How Important Are Ethics and Social Responsibility?

The search register for this journal is available at http//www. mcbup. com/ research_registers The received issue and full text archive of this journal is available at http//www. emerald-library. com/ft How central be honourable motive and loving state? A multinational break down of merchandising victors Anusorn Singhapakdi and Kiran Karande College of credit line and Public Administration, Old pattern University, Virginia, the States How master(prenominal) be religion? 133Received September 1998 rewrite March 1999 June 1999 September 1999 College of Administrative Sciences, Kuwait University, Safat, Kuwait, and School of business organisation Administration, University of Mississippi, the States Keywords global merchandising, Ethics, Social indebtedness, National cultures, Consumer behaviour Abstr human doingion States that in the inclose era of global market, as to a great uttermost companies enter supranational markets, respectable problems be possible to increase.As companies and their man jump onrs deal with their counterparts in polar countries, at that place is a need to experience the latters honourable decision- qualification processes. Divergence in estimable behavior and attitudes of marketing professionals crosswise cultures rear end be explained by, among variant variables, differences in perceptions deferenceing the impressiveness of respectable motive and friendly righteousness in achieving organisational military strength. This write up investigates the variation in those perceptions among marketing professionals from Australia, Malaysia, siemens Africa, and the regular army.The variation is explained by soil differences ( ethnic differences, differences in the scotch surroundings, and differences in impartialityful/ policy- devising environment), organisational estimable climate, and selected demographic characteristics of the marketer (gender and shape up). C. P. Rao Scott J. Vitell Introd uction The remove of object lesson philosophy has become increasingly crucial with global job expansion, because of an increase in honourable and complaisant office concerns that feargons face in diametric soil environments. in that respect make ups, however, a wide divergence in the take aim of grandness draw toge at that placed to these devil issues in different countries (Czinkota and Ronkainen, 1998). More all(a) over, vast differences exist from untaught to country in the scotch development, heathenish standards, wakeless/ semi policy- make systems, and abstractizeations regarding blood birth (Wotruba, 1997). In addition, at that place is great divergence in the enforcement of policies (Mittelstaedt and Mittelstaedt, 1997). The authors would like to give thanks Mohd.Rashid Ahmed, Universiti Pertanian Malaysia, Malaysia Nicola Higgs-Kleyn, University of the Witwatersrand, southeast Africa and Muris Cicic, University of Wollongong, NSW, Australia for th eir assistance in the info collection for this story. The authors would in addition like to thank Janet Marta for her comments on the earlier versions of the manuscript. European diary of trade, Vol. 35 no(prenominal) 1/2, 2001, pp. 133-152. MCB University Press, 0309-0566 European daybook of Marketing 35,1/2 134In the job virtuouss literature, honourable variations among marketers/ managers from different nations ar documented in umteen falsifiable studies on divers(a) types of honorable issues (e. g. Arm robust et al. , 1990 Graham, 1985 Becker and Fritzsche, 1987). Variation in morals across cultures was evidenced in a cross-national line of subscriber line of industrial salespeople by Dubinsky et al. (1991) where near signifi pilet differences in respectable perceptions were set up among marketing managers from Japan, Korea, and the the States. A film by Singhapakdi et al. 1994) in any case revealed that Ameri brook and Thai marketers differ on discorda nt components of their respectable decision-making process. However, global researchers consecrate non investigated differences in the terminus to which marketers from different countries bank that morals and loving indebtedness be all- alpha(prenominal) for organisational military strength. An unmarriedistics perception astir(predicate) whether honorable motive and favorable responsibility contri bute to organisational lastingness is plausibly to be a critical antecedent of whether he/she withal groks an honourable problem in a wedded stake (Singhapakdi et al. 1995). This is a pragmatic view ground on an argument that managers mustiness depression descry morals and fond responsibility to be rattling to organisational posture onward their behaviors exit become to a great extent than honourable and reflect great mixer responsibility. This view is consonant with Hunt and Vitells (1986) portraying of honorable judgment as including a teleologic al evaluation, when an case-by-case evaluates option actions by weighing the comprehend probability and desirability of consequences.Essentially, a managers choice of behavior in a situation that has problematic estimable fill go forth be base on his/her perception of the likelihood that the actions testament operate about a desired outcome. This view is also consistent with Jones (1991) issue-contingent perplex where it is postulated that the probability of effect which is defined as the probability that the act in question will actually take place and the act in question will actually cause the harm (benefit) (Jones, 1991, p. 75) will affect an individuals good decision making. Intuitively, honourable motive and affectionate responsibility should have a positive impact on the conquest of an administration, because consumers make ethical judgments that atomic number 18 likely to influence their purchases. As Laczniak and Murphy (1993, p. 5) put it Consumers over t ime will normally recognize the organizations that attempt to be antiphonal to various ethical and cordial cistrons in the marketplace.Accordingly, it is vital for marketers to inembodied ethical and friendly considerations in their work. Thus, the aim of this case is to investigate whether marketers from Australia, Malaysia, South Africa, and the ground forces differ in the extent to which they believe that ethical and complaisantly accountable practices are important in relation to various aspects of organisational military capability such as quality, colloquy, profits, agonisticness, survival, efficiency, and stakeholder ecstasy.Based on past literature that emphasizes cultural factors, corporal culture, and individual characteristics (e. g. Hunt and Vitell, 1986 Ferrell and Gresham, 1985), the cross-cultural variation in marketers discriminated immensity of ethical motive and mixer responsibility in achieving organizational effectiveness is explained by countr y differences (including cultural differences and differences in the economic environment), organizational ethical climate, and selected demographic characteristics of individual marketers.The iv countries included were judged appropriate because they are geographically separated and exhibit differences in ground of Hofstedes (1980) atomic number 23 cultural dimensions and the level of economic development, which are utilise to support the hypothesis about country differences.Theoretical launchation and hypotheses In this section it is proposed that the variations in the sensed brilliance of ethical motive and well-disposed responsibility as determinants of organizational effectiveness is explained by country differences (including cultural differences and differences in the economic environment), organizational ethical climate, and individual characteristics of gender and age. Figure 1 summarizes the proposed example. Country differences Cultural differences. Hofstede (19 80) and Hofstede and Bond (1988) proposed a typology for classifying cultures base on five dimensions (1) individualism (2) uncertainty avoidanceHow important are morality? 135 Figure 1. Theoretical framework European journal of Marketing 35,1/2 136 (3) causation distance (4) masculinity and (5) Confucian desirableness. It is hypothesized that these cultural dimensions contribute to differences in the perceive importance of morals and social responsibility. For example, marketers in collectivistic countries (such as Malaysia) would be evaluate to be much than loyal to their organizations because of greater dependence (Hofstede, 1983), and therefore, implicated for their organizations well-being when making decisions that elicit organizational effectiveness.Consequently, collectivistic cultures would affix to a greater extent importance to achieving superior organizational execution than to ethics and socially responsibility. Masculine societies encourage individuals to be driven and competitive, and to strive for material success (Hofstede, 1980), which whitethorn tempt marketers from countries ranking racy on masculinity to achieve greater efficiency, at all costs. Therefore, they would bring together less importance to ethics and social responsibility than to efficiency, competitiveness, and long-term survival.Individuals from cultures with heights power distance (such as Malaysia) usually accept the inequality of power, perceive differences surrounded by superiors and subordinates, are reluctant to disagree with superiors and believe that superiors are empower to privileges (Hofstede, 1983). Consequently, marketers from high power distance countries are likely to perceive a need to minimize disagreement with superiors and satisfy superiors through with(predicate) repaird consummation. In separate(a) words, organizational performance is likely to be relatively more than important to them relative to the extent to which a decision is ethical and socially answerable.The risk-taking orientation of marketers from low uncertainty avoiding countries would lead them to believe that it efficacy be worth taking the risk of unethical actions in gild to improve efficiency and competitiveness. Therefore, marketers from low uncertainty avoidance countries are likely to bind less importance to ethics and social responsibility in achieving organizational effectiveness. Individuals in countries ranking high on Confucian muscularity bleed to adhere to the more future-oriented teachings of Confucius those from countries ranking low on Confucian dynamism tend to be more present- and past-oriented (Hofstede and Bond, 1988).From the perspective of this theater of operations, marketers from cultures ranking high on Confucian dynamism have a strong sense of chagrin and are likely to be wary of actions that are improper or disgraceful. Marketers from high Confucian dynamism countries (such as Hong Kong, Taiwan, Japan, and Ko rea) would, therefore, believe that any actions transport disrepute and shame to the lodge would be detrimental to organizational performance. This is also consistent with the greater future-orientation of individuals from these countries.Alternatively, it is also executable that marketers from high Confucian dynamism countries might be sensitive to the shame arising out of inferior performance and might therefore believe that greater efficiency and profits are important at the cost of ethics and social responsibility. In other words, the effects of Confucian dynamism might be expected in both directions. send back I summarizes Hofstedes ranking of the quartette countries on five dimensions of culture (Hofstede, 1980 Hofstede and Bond, 1988).It is apparent that, in general, Australians, Ameri usher outs, and South Africans are higher on individualism and masculinity and get on uncertainty avoidance and power distance than Malaysians. On Confucian dynamism, the USA and Australia rank very close. Although there is no ranking available for South Africa and Malaysia, Malaysians can be expected to rank higher because of a strong Chinese influence, especially in the trading sector (Hong Kong and Taiwan rank first and second on Confucian dynamism).Based on individualism, power distance, and uncertainty avoidance, Malaysian marketers would be expected to have lower comprehend importance of ethics and social responsibility than marketers from Australia, South Africa, and the USA. Based on masculinity, it would be expected that Malaysian managers will have greater comprehend importance of ethics and social responsibility in achieving organizational effectiveness than those from the other trey countries, whereas based on Confucian dynamism it is only possible to hypothesize differences.Therefore, based on the cultural differences outlined above, we would expect Australian, Malaysian, US, and South African marketers to attach different levels of importance to eth ics and social responsibility in achieving organizational effectiveness. Economic environment differences. Countries also have different economic and tune environments, including the licit environment and societal expectations about business ethics in a given country.In substantial countries (such as the USA and Australia), the business environment is typically characterized by powerful business enterprises, a legal environment aimed at eliciting ethical behaviors on the part of businesses, and societal expectations that businesses should be more ethical and socially responsible. These environmental forces may make the marketers in developed countries attach greater importance to the ethical and social responsibilities of their several(prenominal) businesses. In developing countries, on the other hand (e. . Malaysia and South Africa), the business and economic environmental forces are still evolving and hence the marketers perceived importance of business ethics and social respo nsibility may be lower relative to their counterparts in developed Country Australia Malaysia South Africa USA power distance Individualism 36 104 49 40 (41) (1) (36-37) (38) 90 26 65 91 (2) (36) (16) (1) Masculinity 61 50 63 62 (16) (25-26) (13-14) (15) Uncertainty avoidance 51 36 49 46 (37) (46) (39-40) (43) Confucian dynamism 31 (11-12) n/a n/a 29 (14)How important are ethics? 137 noe a Ranks range from 1-53 for all dimensions except Confucian dynamism 1-20 Source Hofstede (1980) and Hofstede and Bond (1988) control board I. scads (and ranks) for the cardinal countries on Hofstedes dimensionsa European ledger of Marketing 35,1/2 138 countries. From other perspective, in developed countries the markets are likely to be more competitive, and therefore, issues of client service and merriment might be relatively more important.Therefore, in making decisions, marketers from developed countries are less likely to take actions that are detrimental to the reputation of the compan y, fearing regulation as well as consumer dissatisfaction. In the context of this theatre, marketers from the USA and Australia should place greater importance on ethics and social responsibility as determinants of organizational effectiveness than marketers from South Africa and Malaysia. Differences in legal/political environment. In the Hunt and Vitell (1993) model, legal/political environment is depicted as a variable influencing ethical decision making.The relationship among the legal environment and ethics has been recognized by many business ethics scholars. For example, Beauchamp and Bowie (1993, p. 4) noted that Law is the publics agency for translating morality into expressed social guidelines and practices and stipulating offenses. DeGeorge (1990, p. 14) noted that stemma is a social enterprise. Its mandate and limits are set by society. The limits are often moral, but they are also ofttimes written into law. Dunfee (1996, p. 18) stated that the legal system is someti mes needed to nurture or implement the moral preferences of society, particularly with reference to linguistic universal moral prohibitions against physical harm. He also argued that where moral views have not converged toward a sufficiently broad consensus, the law may help to bring about a alternate in attitude. In the context of our study, these discussions take that the legal/political framework within a country can be expected to impact a managers perceptions about ethics and social responsibility.Business ethics scholars have also noted that the legal/political systems vary across countries (e. g. Vogel, 1992). In his analysis of the USA, Western Europe, and Japan, Vogel (1992) noted that in spite of globalization, the norms of business (as well as business and academic interest) in ethics were substantially higher in the USA than in other advanced capitalist countries. He attributed this to the distinctive institutional, legal, social, and cultural environment in the USA. In the context of this study, differences can be expected in the legal/political environments in the USA, Australia, Malaysia, and South Africa. While in the USA the legal/political systems are relatively well developed (and in Australia to a certain degree), the regulatory environments in Malaysia and South Africa are evolving, and therefore, the existence as well as the particularisedity of laws may vary across the foursome countries. The importance of ethics is also influenced by the degree of law enforcement, where we also can expect differences across the four countries.While elaborate legal/political systems prevail for enforcement in the USA, they are relatively less prevalent (and to change degrees) in Australia, Malaysia, and South Africa. Vogel (1992, p. 32) pointed out that even compared to other advanced countries, the enforcement of law in the USA is more stringent, and gave the chase example, In America each new disclosure of business misconduct prompts a new rove of public indignation, accompanied by numerous articles n the business and universal press which bemoan the general decline in the ethical conduct of managers and seek to explain what went wrong in the close to recent case. This is frequently followed by Congressional hearings featuring politicians demanding more vigilant prosecution of white-collar criminals curtly thereafter, regulatory standards are tightened, penalties are increased, and enforcement efforts are strengthened. How important are ethics? 139It should be recognized that the possible influences of the legal/political environment are more complex than discussed here, because of the range of issues involved as well as the aspects of environment that cannot be measured directly, such as the enforcement of regulatory systems. However, differences exist in the midst of the four countries in the legal/political environment, which can be expected to influence managers perceived importance of ethics and social responsib ility relative to organizational effectiveness.In the preceding paragraphs, country differences were analyzed based on three aspects (1) culture (2) economic development and (3) legal/political environment. Overall, based on cultural differences, we expect Australian, Malaysian, US, and South African marketers to attach different levels of importance to ethics and social responsibility in achieving organizational effectiveness. Based on economic environment differences, we expect that marketers from the USA and Australia will place greater importance on ethics and social responsibility than marketers from South Africa and Malaysia.Given that legal and political environments tend to vary amidst the four countries, we also expect the managers from these four diverse countries to attach different levels of importance to ethics and social responsibility in achieving organizational effectiveness. Thus, the following hypothesis was formulated H1 Due to differences in culture, economic de velopment, and legal/political environment, there are differences in the perceived importance of ethics and social responsibility among marketers in Malaysia, Australia, South Africa, and the USA.In analyzing country differences, it is evident that seven-fold aspects of country differences influence marketers perceived importance of ethics and social responsibility, at times in conflicting ways (as in the effects of masculinity and individualism). Also, since this is the first attempt at investigating crosscultural variation in the perceived importance of ethics and social responsibility as determinants of organizational effectiveness, there is a privation of knowledge regarding the relative importance of differences in cultural European ledger of Marketing 35,1/2 140 dimensions.Consequently, it is not possible to hypothesize the direction of differences, only their existence. organizational ethical climate In the Hunt and Vitell (1986 1993) models, organizational ethical climat e is included as a range variable that affects a marketers ethical decision making. Organizational ethical climate refers to the shared sense regarding what is correct behavior and how ethical issues will be handled (DeConinck, 1992). It helps establish and maintain the standards that delineate the right things to do and the things worth doing (Jansen and Von Glinow, 1985).The ethical climate in an organization affects ethical attitudes and standards of individuals. An organization that seeks to nurse an ethical environment will not only have a code of ethics, but also the willingness and commitment to enforce it. Managers consider modifying the morality of their actions not just because of stated organizational concern, but only when particularised sanctions are attached for misconduct (e. g. Laczniak and Inderrieden, 1987). The contention that organizational pressures, and not individual moral deficiencies, account for unethical standards is held by several authors (e. . Ford and Richardson, 1994). Weeks and Nantel (1992) found that wellcommunicated codes of ethics led to higher ethical standards and superior job performance of salespeople in the USA. Consequently, marketers in companies with an ethical climate that encourages ethical and socially responsible behavior and that punishes unethical behavior would perceive ethics to be more important for organizational effectiveness. Research has shown that when ethical standards of an organization are astray shared, organizational success will be enhanced (Hunt et al. 1989). Relevant to this study, in a recent study of US marketers, Singhapakdi et al. (1995) revealed that marketers in organizations with high levels of corporal ethical values tended to assign a higher level of importance to certain elements of corporate ethics and social responsibility. Therefore, we hypothesize that H2 regardless of country, organizational ethical climate is positively related to managers perceived importance of ethics a nd social responsibility relative to different aspects of organizational effectiveness. sexual practice Gender is generally recognized as an important personal characteristic influencing an individuals ethical decisions. For example, Gilligan (1982) argued that men and women differ in their moral reasoning. In particular, men are more likely to adhere to the ethic of justice by accentuation rules and individual rights. Women, however, are more likely to adhere to the ethic of caveat by emphasizing relationships and compassion. In a recent meta-analysis, Franke et al. (1997) used data from more than 20,000 respondents in 66 tastes nd revealed that women are more likely than men to perceive business practices as unethical. Although there has been no research directly investigating the effects of gender on perceived important of ethics and social responsibility, it has been incorporated in numerous marketing ethics studies. Based on the work of Gilligan (1982) and Franke et al. (199 7), it can be argued that the ethic of condole with exhibited by women would lead them to believe that taking actions in the interest of the customer would enhance company performance and would contribute to a perception of greater importance of ethics in organizational effectiveness.Thus, we would expect women to attach greater importance to ethics and social responsibility as determinants of organizational effectiveness. H3 disregardless of country, women perceive ethics and social responsibility to be more important relative to different aspects of organizational effectiveness than men. years Marketing ethics theories generally recognize personal characteristics as determinants of various aspects of a marketers ethical decision-making process (e. g. Ferrell and Gresham, 1985 Hunt and Vitell, 1986).Age could also directly influence an individuals ethical decision. According to Kohlbergs (1981) cognitive moral development theory, an individuals cognition, emotion, and judgment may change as he/she moves through stages of moral development. Given that an individual moves through stages of moral development and the changes are essentially repayable to life experiences, intuitively one would expect a positive relationship between age and ethical behavior. In fact, Terpstra et al. (1993) have argued that people tend to become more ethical as they grow older.A good explanation is that as people age they tend to become less have-to doe with with wealth and advancement and more interested in personal growth (Hall, 1976). In other words, older marketers are likely to appreciate the long-term benefits (to organizational performance) of acting in an ethical and socially responsible manner. Accordingly, we would generally expect a positive relationship between a marketers age and his or her perception about the importance of ethics and social responsibility.H4 Irrespective of country, a marketers age is positively related to his/her perception of the importance of ethics and social responsibility relative to different aspects of organizational effectiveness. Methodology Sample A self-administered questionnaire was used as the data collection technique for all four groups of marketing practitioners. For the US and South African groups, national send out lists of professional members of the American Marketing Association (AMA) and the South African Institute of Marketing How important are ethics? 141 European diary of Marketing 35,1/2 142 attention were used as have frames.For the Australian sample, a mailing list of recipients of the Australian Marketing Institute magazine was used. For the Malaysian group, the sampling frame consisted of managers responsible for making marketing decisions for companies listed on the Kuala Lumpur Stock Exchange. The questionnaire was administered in incline for all four samples. Because Malaysia and South Africa are members of the British Commonwealth, English is a well-understood language, particularly in the business setting. The numbers of respondents were 500 from Australia, 446 from the USA, 256 from South Africa, and 159 from Malaysia1.The chemical reaction rates were 22. 7 percent (USA), 13 percent (South Africa), and 45 percent (Malaysia). Since questionnaires were not directly mailed to the sample in Australia, the response rate could not be assessed. The non-response warp for the USA and South African samples was assessed with an analysis of variance between the proto(prenominal) and late respondent groups (Armstrong and Overton, 1977). There were no statistical differences among the deuce groups for either country2. The profiles of the respondents are summarized in Table II.They represent a range of age groups, gender, job designations, industry, and years of experience, with claw differences between the four sets of respondents. Age and gender were included in the analyses. another(prenominal) variables (such as job title, education, and industry) were not include d as control variables because educational systems, industry classifications, and job titles and functions vary from country to country. Measures Singhapakdi et al. (1995) developed a outmatch for measuring managers perceptions about the importance of ethics and social responsibility (PRESOR) in organizational effectiveness.Seven of the 14 items from that case were used, relating to specific aspects of organizational effectiveness such as proceeds quality, efficiency, profitability, communication, long-term survival, competitiveness, and stakeholder satisfaction. Excluded items were statements such as levelheaded ethics is good business and corporate strategy should include ethics and social responsibility, which do not address specific aspects of organizational effectiveness. The scale items used in the analyses are shown in Table III. The factor structures were found to be similar across the four countries and the reliabilities were generally high3.It may be noted that the PR ESOR scale has previously performed satisfactorily in wrong of reliability, as well as content and predictive validity (Singhapakdi et al. , 1995, 1996). Organizational ethical climate, gender and age. The corporate ethical values (CEV) scale developed by Hunt et al. (1989) was used in this study to measure organizational ethical climate. The scale was designed to reflect a composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization (Hunt et al. , 1989). The five-item CEV scale4 was developed to three broad-based perceptionsCharacteristics of respondents Gender Male Female Age group Under 30 30 to 39 40 to 49 50 and over 50 Education High school or less Some college Bachelors degree Masters degree Doctorate differenta Job title CEO/president/MD/director Marketing managers Others perseverance USA Wholesale or retail Manufacturer or construction service Communications Advertising or public relations Marketing consul ting Other Malaysiab Consumer products Diversified Construction Trading services Finance Properties Plantation minelaying and primary resources Notes sample a b Australia (%) Malaysia (%) South Africa (%) USA (%)How important are ethics? 73. 0 27. 0 20. 0 35. 0 29. 0 17. 0 11. 0 15. 0 58. 0 15. 0 1. 0 37. 0 52. 0 11. 0 84. 0 16. 0 11. 0 39. 0 40. 0 10. 0 6. 0 10. 0 43. 0 24. 0 1. 0 16. 0 39. 0 30. 0 31. 0 80. 0 20. 0 4. 0 29. 0 40. 0 27. 0 6. 0 15. 0 30. 0 30. 0 19. 0 2. 0 44. 0 37. 0 19. 0 51. 0 49. 0 17. 0 37. 0 29. 0 17. 0 1. 0 6. 0 43. 0 43. 0 6. 0 47. 0 43. 0 10. 0 143 3. 0 10. 0 20. 0 33. 0 7. 0 17. 0 6. 0 37. 0 4. 0 3. 0 28. 0 11. 0 13. 0 3. 0 1. 0 7. 0 20. 0 25. 0 7. 0 1. 0 5. 0 35. 0 12. 0 17. 0 35. 0 9. 0 7. 0 18. 0 2. 0 Other educational qualifications include professional education in the Malaysian This categorization of industries was appropriate in the Malaysian context Table II. Profiles of respondents in Australia, Malaysia, South Afr ica and USA 144 European daybook of Marketing 35,1/2 Organizational effectiveness dimension Univariate tests Quality while siding signal quality is essential for corporate success, ethics and social responsibility are not NS Communication communication is more important to the boilers suit effectiveness of an organization than whether or not it is concerned with ethics and social responsibility 5. 1 0. 0001 Profits The most important concern for a firm is making profits, even if it convey bending or breaking rules 5. 45 0. 0001 Competitiveness To remain competitive in a global environment, business firms will have to inattention ethics and social responsibility NS Survival If survival of a business enterprise is at stake, then you must forget about ethics and social responsibility 21. 25 0. 0001 Efficiency Efficiency is much more important to the firm than whether or not the firm is seen as ethical or socially responsible 14. 1 0. 0001 Stakeholder satisfaction If stakeholders are unhappy, zip else matters 11. 19 0. 0001 multivariate tests F based on Wilks lambda (21, 3,673 df) 5. 38 0. 0001 66. 43 28. 62 74. 24 49. 95 39. 79 29. 46 27. 17 0. 0001 0. 0001 0. 0001 0. 0001 0. 0001 0. 0001 0. 0001 Table III. Multivariate and univariate results Country Organizational culture Gender Age 17. 88 0. 0001 3. 68 0. 0552 8. 97 0. 0028 6. 46 0. 0112 17. 63 0. 00001 NS NS 2. 56 NS 0. 0535 NS NS NS NS NS 1) the extent to which employees perceive their managers are acting ethically in their organization (item 1) (2) the extent to which employees perceive that managers are concerned about the issues of ethics in their organization (item 3) and (3) the extent to which employees perceive that ethical (unethical) behavior is rewarded (punished) in their organization (items 2, 4, and 5) (Hunt et al. , 1989). The CEV was measured victimisation a nine-point Likert scale with 1= on the whole disagreeand 9= completely agree.For each respondent, the CEV score was obtained by summing all CEV items (with items 1 and 2 reverse-coded). A high CEV score means that the manager works in an organization with higher corporate ethical values. The similarity of factor structures of the CEV scale between the four countries was assessed to be moderate and the reliabilities of the scale were high5. The CEV measure has been used in the past (e. g. Hunt et al. , 1989 Singhapakdi et al. , 1995). Gender was measured as a dichotomous variable and age was measured in four categories.Results Multivariate analysis of variance (MANOVA) was performed using the seven PRESOR items as dependent variables, and the country of residence, organizational ethical climate, gender, and age as independent variables6. MANOVA results show that overall country of residence, organizational ethical climate, gender, and age noteworthyly explain differences between marketers from the four countries in their perception of the importance of ethics and social responsibility in achieving organizati onal effectiveness (F = 5. 38 based on Wilks Lambda, p 0. 001). H1 states that there are country differences in the perceived importance of ethics and social responsibility in achieving organizational effectiveness. Univariate analysis of variance (ANOVA) identify significant cross country differences between marketers on all PRESOR items except output quality and competitiveness. For example, there are differences in the extent to which marketers from the four countries believe that the most important concern for a firm is making profits, even if it means bending or breaking rules (F = 5. 45, p . 001). Also, there are differences in the extent to which they agree with statements such as if survival of a business enterprise is at stake, then you must forget about ethics and social responsibility (F = 21. 25, p 0. 0001), efficiency is much more important to the firm than whether or not the firm is seen as ethical or socially responsible (F = 14. 91, p . 0001), and communication i s much more important to the overall effectiveness of an organization than whether or not it is concerned with ethics and social responsibility (F = 5. 1, p 0. 0001). Therefore, there is support for H1 (average rafts for marketers from the four countries on each of the seven items are given in Table IV). How important are ethics? 145 European Journal of Marketing 35,1/2 146 H2 states that the organizational ethical climate positively influences managers perceived importance of ethics and social responsibility. In fact, results indicate it has a strong influence on all seven dimensions of PRESOR with F statistics ranging from 27. 17 to 74. 24 (with all p 0. 0001). Therefore, H2 is supported.Results also indicate gender differences in managers perceived importance of ethics and social responsibility in achieving organizational effectiveness on the quality, communication, profits, competitiveness, and survival dimensions, but not on the efficiency and stakeholder satisfaction dimens ions (F statistics ranging from 3. 68 to 17. 88). Therefore, H3 is generally supported. Also, results related to H4 indicate that, in general, there are no age differences in the perceived importance of ethics and social responsibility in achieving organizational effectiveness.Therefore, H4 is not supported. The lack of significance of age in influencing PRESOR is probably a reflection of the greater impact of environmental factors such as greater societal expectations and awareness about ethical issues. Discussion and implications The current investigation into cross-country variation in perceptions of marketing professionals regarding the importance of ethics and social responsibility as determinants of business success has potential implications for international companies.In the international marketing context, cultural, economic, and other gaps between international buyers and sellers create the potential for conflicts of values, which in turn hinder liquid business interactio ns between the parties. Whether a marketing organization necessitates in exporting, importing, control stick ventures, licensing agreements or fully owns an overseas operation, the scope exists for conflict of values, especially in the areas of marketing ethics and social responsibility. For example, in recent years, companies in the USA have faced public disapproval of the unethical practices of their overseas suppliers.As businesses all over the world progressively globalize their operations, it becomes necessary that they understand whether there are significant gaps between their ethical and social responsibility perceptions and their overseas partners. Such perceptual gaps need to be systematically investigated and measures taken to reduce or, preferably, eliminate them in the interest of establishing enduring international business Organizational effectiveness dimension Australia 7. 67 6. 16 6. 93 7. 56 7. 22 6. 44 6. 82 Malaysia 7. 61 5. 27 6. 61 7. 27 5. 76 5. 12 5. 79 So uth Africa 7. 96 6. 40 7. 01 7. 71 7. 05 6. 26 6. 6 USA 7. 82 6. 23 7. 46 7. 69 7. 64 6. 72 7. 08 Table IV. Output quality Mean perceived Communication importance of ethics Profits and social responsibility rack up on Competitiveness different dimensions of Survival Efficiency organizational Stakeholder satisfaction effectiveness relationships. This study identified three sources of gaps that can exist between marketers from different countries in terms of the perceived importance of ethics and social responsibility as determinants of organizational effectiveness. They are (1) Country differences in culture, economic development, and legal/ political environment. 2) Differences in organizational ethical climate. (3) Gender differences. Similarities and differences were found between countries in terms of the extent to which they find ethics and social responsibility to be important relative to some dimensions of organizational effectiveness. On two dimensions, output quality and co mpetitiveness, there were no significant inter-country differences. It seems that output quality and competitiveness are universal business orientations exhibited by marketing executives, which is consistent with globalization of markets and the accompanying intensification of competition.International companies, therefore, may assume that their counterparts in different parts of the world will be as concerned with output quality and competitiveness (relative to ethical and social responsibility concerns). Hence, these two core business values can provide common bases for lucky international negotiations and establishing long-term relationships, which are critical for success in the international business arena.While there are inter-country similarities on these two dimensions, significant inter-country differences were found with regard to other organizational effectiveness dimensions communications, efficiency, profits, survival, and stakeholder satisfaction. Based on the finding s of our study, multi-national companies who transfer employees between these four countries can help them anticipate differences in perceptions about the importance of ethics and social responsibility relative to different aspects of organizational effectiveness.For example, Malaysian companies posting managers in Australia (or South Africa or the USA) might want to educate them about the environmental differences that lead to Australian managers placing greater importance on ethics and social responsibility relative to profitability, efficiency, communication, survival, and stakeholder satisfaction. These perceptual differences can impact ethical attitudes and actions, and therefore, managerial expectations about overseas employees should be altered accordingly.Corporate managers should also give a thought to what can be done to overcome these differences in perceived importance of ethics and social responsibility. The content of ethics training programs can incorporate the findin gs of this study by developing scenarios and cases highlighting the tradeoffs between ethics and social responsibility, and specific aspects of organizational effectiveness, such as efficiency and stakeholder satisfaction. These scenarios can be drawn-out by including cross-national differences in How important are ethics? 47 European Journal of Marketing 35,1/2 148 culture, economic development, and legal/political environment, as well as differences in perceptions about ethics and social responsibility across countries. Organizational ethical climate positively influenced the perceived importance of ethics and social responsibility across all four countries. Irrespective of the country, organizational ethical climate had a strong influence on all seven dimensions of organizational effectiveness vis-a-vis ethics A and social responsibility.Therefore, we can conclude that organizations from different countries with similar organizational ethical climates can find common ground on i ssues of ethics and social responsibility. Hence, international companies, when scouting for suitable partners in foreign markets, may case for overseas partners with similar organizational ethical values. This would ensure smoother business relations and interactions especially in the areas of ethics and social responsibility.Also, it is useful for international marketers to know that, in general, women perceive ethics and social responsibility to be more important in achieving organizational effectiveness than men, though there are no differences across age groups. This is particularly relevant given the increase in employment of women in the workplace. Limitations This study has some potential limitations. One concerns the limited number of factors investigated in our study. Ethical decision making is a very complex phenomenon, and exploring cross-cultural differences is even more difficult.For example, in addition to the variables we studied, marketing ethics theories have also specified moral philosophies, personal values, religion, professional environment, and organizational and industrial characteristics as important background factors underlying the ethical decision making of managers (e. g. Ferrell and Gresham, 1985 Hunt and Vitell, 1986). However, the scope of this study is limited to cultural dimensions, economic environment, organizational ethical climate, and selected demographic variables as explanatory factors.It should be pointed out that in this study, some important demographic variables, such as education, were not included because of a lack of conceptual equivalence, as explained in the next section. Another limitation concerns the samples analyzed in this study. Although four relatively diverse countries were studied, the findings can not be generalized to other countries with different cultural characteristics and levels of economic development. next research avenues This research can be extended in many ways. As a first step, a non-d irectional hypothesis for country differences was presented.This was necessitated by the fact that this was the first study dealing with the investigation of cross-cultural variation in the perceived importance of ethics and social responsibility as determinants of organizational effectiveness. Future research should investigate the direction of expected differences. A comprehensive framework modeling antecedents and consequences of the perceived importance of ethics and social responsibility can be developed and tested. This will add another dimension to our understanding of ethical decision making.As pointed out earlier, one limitation of this study concerns its limited samples and, consequently, its limited generalizability. Therefore, there is a need to replicate this study using managerial samples from other countries with different cultural characteristics and/or levels of economic development. Given the complexity of the phenomenon under study, future research should investig ate other determinants specified in marketing ethics models, such as moral philosophies, personal values, religion, professional environment, and organizational and industrial characteristics.Among demographic variables, education could be an important determinant but was not included because of a lack of conceptual equivalence. In cross-cultural research, conceptual equivalence in terms of the meaning of research concepts, stimuli, and materials must first be established before any meaningful similaritys are made (Malhotra et al. , 1996). In our study, the US sample is predominantly business-educated, which might not be the case with the other three samples. In addition to differences in the educational background of the managers, the lack of conceptual equivalence can also be attributed to .The educational systems and curricula in the four countries being different. . Differences in the extent to which ethics is required to be emphasize in the curriculum content across different countries (for example, accredited business schools in the USA are required to incorporate business ethics into their curricula, and such requirements might exist to a greater or lesser degree in other countries). . Variation in the extent to which ethics is actually incorporated and emphasized in the curricula.Thus, it is not education per se, but the incorporation of ethics into educational curricula, the actual implementation, and its impact on the managers that is likely to influence their perceived importance of ethics and social responsibility. In the future, the cross-country differences in educational background of the respondents as well as the extent to which ethics is emphasized in education should be measured, and analyzed as a potential factor influencing a managers perceived importance of ethics and social responsibility.Conclusion To summarize, this research investigated whether marketers from Australia, Malaysia, South Africa, and the USA differ in their beliefs reg arding the importance of ethics and social responsibility as determinants of organizational effectiveness. The study was based on an alternative approach to studying perceptions about ethical issues and problems in business. Traditionally cross- How important are ethics? 149 European Journal of Marketing 35,1/2 150 cultural researchers have evaluated ethical perceptions, attitudes, and intentions with regard to specific business/marketing practices involving ethical problems.Here, we investigate differences in the perceived importance of ethics and social responsibility in relation to various aspects of organizational effectiveness such as quality, communication, profits, competitiveness, survival, efficiency, and stakeholder satisfaction. The results of this study are important because perceived importance of ethics and social responsibility has been shown to influence ethical intention, when managers are faced with an ethical situation (Singhapakdi, 1999). Results indicate that di fferences in the perceived importance of ethics and social responsibility among marketers from the four countries exist because of . ountry differences in culture, economic development, and legal/political environment . differences in organizational ethical climate and . gender differences. There are not any differences due to age. Overall similarities and differences among the four countries emerged on specific dimensions of business effectiveness. On the dimensions of output quality and competitiveness, there were no differences among the four countries. Inter-country differences were found on the dimensions of communication, efficiency, profits, survival, and stakeholder satisfaction.These findings regarding cross-cultural similarities and differences are useful in furthering our understanding and precaution of ethics and social responsibility in the international context. Notes 1. For subsequent analysis using LISREL, a sample size of 159 was judged adequate because it is close to the recommended level of ten observations for both parameter estimated (Haire et al. , 1998). 2. For the Australian and Malaysian sample, the non-response bias based on early and late respondents could not be assessed as this information (i. e. dates when the questionnaires were received) was not preserve at the time of data collection. . The similarity of factor structures of the seven-item scale for individual countries was assessed with confirmatory factor analysis. break measures for individual countries, including chi-square per degree of freedom (range 1. 87-3. 32), GFI (0. 94-0. 97), AGFI (0. 890. 95), and CFI (range 0. 91-0. 96), for the four countries were high. The reliability of the seven-item scale ranged from 0. 73-0. 76 for the four countries. 4. The five items in the corporate ethical values scale were . Managers in my company often engage in behavior that I consider to be unethical. . In order to succeed in my company, if is often necessary to compromise ones ethics. Top management in my company has let it be known in no uncertain terms that unethical behaviors will not be tolerated. If a manager in my company is discovered to have engaged in unethical behavior that results in personal gain (rather than corporate gain), he/she will be instantly reprimanded. . If a manager in my company is discovered to have engaged in unethical behavior that results in corporate gain (rather than personal gain), he/she will be promptly reprimanded. 5.The similarity of factor structures of the five-item CEV scale for individual countries was assessed with confirmatory factor analysis. Fit measures for individual countries, including chi-square per degree of freedom (range 2. 00-35. 23), GFI (0. 88-0. 99), AGFI (0. 63-0. 99), and CFI (range 0. 74-0. 99), for the four countries were moderate. 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