A Cross-Cultural Comparison of the Deliberative Reasoning of Canadian and Chinese Accounting Students

Absract  Using Hofstede’s culture theory (1980, 2001, Culture’s Consequences: Comparing Values, Behaviours, Institutions, and Organizations Across Nation. Sage, NewYork), the current study incorporates the moral development (e.g. Thorne, 2000; Thorne and Magnan, 2000; Thorne et al., 2003) and multidimensional ethics scale (e.g. Cohen et al., 1993; Cohen et al., 1996b; Cohen et al., 2001; Flory et al., 1992) approaches to compare the ethical reasoning and decisions of Canadian and Mainland Chinese final year undergraduate accounting students. The results indicate that Canadian accounting students’ formulation of an intention to act on a particular ethical dilemma (deliberative reasoning) as measured by the moral development approach (Thorne, 2000) was higher than Mainland Chinese accounting students. The current study proposes that the five factors identified by the multidimensional ethics scale (MES), as being relevant to ethical decision making can be placed into␣the three levels of ethical reasoning identified by Kohlberg’s (1958, The Development of Modes of Moral Thinking and Choice in the Years Ten to Sixteen. University of Chicago, Doctoral dissertation) theory of cognitive moral development. Canadian accounting students used post-conventional MES factors (moral equity, contractualism, and utilitarianism) more frequently and made more ethical audit decisions than Chinese accounting students. Lin Ge is an accountant at Guest-tek Interactive Entertainment Ltd. Her research interest includes ethics and judgment of accountants and auditors, cross-cultural studies and international business. Stuart Thomas, Ph.D., is associate professor of accounting in the Faculty of Management at the University of Lethbridge, Alberta, Canada. He has published in the Journal of Business Ethics, Business and Society, Research on Professional Responsibility and Ethics in Accounting, Advances in Management Accounting and the Journal of Accounting Case Research. His research interests focus on ethical decision making and the effects of pay schemes on performance and standard setting.     

The Ethical Environment of Tax Professionals: Partner and Non-Partner Perceptions and Experiences

This article examines perceptions of tax partners and non-partner tax practitioners regarding their CPA firms’ ethical environment, as well as experiences with ethical dilemmas. Prior research emphasizes the importance of executive leadership in creating an ethical climate (e.g., Weaver et al., Acad Manage Rev 42(1):41–57, 1999; Trevino et al., Hum Relat 56(1):5–37, 2003; Schminke et al., Organ Dyn 36(2):171–186, 2007). Thus, it is important to consider whether firm partners and other employees have congruent perceptions and experiences. Based on the responses of 144 tax practitioners employed at CPA firms, the results show that tax partners rate the ethical environment of their firms as stronger than non-partner tax practitioners, particularly among those who describe a self-identified ethical dilemma. Tax partners also report having encountered more of the common examples of researcher-provided ethical dilemmas than non-partner tax practitioners, although non-partners perceive that certain ethical dilemmas occur at a higher rate than partners do. Overall, this study provides evidence of a disconnect between tax partners and non-partner tax practitioners with respect to perceptions of organizational ethics. Suggestions for potential remedies are offered.     

Evolutionary Processes,Moral Luck,and the Ethical Responsibilities of the Manager

The responsibilities of the manager have been examined through several lenses in the business ethics literature: Kantian (Bowie, 1999), contractarian (Donaldson and Dunfee, 1999), consequentialist (Friedman, 1970), and virtue ethics (Solomon,1992), to name just four. This paper explores what the ethical responsibilities of the manager would look like if viewed through an evolutionary lens. Discussion is focused on the impact of evolutionary thinking on the process of moral reasoning, rather than on the sources or the substance of morality. The conclusion is reached that the evolutionary lens supports the view that moral luck plays an important role in how we assign ethical responsibilities.     

Small-Business Owner-Managers’ Perceptions of Business Ethics and CSR-Related Concepts

Recent academic articles point to an increased vagueness and overlap in concepts related to business ethics and corporate responsibility. Further, the perception of these notions can differ in the small-business world from the original academic definitions. This article focuses on the cognition of small-business owner-managers. Given the impact of small-business owner–managers on their ventures, corporate responsibility and ethical issues can take a different route in SMEs. The small-business owner–manager is able to shape the corporate culture and to enact values other than profit. Adopting a cognitive perspective, we have identified how the small-business owner–manager makes sense of notions linked to corporate social responsibility (CSR) and business ethics. The concept of sensemaking has recently been applied to CSR (Basu and Pallazzo, 2008; Cramer et al., 2006). Applying a cognitive perspective to small-business owners may help in explaining specific phenomena found within small-business ownership. For this research, the Repertory Grid Technique (RGT) is used, a method that has not previously been widely applied in the business and society field.     

Conceptualising Corporate Social Responsibility: ‘Relational Governance’ Assessed,Augmented, and Adapted

Academic interest in corporate social responsibility (CSR) can be traced back to the 1930s. Since then an impressive body of empirical data and theory-building has been amassed, mainly located in the fields of management studies and business ethics. One of the most noteworthy recent conceptual contributions to the scholarship is Midttun’s (Corporate Governance 5(3):159–174, 2005) CSR-oriented embedded relational model of societal governance. It re-conceptualises the relationships between the state, business, and civil society. Other scholars (In Albareda et al. Corporate Governance 6(4):386–400, 2006; Business Ethics: A European Review 17(4):347–363, 2008; Lozano et al., Governments and Corporate Social Responsibility, 2008) have recently successfully used the model as the basis for their analytical framework for researching CSR activities in a large number of western European countries. While this research offers valuable insights into how CSR is operationalised, it also suffers from a number of significant limitations. To develop a stronger analytical framework with which to explore CSR, this article draws more deeply on political science literature concerned with governance and public policy analysis. This represents the main purpose of this article. In addition, this article also addresses a second and more modest aim: to reflect on the ways in which relational governance-inspired frameworks could be adapted and applied to politico-economic systems where state-industry-third sector relations differ from those found in North America and Western Europe. Both lines of argument are illustrated using vignettes from a case study of the Evenkia Hydro-Electric Station building project in the Russian Federation.     

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.     

Stakeholder Salience Revisited: Refining,Redefining, and Refueling an Underdeveloped Conceptual Tool

This article revisits and further develops Mitchell et al.’s (Acad Manag Rev 22(4):853–886, 1997) theory of stakeholder identification and salience. Stakeholder salience holds considerable unrealized potential for understanding how organizations may best manage multiple stakeholder relationships. While the salience framework has been cited numerous times, attempts to develop it further have been relatively limited. We begin by reviewing the key contributions of other researchers. We then identify and seek to resolve three residual weaknesses in Mitchell et al.’s (1997) framework, thereby strengthening its foundations for further development. We argue, first, that urgency is not relevant for identifying stakeholders; second, that it is primarily the moral legitimacy of the stakeholder’s claim that applies to stakeholder salience; and last, that the salience of stakeholders will vary as the degrees of the attributes vary. These insights inform revised definitions of stakeholder salience and legitimacy, and necessitate a new theoretical underpinning for the role of legitimacy. Finally, we present an extensive agenda for future research with the objective of refueling research in stakeholder salience.     

Corporate Governance and Institutional Transparency in Emerging Markets

This paper posits that differences in corporate governance structure partly result from differences in institutional arrangements linked to business systems. We developed a new international triad of business systems: the Anglo-American, the Communitarian and the Emerging system, building on the frameworks of Choi et al. (British Academy of Management (Kynoch Birmingham) 1996, Management International Review 39, 257–279, 1999). A common factor determining the success of a corporate governance structure is the extent to which it is transparent to market forces. Such transparency is more than pure financial transparency; as it can also be based on factors such as governmental, banking and other types of institutional transparency mechanism. There may also be a choice for firms to adopt voluntary corporate disclosure in situations where mandatory disclosure is not established. The Asian financial crisis of 1997–1999 and the more recent corporate governance scandals such as Enron, Andersen and Worldcom in the United States and Ahold and Parmalat in Europe show that corporate governance and business ethics issues exist throughout the world. As an illustration we focus on Asia’s emerging¹ markets, as, both in view of the pressure of globalization and taking into account the institutional arrangements peculiar to the emerging business system, these issues are important there. Particularly for those who have to find an accommodation between the corporate governance structures and disclosure standards of the Emerging system and those of the Anglo-American and Communitarian systems.     

Are Stock Options Grants to CEOs of Stagnant Firms Fair and Justified?

Prior research has examined several ethical questions related to executive compensation. The issues that have received most attention are whether executives’ pay is fair and justified by performance. Since more recent studies show that stock options grants constitute the single largest component in executive compensation, we examine the relations of these grants to economic determinants and corporate governance for firms in the stagnant stage of their lifecycle. We find that, on average, stock options grants comprise a significant portion of annual CEO compensation (26.4%) for stagnant firms. We also find that economic (corporate governance) factors explain less (or more) of the cross-sectional variation in stock options grants for stagnant firms than for growth firms. Furthermore, we document lower pay-performance sensitivity (i.e., weaker incentive alignment) and no improvement in future firm performance from past stock options grants to CEOs of stagnant firms. In particular, our study provides empirical evidence on some inefficiencies associated with stock options grants to CEOs of low potential (stagnant) firms, a long-standing concern of business ethics researchers (Moriarty, 2005; Nichols and Subramaniam, 2001; Perel, 2003). Our results also provide support for the corporate governance reforms discussed in Matsumura and Shin (2005), especially those proposed provisions that curtail the power of CEOs in the governance of firms.     

Enabling Guanxi Management in China: A Hierarchical Stakeholder Model of Effective Guanxi

Guanxi (literally interpersonal connections) is in essence a network of resource coalition-based stakeholders sharing resources for survival, and it plays a key role in achieving business success in China. However, the salience of guanxi stakeholders varies: not all guanxi relationships are necessary, and among the necessary guanxi participants, not all are equally important. A hierarchical stakeholder model of guanxi is developed drawing upon Mitchell et al.’s (1997) stakeholder salience theory and Anderson’s (1982) constituency theory. As an application of instrumental stakeholder theory, the model dimensionalizes the notion of stakeholder salience, and distinguishes between and among internal and external guanxi, core, major, and peripheral guanxi, and primary and secondary guanxi stakeholders. Guanxi management principles are developed based on a hierarchy of guanxi priorities and management specializations. The goal of this application of instrumental stakeholder theory is to construct, for Western business firms in China, a means to reliably identify guanxi partners by employing the principles of effective guanxi. These principles are described in the form of testable propositions that advance social scientific research in this area of international business ethics. Chenting Su is Associate Professor of Marketing at City University of Hong Kong. He is also Adjunct Professor at Wuhan University, P.R. China. He previously taught at the University of Victoria, Canada, He writes for Journal of Marketing Research, International Journal of Research in Marketing, Journal of Travel Research, Journal of Business Ethics, Psychology & Marketing, International Journal of Market Research, Service Marketing Quarterly, Research in Marketing, and others. He presently serves as Executive Director of China Marketing Association, P.R. China. Ronald K. Mitchell is Professor of Entrepreneurship and J. A. Bagley Regents Chair in Management in the Rawls College of Business at Texas Tech University. He publishes in the areas of new value creation and stakeholder theory. From 1999–2002 he held a joint appointment in strategy and public policy in the Guanghua School of Management at Peking University, Beijing, PRC. He has won numerous awards for research and program building; presently serves in the leadership of the AOM Entrepreneurship Division; and is Co-Editor for the Entrepreneurship Theory & Practice three-volume Special Issue on Entrepreneurial Cognition. Joe Sirgy is Professor of Marketing and Virginia Real Estate Research Fellow at Virginia Polytechnic Institute and State University (Virginia Tech). He has published extensively in the area of business ethics and quality-of-life (QOL) research in relation to theory, philosophy, measurement, business, and public policy. He co-founded the International Society for Quality-of-Life Studies (ISQOLS) in 1995 and is currently serving as its Executive Director. He received the Distinguished Fellow Award from both the Academy of Marketing Science and ISQOLS. In 2003, ISQOLS recognized him as the Distinguished QOL Researcher for research excellence and a record of lifetime achievement in QOL research. He also is the current JMM section editor on QOL issues and a co-editor of Applied Research in Quality of Life.     

Self-regulation,Corporate Social Responsibility,and the Business Case: Do they Work in Achieving Workplace Equality and Safety?

The political shift toward an economic liberalism in many developed market economies, emphasizing the importance of the marketplace rather than government intervention in the economy and society (Dorman, Systematic Occupational Health and Safety Management: Perspectives on an International Development, 2000; Tombs, Policy and Practice in Health and Safety 3(1):24–25, 2005; Walters, Policy and Practice in Health and Safety 03(2):3–19, 2005), featured a prominent discourse centered on the need for business flexibility and competitiveness in a global economy (Dorman, 2000; Tombs, 2005). Alongside these developments was an increasing pressure for corporate social responsibility (CSR). The business case for CSR – that corporations would benefit from voluntarily being socially responsible – was increasingly promoted by governments and corporations as part of the justification for self-regulation. The aim of the article is to examine more closely the proposition that self-regulation is effective, with particular reference to the business case for workplace equality and safety. Based on a comprehensive literature review and documentary analysis, it was found that current predominant management discourse and practice focusing on diversity and safety management systems (OHSMS) resonate well with a government and corporate preference for the business case and self-regulation. However, the centrality of individual rather than organizational factors in diversity and OHSMS means that systemic discrimination and inherent workplace hazards are downplayed, making it less likely that employers will initiate structural remedies needed for real change. Thus, reliance on the business case in the argument for self-regulation is problematic. In terms of government policy and management practice, the business case needs to be supplemented by strong, proactive legislation, and worker involvement.     

Ethical Outcomes and Business Ethics: Toward Improving Business Ethics Education

Unethical conduct has reached crisis proportions in business (Walker et al., Wall Str J East Edn, 258(37):A1–A10, 2011) and on today’s college campuses (Burke et al., CPA J, 77(5):58–65, 2007). Despite the evidence that suggests that more than half of business students admit to dishonest practices (McCabe et al. 2006), only about 5 % of business school deans surveyed believe that dishonesty is a problem at their schools (Brown et al., Coll Stud J A, 44(2):299–308, 2010). In addition, the AACSB which establishes standards for accredited business schools has resisted the urging of deans and business experts to require business schools to teach an ethics class, and fewer than one-third of businesses schools now teach a business ethics course at the graduate or undergraduate levels (Swanson and Fisher, Advancing Business Ethics Education, 2008). In this paper we briefly introduce the status of business ethics education and report the results of a survey of business students, deans of the top business schools, and business ethics subject matter experts about ten ethical outcomes. We then offer five specific recommendations to encourage business ethics faculty and decision makers to improve the teaching of business ethics.     

Linking Ethics and Risk Management in Taxation: Evidence from an Exploratory Study in Ireland and the UK

Ethical dilemmas involving tax issues were identified by members of the American Institute of Certified Public Accountants as posing the most difficult ethical problem for them (Finn et al., Journal of Business Ethics 7(8), pp. 607–609, 1988). The KPMG tax shelter fraud case proves that the tax profession has not gone untainted in the age of numerous accounting and corporate scandals, such as the Enron débacle (Sikka and Hampton, Accounting Forum 29(3), 325–343, 2005). High-profile scandals serve to highlight the problems caused by differences in ethical judgement among accountants and tax practitioners and the issue of ethics has been brought publicly to the forefront of the profession. Nevertheless, the nature and dimension of ethical issues in tax practice have been largely unexplored (Erard, Journal of Public Economics 52(2), 163–197, 1993; Marshall et al., Journal of Business Ethics 17(12), 1265–1279, 1998; Frecknall Hughes, Unpublished PhD Thesis, The University of Leeds, 2002). This research aims to contribute to the debate on ethics in tax practice by reporting interview data on tax practitioners’ perceptions of ethics in the jurisdictions of Ireland and the United Kingdom and exploring the link or equation of ethics with risk management.     

Ethical Mindsets: An Australian Study

This article investigates the development of research in the field of CSR in China. The justification for this is that (i) there is evidence that CSR is emerging as a management practice and management field internationally; (ii) there is a general interest in the distinctiveness or comparability of management and management research in Asia and China; (iii) there is evidence that CSR is growing as a management issue in China; and (iv) yet, the mainsprings of this are very different from those in Western business systems. This article adopts a methodology used in wider analysis of CSR in management research (Lockett et al., Journal of Management Studies 43, 2006, 115) to bring forth comparisons over the salience, focus and nature of CSR in China research. It finds a rapidly growing salience of CSR in China research, albeit from a low base. It parallels Lockett et al.’s (2006) finding of a ‘thickening’ of CSR research focus from early concerns with Ethical issues only to greater attention to Social, Environmental and Stakeholder concerns. It also generally parallels Lockett et al.’s (2006) findings on the balance of research methodologies deployed. The significance of the findings for future CSR research in China is considered both for the notion of a CSR field of research and for our understanding of the development of CSR in China.     

Google in China: A Manager-Friendly Heuristic Model for Resolving Cross-Cultural Ethical Conflicts

Management practitioners and scholars have worked diligently to identify methods for ethical decision making in international contexts. Theoretical frameworks such as Integrative Social Contracts Theory (Donaldson and Dunfee, 1994, Academy of Management Review 19, 252–284) and more recently the Global Business Citizenship Approach [Wood et al., 2006, Global Business Citizenship: A Transformative Framework for Ethics and Sustainable Capitalism. (M. E. Sharpe, Armonk, NY)] have produced innovations in practice. Despite these advances, many managers have difficulty implementing these theoretical concepts in daily practice. Using the example of recent decisions by internet service providers Google, Yahoo, and MSN regarding censorship requirements in China, we offer six heuristic questions to help managers to resolve cross-cultural ethical conflicts in which the firm’s way of doing business differs from the practice in the host country. Recognizing that companies can take different approaches to law and ethics (Paine, 1994, Harvard Business Review 72(2), 107–117), our aim is to provide a management decision process to deal with demands or opportunities for engaging in questionable business practices in a host country.     

International issues in entrepreneurship

In recent decades, there has been a substantial increase in private and public investment in entrepreneurship. This trend has important managerial, financial, and public policy implications. There is also considerable interest in understanding the financial practices of early stage companies. The recent global resurgence of leveraged buyouts and the concomitant rise of “private equity” markets have also heightened interest in entrepreneurship (e.g., Cumming et al. 2007). In this essay, we provide focused summaries of the papers in this special issue, which address these issues.      

Use of a “Coping-Modeling,Problem-Solving” Program in Business Ethics Education

During the last decade, scholars have identified a number of factors that pose significant challenges to effective business ethics education. This article offers a “coping-modeling, problem-solving” (CMPS) approach (Cunningham, 2006) as one option for addressing these concerns. A rationale supporting the use of the CMPS framework for courses on ethical decision-making in business is provided, following which the implementation processes for this program are described. Evaluative data collected from N = 101 undergraduate business students enrolled in a third year required course on ethical decision-making in business indicated that the CMPS model is a promising alternative for both overcoming teaching challenges and for facilitating skill acquisition in the areas of ethical recognition, judgment, and action. Limitations and directions for future research are discussed.     

How the Perceptions of Five Dimensions of Corporate Citizenship and Their Inter-Inconsistencies Predict Affective Commitment

Through a convenience sample of 260 employees, the study shows how employees’ perceptions about corporate citizenship (CC) predict their affective commitment. The study was carried out in Portugal, a high in-group and low societal collectivistic culture. Maignan et al.’s (1999, Journal of the Academy of Marketing Science 27(4), 455–469) construct, including economic, legal, ethical, and discretionary responsibilities was used. The main findings are: (a) contrary to what has been presumed in the literature, the discretionary dimension includes two factors: CC toward employees and toward community; (b) perceptions of CC explain 35% of unique variance of affective commitment; (c) the best predictors are perceptions of economic and legal CC and, mainly, perceptions of discretionary CC toward employees; (d) the perceptions of discretionary CC toward employees are significantly better predictors of affective commitment than are perceptions of economic, ethical, and discretionary CC toward the community; (e) perceived inconsistency of the several CC dimensions is detrimental to employees’ affective commitment. The study questions the four-dimensional model of the CC construct as operationalized by Maignan et al., suggests that culture should be included as a moderating variable in future research, and stresses that affective commitment may decrease when employees perceive that their organizations act upon the several areas of CC inconsistently.     

Students' and Faculty Members' Perceptions of the Importance of Business Ethics and Accounting Ethics Education: Is There an Expectations Gap?

Despite a wealth of prior research (e.g., Wynd and Mager, 1989; Weber, 1990; Harris, 1991; Harris and Guffey, 1991; McCabe et al., 1991; Murphy and Boatright, 1994; Gautschi and Jones, 1998), little consensus has arisen about the goals and effectiveness of business ethics education. Additionally, accounting academics have recently been questioned as to their commitment to accounting ethics education (Gunz and McCutcheon, 1998). The current study examines whether accounting students' perceptions of business ethics and the goals of accounting ethics education are fundamentally different from the perceptions of accounting faculty members. The study uses a survey instrument to elicit student and faculty responses to various questions concerning the importance of business ethics and accounting ethics education. Statistical analyses indicate that students consider both business ethics and the goals of accounting ethics education to be more important than faculty members. Implications of these results for accounting faculty members interested in accounting ethics education are discussed.