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1. Introduction
1.1Research Background
1.1.1 Business Ethics as Foundation of Responsible Corporations.
Joyner et al. (2002) define business ethics as a doctrine that concentrates on moral standards as they are applied to business policies, institutions, and behaviors (p.114). Business ethics is also a standard of behavioral conduct providing guidance for employees to deal with ethical questions that may be beyond their professional knowledge. Since the United Nations issued its Global Compact and aroused a series of discussions about ethical business, many
corporations have internally promoted business ethics by establishing a code of conduct for the purposes of either cultivating employees’ skills to make critical judgments or
demonstrating to society their rigid ethical values.
However, confusion may be caused by the relationship between business ethics and
Corporate Social Responsibility (CSR). That is, although business ethics and CSR overlap in the formation of ethical businesses, high CSR performance often depends on factors such as managers’ discretion, monetary capability (e.g. philanthropic campaign, investment in public service), or different foci according to a company’s recognition. More specifically, the definition of high CSR performance is still ambiguous. Various international institutes have envisaged CSR as a corporate response to pressure from stakeholders1, responsibility for the society and environment2, or even sustainable development3; there still remains a lack in
1 The Forum Empresa Network, 2010 ―What is CSR?‖
http://www.empresa.org/sitio-2009/index.php?option=com_content&view=article&id=175&Itemid=313 (Date visited: February 9, 2010 )
2 The Confederation of British Industry's, 2010. “What is corporate social responsibility”
http://www.cbi.org.uk/ndbs/content.nsf/802737AED3E3420580256706005390AE/9D502144AC9F644380256F 58005BD16C (Date visited: February 9, 2010)
The Committee of Economic Development ―Think Shift., evolution of CSR”
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international agreement on how standards should be imposed on corporations since CSR policies often vary due to the cultural differences (Maignan & Ralston, 2002; Preusse, 2008) .
On the other hand, internally, business ethics are considered clear conduct standards which exist within different business sectors, such as, finance, marketing and manufacturing, etc.
Business ethics represent the responsibility that employees have to work in favor of their corporations. Meanwhile, as compared to CSR, business ethics is an external responsibility toward the public uncompromised by other corporate considerations.
For instance, the Bhopal disaster in India and the scandals of the American company Enron and the French bank Société Générale are all reminders that the damage caused by
employees’ unethical decisions can be tremendously harmful to societies regardless of corporations’ various campaigns to highlight their socially responsible personalities.
Therefore, although business ethics and CSR both contain a sense of responsible business behavior, in this article the value of business ethics is stressed as a fundamental and
embedded impetus for employees to forge a genuinely ―socially responsible corporation‖. Put simply, a company with high performance of business ethics is more likely to produce ethical behaviors.
Studying a fivefold increase in the number of stand-alone ethics courses of global top MBA programs4 from 1988 to 2007, Christensen et al (2007) also claim the importance of
cultivating individuals’ values with respect to business ethics, which are not compelled by outside stakeholders nor imposed ethical conducts, but persistently by one’s values and
http://thinkingshift.wordpress.com/2007/03/27/the-evolution-of-csr/ (Date visited: February 9, 2010)
3 The World Bank, 2007. “Sustainable development-DevComm CSR program”
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTDEVCOMMENG/EXTDEVCOMSUSDEVT/0,,content.
(date visited : February 9, 2010)
4 As rated by the Financial Times in their 2006 Global MBA rankings
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willing actions (Valentine & Fleischman, 2008; Collier & Esteban, 2007).
1.2 Research Motivations and Problems
If business ethics are expected to universally exist in corporations, then how do they interact with different cultural backgrounds and individual values? Do certain cultures or personal values facilitate ethical business values while others do quite the opposite? To answer these questions much past research has employed Hofstede’s cultural model to explain
higher/lower ethical standards. On the other hand, others have taken a more individual angle considering differences in social status, education, and religion. What is missing in this area of research is a study considering both levels at the same time. This negligence has caused an array of contradictory results in the study of cross-cultural business ethics research. The two common contradictions are presented below.
1.2.1 First Research Problem: Conflicting Results of Business Ethics Studies
Employing Hofstede’s Cultural Model.
Much research utilizes Hofstede’s cultural tendencies model to explain different reactions to ethical questions between Western and Chinese respondents. In spite of various sampling from different nations, an evident contradiction can be seen among the results of various studies. For example, Tsui and Windsor (2001) concluded participants from Australia have higher awareness and perceive greater importance of business ethics than their Chinese counterparts. Dunn and Shome (2009) found that Canadian participants find questionable corporate conduct less acceptable than Chinese participants. In contrast, however, Phau and Kea (2007) report that Chinese students (i.e. Hong Kong and Singapore) are more supportive of business ethics than their Australian counterparts. The result of research by Whitcomb et al.
(1998) is that Chinese students demonstrate ethical values and make responsible business
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decisions similar to their American fellows despite differences in their reasoning5.
Furthermore, mixed research results offered by McGee et al. (2008)6 are a further reminder that the disagreement of ethical values may be attributed to the variance of chosen subjects.
Additionally, other researcher, such as, Baker & Viet, (1998) and Ahmed et al. (2003) also propose that the relationship between cultural traits and ethical attitudes should be examined in the context of regulatory and historical backgrounds. Obviously, using Hofstede’s cultural model has been a convenient research framework; but it is not sufficient for making
generalizations about the tie between ethical values and culture.
1.2.2 Second Research Problem: Negligence of Overlapping Cultural and
Individual Variables
In addition to the inconsistent results of culture-based business ethics research, a second contradiction can be found when one further subdivides subjects in either individualistic or collectivistic culture. For instance, although many researchers have explained why some Chinese cultural characteristics, specifically unique interpersonal networks and
favor-returning traditions (guanxi 關係; ren-qing 人情), may hinder Chinese acceptance of the idea of ethical business (Huang, 2000, Ho, 1998, Ang & Leong, 2000); others have identified variables influencing the practice of high ethical standards for individuals in the same culture. High ethical standards have been linked to individuals who earn relatively higher incomes (Lam &Hung 2005), regularly practice religion (Lee et al., 2003; Phau & Kea, ibid), occupy managerial and NPO-related professions (Ebrahimi et al., 2005; Siu & Lam, 2009), and pursue certain collegiate majors (Du & Tang, 2005). Therefore, there is a need to reexamine the relationship between business ethics and cultures while taking individual differences into consideration.
5 In Whitcomb et al. (1998)’s research two exceptions are attributed to specific cultural and political factors.
6 McGee et al. (2008) finds that both U.S. and Hong Kong participants significantly oppose tax evasion, the average score in the U.S group is rather higher because the large score variance in the Hong Kong group.
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1.3 Research Approach and Questions
This research selects business students from the USA and the ROC (herein after: Taiwan) as subjects representing two different sets of cultural values to conduct a comparison study of ethical dilemmas. Acknowledging that cultures can be further subdivided into many regions and the limitation of this research, Taiwanese students were chosen as research subjects due to the consideration that Taiwan receives less research attention compared to other Chinese culture holders. Nonetheless, Taiwan’s relatively early economic and democratic
development is a distinct environment from Mainland China and could possibly nourish higher expectations of business ethics.
Chapter Three will introduce in more detail the methodology employed in this study. Using a survey questionnaire, the research firstly compared the ethical choices of American and Taiwanese business students, including, their reasoning in a way that many past researchers have adopted when solely culture variables are considered. During the second phase, a third group of business students was recruited. This group is comprised of Taiwanese students who have completed at least one collegiate course in business ethics. Their responses were
compared to the previous group of Taiwanese students (those who have not participated in any business ethics training). The goal of this step is to investigate differences in responses to business ethics questions by Taiwanese respondents when the cultural variable is controlled and the variable of business ethics education is included. The results will help not only to ascertain the impact of business ethics courses, but also the need to highlight individual differences in ethical decision-making.
This research project is concerned with three central research questions:
(1) Do Taiwanese respondents respond to ethical dilemmas differently compared to their American counterparts when both have participated in ethics training?
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(2) Do Taiwanese respondents, who have completed the ethics training respond to ethical dilemmas differently compared to their Taiwanese counterparts who have not participated in ethics training?
(3) Is there different reasoning between the three groups’ responses to different ethical dilemmas? How are the responses similar or different?
1.4 Research Contribution
By responding to these three questions, this research hopes to provide a case for more refined and careful cross-cultural research on business ethics. Taking Taiwanese business students who haven’t participated in ethics training as a control group, the salience of two variables:
culture and business ethics education will be compared. It is beyond doubt that Hofstede’s cultural model is influential in many fields of social sciences; however, with regard to frequent confusion of cross-cultural business ethics research, the validity of applying Hofstede’s model to explain individuals’ ethical decisions should be viewed through the lenses of individuals’ value differences.
The results of this research will improve future cross-cultural business ethics research by encouraging the consideration of potentially influential individual factors. Finally, this
research will be valuable for practitioners of business ethics working both in education and in international corporations.