Business Ethics in Brazil Essay Example for Free

Business morality in Brazil EssayIn this comparative survey of 126 Brazilian and U.S. seam professionals, we explore the effect of home(a) husbandry on estimable decisionmaking within the context of business. Using Reidenbach and Robins (1988) multi-criteria honourable motive cock, we examined how these dickens countries differences on Hofstedes individuation/collectivism Rafik I. Beekun (Ph.D., The University of Texas, Austin) is Professor of centering and Strategy in the Managerial Sciences Department at the University of Nevada, Reno. His current research interests be in the atomic number 18a of strategic adaptation, the link mingled with discipline refinings and ethics, and the kinship amidst management and spirituality. He has make in such journals as Journal of Applied Psychology, Human Relations, Journal of Management and Decision Sciences. Correspondence regarding this expression should be sent to him at Managerial Sciences Department, Mail Stop 28, University of Nevada, Reno, 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 pointes on the following areas CEO performance evaluation, gender discrimination in employment, ethics in business, decision making crosswise socializations, and managing knowledge workers. Jeanne H. Yamamura (CPA, Ph.D., Washington State University) is an Associate Professor of Accounting in the College of Business at the University of Nevada Reno. Her didactics 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 extensive practi cal experience in the field of accounting through her previous employment in public and clandestine accounting.Rafik I. Beekun Yvonne Stedham Jeanne H. Yamamura dimension are related to the manner in which business practitioners make ethical decisions. Our results indicate that Brazilians and Americans evaluate the ethical study of exercises or decisions differently when applying utilitarian criteria. By contrast, business good deal from both countries do not differ significantly when they use egoistic criteria in evaluating the ethical disposition of business decisions. pigment WORDS Brazil, egoism, ethics, national nicety, U.S., utilitarianism As business organizations move from domestic to global and transnational competition, they are finding that cultural set qualify significantly across national boundaries, and are likely to affect business practices (Husted, 2000). During the past decade, several 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) abide noted the potential influence of national husbandry on ethics within a business context. What obscures the impact of national culture on ethics is that business practices may conflict with ethical set in a manner that medicine, law and government do not (DeGeorge, 1993). Not surprisingly, empirical research investigating the family mingled with national culture and ethical decision-making is relatively sparse (Vitell et al., 1993). A uncomplicated reason for exploring the effects of culture on ethics is the increased globalization of business. This trend, in turn, is characterized by a several(a) array of interorganizational arrangements that require cross-cultural interaction. As a result, cultural misunderstandings are likely to occur.One of the key areas where such mis- Journal of Business Ethics 42 267279, 2003. 2003 Kluwer Academic Publishers. Printed in the Netherlands. 268 Rafik I. Bee kun 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). fitly, in our study, we explore the relationship between national culture and business ethics. We will seek to investigate what process underlies ethical sort across national boundaries. reason this process may help global managers develop tools to promote ethical 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 ethical decision-making in a business context. Since culture is a broad concept, it is necessary to specify the values that could be related to behaviors or practices (Husted, 2000). For the purposes of this study, we utilise a well-established framework of national culture (Hofstede, 1980). Hofstede conducted one of the most 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/collectivism dimension of national culture and ethical criteria. With respect to ethical decision-making, we adopted the instrument proposed and validated by Reidenbach and Robin (1988, 1990).They have generated a set of scales that measure the core dimensions characterizing different 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 conceptualizations typically center on values, they differ with respect to the speci fic values that are included 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) accentuate 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 activity (Husted, 2000). Therefore, his framework is relevant for the study of business decisions. Focusing on national cultures, Hofstede (1997, p. 260) defines culture as the collective programming of the mind which distinguishes the members of one group or category of people from another. Thus, although the problems faced by groups (whether organizational or national) are world(a), the solutions devised by distributively group may be relatively unique to that group. These solutio ns then flex taken for granted over time, and may suggest why people hold certain beliefs and behave 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 interpret web sites and behavior, they are likely to be related to how individuals engage in decision-making in general (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 distance, uncertainty dodge, masculinity/femininity, individualism/collectivism, and long-term/short-term orientation. Power distance refers to the degree to which less powerful members in a country accept an unequal distribution of power. Uncertainty avoidance depicts a peoples ability to cope with ambiguous 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. Individualism, which will be discussed in more particular later, refers to the tendency of people to consider their interests and those of A Comparative probe of Business Ethics their immediate family only. By contrast, collectivism refers to the rock 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. add-in 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, a nd hence is considered a collectivistic country by contrast, the U.S. scored high on individualism and is considered an individualist country.The individualism/collectivism dimension describes how individuals relate to others and to high society, and represents the extent to which they are emotionally and cognitively attached to a particular network of individuals. Individualism 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 comparison, describes a culture where individuals are viewed as part of a larger group, and look after each other. Collectivistic cultures protect the interests of their members in return for their loyalty. In collectivist cultures, morality is defined in terms of the ben efits for the in-group (family, friends, work companies, 269 etc.), implying the sustentation 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 shared 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 accent mark 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 merciful 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 Gold, 1998).Ethics often require behavior that meets higher standards than those established by law, includin g selfless behavior rather than calculated action intended to produce a tangible benefit. With respect to this study, business ethics describe the ultimate rules governing the appraisal of what constitutes right 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 own perception, by others perceptions of our actions, and by our perception of universal laws. As a TABLE 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 most salient at the time. Further, Hartmann suggests that cultures may differ not only with respect to the ethical principle s fundamental decisions but in like manner with respect to which of the three stakeholders self, society, and universal laws is emphasized 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 right 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 unethical, 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 carry a single theory or philosophy by which to make their decisions. In fact, Reidenbach and Robin (1988) found that a varying combination of ethical philosophies or theorie s is employed when ethical decisions are made. Shaw (1999) draws a distinction between two types of ethical theories, consequentialist and nonconsequentialist. Consequentialist theories suggest that the moral rightness 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 involved? The most important consequentialist theories are egoism and utilitarianism. Egoism promotes individual expediency as the guiding principle whereas utilitarianism advocates that everyone affected by the action or decision must be taken into account (Shaw, 1999). By contrast, nonconsequentialist theories suggest that it is not simply the consequence of an act that matters, but also its inherent c haracter. 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, breaking a promise is wrong not simply because of the consequences that result from breaking 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 practically more parsimonious, yet thorough, analysis. Ethical perspectives and national culture hypotheses Whether egoistic or utilitarian principles are employed, ethics are a product of a societys culture, which inc ludes 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 arise when businesspersons from one culture consider something morally significant whereas their counterparts from another culture are ethically neutral. Third, business people from two cultures may interpret a common situati on 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 expect Brazilians and Americans to differ in their assessment of the ethical substance of business decisions.Accordingly, we propose the following hypothesis H1 The assessment of the ethical confine 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 above 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. T hose who abide by this approach to ethics intensely believe that all altruistic 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 judge 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 superlative possible balance 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 ben efit 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 consonant with prior ethics research (Reidenbach and Robin, 1988), the above hypotheses (H1.a and H1.b) together suggest that Americans and Brazilians rely on more than one ethical criterion when assessing the ethical content of an action or decision. Howev er, 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 Sample 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 congruence between the two groups. Second, since all students (both U.S. and Brazilian) were currently employed by companies or had recent professional work experience, the sample can be used as a pro xy 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 measure 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 stimulus 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 participants (in Portuguese) and provided via written instrument and website access to U.S. participants (in English). The Brazilian instrument was ba ck 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 internal 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 south scenario and 0.86 for the third scenario. All three coefficients indicate that the scale items are internally con- TABLE 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 greatest utility/produces the to the lowest degree 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 inefficient (unethical). A Comparative Investigation of Business Ethics