Ethical issues across cultures: managing the differing ...

1 Ethical issues across cultures: managing the differingperspectives of China and theUSAD ennis A. PittaProfessor of Marketing, University of Baltimore, Baltimore,Maryland, USAHung-Gay FungDr Tsiang Professor of Chinese Studies, University of Missouri,St Louis, Missouri, USAS teven IsbergAssociate Professor of Finance, University of Baltimore, Baltimore,Maryland, USAK eywordsChina, Consumer behaviour, Ethics, Marketing strategy, National cultures,USAA bstractUS marketers know the US standard of ethics. However, that standard can leadto Ethical conflict when Americans encounter the emerging market giant, China.

2 Assmaller US companies enter China, the potential for Ethical conflict increases. Reducingthat potential requires knowledge. Knowing the nature and history of the two cultures canlead to an understanding of the foundation of their Ethical systems. Ethics and theexpectations within cultures affect all business transactions. It is vital for Westernmarketers to understand the expectations of their counterparts around the the cultural bases for Ethical behavior in both the USA and China can arma marketer with knowledge needed to succeed in cross-cultural business.

3 Implementingthat knowledge with a clear series of managerial guidelines can actualize the value ofthat businesspeople often concentrate on the fundamentals. In thebusiness and marketing sense, the fundamentals are:.sound marketing strategy;.professional marketing research;.world-class product development;.effective pricing;.motivating promotion; on the basics makes success in competitive markets , serious problems can materialize in business practice between theWest and the emerging market giant, difficulty lies in more fundamental issues than product, price, promotionand place.

4 With the transition from domestic-focussed operations to a trueworldwide view, other factors are essential for success. One pervasive factoris culture. Culture and the expectations within cultures affect all businesstransactions. It is vital for Western marketers to understand the expectationsof their counterparts around the world. Even at the threshold of themillennium, inability to master the basic cultural factors still leads to be accurate, culture is one of the factors that affect business ethics. TheRandom House College Dictionarydefines ethics as, ``the rules of conductCultural factors240 JOURNAL OF CONSUMER MARKETING, VOL.

5 16 NO. 3 1999, pp. 240-256#MCB UNIVERSITY PRESS, 0736-3761recognizedinrespecttoaparticula rclassofhumanactionsoraparticulargroup,c ulture,etc.''. 'smembersbyparentingandsocialization,edu cation, ,acceptedhumanresourcemanagementsystems, organizationalculture, , , , ,researchintotheethicsofinternationalman agementhasbecomeagrowingfield(Jeurissena ndvanLuijk,1998;JacksonandArtola,1997;Ho neycuttetal.,1995;ArmstrongandSweeney,19 94). :.illegalcampaigncontributions;.bribery; .knowinglysellingdefectivegoods;.hidingi nformation; ; , ,enactedintheUSA, ,intheirworldwideoperations, ,briberytoobtainbusinessisstrictlyforbid denforaUSDifferencesinsystemsoflawsUneth icalbehaviorJOURNALOFCONSUMERMARKETING, , , , ,itfacesgreatpressuretohideit, , ,atthiswriting,bribesareexplicitlytaxded uctibleinanotherWesterncountry, , ,thebasisforbusinessethicsThereiscommona greementthatacountry' :first,byovertactionssuchaspublicorcorpo ratestatementsandactionsaboutethicalbeha vior;second, , ,developedcivilization, (Schein,1985).

6 Schein(1985) , ,worksofart,museums, ,inancientRome, , , , , ' (1961)comparedanumberofculturesacrosssix dimensions, :BriberypartoffabricoflifeRulesofconduct 242 JOURNALOFCONSUMERMARKETING, (1)Whataresociety'sassumptionsaboutthees sentialgoodnessofpeople?Doesthesocietyas sumethatpeopleareessentiallygood,badorbo th?(2)Whatdoesthesocietyemphasizeininter personalrelations,theindividualorthegrou p?Shouldanindividualfeelfreetoactasanind ividualorshouldheconsiderthegroupbeforea cting?(3)Whatisthevalueofpersonalspacein asociety?Insomesocieties, ,thereisanacceptedphysicaldistance,abuff er, ,peopleareveryuncomfortablestandingtoocl ose.

7 (4)Whatdoesthesocietyassumeabouttherelat ionshipofmanandnature?Ismanmeanttolivein harmonywithnatureortodominateit?(5)Whati stheroleofchangeinsociety?Doestheculture valuestability,andpreservingthestatusquo ?Incontrast,doesthesocietyvalueprogressa ndchange?(6)Finally,whatissociety'sorien tationtowardtime:past,presentorfuture?Kl uckholnandStrodtbeck(1961) , , ,inagivenculture, ,likeChina,presentationofasmall, ,itmayrestwiththereceiverwhomaynottrustt hegiver' , ,giftswhosepurposeistoinfluenceadecision -maker' ,bribesareusuallynotconsidered``right'' ,theconflictdealswithfundamentalstandard soffairness(KohlsandBuller,1994).

8 Thereisacontinuumofethicalconflictrangin gfromsimple, :ClearguidelinesJOURNALOFCONSUMERMARKETI NG, ' ,moralandethicalbasesareprovidedthrought hedecreesofasovereignmoralauthority, ,Goddeclaresrightandwrong, , 'sfounders,enlightenmentphilosophyandits focuson``naturallaw''ledtotheiraffirmati onofanindividual's``inalienablerights''. Thefoundersidentifiedthreebasic``self-ev ident''truthsregardingthe``inalienable'' rightsofmankindto:(1)life;(2)liberty;and (3)thepursuitofhappiness; , ,itmeansthatthereexistnoaprioriclaims,ag ainstone'slife,libertyand/orabilitytodis poseofone' 'slife,liberty, ,theUSAhasbecomeaplacewheretheindividual 'srightsareemphasized,contractsareimport ant, ' ' ,any``heads-up'' ``nexusofcontracts'',wherebyindividualan dcorporateeconomicagentsvoluntarilyagree toexchangemoney,time, , , , ``optimal'' , ,whoisgivencreditforcontributingtothedes ignofthissystem,arguedthat,whileitwasimp ortanttoallowthemarketeconomytofunctionf reely.

9 Smithoutlinedtheimportanceoftheroleplaye dby``institutionalsociety'',whichis,ines sence, , :(1)home;(2)church;and(3)school;arethere byresponsibleforinstillingprinciplesofet hicalbehaviorinsociety, (Muller,1993).Theintegrationofbehavioral andethicalcodestaughtwithincivicandcomme rcialsocietyservetomaketheoverallsociety ``decent''.Intheidealsetting, ,transactionswillbenegotiatedinanenviron mentinwhichparticipantswillbeboundbythet ruth,andwillrepresentthemselves``ingoodf aith''. , ,mostoftenawrittendocument,spellsoutthen atureofthebusinessrelationshipandtheobli gationsofeachpartytothebusinesstransacti on(s) , , ,however, , ,individualsareboundtonegotiateinthecont extofthetruth,``sayingwhattheymean''and` `meaningwhattheysay''.

10 Tosummarizetheimpactofthisethicalcontext ontheconductofcommercialtransactions,bus inessagentsintheUSAcanbeexpectedtoactasp ersonal(orcorporate)advocates, ,however,isintendedtobeingoodfaith, , ,iffollowedtotheletter,bepredatoryincert aincases, ,inpart, ,USmultinationalshavesubstantiallyincrea sedtheirinvestmentsinChinathroughjointve ntures, ,itisofcriticalimportancethatexecutivesi nbothcountriesunderstandeachother' , , , , , ,inparticular, , ,which,overalongperiodoftime, , , ,scholars,philosophers, ,dominantreligionsprevailinginChina,such asPersonaladvocatesEverythinginharmony24 6 JOURNALOFCONSUMERMARKETING, , ,however, , , ,whichincluderelatives,schoolmates.