Table I summarizes Hofstede's ranking of the four countries on five dimensions of culture (Hofstede, 1980; Hofstede and Bond, 1988). It is apparent that, in general, Australians, Americans, and South Africans are higher on individualism and masculinity and lower on uncertainty avoidance and power distance than Malaysians. On Confucian dynamism, the USA and Australia rank very close. Although there is no ranking available for South Africa and Malaysia, Malaysians can be expected to rank higher because of a strong Chinese influence, especially in the business sector (Hong Kong and Taiwan rank first and second on Confucian dynamism). Based on individualism, power distance, and uncertainty avoidance, Malaysian marketers would be expected to have lower perceived importance of ethics and social responsibility than marketers from Australia, South Africa, and the USA. Based on masculinity, it would be expected that Malaysian managers will have greater perceived importance of ethics and social responsibility in achieving organizational effectiveness than those from the other three countries, whereas based on Confucian dynamism it is only possible to hypothesize differences. Therefore, based on the cultural differences outlined above, we would expect Australian, Malaysian, US, and South African marketers to attach different levels of importance to ethics and social responsibility in achieving organizational effectiveness.
Economic environment differences. Countries also have different economic and business environments, including the legal environment and societal expectations about business ethics in a given country. In developed countries (such as the USA and Australia), the business environment is typically characterized by powerful business enterprises, a legal environment aimed at eliciting ethical behaviors on the part of businesses, and societal expectations that businesses should be more ethical and socially responsible. These environmental forces may make the marketers in developed countries attach greater importance to the ethical and social responsibilities of their respective businesses. In developing countries, on the other hand (e.g. Malaysia and South Africa), the business and economic environmental forces are still evolving and hence the marketers' perceived importance of business ethics and social responsibility may be lower relative to their counterparts in developed countries. From another perspective, in developed countries the markets are likely to be more competitive, and therefore, issues of customer service and satisfaction might be relatively more important. Therefore, in making decisions, marketers from developed countries are less likely to take actions that are detrimental to the reputation of the company, fearing regulation as well as consumer dissatisfaction. In the context of this study, marketers from the USA and Australia should place greater importance on ethics and social responsibility as determinants of organizational effectiveness than marketers from South Africa and Malaysia.
Differences in legal/political environment. In the Hunt and Vitell (1993) model, legal/political environment is depicted as a variable influencing ethical decision making. The relationship between the legal environment and ethics has been recognized by many business ethics scholars. For example, Beauchamp and Bowie (1993, p. 4) noted that:
Law is the public's agency for translating morality into explicit social guidelines and practices and stipulating offenses.
DeGeorge (1990, p. 14) noted that:
Business is a social enterprise. Its mandate and limits are set by society. The limits are often moral, but they are also frequently written into law.
Dunfee (1996, p. 318) stated that the legal system is sometimes required to nurture or implement the moral preferences of society, particularly with reference to universal moral prohibitions against physical harm. He also argued that where moral views have not converged toward a sufficiently broad consensus, the law may help to bring about a change in attitude. In the context of our study, these discussions imply that the legal/political framework within a country can be expected to impact a manager's perceptions about ethics and social responsibility.
Business ethics scholars have also noted that the legal/political systems vary across countries (e.g. Vogel, 1992). In his analysis of the USA, Western Europe, and Japan, Vogel (1992) noted that in spite of globalization, the norms of business (as well as business and academic interest) in ethics were substantially higher in the USA than in other advanced capitalist countries. He attributed this to the distinctive institutional, legal, social, and cultural environment in the USA. In the context of this study, differences can be expected in the legal/political environments in the USA, Australia, Malaysia, and South Africa. While in the USA the legal/political systems are relatively well developed (and in Australia to a certain degree), the regulatory environments in Malaysia and South Africa are evolving, and therefore, the existence as well as the specificity of laws may vary across the four countries.
The importance of ethics is also influenced by the degree of law enforcement, where we also can expect differences across the four countries. While elaborate legal/political systems prevail for enforcement in the USA, they are relatively less prevalent (and to varying degrees) in Australia, Malaysia, and South Africa. Vogel (1992, p. 32) pointed out that even compared to other advanced countries, the enforcement of law in the USA is more stringent, and gave the following example,
In America each new disclosure of business misconduct prompts a new wave of public indignation, accompanied by numerous articles in the business and popular press which bemoan the general decline in the ethical conduct of managers and seek to explain "what went wrong" in the most recent case. This is frequently followed by Congressional hearings featuring politicians demanding more vigilant prosecution of white-collar criminals; shortly thereafter, regulatory standards are tightened, penalties are increased, and enforcement efforts are strengthened.
It should be recognized that the potential influences of the legal/political environment are more complex than discussed here, because of the range of issues involved as well as the aspects of environment that cannot be measured directly, such as the enforcement of regulatory systems. However, differences exist between the four countries in the legal/political environment, which can be expected to influence managers' perceived importance of ethics and social responsibility relative to organizational effectiveness.
In the preceding paragraphs, country differences were analyzed based on three aspects:
(1) culture;
(2) economic development; and
(3) legal/political environment.
Overall, based on cultural differences, we expect Australian, Malaysian, US, and South African marketers to attach different levels of importance to ethics and social responsibility in achieving organizational effectiveness. Based on economic environment differences, we expect that marketers from the USA and Australia will place greater importance on ethics and social responsibility than marketers from South Africa and Malaysia. Given that legal and political environments tend to vary between the four countries, we also expect the managers from these four diverse countries to attach different levels of importance to ethics and social responsibility in achieving organizational effectiveness. Thus, the following hypothesis was formulated:
H1: Due to differences in culture, economic development, and legal/political environment, there are differences in the perceived importance of ethics and social responsibility among marketers in Malaysia, Australia, South Africa, and the USA.
In analyzing country differences, it is evident that multiple aspects of country differences influence marketers' perceived importance of ethics and social responsibility, at times in conflicting ways (as in the effects of masculinity and individualism). Also, since this is the first attempt at investigating cross-cultural variation in the perceived importance of ethics and social responsibility as determinants of organizational effectiveness, there is a lack of knowledge regarding the relative importance of differences in cultural dimensions. Consequently, it is not possible to hypothesize the direction of differences, only their existence.
Organizational ethical climate
In the Hunt and Vitell (1986; 1993) models, organizational ethical climate is included as a background variable that affects a marketer's ethical decision making. Organizational ethical climate refers to the shared understanding regarding what is correct behavior and how ethical issues will be handled (DeConinck, 1992). It helps establish and maintain the standards that delineate the "right" things to do and the things "worth doing" (Jansen and Von Glinow, 1985). The ethical climate in an organization affects ethical attitudes and standards of individuals. An organization that seeks to foster an ethical environment will not only have a code of ethics, but also the willingness and commitment to enforce it. Managers consider modifying the morality of their actions not just because of stated organizational concern, but only when specific sanctions are attached for misconduct (e.g. Laczniak and Inderrieden, 1987). The contention that organizational pressures, and not individual moral deficiencies, account for unethical standards is held by several authors (e.g. Ford and Richardson, 1994). Weeks and Nantel (1992) found that well-communicated codes of ethics led to higher ethical standards and superior job performance of salespeople in the USA. Consequently, marketers in companies with an ethical climate that encourages ethical and socially responsible behavior and that punishes unethical behavior would perceive ethics to be more important for organizational effectiveness. Research has shown that when ethical standards of an organization are widely shared, organizational success will be enhanced (Hunt et al., 1989). Relevant to this study, in a recent study of US marketers, Singhapakdi et al. (1995) revealed that marketers in organizations with high levels of corporate ethical values tended to assign a higher level of importance to certain elements of corporate ethics and social responsibility. Therefore, we hypothesize that
H2: Irrespective of country, organizational ethical climate is positively related to managers' perceived importance of ethics and social responsibility relative to different aspects of organizational effectiveness.
Gender
Gender is generally recognized as an important personal characteristic influencing an individual's ethical decisions. For example, Gilligan (1982) argued that men and women differ in their moral reasoning. In particular, men are more likely to adhere to the "ethic of justice" by emphasizing rules and individual rights. Women, however, are more likely to adhere to the "ethic of care" by emphasizing relationships and compassion. In a recent meta-analysis, Franke et al. (1997) used data from more than 20,000 respondents in 66 samples and revealed that women are more likely than men to perceive business practices as unethical.
Although there has been no research directly investigating the effects of gender on perceived important of ethics and social responsibility, it has been incorporated in numerous marketing ethics studies. Based on the work of Gilligan (1982) and Franke et al. (1997), it can be argued that "the ethic of caring" exhibited by women would lead them to believe that taking actions in the interest of the customer would enhance company performance and would contribute to a perception of greater importance of ethics in organizational effectiveness. Thus, we would expect women to attach greater importance to ethics and social responsibility as determinants of organizational effectiveness.
H3: Irrespective of country, women perceive ethics and social responsibility to be more important relative to different aspects of organizational effectiveness than men.
Age
Marketing ethics theories generally recognize personal characteristics as determinants of various aspects of a marketer's ethical decision-making process (e.g. Ferrell and Gresham, 1985; Hunt and Vitell, 1986). Age could also directly influence an individual's ethical decision. According to Kohlberg's (1981) cognitive moral development theory, an individual's cognition, emotion, and judgment may change as he/she moves through stages of moral development. Given that an individual moves through stages of moral development and the changes are essentially due to life experiences, intuitively one would expect a positive relationship between age and ethical behavior. In fact, Terpstra et al. (1993) have argued that people tend to become more ethical as they grow older. A good explanation is that as people age they tend to become less concerned with wealth and advancement and more interested in personal growth (Hall, 1976). In other words, older marketers are likely to appreciate the long-term benefits (to organizational performance) of acting in an ethical and socially responsible manner. Accordingly, we would generally expect a positive relationship between a marketer's age and his or her perception about the importance of ethics and social responsibility.
H4: Irrespective of country, a marketer's age is positively related to his/her perception of the importance of ethics and social responsibility relative to different aspects of organizational effectiveness.
Methodology
Sample
A self-administered questionnaire was used as the data collection technique for all four groups of marketing practitioners. For the US and South African groups, national mailing lists of professional members of the American Marketing Association (AMA) and the South African Institute of Marketing Management were used as sampling frames. For the Australian sample, a mailing list of recipients of the Australian Marketing Institute magazine was used. For the Malaysian group, the sampling frame consisted of managers responsible for making marketing decisions for companies listed on the Kuala Lumpur Stock Exchange. The questionnaire was administered in English for all four samples. Because Malaysia and South Africa are members of the British Commonwealth, English is a well-understood language, particularly in the business setting.
The numbers of respondents were: 500 from Australia, 446 from the USA, 256 from South Africa, and 159 from Malaysia[1]. The response rates were 22.7 percent (USA), 13 percent (South Africa), and 45 percent (Malaysia). Since questionnaires were not directly mailed to the sample in Australia, the response rate could not be assessed. The non-response bias for the USA and South African samples was assessed with an analysis of variance between the early and late respondent groups (Armstrong and Overton, 1977). There were no statistical differences among the two groups for either country[2].
The profiles of the respondents are summarized in Table II. They represent a range of age groups, gender, job titles, industry, and years of experience, with minor differences between the four sets of respondents. Age and gender were included in the analyses. Other variables (such as job title, education, and industry) were not included as control variables because educational systems, industry classifications, and job titles and functions vary from country to country.
Measures
Singhapakdi et al. (1995) developed a scale for measuring managers' perceptions about the importance of ethics and social responsibility (PRESOR) in organizational effectiveness. Seven of the 14 items from that scale were used, relating to specific aspects of organizational effectiveness such as output quality, efficiency, profitability, communication, long-term survival, competitiveness, and stakeholder satisfaction. Excluded items were statements such as "Good ethics is good business" and "Corporate strategy should include ethics and social responsibility", which do not address specific aspects of organizational effectiveness. The scale items used in the analyses are shown in Table III The factor structures were found to be similar across the four countries and the reliabilities were generally high[3]. It may be noted that the PRESOR scale has previously performed satisfactorily in terms of reliability, as well as content and predictive validity (Singhapakdi et al., 1995, 1996).
Organizational ethical climate, gender and age. The corporate ethical values (CEV) scale developed by Hunt et al. (1989) was used in this study to measure organizational ethical climate. The scale was designed to reflect "a composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization" (Hunt et al., 1989). The five-item CEV scale[4] was developed to three broad-based perceptions:
(1) the extent to which employees perceive their managers are acting ethically in their organization (item 1);
(2) the extent to which employees perceive that managers are concerned about the issues of ethics in their organization (item 3); and
(3) the extent to which employees perceive that ethical (unethical) behavior is rewarded (punished) in their organization (items 2, 4, and 5) (Hunt et al., 1989).
The CEV was measured using a nine-point Likert scale with 1= "completely disagree"and 9= "completely agree". For each respondent, the CEV score was obtained by summing all CEV items (with items 1 and 2 reverse-coded). A high CEV score means that the manager works in an organization with higher corporate ethical values. The similarity of factor structures of the CEV scale between the four countries was assessed to be moderate and the reliabilities of the scale were high[5]. The CEV measure has been used in the past (e.g. Hunt et al., 1989; Singhapakdi et al., 1995). Gender was measured as a dichotomous variable and age was measured in four categories.
Results
Multivariate analysis of variance (MANOVA) was performed using the seven PRESOR items as dependent variables, and the country of residence, organizational ethical climate, gender, and age as independent variables[6]. MANOVA results show that overall country of residence, organizational ethical climate, gender, and age significantly explain differences between marketers from the four countries in their perception of the importance of ethics and social responsibility in achieving organizational effectiveness (F = 5.38 based on Wilks' Lambda, p < 0.0001).
H1 states that there are country differences in the perceived importance of ethics and social responsibility in achieving organizational effectiveness. Univariate analysis of variance (ANOVA) identified significant cross-country differences between marketers on all PRESOR items except output quality and competitiveness. For example, there are differences in the extent to which marketers from the four countries believe that "the most important concern for a firm is making profits, even if it means bending or breaking rules" (F = 5.45, p < .0001). Also, there are differences in the extent to which they agree with statements such as "if survival of a business enterprise is at stake, then you must forget about ethics and social responsibility" (F = 21.25, p < 0.0001), "efficiency is much more important to the firm than whether or not the firm is seen as ethical or socially responsible" (F = 14.91, p < .0001), and "communication is much more important to the overall effectiveness of an organization than whether or not it is concerned with ethics and social responsibility" (F = 5.81, p < 0.0001). Therefore, there is support for H1 (average scores for marketers from the four countries on each of the seven items are given in Table IV).
H2 states that the organizational ethical climate positively influences managers' perceived importance of ethics and social responsibility. In fact, results indicate it has a strong influence on all seven dimensions of PRESOR with F statistics ranging from 27.17 to 74.24 (with all p < 0.0001). Therefore, H2 is supported. Results also indicate gender differences in managers' perceived importance of ethics and social responsibility in achieving organizational effectiveness on the quality, communication, profits, competitiveness, and survival dimensions, but not on the efficiency and stakeholder satisfaction dimensions (F statistics ranging from 3.68 to 17.88). Therefore, H3 is generally supported. Also, results related to H4 indicate that, in general, there are no age differences in the perceived importance of ethics and social responsibility in achieving organizational effectiveness. Therefore, H4 is not supported. The lack of significance of age in influencing PRESOR is probably a reflection of the greater impact of environmental factors such as greater societal expectations and awareness about ethical issues.
Discussion and implications
The current investigation into cross-country variation in perceptions of marketing professionals regarding the importance of ethics and social responsibility as determinants of business success has potential implications for international companies. In the international marketing context, cultural, economic, and other gaps between international buyers and sellers create the potential for conflicts of values, which in turn hinder smooth business interactions between the parties. Whether a marketing organization engages in exporting, importing, joint ventures, licensing agreements or fully owns an overseas operation, the scope exists for conflict of values, especially in the areas of marketing ethics and social responsibility. For example, in recent years, companies in the USA have faced public disapproval of the unethical practices of their overseas suppliers. As businesses all over the world progressively globalize their operations, it becomes necessary that they understand whether there are significant gaps between their ethical and social responsibility perceptions and their overseas partners. Such perceptual gaps need to be systematically investigated and measures taken to reduce or, preferably, eliminate them in the interest of establishing enduring international business relationships. This study identified three sources of gaps that can exist between marketers from different countries in terms of the perceived importance of ethics and social responsibility as determinants of organizational effectiveness. They are:
(1) Country differences in culture, economic development, and legal/political environment.
(2) Differences in organizational ethical climate.
(3) Gender differences.
Similarities and differences were found between countries in terms of the extent to which they find ethics and social responsibility to be important relative to some dimensions of organizational effectiveness. On two dimensions, output quality and competitiveness, there were no significant inter-country differences. It seems that output quality and competitiveness are universal business orientations exhibited by marketing executives, which is consistent with globalization of markets and the accompanying intensification of competition. International companies, therefore, may assume that their counterparts in different parts of the world will be as concerned with output quality and competitiveness (relative to ethical and social responsibility concerns). Hence, these two core business values can provide common bases for successful international negotiations and establishing long-term relationships, which are critical for success in the international business arena.
While there are inter-country similarities on these two dimensions, significant inter-country differences were found with regard to other organizational effectiveness dimensions: communications, efficiency, profits, survival, and stakeholder satisfaction. Based on the findings of our study, multi-national companies who transfer employees between these four countries can help them anticipate differences in perceptions about the importance of ethics and social responsibility relative to different aspects of organizational effectiveness. For example, Malaysian companies posting managers in Australia (or South Africa or the USA) might want to educate them about the environmental differences that lead to Australian managers placing greater importance on ethics and social responsibility relative to profitability, efficiency, communication, survival, and stakeholder satisfaction. These perceptual differences can impact ethical attitudes and actions, and therefore, managerial expectations about overseas employees should be altered accordingly.
Corporate managers should also give a thought to what can be done to overcome these differences in perceived importance of ethics and social responsibility. The content of ethics training programs can incorporate the findings of this study by developing scenarios and cases highlighting the trade-offs between ethics and social responsibility, and specific aspects of organizational effectiveness, such as efficiency and stakeholder satisfaction. These scenarios can be extended by including cross-national differences in culture, economic development, and legal/political environment, as well as differences in perceptions about ethics and social responsibility across countries.
Organizational ethical climate positively influenced the perceived importance of ethics and social responsibility across all four countries. Irrespective of the country, organizational ethical climate had a strong influence on all seven dimensions of organizational effectiveness vis-à-vis ethics and social responsibility. Therefore, we can conclude that organizations from different countries with similar organizational ethical climates can find common ground on issues of ethics and social responsibility. Hence, international companies, when scouting for suitable partners in foreign markets, may look for overseas partners with similar organizational ethical values. This would ensure smoother business relations and interactions especially in the areas of ethics and social responsibility. Also, it is useful for international marketers to know that, in general, women perceive ethics and social responsibility to be more important in achieving organizational effectiveness than men, though there are no differences across age groups. This is particularly relevant given the increase in employment of women in the workplace.
Limitations
This study has some potential limitations. One concerns the limited number of factors investigated in our study. Ethical decision making is a very complex phenomenon, and exploring cross-cultural differences is even more difficult. For example, in addition to the variables we studied, marketing ethics theories have also specified moral philosophies, personal values, religion, professional environment, and organizational and industrial characteristics as important background factors underlying the ethical decision making of managers (e.g. Ferrell and Gresham, 1985; Hunt and Vitell, 1986). However, the scope of this study is limited to cultural dimensions, economic environment, organizational ethical climate, and selected demographic variables as explanatory factors. It should be pointed out that in this study, some important demographic variables, such as education, were not included because of a lack of conceptual equivalence, as explained in the next section. Another limitation concerns the samples analyzed in this study. Although four relatively diverse countries were studied, the findings can not be generalized to other countries with different cultural characteristics and levels of economic development.
Future research avenues
This research can be extended in many ways. As a first step, a non-directional hypothesis for country differences was presented. This was necessitated by the fact that this was the first study dealing with the investigation of cross-cultural variation in the perceived importance of ethics and social responsibility as determinants of organizational effectiveness. Future research should investigate the direction of expected differences. A comprehensive framework modeling antecedents and consequences of the perceived importance of ethics and social responsibility can be developed and tested. This will add another dimension to our understanding of ethical decision making. As pointed out earlier, one limitation of this study concerns its limited samples and, consequently, its limited generalizability. Therefore, there is a need to replicate this study using managerial samples from other countries with different cultural characteristics and/or levels of economic development. Given the complexity of the phenomenon under study, future research should investigate other determinants specified in marketing ethics models, such as moral philosophies, personal values, religion, professional environment, and organizational and industrial characteristics.
Among demographic variables, education could be an important determinant but was not included because of a lack of conceptual equivalence. In cross-cultural research, conceptual equivalence in terms of the meaning of research concepts, stimuli, and materials must first be established before any meaningful comparisons are made (Malhotra et al., 1996). In our study, the US sample is predominantly business-educated, which might not be the case with the other three samples. In addition to differences in the educational background of the managers, the lack of conceptual equivalence can also be attributed to:
·The educational systems and curricula in the four countries being different.
·Differences in the extent to which ethics is required to be emphasized in the curriculum content across different countries (for example, accredited business schools in the USA are required to incorporate business ethics into their curricula, and such requirements might exist to a greater or lesser degree in other countries).
·Variation in the extent to which ethics is actually incorporated and emphasized in the curricula.
Thus, it is not education per se, but the incorporation of ethics into educational curricula, the actual implementation, and its impact on the managers that is likely to influence their perceived importance of ethics and social responsibility. In the future, the cross-country differences in educational background of the respondents as well as the extent to which ethics is emphasized in education should be measured, and analyzed as a potential factor influencing a manager's perceived importance of ethics and social responsibility.
Conclusion
To summarize, this research investigated whether marketers from Australia, Malaysia, South Africa, and the USA differ in their beliefs regarding the importance of ethics and social responsibility as determinants of organizational effectiveness. The study was based on an alternative approach to studying perceptions about ethical issues and problems in business. Traditionally cross-cultural researchers have evaluated ethical perceptions, attitudes, and intentions with regard to specific business/marketing practices involving ethical problems. Here, we investigate differences in the perceived importance of ethics and social responsibility in relation to various aspects of organizational effectiveness such as quality, communication, profits, competitiveness, survival, efficiency, and stakeholder satisfaction. The results of this study are important because perceived importance of ethics and social responsibility has been shown to influence ethical intention, when managers are faced with an ethical situation (Singhapakdi, 1999).
Results indicate that differences in the perceived importance of ethics and social responsibility among marketers from the four countries exist because of:
·country differences in culture, economic development, and legal/political environment;
·differences in organizational ethical climate; and
·gender differences.
There are not any differences due to age. Overall similarities and differences among the four countries emerged on specific dimensions of business effectiveness. On the dimensions of output quality and competitiveness, there were no differences among the four countries. Inter-country differences were found on the dimensions of communication, efficiency, profits, survival, and stakeholder satisfaction. These findings regarding cross-cultural similarities and differences are useful in furthering our understanding and management of ethics and social responsibility in the international context.