Premium Essay

Cultural Dimensions of Business Ethics

In:

Submitted By tristen001
Words 7933
Pages 32
Journal of Business Ethics (2007) 75:273–284 DOI 10.1007/s10551-006-9252-9

Ó Springer 2007

Cultural Values and International Differences Bert Scholtens Lammertjan Dam in Business Ethics

ABSTRACT. 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. KEYWORDS: business ethics, codes of ethics, cultural values JEL: G300, L210, M140

Introduction Are there differences with respect to the ethical policies of firms that are headquartered in different countries? And are there differences among firms that belong to different industries? Chryssides and
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

Similar Documents

Premium Essay

Comparing Ethical Attitudes Across Cultures

...culture is the ethics found in different countries. Although, many different countries share views on the ethics of business, there still are many significant differences in opinion found among different countries' opinions regarding business ethics. There were many tests and samples done in South Africa, Turkey, Israel, USA, Western Australia that were compared to more recent studies done in Jamaica, and the West Indies. Researchers compared the countries' cultures using Hofstede's four dimensions of National culture: power distance, collectivist vs individualist, femininity vs masculinity, and uncertain avoidance. The researchers then gathered employee attitudes towards business ethics from a sample of people in each country. Some examples of things on the questionnaire are “The only moral of business is making money” or “I view sick days as vacation days that I deserve” etc. The results suggested that the people in Jamaica and West Indies had similar views on business ethics to those living in Western Australia. Taking it a step further, they found that both Australia and Jamaica scored moderately on power distance and on masculine culture. USA culture received a score similar to the Australian culture on all four of Hofstede's dimensions, yet Jamaica's attitudes of business ethics were extremely different towards the attitudes of those in USA. This shows that Hofstede's dimensions of national culture doesn't include the attitudes towards business ethics. The Turkish...

Words: 615 - Pages: 3

Premium Essay

Mgmt2002 Assignment

...Managing Business Communications MGMT2002 Managing Business Communications Tutor: Han Ayshan Tutorial Time: Thursday 3pm-4pm Completion Date: 25th September 2014 Word Count: 2420 Tutor: Han Ayshan Tutorial Time: Thursday 3pm-4pm Completion Date: 25th September 2014 Word Count: 2420 EXECUTIVE SUMMARY The purpose of this report is to critically analyse the Southern Cross Health Systems case from a communication perspective, by identifying and discussing the relevant communication and ethical issues in the company. The results have shown that various communication flaws are present between the company’s three main employees: Bieber, Harris and Hirokawa. Firstly, research has shown that effective communication can be achieved through the appropriate choice of communication channels (Lengel 1983). However, Bieber and Harris are utilising the inappropriate channels, such as E-mails and SMS for unsuitable occasions, thus communication is undermined. Next, the report discusses the significance of nonverbal communication. Bieber and Harris have displayed various nonverbal cues, either consciously or unconsciously, to suggest their authority towards their colleagues. Furthermore, the report examines the problems during intercultural communication, with a particular focus on Hirokawa and Harris. Hirokawa is from a Japanese background, whilst Harris is from an African American background; therefore they belong to the different cultural dimensions of collectivism...

Words: 2887 - Pages: 12

Premium Essay

International Business Cultural Analysis Preliminary Essay

...A culture can be considered a driving force behind human actions in any country of the world; it plays part in politics, economics, progression, and every aspect of a community. It is transmitted to generations and generations thereafter. I chose Japan because they appear distinctly different in business interactions than the United States, and as an accounting major, I have an interest in how various cultural traits may or may not determine a way a country conducts business in the global community. My research will include analysis of various dimensions of culture to include: communication, religion, ethics, values and attitudes, manners, customs, structures and organizations within Japan’s culture, and education. The analysis should reveal how the elements and dimensions of culture influence businesses conducted with locals of the region; how do the elements and dimensions as well as the local business interaction compare to the United States’ culture and local businesses; and, implications for United States’ businesses who wish to conduct business in Japan. Although the fore mentioned are the basis of the cultural analysis, I hope to unfold how past/ current political constraints limits Japan’s maturity within the global community, for example, the limitations imposed by the signing of Treaty of Mutual Cooperation and Security. Over fifty years ago, Japan and the United States signed the “Treaty of Mutual Cooperation and Security,” to assist in the containment of Communism...

Words: 909 - Pages: 4

Premium Essay

Saudi Arabia

...Business Cultural Analysis Outline Saudi Arabia 1. What are the major elements and dimensions of culture in this region? 1.1. Introduction 1.1.1. Brief history of Saudi Arabia 1.2. Communication 1.2.1. Verbal and Nonverbal 1.2.2. High Context vs. Low Context 1.3. Languages 1.3.1. Arabic is the official language 1.3.2. English is widely spoken 1.3.3. Other languages spoken by non-Saudi population 1.3.3.1. Urdu 1.3.3.2. Farsi 1.3.3.3. Turkish 1.4. Religion 1.4.1. Islam 1.4.2. Christianity 1.5. Ethics 1.5.1. Business Ethics in Saudi Arabia 1.5.2. Issue of Corruption 1.6. Values and Attitudes 1.6.1. Concept of time/time management 1.6.2. Dealing with change 1.6.3. The role of gender 1.6.4. Social Status 1.7. Business Manners and Customs in Saudi Arabia 1.7.1. Business etiquette 1.7.1.1. Relationships and Communication 1.7.1.2. Business Meeting Etiquette 1.7.1.3. Business Negotiating 1.7.1.4. Dress Etiquette 1.7.1.5. Business Cards 1.7.2. Customs 1.8. Social Structures and Organizations 1.8.1. Social groups 1.9. Education 1.10. Hofstede's Dimensions of Culture 1.10.1. Individualism in Saudi Arabia 1.10.2. Power Distance 1.10.3. Masculinity 1.10.4. Uncertainty Avoidance 2. How are these elements and dimensions integrated by locals conducting business in the nation? 2.1. Integration of communication in local business 2.2. Integration of language in local business 2.3. Integration of religion in local business 2.4. Integration of ethics in local business 2.5. Integration of values...

Words: 432 - Pages: 2

Free Essay

Global Business Cultural Analysis of South Korea

...Global Business Cultural Analysis of South Korea John Smith University of Rochester BUS 800 – INTERNATIONAL BUSINESS Dr. Peterson March 6, 2015   Abstract Today, the United States conducts a substantial amount of business with South Korea. It is important that American managers, entrepreneurs, and businessmen understand the South Korean social, cultural, and religious dimensions of the nation. The South Korean culture and customs are uniquely different from those of the United States. The culture and customs of the United States are based on European traditions and religious Christian beliefs. The culture and customs of South Korea are based on Confucianism’s way of life, Buddhism’s individual salvation, and since the 1950’s Christianity’s redemption of the soul. American businesses that incorporate South Korean culture into American business practices will develop long lasting business relationships with their South Korean counterparts. American businessmen working in multinational corporations have adjusted well the collectivist culture of South Korea. Multinational enterprises considering cross border business in South Korea can feel safe investing in South Korea. Keywords: South Korea, United States, cultural dimensions, multinational business, Hofstede.   Introduction South Korea is one of the United States most important strategic and economic partners in Asia. Members of Congress tend to be interested in South Korea for political purposes. South...

Words: 7498 - Pages: 30

Premium Essay

Marketing

...BHP Billiton Leeora D. Black Australian Centre for Corporate Social Responsibility; and Faculty of Business and Economics, Monash University Corporate social responsiveness is what companies do in order to be socially responsible. This paper presents a case study of social responsiveness at the global mining firm BHP Billiton to illustrate a model of social responsiveness capabilities. Until now, corporate social responsiveness has described processes of environmental scanning, issues management and stakeholder management. The model presented here suggests that social responsiveness is rather understood as a cluster of five organisation-level capabilities that span an organisation’s culture and structure. The case study explores evidence for social responsiveness capabilities at BHP Billiton and considers management implications for the development of management abilities for social responsibility. Director of the Australian Centre for Corporate Social Responsibility, Dr Leeora Black is a consultant, researcher and educator focused on integrating social responsibility into business operations and strategies and measuring corporate social responsibility. Her work analyses complex CSR issues and problems and builds organisational CSR capabilities. She works with global firms, government businesses and social-sector organisations on integration of CSR into business operations and strategies, CSR measurement, stakeholder engagement and reporting. JCC 23 Autumn...

Words: 6245 - Pages: 25

Free Essay

Geert Hofstede

...Article  Review   What  Goals  Do  Business  Leaders  Pursue?  A  Study  in  Fifteen  Countries   By  Geert  Hofstede     Geert  Hofstede  discusses  in  the  article  the  causes  of  the  failure  of  newly   formed  joint  ventrues.  He  says  that  when  the  goals  of  the  leaders  are  not  clear  to   both  parties  the  new  venture  is  alost  certain  to  get  into  trouble.  He  says  that   “such  fundamental  goal  disparitires  oftern  go  unrecognized  or  remain  taboo.”1  It   is  for  this  very  reason  that  joint  ventures  often  fail.    Hofstede’s  five  levels  of   cultural  dimensions  shed  light  on  the  differences  of  foreign  investment.     Semenov  analyzed  the  differences  in  economic  governance  among  18   developed  countries  Western  countries  and  proved  direct  links  between  systems   of  governance  and  Hofstede’s  original  four  cultures  value  dimensions  of  Power   Distance,  Uncertainty  Avoidance,  Individualism  and  Masculinity.       Kogut  and  Singh  in  the  article  have  found ...

Words: 897 - Pages: 4

Free Essay

Canada's Cultural

...Canada Global Cultural José A. Rivera Osorio GRST 500 Research Paper Prof. Jared Mink April 8, 2014 Abstract Canada is the second largest country in the globe with population of over 32 million, the largest and most important industry Canada has is oil and logging. For businesses who want to expand towards Canada they are eight dimensions of business culture that will be detail in this analysis, and how NAFTA was formed. The agreements between U.S. and Canada with provisions that will benefit both countries, Canada also has bilateral agreements in trade with European Union and Asia, however we will only analyze U.S.-Canada cultures in business. Canada’s History The first inhabitants of Canada were native’s Indian people, primarily the Inuit “Eskimos. The Norse explorer Leif Eriksson reaches the shores of Canada at Nova Scotia in the year 1000, but the country actually begun 1497 with the introduction of the white man, John Cabot Italian at the service of King Henry VII of England reaches Nova Scotia. Canada was lost to the English in the year 1534 by Jacques Cartier which was the settlement of New France 1604, but was then was Nova Scotia in 1608. Quebec was founded, France’s colonization were not successful and ended at the end of 17th century. They penetrated beyond the Great Lakes to the western prairies and south along the Mississippi to the Gulf of Mexico. The English Hudson’s Bay Company in 1670 establishes themselves because of the abundance of fisheries...

Words: 3276 - Pages: 14

Premium Essay

Managing Justly Across Cultures

...www.sciedu.ca/jms Journal of Management and Strategy Vol. 1, No. 1; December 2010 Managing Justly Across Cultures: The Problem of Fairness in International Business Rolf D. Dixon (Corresponding author) Weber State University 3802 University Circle, Ogden, Utah 84408, USA Tel: +1-(801)-626-7542 E-mail: rddixon@weber.edu Cam Caldwell University of Georgia G-2 Brooks Hall, Athens, GA 30602-6256, USA Tel: +1-(318)-446-0129 E-mail: camcaldw@uga.edu Apichai Chatchutimakorn College of Business, McNeese State University Kayla Gradney College of Business, McNeese State University Kochakan Rattanametangkul McNeese State University katekochakan@yahoo.com Received: September 14, 2010 Abstract The aim of this paper is to examine the relationships between organizational justice and the factors that characterize cultural differences. This paper begins by briefly summarizing the nature of organizational justice and by identifying how justice is perceived. Hofstede’s five factors of cultural dimension model, which he developed in his seminal 1980 research on national cultures, is utilized to present characteristics of cultural differences. Ten propositions are then offered which relate to organizational justice and differences in cultural perspectives. These propositions suggest specific management approaches that organizational leaders can adopt to be more effective in dealing with employees from respective cultures. This paper concludes by identifying the importance of understanding...

Words: 7281 - Pages: 30

Premium Essay

Global Cultural Analysis-Japan

...of Finance and International Business at James Madison University. He is an author of several business articles and has been featured in many business journals. His main purpose of this article is to get the reader to understand the differences between the cultures, decision-making, and employment strategies of Japan and the United States. This topic is suitable for my research paper because it helps me answer the first research question, which deals with the elements and dimensions of culture of Japan. Fukuda, J. (1992). The internationalization of Japanese business: different approaches, similar problems. The International Executive , 34 (1), 27-41. John Fukuda is a professor in the department of the International Business at the Chinese University of Hong Kong. He has written peer reviewed articles for the International Executive. His main purpose for this article is to get the reader to understand the Japanese's approach to business versus the other countries. This article is suitable for my research paper because it helps me to answer question numbers 1 and 2 of the Business cultural analysis. Fukukawa, K., & Teramoto, Y. (2008). Understanding Japanese CSR: the reflections of managers in the field of global operations. Journal of Business Ethics , 85 (1), 133-146. Kyoko Fukuawa is a Senior lecturer in marketing at Bradford University School of Management. Her publications appear in the Journal of Business Ethics and Journal of Corporate Citizenship...

Words: 1838 - Pages: 8

Premium Essay

Global Business Analysis of Uae

...The major elements and dimensions of culture in the UAE The elements and dimensions of culture include communication (language), religion, ethics, values and attitudes, manners, customs, and social structures and organizations. The understanding of these principles, relative to culture, is imperative to the success of international businesses, marketing scholars, and practitioners alike. Within this insight lies approved goals and objectives to meet the needs of merchants and consumers internationally. Social Structure of the UAE The UAE is one of six members belonging to the Gulf Corporate Council (GCC). It is also a member of the United Nations (UN), International Monetary Fund (IMF), Oil Product Exporting Countries (OPEC) and the World Trade Organization (WTO) (Rees, C. J., Mamman, A., & Braik, A., 2007). Compared to other nations in the Middle East, the UAE is regarded as the most politically stable (Akoum, 2008). After declaring its independence from British parliament in 1971, the UAE formed a federation of seven independent emirates (Akoum, 2008). Those emirates are: Abu Dhabi, which is the largest city and capital of the UAE, Dubai, Sharjah, Ajman, Umm Al Qaiwain, Ras Al Khaimah, and Fujairah. Governed by Hereditary rule, each emirate consists of a Sheikh from the supreme council of rulers who work alongside a Crown Prince and a deputy ruler (Rees, et. al., 2007). These rulers control general policy and federal laws. Values and attitudes In keeping with Islamic...

Words: 4265 - Pages: 18

Premium Essay

Ethics

...Running Head: Business Ethics Main Title: The Cultural Dimensions of Business Ethic Monroe College Contents Rationale 3 Introduction 3 Some Factors which may Influence Business Ethics 3 How Peoples Action can Affect Business Ethics 4 How Structure Affects Business ethics 4 How Culture, Norms and Laws Affect Business Ethics 5 Unethical Practices and How They May Affect a Business 5 Recommendations 7 Conclusion 8 Sources 10 Rationale The purpose of this paper is to discuss and address cultural aspects of business ethics. It will also examine how these cultural aspects may affect businesses and shape societies view on these organizations. Recommendations will also be made for example, on the aspect of setting companies policy while taking morals and ethical matters into consideration. Introduction Ethics is a huge area of interest, study and debate. According to Dictionary.com, Ethics is a body of moral principles or values governing or distinctive of a particular culture or group. Business ethics can be described as the behavior that a business adheres to in its daily interactions with society .The ethical standards of a business can be examined by looking into the firm’s human rights policy, its regulations of bribery and corruption, and its execution and compliance of its codes of ethics. The ethical standards of business can vary significantly depending on the country it is headquartered in. These standards apply not only...

Words: 2043 - Pages: 9

Free Essay

Business Ethich and Global Dimension

...An Article On Business Ethics and Global Dimension of Business Business Ethics and Global Dimension of Business October 19, 2014 Ethical issues have been around for a long time and its association with globalization has been documented. The effects on the association with globalization are similar and closely related to that of international marketing. As a result, the increased globalization over the years has brought an increase in many problems associated with global trading including ethical ones. (WTO, 2011). As indicated by World Trade organization in 2011, there was significant expansion in world trade from 1950 to 2000. This increase was documented to be over twenty-fold with foreign direct investment and exports playing a significant role. This increase in world trade in the middle to late 20th century also saw small businesses increasing their investments in cross border trading. This resulted in an increase in the average yearly outflow of Foreign Direct Investment (FDI) from about $25 billion in 1975 to a record $1.3 trillion in 2000. (UN, 2001). This means that there were a great number of business people with different social and cultural backgrounds doing business in other areas of different geographical, political, legal, social and cultural environments. The challenges that confronted these business people working in these different environments with its associated social and cultural problems created a platform for indulgence in ethical problems and other...

Words: 2072 - Pages: 9

Premium Essay

Ib Ch.3

...1. Introduction Cross-cultural literacy (an understanding of how cultural differences across and within nations can affect the way in which business is practiced) is important to success in international business There may be a relationship between culture and the costs of doing business in a country or region Culture is not static, and the actions of MNEs can contribute to cultural change 2. What is Culture? Question: What is culture?  Culture is a system of values (abstract ideas about what a group believes to be good, right, and desirable) and norms (the social rules and guidelines that prescribe appropriate behavior in particular situations) that are shared among a group of people and that when taken together constitute a design for living  A society is a group of people who share a common set of values and norms 3. Values and Norms  Values provide the context within which a society’s norms are established and justified  Norms are the social rules that govern the actions of people toward one another and can be further subdivided into ◦ folkways (the routine conventions of everyday life) ◦ mores (norms that are seen as central to the functioning of a society and to its social life) 4. Culture, Society, and the Nation-State A society can be defined as a group of people that share a common set of values and norms  There is not a strict one-to-one correspondence between a society and a nation-state ◦ Nation- states are political creations that can contain a single...

Words: 2521 - Pages: 11

Premium Essay

Eco 561 Cultural Challenges of Doing Business Overseas

...Running head: THE CULTURAL CHALLENGES OF DOING BUSINESS OVERSEAS Week 6 Paper The Cultural Challenges of Doing Business Overseas University of Phoenix Online ECO/561 July, 26 2010 Dr. George Sharghi Abstract Mr. Kafka is an American of Czech origin. He’s a franchisor for Chicago Style Pizza and decided to expand his business into the Czech Republic and anticipates he will face some difficulties at the new location in Prague, Czech Republic. Born in the United States, he has family and friends in the Czech Republic, speaks Czech fluently, and has visited the country of his origin several times (University of Phoenix, 2010). This paper will identify major differences, incompatibilities, risks, mitigation factor, comparative advantages that exist and how best Steve can benefit, Hofstede's four primary dimensions, trade barriers, assessment of demand, cost, and what Mr. Steve Kafka should know about price and income elasticites.   U.S./Czech Cultures & Comparative Advantages Some of the major differences and incompatibilities between the United States and Czech cultures are; norms, values, beliefs and behavior. The citizens of the Czech Republic believe in the firm hand shakes upon introduction and again when departing. They address each other by their first name takes time and occur when the consent is mutual. They raise a hand in order to get their attention.  Czech citizens are well informed about politics and religion.  The general attitude of Americans...

Words: 979 - Pages: 4