceptions of reality may mean that syntheses, emotion, and intuition, are not adequately developed. This presents implications for doing business and managing across cultures and for resolving ethical dilemmas.     

The psychology of psychic distance: Antecedents of asymmetric perceptions

Already on its introduction into the international business literature, the concept of ‘psychic distance’ implied asymmetry in the distance perceptions between country pairs, a characteristic corroborated in subsequent empirical studies. However, predominant empirical operationalizations and their theoretical underpinnings assume psychic distances to be symmetric. Building on insights from psychology and sociology, this paper demonstrates how national factors and cognitive processes interact in the formation of asymmetric distance perceptions. The results suggest that exposure to other countries through emigrants and imports of cultural goods and services have asymmetric effects on psychic distance perceptions. The size of these effects appears to vary with the size of the home country – smaller countries tend, on average, to perceive psychic distances to the rest of the world as smaller than do bigger ones. The reputational status of target countries relative to that of the home country is found to have a non-linear, asymmetric effect on distance perceptions.     

Knowledge Management in Central and Eastern Europe Through Network Development and Boundary Spanners

ABSTRACT

Central and Eastern European (CEE) countries have become a popular research venue due to their transitioning into market based economies. For international business scholars this represents a unique opportunity, as one of the key driving forces is the privatization of state-owned enterprises. Due to the market's great potential, many multinational enterprises are entering CEE countries and realizing that a transfer of market knowledge (i.e., customer tastes, distribution methods/channels, etc.) from the host country to the multinational, as well as from the multinational to the host country (i.e. technology, management/marketing capabilities, etc.), is essential.

The lack of host country skills have made knowledge transfer difficult. Also, the tacit nature of some of the most important knowledge embedded within the host country's organization and the multinational makes knowledge diffusion a daunting task to manage. However, successful knowledge management will assist in positive performance measures so researchers are examining knowledge management and its constructs (acquisition, transfer, conversion, and application).

Our research explores the linkage between knowledge management and performance in host country firms in a CEE country, Croatia. We also explored antecedents of successful knowledge management that of networks and human resources (boundary spanners). Finally we explored whether cultural distance moderates these relationships in the knowledge management process.     

MNE home country cultural norms and conflict strategy fit in transnational business contract disputes

The increasing frequency and complexity of transnational business relationships has been commensurate with an increase in contractual disputes. In such situations, home country cultural norms will often influence how MNEs resolve contractual disputes in foreign markets. This begs the question: does fit between an MNE's choice of conflict strategy and its home country cultural norms affect monetary payouts (costs) in transnational business contract disputes? We apply organizational imprinting theory and the fit paradigm to a model employing data from U.S. court cases involving 316 MNEs from 47 countries. We find that choosing a conflict strategy that fits home country cultural norms will result in higher monetary payouts for MNEs. Additionally, cultural distance, but not legal distance, enhances the positive relationship between MNE conflict strategy fit and monetary payouts. Implications and future research directions are discussed.     

Cultural Values and International Differences in Business Ethics

We analyze ethical policies of firms in industrialized countries and try to find out whether culture is a factor that plays a significant role in explaining country differences. We look into the firm’s human rights policy, its governance of bribery and corruption, and the comprehensiveness, implementation and communication of its codes of ethics. We use a dataset on ethical policies of almost 2,700 firms in 24 countries. We find that there are significant differences among ethical policies of firms headquartered in different countries. When we associate these ethical policies with Hofstede’s cultural indicators, we find that individualism and uncertainty avoidance are positively associated with a firm’s ethical policies, whereas masculinity and power distance are negatively related to these policies. Bert Scholtens received his Ph.D. at the Universtiy of Amsterdam. Since 1999 he has been working at the Department of Finance of the University of Groningen, the Netherlands. His research particularly looks into the interaction between financial institutions and corporate social responsibility. He has published in, among others, Ecological Economics, Journal of Banking and Finance, Finance Letters, Journal of Investing, Sustainable Development, and Journal of Business Ethics. Lammertjan Dam is a Ph.D. student at the Universtiy of Groningen. He expects to defend his thesis about the integration of corporate social responsibility in economic valuation in Summer 2007.     

Performance implications of store format diversification for international retailers

Abstract

International retailers face formidable tasks in trying to replicate, or improve upon, their home country success abroad. Their market-seeking efforts sometimes require strategic diversifications of their store format portfolios capable of serving customers in different host countries. In this study, we examine whether the degree of store format diversification helps improve the performance of international retailers. We also assess the possible moderating effects of three factors—internationalization speed, political distance, and cultural distance—on this relationship. Utilizing 2001–2015 panel data for 19 retailers originating from several home countries and operating in multiple host countries, we employ a fixed effects model to examine the hypothesized relationships. Our results show that the performance of international retailers is influenced negatively by store format diversification. This relationship is moderated by internationalization speed and political distance, but not by cultural distance.     

A Cross-Cultural Study of Ethics: The United States,Romania, Poland,and the Czech Republic

Global expansion of business into areas defined by different cultural and national environments creates the need for companies to better understand the impact of culture on business operations. Of particular importance is the role country of residence plays. Researchers argue that many cultural differences are malleable, capable of shifting to fit the corporate culture of an organization. However, additional research aimed at identifying different countries’ cultural values is needed. This paper presents the results of a multi-national survey of business students identifying differences in cultural perceptions of ethical behaviors. Differences in personal versus social decision making are discussed.     

Business Cultural Intelligence Quotient: A Five‐Country Study

Cultural intelligence (CI) has often been linked to performance at the individual, team, and firm levels as a key factor in international business success. Using a new measure of CI, the business cultural intelligence quotient (BCIQ), our study provides empirical evidence on several key antecedents of CI using data on business professionals across five diverse countries (Austria, Colombia, Greece, Spain, and the United States). The findings suggest that the most important factors leading to cultural intelligence, in order of importance, are the number of countries that business practitioners have lived in for more than six months, their level of education, and the number of languages spoken. We find that cultural intelligence varies across countries, suggesting that some countries have a higher propensity for cross‐cultural business interactions. By teasing out the common antecedents of BCIQ among professionals, our findings may help with screening and training professionals for international assignments. Future research may examine the environmental (country‐specific) factors associated with a higher propensity for cultural intelligence (such as immigration, cultural diversity, languages spoken, and international trade) to explain the effect of country of origin on cultural intelligence in the professional community. © 2016 Wiley Periodicals, Inc.     

Globalizing Business Ethics Research and the Ethical Need to Include the Bottom-of-the-Pyramid Countries: Redefining the Global Triad as Business Systems and Institutions

A majority of the countries in the world are still considered “developing,” with a per capita income of less than U$1,000. Hahn (2008, Journal of Business Ethics 78, 711–721) recently proposed an ambitious business ethics research agenda for integrating the “bottom-of-the-pyramid” countries (Prahalad and Hart, 2002, Strategy and Competition 20, 2–14) through sustainable development and corporate citizenship. Hahn’s work is among the growing field of research in comparative business ethics including the global business ethics index (Michalos, 2008, Journal of Business Ethics 79(1), 9–19; Scholtens and Dam, 2008, Journal of Business Ethics 75(3), 273–284; Tsalikis and Seaton, 2008, Journal of Business Ethics 75(3), 229–238). This article is complementary to Hahn’s work and it advocates an urgent need for business ethics researchers to globally integrate the bottom-of-the-pyramid countries through a fundamental re-definition of the global economic triad, including the United States, Western Europe, and Japan [Ohmae, 1985, Triad Power: The Coming Shape of Global Competition (New York: Free Press)]. The definition that we propose is based on business systems and institutional perspectives that include the bottom-of-the-pyramid countries. We also propose to broaden the research in business ethics to enable comparisons across business systems indifferent income levels.     

International Success of Business Groups as an Indicator of National Competitiveness

Abstract

Business groups are the dominant form of large private enterprise throughout Latin America. However, relatively little academic research has attempted to identify the dominant characteristics of these groups and even fewer formal studies have examined how these groups are fairing in today's age of increased competition and globalization. While there are numerous characteristics of business groups that are worthy of examination, in this paper we focus on their foreign direct investment (FDI) activities. In order to better understand the potential strengths and weaknesses of Mexican multinationals, we draw upon Dunning's eclectic paradigm of international production and the literature examining developing country multinationals. While this body of knowledge provides a useful theoretical lens, the current FDI activity of Mexican business groups is somewhat at odds with the existing literature.     

How do economic,cultural, and global-connectedness distances moderate the effect of customers’ experiences on their intention to revisit non-indigenous restaurants? Evidence from Korean restaurants

In this study, we evaluate how the effect of customers' experiences on revisit intention for non-indigenous restaurants can be moderated by economic distance (ED), cultural distance (CD) and global-connectedness distance (GD) between the country of origin for a given non-indigenous restaurant and the customer’s resident country. Surveys were conducted in seven countries across three continents, and the levels of ED, CD and GD between Korea and the seven countries were used as moderators. The findings suggest that the types of food and staff are two elements that should be emphasized in countries that are relatively close to Korea. Conversely, elements like the atmosphere of the restaurant and word of mouth should be emphasized in countries that have greater distances from Korea. Of the three distances considered in the study, GD had the strongest moderating effect on the relationship between customers’ experiences and their intentions to return to the restaurant. As a whole, the results imply that ED, CD and GD are important points of reference when considering prior experience while selecting a target country based on the strength of the restaurant’s experience management.     

U.S.-American and German Business Ethics:An Intercultural Comparison

The differences between the "habits of the heart" in German and U.S.-American corporations can be described by analyzing the way corporations deal with norms and values within their organizations. Whereas many U.S. corporations have introduced formal business ethics programs, German companies are very reluctant to address normative questions publicly. This can be explained by the different cultural backgrounds in both countries. By defining these different "habits of the heart" underlying German and American business ethics it is possible to show the problems and questions within the intercultural management of values, but also the possible solutions.     

Comparing advertising effectiveness in South-American and North-American contexts: testing Hofstede's and Inglehart's cultural dimensions in the higher education sector

ABSTRACT

This research compares the effectiveness of advertising and relational marketing in two countries characterized by varying levels of both Hofstede's and Inglehart's cultural dimensions – Peru (high-power distance, high collectivism, survival and traditional values) and Canada (low-power distance, high individualism, self-expression and secular-rational values). Survey data from a high credence service sector (higher education) in both countries is used for the analysis. The results indicate that advertising and relational marketing have direct effects on choice in Peru, but do not have significant direct effects on choice in Canada. Advertising does, however, affect positively perceptual outcome measures (perceived marketing effectiveness) in Canada. Additionally, we find that advertising and relational marketing have an indirect impact on choice and perceived marketing effectiveness through the mediation of perceived informativeness and influencers in both countries. These results point to the need to account for mechanisms and mediating variables when building theoretical frameworks in cross-country studies.     

Comparing Attitudes Toward Ethical Dilemmas in Small Business

Abstract

This paper presents a comparative analysis of attitudes between Russian and U.S. undergraduate students on ethical issues in managing Russian small firms engaged in business transactions with U.S. firms. Based on the real life situations, Russian and American respondents were asked to select decision alternatives dealing with ethical dilemmas. Significant differences were found between the two groups. Russians do not recognize significant differences between various alternatives, despite the disparity in the severity of these alternatives for resolving business problems. Russians, compared to Americans, tend to prefer more forceful decision alternatives resorting to business practices that would be considered unethical in the U.S. This is attributable to differences in the countries' history, political, legal, and cultural environment. The transitional nature of the Russian economy affects decision-making and business ethics.     

Toward a Model for International Business Ethics

This paper briefly examines the topic of business ethics and attempts to suggest a code of ethics for multinational firms. While most companies have basic policies on employee integrity, confidentiality and sexual harassment, relatively few have established policies regarding bribery, exploitive child labor, human rights violations and other issues they may encounter in the global market place (Drake, 1998). Until recently, very few companies had truly global operations. Consequently little attention was paid to the issue of ethical guidelines in a global context. Recent changes in international markets have led to an explosion of corporations with global operations, and the need for a global code of ethics has grown commensurately. In this paper we explore the issue of global business ethics and attempt to provide a framework for future discussion. We also examine some of the unique difficulties surrounding the development of any set of global business standards. Key among these difficulties is the issue of competing ethical values in home and host countries.