Ethical Dimensions of International Management


Stephen J. Carroll & Martin J. Gannon

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  • Sage Series in Business Ethics

    Series Editor: Robert A. GiacaloneThe E. Claiborne Robins School of Business, University of Richmond

    Editorial Board

    Norman Bowie University of Minnesota

    F. Neil Brady Brigham Young University

    Steve Brenner University of Portland

    Rogene Bucholz Loyola University-New Orleans

    Archie Carroll University of Georgia

    Guido Corbetta SDA Bocconi

    Terry Ferris University of Illinois, Urbana-Champaign

    Clive Fletcher University of London

    Donnelson Forsyth Virginia Commonwealth University

    Ed Gray Loyola Marymount University

    Jerald Greenberg Ohio State University

    Robert Hay University of Arkansas

    M. David Hoch University of Southwestern Louisiana

    John Kilpatrick Idaho State University

    Jeanne Liedtka University of Virginia

    Alex Michalos University of Guelph, Canada

    Dennis Moberg Santa Clara University

    Chimezie Obsigweh Norfolk State University

    Jean Pasquero University of Quebec at Montreal

    Stephen L. Payne Eastern Illinois University

    Barry Posner Santa Clara University

    Joanne Preston Pepperdine University

    Paul Rosenfeld Navy Personnel Research & Development Center

    James Schweikart University of Richmond

    Linda Trevino Pennsylvania State University

    Henk J. L. van Luijk The Netherlands School of Business

    Scott Vitell University of Mississippi

    Donna Wood University of Pittsburgh

    Dan Worrell Appalachian State University


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    This book is dedicated to our parents and teachers who especially exemplified principles of integrity and ethical behavior and by so doing served as models of emulation for us and many others: Helene Carroll, Stephen Carroll, Sr., Catherine A. Gannon, Leo W. Gannon, Marvin Dunnette, George England, James Jenkins, Thomas Mahoney, Donald Paterson, George Seltzer, Dale Yoder, the late Brother Bernard Rodolf, S. J., and Clarence C. Walton.


    It is difficult to identify two topics that have been more frequently discussed—and either directly or indirectly accorded prominent attention—in very recent years in business schools and business itself than those of ethics and culture. Ethics, of course, has been an important topic since ancient times and, although such writings as Plato's Republic and Aristotle's Nicomachean Ethics are still widely read and discussed, ethics in business is of more recent vintage. We now have courses on ethics in business schools, laws governing ethicality in business behaviors, codes of ethics in companies, and even some journals focusing on business ethics at both the academic and the practitioner levels. With the ever increasing globalization of business, we also have a renewed interest in national cultural differences and their influence on international business operations, which is reflected in a significant increase in the number of academic courses and journals devoted to these topics.

    This book examines the issue of the relationship of national cultural differences to ethical behaviors. One might legitimately ask: Why is an investigation of the relationship of cultural differences to ethical differences important? Perhaps the best place to begin the search for an answer is to analyze why it is important to study ethical behaviors at all. One reason for doing so is that ethical behavior in a society has a significant influence on critical social and economic outcomes. Societies must have some degree of trust before they will cooperate with one another in any type of extended relationship. Predictability is necessary for cooperation and for social and economic investments that will not provide a payoff for many years, and clearly predictability is associated with a perception that certain ethical standards of behavior are a given in a society and across societies.

    Such ethical norms or standards of behavior may be incorporated officially into the laws of the nation but they may also be unofficial in the sense that they consist of the internal standards that govern daily behavior. One of the reasons why there have been so many difficulties in moving from collectivist to market-oriented economies in the former Soviet Union and Eastern European economies is that ethical systems currently operating appear to be insufficiently supportive of the development of trust. Also, the ethical standards of a nation are related to other economic factors, such as the willingness of organizations from other nations to invest in that country or to join in partnerships with that country's enterprises. Furthermore, a nation's ethical standards and behaviors can be associated with the amount of internal conflict or social turbulence in that nation, which can directly affect the country's quality of life.

    Thus, we feel that the relationship between national cultures and ethical behaviors may help to account for some of the variation that we can observe among nations in terms of their economic progress, their political stability, and the quality of life of their people. Also, studying the relationship between cultural factors and ethical standards and behaviors can help us predict how the ethical norms of a nation may change over time in response to alterations in culture. Knowledge of the manner in which culture affects a society's ethical standards and behaviors can also promote a better understanding of the nature of other societies, which, in turn, can reduce ethnocentrism, racism, stereotypes, and other cognitive biases that militate against human understanding and cooperation in general.

    This book is structured around a model of culture and ethical behaviors of managers (see Figure 1.1). In Chapter 1, we explain our research approach for validating this model. We point out that because of the absence of data on ethical behavioral or decisional differences among managers in different nations, we must use an eclectic approach that combines several sources of data, which include surveys, actual published cases on unethical decisions by managers in many countries, and published descriptive information on the many characteristics of nations around the world that we wish to compare.

    With respect to the structure of the book, the remainder of the first part, dealing with ethical differences, includes two chapters, one that compares managerial ethical practices across nations, and one that analyzes differences among nations with respect to values and other cultural characteristics. The next part of the book describes primary influences on ethical behavior, such as parenting and educational systems, and secondary influences, such as law, human resource management or HRM systems, and organizational cultures. In the third part of the book, we then provide in-depth treatments featuring case studies of the ethical systems of the United States and Japan. Our original plan was to discuss two additional nations, but space limitations prevented us from doing so. (However, we do present extensive information on specific countries throughout the book.) Thus, we chose two nations that are quite different culturally to discuss this issue of national managerial ethical orientations in some depth. Part III concludes with an analysis of the degree to which ethical systems of different nations may converge or diverge in the coming years.

    Given the sensitive nature of the topics addressed in this book, we feel strongly that the reader should understand our backgrounds and values. Neither of us can be described, or has ever been accused of being, radical partisans in any area, including politics and education, but we do react negatively to true believers who feel that their viewpoint represents the only valid truth. We have taught on the same faculty for 28 years, have had extensive consulting experiences in a large number of business firms and governmental agencies, and have traveled, lived with, and taught students and managers in several nations. Most important, we were both attracted to the field of management because it provided an outlet for pursuing many significant and diverse but interrelated intellectual topics, and we have published extensively in the areas of human resource management, business strategy, organizational behavior, and cross-cultural management. Given our close intellectual interests and friendship, we welcomed the opportunity to work together on this book, as we believe strongly that ethics—particularly the development of trust among people of all types—is central to human existence. This book has given us the opportunity to explore our mutual interests in management and ethics in some depth, and for this we are grateful.

    There are several distinctive features of this book, and these include the development and justification for the basic model, presented in Chapter 1, around which the book is structured; the very large number of short cases (at least 200) that can be found in every chapter; the numerous short examples that we use to illustrate our points; the extensive and intensive review and summary of the relevant research literature; the focus on a large number of nations; and the direct comparison of two very different nations, Japan and the United States, in terms of their ethical orientations. We have attempted to make the book reader-friendly not only through the use of case studies and examples but also by presenting discussion questions at the end of each chapter and starting each chapter with short cases.

    We would like to thank several individuals for their help with this book. Bob Giacalone has been a patient and helpful Series Editor, as has been our Sage editor, Marquita Flemming … and so on. Of course, we accept responsibility for any errors that might have occurred and would be grateful if the reader would bring them to our attention.

    StephenJ.Carroll, Jr.
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    Name Index

    About the Authors

    Stephen J. Carroll completed his BA at UCLA and his MA and PhD at the University of Minnesota. He is author or coauthor of more than 12 books and monographs and more than 100 published papers. The books and monographs include Management by Objectives, The Management of Compensation, Management: Contingencies, Structure and Process, Managing Organziational Behavior, Performance Appraisal and Review Systems, Management, Human Resource Management in the 1980s, Cases in Management, Development of Management Performance, and The Design and Implementation of Pension Plans. The papers have been published in many outlets including Administrative Science Quarterly, Academy of Management Journal, Academy of Management Review, Californial Management Review, Human Resource Management, Industrial Relations, Journal of Applied Psychology, Journal of Business, Personnel Psychology, and Public Opinion Quarterly. He has been a consultant to more than 40 business or government organizations. He has been elected a fellow in the Academy of Management, The American Psychological Association, and the American Psychological Society. His professional and administrative experience includes positions as chairman, Personnel/Human Resources Division of the Academy of Management; Chair Faculty of Management and Organization, University of Maryland; co-director, Center for Innovation, University of Maryland; Distinguished Scholar-Teacher, University of Maryland; Fulbright Research Professor in Japan; and editorial board, Academy of Management Journal.

    Martin J. Gannon, who received his PhD from Columbia University, is Professor of Management, College of Business and Management, University of Maryland at College Park. In this college he has also served as Associate Dean for Academic Affairs, chairperson of the Faculty of Management and Organization, and co-director of the Small Business Development Center. He has also been the Senior Research Fulbright Professor at the Center for Higher Education and Work in West Germany; the John F. Kennedy/Fulbright Professor at Thammasat University, Bangkok; and a visiting faculty member at the London Business School, Bocconi University (Italy), University College Dublin, and the University of Kassel (Germany). He has written 75 articles that have been published in journals such as the Academy of Management Journal, The Academy of Management Review, Journal of Applied Psychology, California Management Review, International Journal of Management, Industrial Relations, and several others. His 10 authored or coauthored books include Managing Without Traditional Methods: International Innovations in Human Resource Management; Understanding Global Cultures: Metaphorical Journeys Through 17 Countries; The Dynamics of Competitive Strategy; Management; Strategic Management Skills; and Organizational Behavior. He is a past president and fellow, Eastern Academy of Management. He has also been past chairperson of the Human Resource Division of the Academy of Management. Throughout his career, he has served as a management trainer and consultant to a number of private firms and government agencies, including Chemical Bank, The Upjohn Company, U.S. Office of Personnel Management, American Federation of Government Employees, and the U.S. General Accounting Office, and has taught managers and students in Europe and Asia.

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