Business Ethics in Brazil Essay

In this comparative survey of 126 brazil nutian and U.S. business concern professionals, we research the effect of bailiwick acculturation on well decisivenessmaking deep down the scene of business. Using Reidenbach and Robins (1988) multi-criteria ethics prick, we examined how these twain countries leavings on Hofstedes personal identity/ socialism Rafik I. Beekun (Ph.D., The University of Texas, Austin) is prof of Management and Strategy in the managerial Sciences Department at the University of Nevada, Reno. His current investigate interests be in the field of study of strategic adaptation, the link surrounded by discipline cultures and ethics, and the relationship between caution and spirituality. He has published in such journals as Journal of utilize Psychology, Human Relations, Journal of Management and Decision Sciences. Correspondence regarding this article should be sent to him at Managerial Sciences Department, Mail Stop 28, University of Nevada, Ren o, NV 89557-0206. Yvonne Stedham (Ph.D., University of Kansas) is an Associate Professor of Management in the Managerial Sciences Department at the University of Nevada, Reno. She has published in such journals as the Journal of Management and Journal of Management Studies. Dr. Stedhams research foc handlings on the following aras CEO performance evaluation, gender secernment in employment, ethics in business, decision making crosswise cultures, and managing knowledge workers. Jeanne H. Yamamura (CPA, Ph.D., Washington State University) is an Associate Professor of Accounting in the College of military control at the University of Nevada Reno. Her teaching responsibilities include auditing and accounting information systems courses. Dr. Yamamuras research focuses on the management of accounting professionals with a particular interest in cross-cultural differences and her work has been published in accounting and business journals. She has lengthy practical experience in the fi eld of accounting through her front employment in public and private accounting.Rafik I. Beekun Yvonne Stedham Jeanne H. Yamamura mark argon related to the manner in which business practitioners make honourable decisions. Our results indicate that Brazilians and Americans pronounce the estimable burden of exercises or decisions contrastively when applying utilitarian criteria. By contrast, business plurality from both countries do not differ significantly when they use egoistic criteria in evaluating the honorable constitution of business decisions. KEY haggling Brazil, egoism, ethics, national culture, U.S., utilitarianism As business organizations move from domestic to global and international competition, they argon finding that cultural values vary significantly across national boundaries, and atomic human action 18 likely to affect business practices (Husted, 2000). During the past decade, many(prenominal)(prenominal) researchers (Ferrell and Gresham, 1985 Hunt et al., 1989 Abratt et al., 1992 Hunt and Vitell, 1992 Tsalikis and Nwachukwu, 1991 Vitell et al., 1993) have noted the potential work on of national culture on ethics within a business context. What obscures the equal of national culture on ethics is that business practices may fight with honourable values in a manner that medicine, law and politics do not (DeGeorge, 1993). Not surprisingly, empirical research investigating the relationship between national culture and honorable decision-making is comparatively sparse (Vitell et al., 1993). A master(a) reason for exploring the effects of culture on ethics is the increase globalization of business. This trend, in turn, is characterized by a diverse array of inter organizational arrangements that exact cross-cultural inter accomplish. As a result, cultural misunderstandings atomic number 18 likely to occur. ane of the key beas where such mis- Journal of Business chastes 42 267279, 2003. 2003 Kluwer schoolman Publishers . Printed in the Netherlands. 268 Rafik I. Beekun et al. understandings take place is in the area of ethics, partly because of the influence that national cultures may have upon business ethics (Husted, 2000). t substantialyly, in our study, we explore the relationship between national culture and business ethics. We lead test to investigate what process underlies honourable behavior across national boundaries. cause this process may service global managers develop tools to promote good behavior in their international workforce. In this research, we compare two culturally diverse countries, the United States (U.S.) and Brazil, in order to identify similarities and differences with regard to approaches toward good decision-making in a business context. Since culture is a broad concept, it is unavoidable to specify the values that could be related to behaviors or practices (Husted, 2000). For the purposes of this study, we employ a well-established framework of national cu lture (Hofstede, 1980). Hofstede guideed one of the about important studies that ascertained the relationship between national culture and management. From this study, he identified several value dimensions along which countries differ. Using Hofstedes (1980) framework, we carried out a crosscultural, comparative survey to assess the relationship between his individualism/ fabianism dimension of national culture and honourable criteria. With approve to ethical decision-making, we adopted the official document offerd and clear by Reidenbach and Robin (1988, 1990).They have generated a set of scales that legal community the core dimensions characterizing polar perspectives of ethical philosophy. Defining national culture Hofstedes dimensions of culture Multiple definitions and conceptualizations of national culture exist (Hofstede, 1980, 1988, 2001 Kluckhohn, 1951, 1962 Kluckhohn and Strodtbeck, 1961 Ronen and Shenkar, 1985 Trompenaars, 1993). Although these frameworks and co nceptualizations typically philia on values, they differ with respect to the specific values that are include in their respective frameworks. For instance, Trompenaars (1993) focuses on values related to relationships such as obligation, emotional orientation in relationships, and involvement in relationships. By contrast, Kluckhohn and Strodtbeck (1961) try more global values such as peoples relationship to nature and time-orientation. With respect to our study, Hofstedes framework of national cultures is the most appropriate since he identified values related to economic action mechanism (Husted, 2000). Therefore, his framework is germane for the study of business decisions. Foc victimisation on national cultures, Hofstede (1997, p. 260) defines culture as the collective programming of the mind which distinguishes the members of one concourse or category of people from an separate. Thus, although the problems faced by groups (whether organizational or national) are universal, the solutions devised by each group may be relatively unique to that group. These solutions then become taken for granted over time, and may notify why people hold certain beliefs and coiffe the way they do (Schneider and Barsoux, 1997). Hofstede (1980, 1988) has suggested that five dimensions of national culture underlie differences in the behavior of individuals from different cultural backgrounds.Since these dimensions describe how individuals view and consider situations and behavior, they are likely to be related to how individuals engage in decision-making in planetary (Weick, 1979 Adler, 2002). Ethical decisionmaking, too, is likely to be affected by these dimensions of national culture. Hofstedes five cultural dimensions (1980, 1988) are power outgo, uncertainty avoidance, masculinity/ femininity, individualism/collectivism, and long-term/short-term orientation. Power distance refers to the degree to which slight herculean members in a country accept an unequal distri bution of power. uncertainty avoidance depicts a peoples ability to cope with double situations as well as the mechanisms they have created to avoid such situations. masculinity exemplifies a focus on material things, such as money, success, etc., whereas femininity refers to a focus on quality of life, caring, etc. individualisation, which pass on be discussed in more detail later, refers to the tendency of people to consider their interests and those of A Comparative Investigation of Business Ethics their immediate family that if. By contrast, collectivism refers to the inclination of people to view themselves as part of a bigger group, and to protect the interests of group members. Longterm/short-term orientation describes the time perspective people take when dealing with a situation. Table I represents the scores for Hofstedes cultural dimensions for Brazil and the U.S. While the scores indicate dissimilarities between the U.S. and Brazil on all five cultural dimensions, by far the largest difference appears in the individualism/collectivism dimension. Brazil scored low on individualism, and then is considered a collectivistic country by contrast, the U.S. scored superior on individualism and is considered an individualistic country.The individualism/collectivism dimension describes how individuals relate to others and to society, and represents the extent to which they are emotionally and cognitively attached to a particular network of individuals. identity describes the inclination of individuals to be primarily concerned with their personal interests and their immediate familys welfare (Hofstede, 1980). Members of a highly individualistic country view themselves as independent of organizations or institutions, and place a higher value on self-reliance and individual action. Collectivism, in likeness, describes a culture where individuals are viewed as part of a larger group, and look after each other. collectivised cultures protect the inter ests of their members in return for their loyalty. In collectivist cultures, chasteity is delimitate in terms of the benefits for the in-group (family, friends, work companies, 269 etc.), implying the maintenance of solidarity (Triandis and Bhawuk, 1997). Hofstede (1980) noted that the individualism/collectivism dimension carried strong moral overtones because this dimension was reflected in value systems share by the majority. For example, in a highly individualistic country, individualism is viewed as a strength and the major reason for the countrys accomplishments. By comparison, inhabitants of a highly collectivistic country view an emphasis on self as a negative attribute to be eliminated for the good of society. Competing ethical frameworks for business decisions Ethics are the principles of human conduct regarding either an individual or a group (Shaw, 1999), and represent the moral standards not governed by law, that focus on the human consequences of actions (Francesco and cash, 1998).Ethics often study behavior that meets higher standards than those established by law, including selfless behavior sooner than calculated action intended to produce a tangible benefit. With respect to this study, business ethics describe the ultimate rules governing the assessment of what constitutes flop or wrong, or good or bad human conduct in a business context (Shaw, 1999). In the assessment of ethical behavior, perception is critical (Hartmann, 2000). Indeed, ethical decisions may be influenced by our feature perception, by others perceptions of our actions, and by our perception of universal laws. As a evade I Cultural dimensions (Hofstede 1980, 1988, 2001) Dimensions of culture U.S. Brazil Difference Power distance Uncertainty avoidance 40 46 69 76 (29) (30) Individualism/Collectivism 91 38 53 Masculine/Feminine Confucian Dynamism 62 29 49 65 13 (36) 270 Rafik I. Beekun et al. result, our final choices may be determined by the perception that is the mos t great at the time. Further, Hartmann suggests that cultures may differ not only with respect to the ethical principles underlying decisions but similarly with respect to which of the three stakeholders self, society, and universal laws is express in any given situation. Depending on which stakeholder is emphasized, people from different cultures may vary in their assessment of the ethical nature of a decision. across most situations, ethical principles that distinguish reform from wrong actions are encompassed by several normative theories, e.g., justice, relativism, egoism, utilitarianism, and deontology. These theories can generate potentially conflicting interpretations of what is ethical or wrong, originating from the very nature of the theories themselves.Moreover, prior research (Cohen et al., 1996 Hansen, 1992 Reidenbach and Robin, 1988, 1990) indicates that individuals making ethical decisions do not select a single theory or philosophy by which to make their decis ions. In fact, Reidenbach and Robin (1988) found that a varying combination of ethical philosophies or theories is employed when ethical decisions are do. Shaw (1999) draws a distinction between two types of ethical theories, consequentialist and nonconsequentialist. Consequentialist theories suggest that the moral safeness of an action depends on the actual or intended results of the action. What is right is determined by weighing the ratio of good to bad that an action is likely to produce (Shaw, 1999, p. 45). A key issue underlying consequentialist theories is the nature of the beneficiaries of the action under consideration. Should one consider the consequences for oneself or for all twisting? The most important consequentialist theories are egoism and utilitarianism. Egoism promotes individual egocentrism as the guiding principle whereas utilitarianism advocates that everyone affected by the action or decision must be taken into account (Shaw, 1999). By contrast, nonconsequ entialist theories suggest that it is not simply the consequence of an act that matters, but withal its subjective character. Although these theories do not deny that con- sequences are morally relevant, they assert that other factors are also important in assessing the moral significance of an action. For example, breakage a promise is wrong not simply because of the consequences that result from time out it, but also because of the nature of the act itself. In this study, we focus on consequentialist theories for several reasons. First, Hofstedes individualism/collectivism dimension can be clearly and easily related to the two consequentialist theories. Second, the two theories represent the perceptions of two of the three possible stakeholders identified by Hartmann (2000), namely own perceptions and others perceptions.Third, staying within one theoretical category allows for a much more parsimonious, however thorough, analysis. Ethical perspectives and national culture hypo theses Whether egoistic or utilitarian principles are employed, ethics are a product of a societys culture, which includes its traditions, values, and norms. Within a society, ethical behavior is generally agreed upon. Francesco and Gold (1998, p. 40) explain that members implicitly understand how relationships, duties and obligations among people and groups ought to be conducted, and distinguish between their selfinterests and the interests of others. However, when two or more countries interact, they often find that their ethics differ. According to Hendry (1999), these differences may lead to three types of culturally based ethical conflicts. First, there are those conflicts where the ethical values typifying the two national cultures lead to differing conclusions what is deemed unethical from one perspective is considered to be ethical from the other. Second, conflict may muster when businesspersons from one culture consider something morally significant whereas their counterp arts from another culture are ethically neutral. Third, business people from two cultures may interpret a common situation differently even when there is some commonality among their national values. A Comparative Investigation of Business Ethics To investigate the relationship between national culture and ethics, we chose two culturally diverse countries, Brazil and the U.S. Given the differences in their respective national cultures, we anticipate Brazilians and Americans to differ in their assessment of the ethical content of business decisions.Accordingly, we propose the following hypothesis H1 The assessment of the ethical content of business decisions is a function of national culture. Egoism and individualism/collectivism According to egoism, the only valid standard of ones behavior is ones obligation to advance ones well-being preceding(prenominal) everyone elses (Beauchamp and Bowie, 1997). Promotion of ones own longterm interest is viewed as the only worthwhile objective and the only determinant of whether an act is morally right or not. Nothing is owed to others or to the organization that one works in. Those who gestate by this approach to ethics intensely believe that all unselfish efforts by others are really acts of self-promotion since an individual may have to help others in order to advance his/her own interests. Brazil is collectivistic whereas the U.S. is individualistic. As discussed earlier, persons from an individualistic culture emphasize their families and their own interests. H1.a When applying egoistic criteria to come close the ethical content of an action or a decision, respondents from the U.S. will be less likely than respondents from Brazil to see a decision or action as unethical. Utilitarianism and individualism/collectivism Utilitarianism, in direct contrast to egoism, is the moral doctrine that we should always act to produce the great possible repose of good over bad for everyone affected by our action (Shaw, 1999, p . 49). Although utilitarians also 271 evaluate an action in terms of its consequences, an action is ethical if it results in the greatest benefit or good for the largest number of people.Issues of self-interest are not germane since actions are assessed in accordance with one primary standard the general good. Utilitarianism has long been associated with social improvement and the promotion of actions that are in the best interest of the community. Actions are right if they promote the greatest human welfare. Brazil is collectivistic. Persons from a collectivistic culture focus on actions that lead to the greatest benefit for most members of a group. H1.b When applying utilitarian criteria to judge the ethical content of an action or a decision, respondents from Brazil will be less likely than respondents from the U.S. to see an action or decision as unethical. To be consistent with prior ethics research (Reidenbach and Robin, 1988), the above hypotheses (H1.a and H1.b) together sug gest that Americans and Brazilians rely on more than one ethical criterion when assessing the ethical content of an action or decision. However, we are also suggesting that when each specific ethical criterion they refer to is considered separately, people from different national cultures will vary in their assessment of the ethical content of a course of action or a decision. Methodology ingest data were collected from 126 respondents 92 from the U.S. and 34 from Brazil. U.S. participants included MBA students at a regional university as well as business professionals. Brazilian participants were all students enrolled in an Executive MBA program. We used MBA students in our study for two reasons. First, MBA students are a commonly used proxy for business people (Dubinsky and Rudelius, 1980). Dubinsky and Rudelius (1980) comparison of 272 Rafik I. Beekun et al. student versus professional evaluations found a high degree of congruity between the two groups. Second, since all stud ents (both U.S. and Brazilian) were currently employed by companies or had recent professional work experience, the sample can be used as a proxy for business professionals in both countries.Data collection The instrument we used was Reidenbach and Robins (1988) pre-validated, multi-criteria instrument incorporating the core dimensions that underlie several ethical perspectives. We selected this survey instrument because it is a multi-philosophy and multi-item questionnaire. As a result, it will enable us to assess both ethical dimensions of interest, i.e., egoism and utilitarianism, simultaneously. This instrument incorporates multiple items for each ethical philosophy and, therefore, is relatively more reliable than single item instruments (Kerlinger, 1986). Reidenbach and Robins instrument includes an initial set of scales that has shown evidence of high reliability and modest convergent validity with respect to U.S. respondents. The scales correlate highly with a univariate meas ure of the ethical content of situations. Hence, the instrument can be said to have high construct validity in the U.S. Additional reliability and validation efforts for the whole sample and for Brazil specifically are reported below. Using a seven-point Likert scale (1 = ethical, 7 = unethical), respondents were asked to rate the action in three scenarios using the criteria (items) described in Table II. The perception of and the criteria emphasized in evaluating the ethical content of a decision or situation depend on the nature of the decision or the situation. In accordance with previous research, scenarios will be used in this study to provide the contextual arousal and to motivate the evaluation process (Alexander and Becker, 1978). We adopted the three scenarios developed and validated by Reidenbach and Robin (1988, 1990).Table III presents the three scenarios used in this study. Data were collected by means of the abovementioned instrument administered to Brazilian particip ants (in Portuguese) and provided via compose instrument and website access to U.S. participants (in English). The Brazilian instrument was back translated to ensure equivalence. Efforts were made to establish the reliability and validity of the instrument in this comparative context and are reported as follows. We examined the reliability of the instrument by assessing its natural consistency through the use of Cronbachs alpha. Since we used three different measures (one for each of the scenarios), we calculated three inter-item coefficient alphas. The Cronbach alpha was 0.81 for the first scenario, 0.75 for the second scenario and 0.86 for the trey scenario. All three coefficients indicate that the scale items are internally con- tabulate II Ethics instrument scales Ethical perspective Items (Seven-point Likert scale 1 to 7)* Egoism Self promoting/not self promoting Self sacrificing/not self sacrificing Personally satisfying/not personally satisfying Utilitarianism Produces g reatest expediency/produces the least utility Maximizes benefits while minimizes harm/minimizes benefits while maximizes harm Leads to the greatest good for the greatest number/leads to the least good for the greatest number * Generally speaking, in the above bipolar scales, 1 = fair or just or efficient (ethical) whereas 7 = unfair, unjust or unable (unethical). A Comparative Investigation of Business Ethics