Comparative Business Ethics Bus 430: Cross Cultural Management Professor: Rajiv Kozhikode Presented by: Herlinna Chung Xindi Li Lina Liu Katrina Cheney

Agenda Introduction 1st Article Summary + Reflection 2nd Article Summary + Reflection Conclusion Industry Application/Debate References

Introduction  Ethics: Controvertial issue people in different positions or countries perceive ethics in different ways  Additional articles: how a corporation can do business in an ethical way how the Hofstede cultural dimensions can affect ethical decision-making in business

Overview of Article #1  “ Ethics and Entrepreneurs: An International Comparative Study ”  Findings: Russia Slovenia United States  Conclusion: In the long-term, all countries should be able to influence the ethical nature of business behavior by developing formal and informal institutions that are conductive to high ethical standards  Limitations: how should each company in the different countries set up institutions, programs, or departments specifically for the purpose of increasing business ethical behavior commitment and what are the benefits?

Reflection of Article #1  Baking Ethics into Company Culture written by Christopher Bauer  Looks at culture influences on corporate level Misconceptions of Business Ethics  Rules of Conduct Vs Ethics Codes  Compliance Programs VS Ethics Programs Strategies on building ethical working environment  Employee involvement  Rewards Why should companies invest in building an ethical business culture?  Returns

Overview of Article #2  U.S.A. vs. Hong Kong  Ethics = Law Ethics = Law  Ethics = Morality Ethics = Dignity

Overview of Article #2  Americans view self-promotion and image management as more ethical  Hong Kong Chinese view blackmail and other illegal tactics as more ethical than do Americans  Why?

Overview of Article #2  Americans more individualistic – the self is the basic unit of moral concern Think more for and of themselves More aggressive and more likely to “ show off ”  HK Chinese more collectivistic – the group is the basic unit of moral concern Individual value based on how he can serve the group More willing to have things like ethical codes dictated by law

Reflection of Article #2  The Effects of Culture on Ethical Decision-making: An Application of Hofstede's Typology  Influence of Hofstede's cultural dimensions on business ethics decision making A high individualism society: Business people are more likely to behave unethically for personal gain A high power distance culture: Superiors have more influence on ethical decision making

 Low uncertainty avoidance culture: More acceptive to unethical behaviour which is different from organization norms. Reflection of Article #2

 A high masculinity society contributes to one ’ s involvement in unethical behaviour as it advocates men being ambitious, competitive and pursuing material gain.

Application: Hotel Industry A very wealthy man arrived for a two-week stay in a luxury hotel in New York City. With him was his entourage of nine people who would be occupying seven other rooms. Upon his arrival, he requested that he did not want to be served by any African-Americans. He explained that the wait staffs, housekeepers, bartenders and any other service personnel who would have direct contact with him could not be black or African-American. The manager was shocked and stymied. He had been looking forward to the man’s visit as well, the man had promised a lucrative pay. Yet the customer was insisting on a racial discrimination practice.

Debate  What should the manager do?  What if our neighbor hotels accepted their request? Are we advantaged/disadvantaged?  How would he feel about granting/not granting this request?  Could he face his employees the next morning?

Most Common Ethical Issues in the Hotel Industry  Employee thefts  Use of recreational drugs  Guest abuses  Racial conflicts  Asymmetric price competition  Personal Relationships  Disclosure of confidential information

Conclusions 1.Differences in ethical attitudes happen at different scales and in different positions 2.Employees of all levels should participate in and contribute to ethics programs 3.Managers in MNCs can consider different perceptions of ethics when training people from diverse cultures 4.Hofstede ’ s cultural dimensions can have an effect on ethical decision making

References  Bauer, C. (2009). Baking ethics into company culture. Financial Executive, 25(4),  Bucar, B., Glas, M., & Hisrich, R. D Ethics and entrepreneurs: An international comparative study. Journal of Business Venturing, 18:  The Hofstede center: Hong Kong. [Web Graphic]. Retrieved from hofstede.com/hong-kong.html  The Hofstede center: Japan. [Web Graphic]. Retrieved from hofstede.com/hong-kong.html  Marriott. (1996, March 07). Business Values: Ethical and Legal Standards. Retreived from  Ralston, D. A., Giacalone, R. A, & Terpstra, R. H Ethical perceptions of organizational politics: A comparative evaluation of American and Hong Kong Managers. Journal of Business Ethics, 13:  Vitell, S. J. (1993). The effects of culture on ethical decision-making: An application of Hofstede's typology. Journal of Business Ethics, 12(10),