Ethics And Executives: A Cross-Cultural Comparison Of Japan, Taiwan, And The United States

Globalization has facilitated the interaction of people from diverse cultures. As more firms now operate internationally, ethical issues tend to increase, and thus managers nowadays face more complicated situations that challenge their ability to reason morally. In the previous studies, cultural difference is often used to explain the ethical conflicts between home and host country. This research investigates the moral reasoning abilities of top-level business managers of three cultural groups— the U.S. and Japanese expatriate managers in Taiwan, and local Taiwanese managers. Kohlberg’s (1969, 1976, 1984b) theory of cognitive moral development (CMD) and Rest’s Defining Issues Test Version Two (DIT-2) were used to access the level of ethical reasoning of these business practitioners. Hofstede’s (2001) theory of cultural dimensions was used to describe differences among these managers. A DIT-2 survey packet was sent to 750 managerial and executive level employees at a variety of organizations in Taiwan. Results indicate that personal characteristics (gender, age, education level) and organizational factors (ethics code, ethical training) may not significantly affect one’s ethical perception. Conversely, cultural difference may be diminished and possible ethical convergence may appear through acculturation to local business environment. INTRODUCTION: CULTURE, VALUES, BELIEFS, AND ATTITUDES anagers often face situations that challenge their ability to reason morally (Weber & Wasieleski, 2001). An earlier study conducted by Carroll (1975) found between 65 percent and 84 percent of all managers face ethical dilemmas at least once in their career. Other researchers have confirmed that managers at all levels often feel under pressure to compromise their personal principles for their organizations (Badaracco & Webb, 1995; Harris, 1990; Lincoln, Pressley, & Little, 1982; Posner & Schmidt, 1984, 1987). With the rapid integration of the world economy, many business organizations now operate in a “borderless world” (Robbins, 1994), and ethical issues tend to increase possibly due to cultural differences. As a result, global managers often must navigate the perplexing “gray zone” that arises when two cultures and two sets of ethics meet (Donalson & Dunfee, 1999). The purpose of this research is to investigate empirically whether there are differences among expatriate and local managers in Taiwan. The concept of culture may generally be defined as the shared beliefs and symbols of a group of individuals (McDonald, 2000). Geertz (1973) defined culture as “the fabric of meaning in terms of which human beings interpret their experiences and guide their actions” (p. 145). Swidler (2001) contends that individuals normally rely on cultural values as guides to action to the extent that values provide rationales for predetermined ends. Values are acquired through lifestyle altering experiences, such as childhood and education (Hofstede, 1991; Karahanna, Evaristo, & Srite, 2005; Velasquez, 1998). It is believed that individuals learn the knowledge, attitudes, and behavior from their ancestors. Such social learning provides general norms and values, and thus forms the basis of culture (Rogers, 1988). According to Schwartz and Bilsky (1987), values are concepts or beliefs about desirable end states or behaviors that (a) transcend specific situations, (b) guide selection or evaluation of behavior or events, and (c) M International Business & Economics Research Journal – July 2006 Volume 5, Number 7 10 are ordered by relative importance. Keeling (1981) exemplified values as an individual’s “theory of what his fellows know, believe and mean, his theory of the code being followed, the game being played, in the society into which he was born” (p. 58). The widely accepted shared customs or norms in society provide a mechanism that Hofstede (1997) called as “software of the mind” or “mental programs,” which shapes the values that individuals acquire in society and hold onto steadfastly. Though values may change in response to major changes in technology, economy, and politics, they are fairly stable (Schwartz, 1992). According to Rokeach (1973), a value is an enduring belief that a specific mode of conduct is personally or socially preferable to an opposite mode of conduct. A value system is an enduring organization of beliefs concerning preferable modes of conduct or an end-state of existence along a continuum of relative importance (Rokeach, 1973). The value system has a strong effect on what is perceived as right or wrong, acceptable or unacceptable, and ethical or unethical (Lu, Rose, & Blodgett, 1999). Thus, a person raised in a particular culture may acquire and cultivate certain attitudes, without even questioning the validity of these attitudes (Christie, Kwon, Stoeberl, & Baumhart, 2003), though individuals may differ in their value system and in the relative stability of these beliefs (Karahanna et al., 2005). National culture is “a collective programming of the mind which distinguishes one group from another” (Hofstede, 1991, p. 260). Hofstede (1984) argued that “despite the regional differences within a particular nation, we can still distinguish some ways of thinking that most inhabitants share and that we can consider part of their national culture or national character” (p. 77). Because the steady and long-lasting characteristic of culture, therefore, “national cultures are extremely stable over time” (Hofstede, 2001, p. 34). Culture has been recognized as one of the most influential variables influencing one’s ethical decision making (Singhapakdi, Vitell, & Leelakulthanit, 1994). A person raised in a particular culture may acquire and cultivate certain attitudes, without even questioning the validity of these attitudes (Christie et al., 2003). Culture seems to be closely connected with one’s perception about right or wrong, acceptable or unacceptable, and ethical or unethical (Lu et al., 1999). Many cross-cultural studies have shown that national culture has an influence on one’s ethical attitude and behavior (Allmon, Chen, Pritchett, & Forrest, 1997; Grunbaum, 1997; Honeycutt, Siguaw, & Hunt, 1995; Hood & Logsdon, 2002; Jackson, 2001; Okleshen & Hoyt, 1996; Singhapakdi, Rallapalli, Rao, & Vitell, 1995). Cultural and Business between East and West East and West cultures differ tremendously in many ways, reflecting in attitudes, values, and norms of the society where they have been developed or will be limited in their applicability elsewhere (Michailove, 2000). One significant difference between Eastern and Western culture in the workplace is individualism and collectivism (Hofstede, 2001). Individualists (West) tend to decide and act on the basis of whether an action leads to personal gain whereas collectivists (East) are apt to consider their actions from the group viewpoint. In addition, individualists value independence and self-sufficiency. Conversely, collectivists value social relationships and sharing of material as a means of maintaining a social network of reciprocation (Hutchings & Murray, 2003). Another significant difference between Eastern and Western culture, according to Hofstede and Bond (1988), is Confucian Dynamism. Hofstede and Bond identified the Confucian dynamism dimension following a survey of Chinese students. This dimension measures the extent to which a culture emphasizes values, which are oriented towards the future (long-term orientation) in contrast to those, which are oriented towards the past and the present (short-term orientation). The long-term orientation contains values indicating a dynamic, future-oriented mentality such as hard work ethic, persistence, respect for status, thrift, concept of time, and having a sense of shame. Countries such as Japan, Hong Kong, Taiwan, and South Korea that have high Confucian Dynamism scores tend to associate more with these values. On the other hand, the short-term orientation contains values representing a static mentality focused on the past and present, such as reciprocation, face, and tradition. Examples of nations with low on the Confucian Dynamism include West Africa, Canada, and Pakistan (Hofstede & Bond, 1988). The issue of saving face is an example to distinguish the East culture from the West. According to Hofstede and Bond (1988), people in nations with high Confucian Dynamism scores such as Japan, Hong Kong, Taiwan, and International Business & Economics Research Journal – July 2006 Volume 5, Number 7 11 Thailand tend to emphasize personal steadiness and stability, saving face, respect for tradition, and reciprocation of greetings, favors, and gifts. Among these cultural characteristics, face issue is extremely important to most Asian people. To those people, business or non-business, losing face is equivalent to shame, and protecting one’s face is to avoid embarrassment and conflicts. On the contrary, in Western cultures, shame may be the least socially acceptable emotion, as it is believed to be a mark of incompetent social members (Goffman, 1967). Researchers also found that shame is more “deeply felt” in Japan than in America (Benedict, 1989, p. 224; Edelmann, 1990), and Chinese are more concerned and aware of the meaning of shame than Americans and Italians (Rosch, 1978; Shaver, Wu, & Schwartz, 1992). Both Japanese and Taiwanese business people tend to attach great importance to maintaining group harmony, that is, to save everyone’ face. Ford and Honeycutt (1992) compare the business practices between the U.S. and Japan using national culture as a basis. They found that Japanese are underlining on process (appearance) rather than the result (bottom line), more concerned for the protection and perseverance of the society as a whole (collectivism), more hierarchical in societal structure, and devoted to long-term survival that may seem predatory to other nations. In the cross-cultural studies, Vaill (1996) stated that “a cultural key is an