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Citation:Littrell,RomieF.

Citation: Littrell, Romie F. (2011). A Proposal for the Structure of Moral and Ethical Education of University Students and Adult Businesspeople: What to Teach and Why. In Stachowicz-Stanusch Agata & Wankel, Charles (Eds.), Effectively Integrating Ethical Dimensions into Business Education, Charlotte, NC, USA: IAP - Information Age Publishing, Inc., Chapter 3, pp. 51-75.

 

Bio Sketch

 

Romie Littrell is Associate Professor of International Business at Auckland University of Technology in New Zealand. He earned his BA in Psychology from the University of Arkansas at Fayetteville, his MBA from California Coast University in Santa Ana, a PhD in Business Administration from Kennedy College in Zurich, Switzerland, and a second PhD in Applied Psychology from Auckland University of Technology. Dr. Littrell has worked in industry for 34 years in the USA, the Caribbean, Latin America, and China. He has taught at university for 12 years in the USA, China, Switzerland/French-speaking, Germany, and New Zealand. Dr. Littrell is facilitator of the Preferred Leader Behaviour and Values Across Cultures global research project, and facilitator of the Leadership and Management Studies in Sub-Sahara Africa biennial conferences. Recent publications include: Littrell, R.F. and Montgomery, E. (2010). Chapter 4: Contemporary Entrepreneurs in South China: A Discussion of Their Individual Values. In Wang, Yue and Ramburuth, Prem (Eds), Thirty Years of China's Economic Reform: Institutions, Management Organizations and Foreign Investment, Hauppauge NY, USA: Nova Science Publishers; and Wanasika, Isaac; Howell, Jon P.; Littrell, Romie & Dorfman, Peter. (2011). Managerial Leadership and Culture in Sub-Saharan Africa, Journal of World Business, 46(2), 234-241.

 

200 Word Summary

 

Given that international accreditation agencies for business school programmes require the teaching of ethics, this chapter addresses what to teach. What should we teach and why? Additionally, The contents of the chapter assume and support through examples of research the following premises: (1) Ethical values and norms are not universal, but vary across cultures; (2) Ethical values and norms vary across vocations and life roles; (3) Ethical values and norms vary within the individual and are dependent upon the situation; (4) Development of ethical values and norms within the individual is a hierarchical developmental process. Taking the position that ethical norms are culturally relative, a case is presented for focussing on both international legal systems and local cultural norms in teaching and management development programmes. A model of the business ecology is presented and offered as a map for designing ethics education curriculums. The chapter notes Hofstede (1978) proposes in a study comparing participant and U.S. and European faculty at a management development programme at a European business school in a management development programme that businesspeople undergo organizational socialisation when they participate in a campus course. Ethically, academics need to provide education and training that is well related to the real world.

 


A PROPOSAL FOR THE STRUCTURE OF MORAL AND ETHICAL EDUCATION OF UNIVERSITY STUDENTS AND ADULT BUSINESSPEOPLE:

WHAT TO TEACH AND WHY

 

Romie F. Littrell 

AUT Business School 

Auckland University of Technology

Auckland 1142

New Zealand 

Email: Romie.Littrell@aut.ac.nz

 


Abstract

 

Given that international accreditation agencies for business school programmes require the teaching of ethics, this chapter addresses what to teach. What should we teach and why? Additionally, The contents of the chapter assume and support through examples of research the following premises: (1) Ethical values and norms are not universal, but vary across cultures; (2) Ethical values and norms vary across vocations and life roles; (3) Ethical values and norms vary within the individual and are dependent upon the situation; (4) Development of ethical values and norms within the individual is a hierarchical developmental process. Taking the position that ethical norms are culturally relative, a case is presented for focussing on both international legal systems and local cultural norms in a teaching and management development programmes. A model of the business ecology is presented and offered as a map for designing ethics education curriculums. Ethically, academics need to provide education and training that is well related to the real world.

 

Keywords: University Ethics Curriculum, Cultural Relativism


Introduction

 

Why teach ethics in business schools? Pragmatically, the major reason is that business schools in the USA, and to a more or less degree in other countries, are in thrall to the Association to Advance Collegiate Schools of Business (AACSB, originally the American Association of Collegiate Schools of Business; the AACSB began international expansion by accrediting a French university in 1997). The AACSB requires its accredited institutions to address the issue of ethics by at least one of two methods: (a) Universities should require their students to take a course in ethics; or (b) Universities should require that ethics be included as an integral part of business courses (see http://www.aacsb.edu). Another accrediting agency, the European Quality Improvement System (EQUIS) for universities, states at its website that it is the leading international system of quality assessment, improvement and accreditation of higher education institutions in management and business administration. EQUIS states requirements for personal and professional development of business students: Ethics and values: Describe the means by which issues relating to business ethics and corporate social responsibility are integrated into personal development processes. The Association of MBAs (AMBA) states on its website that it is the international impartial authority on postgraduate business education. “Our accreditation service is the global standard for all MBA, DBA and MBM programmes.” AMBA requires that all programmes should ensure that candidates acquire a firm understanding of the major areas of knowledge which underpin general management, including (amongst others): “(vi) the impact of environmental forces on organisations, including: legal systems; ethical, social, economic, and technological change issues...”.

 

This accreditation situation moots the question of must we teach ethics; given that we must teach ethics, my position is to take a Relativism approach to business ethics, vs. Absolutism or Universalism. What should we teach and why? There are many points of view supported by volumes of justification; I find Relativism of ethical values and behaviour to be well supported by my work and life experience of several years each in English, Spanish, Chinese, French, and German speaking societies, and my business, education, and research experience in those societies. I take a perspective of international business management in this chapter, based upon these premises:

    Ethical values and norms are not universal, but vary across cultures;Ethical values and norms vary across vocations and life roles;Ethical values and norms vary within the individual and are dependent upon the situation;Development of ethical values and norms within the individual is a hierarchical developmental process.

I will expand each premise below. Given our guidelines on chapter length, I will cite and discuss specific exemplary references on each topic, selected from thorough literature reviews. The topics are introduced in isolation, as there is no one logical, building block sequence for the multiple influences on perceptions of ethical behaviour. Each topic is intended to provide an element of support to the conclusion of an educational curriculum response to the general validity of ethical relativism.

 

Defining Ethics

 

Study of ethics, sometimes referred to as moral philosophy, is the branch of philosophy concerned with evaluating human action (comparing the behaviour to group values). Some distinguish ethics, what is right or wrong based on pragmatic, consequence-based reasoning, from morals, what is considered right or wrong behaviour based on social custom. This kind of moral reasoning ignores the situation that ethics, morality, and moral reasoning are inextricably intertwined. Attempting to parse them into mutually exclusive topics is analogous to debating how many angels can dance on the head of a pin without jostling one another; it does not provide valuable information.

 

Della Costa (1998: 123) writes, “…values represent qualities that are held in worth or appreciation” whereas “ethics, on the other hand, may be held in worth, but they represent not just what is appreciated but what is right…” and “Ethics are the norms that a community defines and institutionalizes to prevent individuals from pursuing self-interest at the expense of others.” This is an interesting Collectivist opinion; pursuing self-interest at the expense of others is unethical. Burns (1978), on the other hand, promotes a more pragmatic view of ethics in managerial leaders; “Moral leadership emerges from, and always returns to, the fundamental wants and needs, aspirations, and values of the followers.” Followers demand and get the ethical behavior they want from their leaders. We always find poor definitions of concepts from academia for culturally and personally relativistic issues. I try to leave definitions to dictionaries. The Random House College Dictionary defines ethics as, “the rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc.” Different cultures have different rules of conduct. This requires that the businessperson know and understand his or her own culture as the starting point of comparison.

 

In well-socialised, acculturated human beings, appropriate moral and ethical development is a process involving age, cognitive growth, and maturation. Discussion of this and other approaches to developmental morality can be reviewed in Kohlberg (2008), Marlowe & Canestrari (2006), and Kagan & Lamb (1987). I will generally be referring in this chapter to the moral and ethical education and behaviour of adult businesspeople, though that in itself is a culturally nebulous concept. Taking the Interpol (2010) legislation as a source, and making the assumption that ages at which people of different sexualities can legally have sex indicates adulthood, even the presumption of the beginning of age of legal adulthood differs, ranging from 12 years old to 18 years old in the nations of the world. I will now address cultural Relativism of ethics.

 

Ethical Values and Norms Are Not Universal Across Cultures

 

Kluckhohn (1955) proposed there were universal higher order moral values for humans. However, Singhapakdi, Vitell & Leelakulthanit (1994) propose that culture is generally recognized as one of the most important factors influencing ethical decision making in business theories; different societies produce different ethical standards. Culture, personality, and the situation moderate altruistic, pro-social behaviours. My literature review finds that differences in definitions and levels of moral reasoning can be related to differences in age, cultural background, and educational experiences. Age and education might be conflated.

 

Forsyth and O’Boyle (in press) review international issues relating to business ethics and find that strategies and procedures that may be considered appropriate, legitimate, or even laudable in one country may be condemned as morally unacceptable elsewhere. Bribery, nepotism, and exploitation of the members of less privileged classes are taken for granted in some locales, but in others these actions cross a moral boundary (see, e.g., Al-Khatib, Robertson, Stanton & Vitell, 2002; Kaikati, Sullivan, Virgo, Carr & Virgo, 2000). In some countries businesspeople scrupulously conform to governmental regulation of business practices, but in others such rules are flouted, or may not even exist (Ferrell, Gresham & Fraedrich, 1989). In some cultures, employees think little of maximizing their personal advancement at the expense of others and the company as a whole. Some accept dallying and prolonging work breaks, calling in sick so they can enjoy some time off, taking credit for work they did not do, and pilfering company supplies for use at home; in some cultures such selfish actions are roundly condemned (Al-Kazemi & Zajac, 1999).

 

Using anecdotal personal experience of the author, who worked as a university professor and a Human Resources and Training manger in the interior of China and also the articles Littrell (2002) and Huyton and Sutton (1996: 26), when Western managers did not go along with the traditional Guanxi+renqing principle of using personal relationships and favours owed to support furthering one's own position or to get things done more quickly, the older generation of Chinese staff felt that Westerners were unethical and had no scruples, but the younger generation welcomed this break from tradition because it meant that they could achieve promotion through "what you know rather than who you know". Additionally Huyton and Sutton found that when Western managers attempted empowerment practices and delegating responsibility subordinates felt the managers were not carrying out their duties and responsibilities; Paraphrasing Confucian analects "a manager's role is to manage, a worker's is to work".

 

Ethics, Cultures, and Religions

 

The teaching and study of business ethics needs to include the interactions of ethics, cultures, and religions. In a short, efficient, and well-crafted analysis of the intertwining of the three, Ruhe & Lee (2008) believe that implicit in most comparative ethical studies is the assumption that cultural and religious differences between countries are the major reasons behind the variations in ethical beliefs and business practice across national cultures. Ruhe & Lee examine research on international ethical issues and attempt to identify the common moral concerns that permeate differing religious, including Judaism, Christianity, Islam, Hinduism, Buddhism, and Confucianism. They include an interesting discussion of the Golden Rule and implications regarding its practical implementation in business practice. Strict application of the Golden Rule would rule out certain bargaining practices in business. It is to the advantage of the negotiator that the opposing trader not know the seller's price, even though the buyer would prefer to know it, and the seller would prefer to know the price the buyer is willing to pay; this idea applies to most competitive win-lose situations. They refer us to Bruton (2004), “Teaching the Golden Rule”, who provides us with arguments for ignoring the Golden Rules for lower levels of interpersonal business transactions. We can conclude that religion has significant effects on ethical behaviour within cultures, but that these effects differ within and across cultures; see Burton & Goldsby (2005) for further discussion. Another set of conditions that affect perceptions of ethical behaviour are vocations and life roles.

 

Ethical Values and Norms Vary Across Vocations and Life Roles

 

The idea that values and ethical norms vary amongst vocations, professions, and life roles had a burst of supporting research in the 1970s. In an early publication by Hofstede (1978) he compared U.S. and European faculty members at a European business school with working executives who were students in a management development programme. Results show that faculty members differ significantly from businessperson participants toward more “academic” values and have less “will to manage”. Hofstede states this is a role difference rather than a nationality difference. Results also show that faculty members evaluate most highly participants with value profiles largely similar to theirs (is this unethical?), but prefer students higher in “Leadership” and relatively low in “Independence”. These data are considered demonstration of the type of organizational socialisation that businesspeople undergo when they participate in a campus course. There was no follow-up, longitudinal study, so the permanence of the change due to participation in education is not known.

 

In a study of role-related differences in ethical hypocrisy, Lammers, Stapel & Galinsky (2010) find power promotes hypocrisy. These researchers, summarising five empirical laboratory studies, find that increasing power inspires hypocrisy, expressed by the tendency to hold high standards for others while accepting engaging in morally problematic behaviours oneself. The research found that power makes people stricter in moral judgment of others, while self-justifying lower standards for themselves. This propensity can cause a severe disconnect between public judgment and private behaviour. Lammers et al. propose hypocrisy has its greatest impact amongst people who are legitimately powerful. In contrast, they found that people who do not feel personally entitled to their power are actually harder on themselves than they are on others, a phenomenon the researchers labelled hypercrisy. Multiple studies confirm the tendency for the powerless to be harder on the self than on others. Lammers et al. conclude that ultimately patterns of hypocrisy and hypercrisy perpetuate social inequality. The powerful impose rules and restraints on others while disregarding these restraints for themselves, whereas the powerless collaborate in reproducing social inequality because they do not feel the same entitlement.

 

Ethical Relativism vs. Absolutism

McDonald (2010) published an insightful analysis of ethical Relativism vs. Absolutism. She indicates that demonstrations of ethical Absolutism employ constructs of Relativism and Absolutism that are oversimplified in their depictions of principles that are philosophically extremely complex. She also finds ethical Relativism publications are subject to a proliferation of different meanings ascribed to similar terms. The support of ethical Relativism appears to attract research perspectives that are heavily dependent on kinds of academic origins. Very often clear distinctions are not made between ethical and situational relativity.

 

McDonald suggests that Relativism is present in the process of moral justification and that ethical Relativism should be analyzed from three levels: the individual level, the role and group level, and the cultural level. She believes the overriding objection to ethical Relativism rests on the consequences of a priori acceptance of Relativism, which undermines the existence and strength of religion and cultural based ethnocentric attributions of global moral standards. McDonald concludes that all we have really produced to date in research on ethics is to “open up a rich vein of research opportunities”. She believes researchers use hypothetical ethical dilemmas that are often unrelated to a specific industry or cultural setting, and this has resulted in many researchers obscuring the differences between situational relativity and true ethical relativity.

 

Ethical Values and Norms Vary Within the Individual Dependent upon the Situation

 

The judgment process underlying ethical decision making is multidimensional. The study results and the literature review of Beekun, Stedham, Westerman & Yamamura (2010) confirmed that multiple concurrent ethical perspectives should not be expected to be independent from each other. Individuals may be using several ethical perspectives simultaneously, although they may not give each equal weight. Beekun et al. also identify the inconclusiveness of studies of the effects of peers or comparison-others. Much work remains to be done in developing a consistent, integrated framework that reflects the multidimensionality of ethical decision-making. Beekun et al. also focus on gender and ethics.

 

Gender and Ethics

 

Beekun, Stedham, Westerman & Yamamura (2010) using samples of university post-graduate business students with work experience from Italy, Germany, and Japan investigated whether men and women differ in ethical decision-making. Their findings indicate that women use a particularistic (Trompenaars & Hamden-Turner, 1998) approach to justice together with an emphasis on pragmatic utility, which stresses the consideration of situational factors in an assessment of right and wrong behaviour. In contrast, for men justice is justice no matter what the situation is and who is involved. For a woman, contextual factors must be taken into consideration when assessing the ethical nature of a decision. The consideration of such factors that are implicit in culture, such as tradition and family, were critical in women's assessment of the unethical action presented. With women indicating effects of national culture dimensions, the emphasis on culture and utilitarianism by women may reflect the social expectations for them to be the caregivers in society. A utilitarianism perspective of ethics specifies the primary obligation on an individual is to do that which benefits the majority of other people; there is a moral responsibility to help others. The results of this study are consistent with the results of research on gender differences in management. Female managers are likely to apply an interactive approach to management and are concerned with relationships and helping others. Men are more likely to adopt a command-and-control approach to management, and a transactional leadership style. As supported by the results of this study, women are willing to look at the particulars of a situation such as who is involved and why. Women take into account the contextual aspects of the specific situation whereas men prefer a universalistic approach; this heuristic requires determining which rule applies to a given situation and the enforcement of that rule.

 

From a practical perspective, the results of this study are useful to managers, providing insights into their different approaches to dealing with ethical dilemmas. Understanding that women are more likely to focus on context and men on the rules may provide a foundation for more effective communication. Female managers may need to provide their male counterparts with full disclosure of all the factors they are considering in their ethical assessment. Correspondingly, male managers may need to suggest to female peers their ethical perspective of consistency and reliability, and that rules may not be bent for every situation. This may allow more accurate mutual expectations to be formed as to how ethical decision processes should occur.

 

Alternatively, the situational approach to ethical decision making may provide female expatriate and cross-cultural managers with enhanced adaptability when faced with different or ambiguous norms, values, and cultures. Their enhanced ability to contextualize ethical issues may provide an advantage when engaging in countries or locales with diverse populations, such as India or China. In an increasingly multicultural and international business environment, such flexibility may be valuable in contrast to a strict adherence to perceptions of universal moral codes that may be erroneous or counterproductive. Ultimately, the ethical decision that male and female managers will arrive at may represent a compromise, but also may represent a more useful decision.

 

Developmental, Hierarchical Stages of Moral Development

 

The influential theories of moral development are hierarchical and developmental. Kohlberg, a seminal researcher of ethics and morality, observed that growing children advance through definite stages of moral development in a manner similar to their progression through Piaget's stages of cognitive development (1969, 1971, Colby, Kohlberg, Gibbs, Lieberman, Fischer & Saltzstein, 1983). Kohlberg’s observations and testing of children and adults led him to theorise that human beings progress consecutively from one stage to the next in an invariant sequence, not skipping any stage or going back to any previous stage. These are stages of increasing of complexity of cognitive processing, implying qualitatively different modes of thinking and of problem solving at each stage. These conclusions have been verified in cross-cultural studies done in, for example, Turkey, Taiwan, Yucatan Mexico, Honduras, India, the United States, Canada, the UK, and Israel. Kohlberg's “six” stages of moral development are characterised by hierarchical stages with the following steps of moral order:

 

  • Pre-moral or pre-conventional stages: behaviour motivated by anticipation of pleasure or pain.
    • Stage 1: Internal compulsion and power: punishment and obedience
    • Stage 2: Simple interpersonal exchange and need satisfaction: instrumental exchange
  • Conventional morality: acceptance of the rules and standards of one's group.
    • Stage 3: Maintaining positive, interpersonal Relationships: interpersonal conformity
    • Stage 4: Maintaining social order: law and order
    • Stage 4?: University-age students come to see conventional morality as relative and arbitrary, but may not have yet identified what are to them universal ethical principles, if they exist, or culture-wide principles, if they exist. The students may drop into a hedonistic ethic of “do your own thing”. This was well noted in the hippie culture of the USA in the l960's. Disrespect for conventional morality was especially infuriating to the Stage 4 mentality, and indeed was calculated to be so.
  • Post-conventional or principled morality: ethical principles
    • Stage 5A: Prior rights and social contract: a legitimate social contract
    • Stage 5B: Prior rights and social contract: intuitive individualism and humanism
    • Stage 6: Individual conscience; universal ethical principles applied to relationships with all others

As noted, Kohlberg observed that order of progression through the stages is invariant. Moral development is growth, and like all growth, takes place according to a pre-determined sequence. One cannot expect someone to grow into high moral maturity overnight. Kohlberg believed that only about 25% of persons ever grow to level six, the majority remaining at level four. Kohlberg developed an interview procedure for assessing an individual’s level of moral development.

 

Over the years, Kohlberg's theory came under some criticism. These criticisms have been sufficient addressed, including cultural biases; see Kohlberg et al. (1983). Snarey (1985) and Gibbs, Basinger, Grime & Snarey (2007), reviewing Kohlberg's claim of cross-cultural universality and found support for the theory. Kohlberg's theory using Rest's Defining Issues Test (DIT, 1986, 1993) has successfully measured moral reasoning of various groups across diverse cultures, including non-western cultures. From my review of the literature, it is apparent that Kohlberg's theory tends to overemphasise Western philosophy, proposing Individualism’s personal rights as a high moral value. Per Hofstede (2001), Individualistic cultures emphasize personal rights while Collectivist cultures stress the importance of accommodating in-groups and community. Collectivist cultures may have different moral outlooks that Kohlberg's theory does not account for, consciously or unconsciously subordinating individual rights and needs to in-group rights and needs.

 

Research relating to Kohlberg’s stages does not find an education effect, at least for adults at the post-graduate university level. Early research, Thoma & Davison (1983), assesses the relationship between formal education and moral reasoning development, while controlling for verbal ability, age, and sex. Their results do not support an educational effect hypothesis. Bar-Yam, Kohlberg & Naameis (1980) find that cultural differences in education of adolescents do have an effect on moral reasoning stage scores. We can expect to see students at at least Stage 3 in universities. We should be able to influence perceptions of pro-social ethical behaviour in undergraduates, less so in post-graduates.

 

Gender and Moral Reasoning

 

Rest (1979) reviewed 22 studies using the DIT, which included information on sex differences. He found only two studies where the sexes significantly differed, and in both, the female group scored higher. There are no indications that Kohlberg’s moral reasoning measures favour men, but they may slightly favour women as to size of scores. Recalling Beekun et al.’s (2010) findings indicating that women use a particularistic approach to justice together with an emphasis on pragmatic utility, stressing the consideration of situational factors, and for men justice is justice no matter what the situation is and who is involved, support is provided for the idea that the DIT may have a situational bias affecting gender scores.

 

Culture and Moral Reasoning

 

Bar-Yam, Kohlberg & Naameis (1980) investigated development of moral reasoning of 115 adolescent subjects representing urban middle-class and lower-class, kibbutz-born and Youth Aliyah (disadvantaged urban youth educated in the kibbutz), Moslem, and Christian Arab groups in Israel. The study employed Kohlberg's moral dilemmas to determine levels of moral reasoning, and the data analysis was done in terms of his six moral stages. Bar-Yam et al. found moral reasoning score differences to be affected by social class and kibbutz living. Christian and Moslem Arab middle-class samples showed similar levels of moral reasoning to the Turkish middle class, the Oriental Jewish lower class, and the American lower working class. Moslem girls showed a lower level of moral reasoning than either the Moslem boys or the Christian Arab girls under study. No significant differences in level of moral reasoning were found between males and females of the kibbutz sample. Interviews with educators of the various groups revealed that (1) kibbutz educators stressed democratic processes, sexual equality, mutual responsibility, and active decision making by kibbutz children; (2) teachers of the Arab students pointed out that although the Moslems were of similar socioeconomic background and similar ability level, the cultural-religious differences had an effect on their school behaviour and social participation. The study indicates that differences in levels of moral reasoning could be related to differences in cultural background and educational experiences.

 

Genetics and Ethics

 

Glenn, Raine & Schug (2009) and Glenn and Raine (2009) present evidence that moral and immoral behaviour are the products of evolution and that there is a significant neurobiological basis to both. They propose the concept of morality may have evolved as an adaptive strategy of cooperation between individuals being beneficial to both. Their brain imaging studies of individuals who primarily engage in immoral or antisocial behaviour suggest there may be neural underpinnings to this approach to social interaction. Several brain regions that are implicated in moral decision-making are found to function differently in antisocial individuals. The personification of immoral behaviour is actually an alternation evolutionary strategy when few in number in the population, psychopaths may successfully use deception, violence, and cheating to obtain resources and maximise reproductive fitness. Many studies indicate an extremely complex interaction amongst genetic hard wiring, culture, and personality in motivating most humans toward pro-social behaviour (see, e.g., Bereczkei, Birkas & Kerekes, 2010). My literature review finds a large body of experimental evidence based on laboratory game studies indicating that human behaviour deviates from economic predictions of profit maximisation. Knafo, Israel, Darvasi, Bachner-Melman, Uzefovsky, Cohen & Ebstein, et al. (2008), using the Dictator game, provide evidence that these deviations are common but not universal, and find support that altruistic behaviour may be to some degree genetically determined. Knafo et al. showed that pro-social altruism or deficits in pro-social behaviour were largely mediated by presence or absence of a particular gene that apparently influences altruistic giving in mentally and physically healthy subjects. No gender differences were observed. Using the Schwartz Value Survey (Bardi and Schwartz, 2003) Knafo et al.’s subjects self-reported their level of altruism and pro-social behaviour. Two subscales were used that represent two different aspects of pro-social values. The researchers found the Universalism sub-scale taps behaviours that represent a pro-social motivation for understanding, appreciation, tolerance and protection of the welfare of all people (e.g. “Make sure everyone I know receives equal treatment”; “Donate money for saving people who suffer from war, famine, etc. in distant countries”). Significant association was observed between scores on the Universalism behaviour subscale and genetic indicators. For the Benevolence behaviour subscale, which assesses behaviours that represent a pro-social motivation to help and support in-group others with whom one is in close or daily contact (e.g. “agree easily to lend things to neighbours”; “help my friend to perform tasks such as moving and studying”), significant association was also observed between scores on that sub-scale and genetic indicators. These studies strengthen the proposition that genes partially contribute to voluntary actions that promote the interest of others, for reasons other than contemporary self-interest. The evidence suggests that humans are to some degree hard-wired for altruistic allocations of money in an economic game and imply that similar genetic determinants are important outside the laboratory. These determinants are represented by individual genetic differences across individuals. Similar results were obtained in twin studies by Reuter, Frenzel, Walter, Markett & Montag (pre-publication proof). The question that arises is can education and training significantly and permanently alter genetic and neurobiological drivers of behaviour?

 

Fallacies in the Expectation of Moral Behaviour in Business

 

Should we expect ethical behaviour amongst businesses? A news media and academia driven aspect of desirable ethical behaviour is Corporate Social Responsibility (CSR). However, the small percentage of articles actually measuring consumer purchase behaviour finds a large attitude–behaviour gap or values–action gap. Mohr, Webb & Harris (2001) in a person-on-the-street interview study in the USA conclude that most of their respondents, 78%, do not regularly use CSR as a purchasing criterion when actually making a purchase, as opposed to pre-purchase attitudes. Young, Hwang, McDonald & Oates (2009) in a study employing in-depth interviews of self-declared “green consumers” in the UK find only 30% of consumers report that they are very concerned about environmental issues, and even this group are struggling to translate this into purchases. In the UK, for example, the market share for ethical foods is about 5% of sales.

 

For a good discussion of the issues related to effects of CSR, I refer you to Devinney (2009). Devinney argues and supports that “the notion of a socially responsible corporation is potentially an oxymoron because of the naturally conflicted nature of the corporation.” Devinney points out that there is no clear relationship between CSR and anything, and that firms with poor environmental and product safety performance tend to engage in higher levels of philanthropy than others.

 

Ahmed, Chung & Eichensehr (2003) conducted a study evaluating university business student responses in single universities in China, Egypt, Finland, Russia, South Korea, and the USA to four described scenarios involving: (a) failure of a car salesman to inform internal parties in a car dealership of a known "serious" engine problem of a car about to be traded-in on a new car sale; (b) the failure of a store manager to correct observed product misrepresentations of one of his sales employees; (c) the failure of a store to notify customers being offered name-brand dinnerware at a deep discount that production of the line of merchandise has been discontinued and complete matched sets will never be available; and (d) the failure of a car dealership to fully repair a car transmission under warranty in anticipation of major billable repair work when the warranty had expired.

 

Interpreting the results of the analyses in the study, Russian subjects systematically perceived least harm in the actions described in all four business scenarios, indicated a higher propensity to pursue the same course of action described in these scenarios, and indicated low priority for ethics in the pursuit of firm profits. They also indicated a higher perception that other people would likely see harm in the actions described in the business scenarios perhaps indicating a requirement for secrecy.

 

Chinese subjects responded similarly to Russian subjects in seeing less harm from the actions described in business scenarios a and d. For scenario c, on the other hand, they were more like to perceive harm (less likely to perceive no harm) than subjects from all other surveyed countries. This third case varied someone from the other three cases in that it portrayed, in some sense, general product-line misrepresentation as opposed to specific product or service misrepresentation. The difference between this case and other cases and the differential Chinese reaction warrants future research. Further paradoxes in Chinese responses (and differences between Chinese and Russian responses) appear in the much lower inclination of Chinese subjects to view ethics as compatible with profits or good business in the long-term, while at the same time indicating a substantially lower propensity to behave in the questionable manner presented in the business scenarios.

 

The study reported perceptions as to the importance or religious/spiritual values in society, with Egyptian students providing high responses and Chinese and Finnish students providing low responses; and (2) a somewhat unique U.S.A. positive response as to the compatibility of ethics and profit-seeking in business.

 

These results can be interpreted in the context of cultural value dimensions, or the maturity of market-based, private enterprise in the countries. China and Russia have recently emerged from economic conditions characterised by shortages of consumer products, and perhaps have not been conditioned by long-term market-based reputational effects, allowing more acceptance of opportunistic product representations.

 

Concerning observed differences in responses related to the role of religion or spiritually in social development, Egypt, following the Muslim tradition of non-separation of religion and politics/economics, exhibits by far the highest response as to the significance of religion. Finland and China can be characterized as countries with weak or declining religious traditions, and these two countries exhibit the lowest responses as to the importance of religion. There was a strong perceived effect between good business ethics and business profits projected by USA subjects, perhaps reflecting the effects of legal and public opinion on the expression business ethics courses in that country.

 

University Teaching: The Basic Issues: Law vs. Morality

 

So what should we as academics be teaching? A tenet of civilisation is that we need laws to regulate the behaviour of businesspeople. Business today may not often be a matter of personal life and death, but it has been. In the earliest codification of some laws of business transactions, Hammurabi's Code of Laws (circa 1780 B.C., translated by L. W. King), discussing contracts, “Item 7. If any one buy from the son or the slave of another man, without witnesses or a contract, silver or gold, a male or female slave, an ox or a sheep, an

ass or anything, or if he take it in charge, he is considered a thief and shall be put to death.” In Hammurabi’s time all records of commercial transactions were recorded on tablets and kept as legal documents in case of discrepancies or disagreements. A large number of this type of tablet has been found in ruins. Property was commonly moved about within society by such means as barter, exchange, or lease. Normally, payment was made by means of other valuable products rather than cash. Where a man was unable to pay his debt, he was able to give his wife, child or slave to work off his indebtedness. The debtor could be detained but could not be detained longer than three years, so even bankruptcy had very serious consequences. Looking back at, for example, what was at the time the U.S. world record bankruptcy of ENRON in late 2001, modern investors and employees might long for more Hammurabi-like laws governing cavalier treatment of other peoples’ money. If judged by Hammurabi’s code, ENRON executives owe a wife, child, or slave and up to three years detention; this may have provided a deterrent to their cavalier behaviour.

 

The curriculums of many, if not most business schools, particularly in British and Commonwealth countries, North America, and Western Europe are full of required courses, leaving few options for students to choose electives. In recent years, business ethics courses have been pushed into the agenda of required courses as these issues gained exposure from international scandal and academic accrediting agencies, leading professors and executives in residence to comment on the relative importance of teaching ethics versus law to international managers.

 

The basic issues in questions of teaching of ethics and morality relate to ethical behaviour consisting of adherence to the law, and ethical behaviour including extra-legal issues relating to morality. Kupetz (2006) points out that Nobel Prize-winning economist Milton Friedman (1970) argued, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engage in open and free competition without deception or fraud.” Ehrlich (2005) asserts, “An ethical manager behaves no differently than one who follows the law and is concerned for the long term profitability of his business.” From this approach Kupetz asks, “If we choose to teach ethics, whose ethics will we teach? If you try to teach that it is unethical for Ford Motors to continue to build SUVs (Sports Utility Vehicles) because they have poor fuel efficiency, which therefore harms the environment, someone else could teach that it is unethical to deprive parents of a sturdy vehicle that is far more likely to keep their children alive in the event of an accident. Ford should decide whether or not to sell SUVs based on the long-term profitability to the company, not the ethical flavor of the day. If it is unethical to sell SUVs, some could argue it is unethical to sell any product that pollutes. Maybe Ford could start selling ice cream cones – until someone argues it is unethical to be in a business that could contribute to childhood obesity...” Which brings me to a suit by California mother Monet Parham, stemming from her inability to resist her children’s appeals for McDonald’s Happy Meal toys, caused by McDonald’s marketing, certainly a low in responsible parenting. This is a bizarre situation in the USA, where citizens are able to file suit, claiming powerlessness facing the onslaught of corporate marketing (Olson, 2010).

 

Instead of unthinking response to media-enhanced minority opinion, we should train future managers that Ford should build products that its customers want and need, that Ford should follow the letter and spirit of US laws and regulations and those in the countries where they do business, and that Ford’s MBA-trained managers should hire lawyers to help ensure compliance. Then we are serving our students and their eventual shareholders well, according to Kupetz, who believes ethical managers, all other things being equal, are better than unethical managers are, but since we cannot definitively choose whose ethics to teach, we should instead teach the law.

 

When Internet broadcasters find clothing made legally in sweat shops in Latin America, or poor health conditions in the factories that vendors used in Indonesia, some consumers will stop buying these products. Therefore, the MBA-trained manager quickly realises the importance of adhering to the ethics of these consumers. Acting ethically in this case increases shareholder value, but we do not need to teach ethics in school, as the behaviour is a function of increasing shareholder value. Kepetz argues what an ethical manager is a law-abiding manager; other requirements are superfluous.

 

Johnson (2006) differs, advancing the argument that in countries such as the USA conflicting state laws and federal laws are not always clear, e.g., with differing laws such as interstate commerce regulations and federal vs. state product liability laws. Therefore, there is not necessarily one law that we can teach. Johnson believes too many firms and individuals behave unethically at times, even though such behaviour might be legally acceptable. Johnson asks the question, “Do we want to develop managers with a legalistic mind frame, or managers with a sound ethical compass (not that the two are necessarily mutually exclusive!)?” Development of laws by politicians and bureaucrats guarantees that when immoral and unethical laws are passed, their costs are borne by taxpayers, generally far removed from the attorneys, corporations, and Governments. Condon (2002) points out in the USA a sub-prime lender, Household Credit, extracted exorbitant fees and interest payments from borrowers who did not qualify as prime credit risks. Market forces were circumvented since Household Credit was the only lender that was prepared to do business with sub-prime borrowers. Johnson (2006) feels these actions are unethical because the problem was dumped on the USA taxpayer. Household Credit’s actions were within the law at the time. We saw in 2009 and 2010 with The Great Recession the continuing and expanding effects of laws under which Household Credit operated. At the time the actions were both legal and to the benefit of the stockholders, but the continuation and expansion of the immoral practices eventually lead to astronomical amounts of destruction of wealth.

 

Kupetz (2006) proposes this Household Credit issue “is a perfect example of a manager acting in the best interests of the shareholder... ‘But that doesn’t make it right’ is an argument for the US Congress.” Ethics matter but the law is the law. Should corporations fail to exercise the opportunities provided them by law they would almost certainly face shareholder litigation, particularly in the USA. Kupetz points out that subsequent extensive analysis of Household Credit’s lending practices as described found them illegal, and several courts ruled against the firm, and some of the rulings were overturned by the US Supreme Court (Justia.com, 2004), a murky situation. Krupetz says, “A manager trained to respect and honor the law, and to hire a lawyer to ensure compliance, would never have engaged in such activity because breaking the law is never – never – the way to maximize shareholder value in the long term.”

 

In the growing transparency and reporting of facts and the reporting of innuendo and lies as fact in the environment of the global reach of the Internet, training managers to follow the letter of the law can increase shareholder profitability in the short-term, however, when the law conflicts with the customer’s interests, managers must consider morality and ethics, doing the right thing, or risk losing customers.

 

As to the he matter of what to teach? Should we teach managerial leaders to obey the law, written or implicit, and also adhere to the values of their society and their market? These may be incompatible. If society demands goods provided in illegal grey markets or from small, informal, off-the-tax-books wholesalers or retailers, then not providing such will price your products out of the market. If you are Christian, St. Augustine the Blessed, Roman Catholic Bishop of Hippo Regius (present-day Annaba, Algeria) tells us “lex mihi esse non videtur, quae iust non fuerit” (“that which is not just does not seem to be a law”; this has been corrupted by proponents of civil disobedience to “lex iniusta non est lex”, “unjust law is not law”). The Church’s power to abrogate national or colonial laws has diminished significantly since St. Augustine’s time. Failure to obey the laws of Government frequently has severe negative consequences, just laws or not. Should legal businesses work to destroy grey markets and informal economies and increase their profits, costs to consumers, and tax revenues to the Government? Solutions to this problem are left as an exercise for the reader.

 

A Model

 

Given acceptance of ethical relativism, I formulated[1] a simple model to identify the variables exerting critical influence on managerial leadership opinions, attitudes, beliefs, and behaviours within and across cultures. Osgood’s (1974) theory of subjective and objective culture is included. Some definitions are,

  • Material/Objective Culture: Buildings, tools, clothing, methods of transportation, etc.
  • Subjective Culture
    • Characteristic ways of viewing the environment (e.g., ideas, theories, and political, religious, scientific, aesthetic, economic, moral and social standards for judging events in the environment.
    • Subjective culture can be institutionalized in government, education, religion, etc. systems.

Values are principles that guide our lives (Schwartz, 1992; Schwartz, 1994). They are designed to lead us toward our ideal world and,

  • Transcend specific situations
  • Guide selection or evaluation of behaviour and events
  • Are ordered by relative importance

The model is depicted in Figure 1. The underlying assumptions are:

    Demographic characteristics and taxonomy of task groups affect both the nature of the acts engaged in in business, as well as the role perceptions and need satisfactions supporting these behaviours;Businessperson behaviour and accompanying role perceptions determine to some extent the nature of need satisfaction, the degree of need fulfilment realized, and the importance of the various needs to the actors; Need satisfaction, need fulfilment, and need importance combine to result in some kind of definable index of “overall” job satisfaction; The proposed relationships between the variables are adaptive feedback systems, i.e., changes in the valence of one variable will affect the other variable to which it is tied; and Feedback may be either immediate or delayed.

The ecological and societal influences can define the structure and topics of business ethics in a university curriculum. Each of the Individual Experience Ecology and the Societal Ecology generate implicit and explicit norms, values, and rules. In societies generally adhering to Universalist values, the rules provide consistent and highly visible guides for behaviour. In Particularistic societies, the rules tend to have little or no importance and each transaction may have its own set of rules based up situation and relationships. Ethical behaviour rules are contingent upon the society in which a transaction occurs.

 

Insert Figure 1 about here

 

One Prescription

 

Having adequately demonstrated the cultural relativity of ethics and provided a model for defining educational topics dealing with development of ethics, I find defining what we should teach to be relatively simple, relative to views developed to fit single societies and then attempting to use and justify them in other societal cultures. For those who see themselves confronted with challenges stemming from parochial views and approaches, Relativism provides a contingency model, which by definition fits different contingencies. A business ethics curriculum needs to prepare students with knowledge of the differences amongst members of categories of contingencies: laws and legal systems and societal cultures, and tools analyse, synthesise, and accommodate the differences.

 

For example, we will receive undergraduate students who at least can operate at Kohlberg’s Stages 3 and 4, Conventional morality: acceptance of the rules and standards of one's group, generally understanding and accepting of norms, rules, and laws. Perhaps in our undergraduate teaching we will encounter Stage 4? students who have come to see conventional morality as relative and arbitrary, but may not have yet identified what are to them universal or acceptable local ethical principles, or not developed and understanding and acceptance of multiple, equally valid ethical systems. Bar-Yam, Kohlberg & Naameis (1980) indicate that education can change and inculcate moral principles at the undergraduate level. There is some doubt if this can occur at the more mature post-graduate and business practitioner level; there the focus needs to be on learning and obeying the implicit and explicit laws of the lands in which the business operates. With effectively designed course content and teaching, it is possible to move undergraduates to the Post-conventional or principled morality Stage 5, learning ethical principles emphasising individual rights, social contracts, and humanism. As demonstrated in discussions above, I strongly support a Relativistic approach within a Business and Culture context. I see value in a required course focussing on business ethics, supported by relevant large or small modules within all the programme courses. Ethically, academics need to provide education and training that is well related to the real world.

 

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Figure 1. Ecological Influences on the Behaviour of the International Managerial Leader

 

Individual Experience Ecology

 

Individual Characteristics

 

Family Influences

 

Occupation Requirements

 

Community Ecology

 

Societal Ecology

 

Intercultural Experience

 

 

 

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Societal Ecology

 

Subjective Culture

 

Objective Culture

 

Personality Dimensions

 

Occupation-Related Variables

 

 

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Behaviour of the Actor

 

 

 

 

The Businessperson

 

 

 

 

 

 

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[1] With the advice, contributions, and thanks to contributors:

  • Dr. George F. Simons, George Simons International, France
  • Dr. Paul T. P. Wong, Trinity Western University, Canada
  • Prof. James Taylor, The Centre for Research on Higher Education Policy, Portugal
  • Dr. Oliver C. S. Tzeng, Professor and Director, Osgood Laboratory for Cross-Cultural Research, Indiana University-Purdue University at Indianapolis, USA

 

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