There appears to be a decline in business ethics. Recent corporate scandals involving accounting manipulation, cover-ups, and conflicts of interest certainly suggest such a decline. This is not a recent phenomenon.
Although the issue is debatable, a lot of people think ethical standards began to erode in the late 1970s. After all, managers consistently report that the action of their bosses is the most important factor influencing ethical and unethical behavior in their organizations. Given this fact, the values of those in middle and upper management should have a significant bearing on the entire ethical climate within an organization.
We described the new global village and said â€œmanagers have to become capable of working with people from different cultures.â€ Because values differ across cultures, an understanding of these differences should be helpful in explaining and predicting behavior of employees from countries.
One of the most widely referenced approaches for analyzing variations among cultures was done in the late-1970s by Geert Hofstede. He surveyed more than 116,000 IBM employees in 40 countries about their work-related values. He found that managers and employers vary on five value dimensions of national culture. They are listed and defined as follows:
The degree to which people in a country accept that power in institutions and organizations is distributed unequally. This ranges from relatively equal (low power distance) to extremely unequal (high power distance).
Individualism versus collectivism:
Individualism is the degree to which people in a country prefer to act as individuals rather than as members of a group. Collectivism is the equivalent of low individualism
Achievement versus nurturing:
Achievement is the degree to which values such as assertiveness, the acquisition of money and material goods, and competition prevail. Nurturing is the degree to which people value relationships, and show sensitivity and concern for the welfare of others.
The degree to which people in a country prefer structured over unstructured situations. In countries that score high on uncertainty avoidance, people have an increased level of anxiety, which manifests itself in greater nervousness, stress, and aggressiveness.
Long-term versus short-term orientation:
People who are in cultures with long-term orientations look to the future and value thrift and persistence. A short-term orientation values the past and present and emphasizes respect for tradition and fulfilling social obligations.
A research study was done and here are a few highlights. China and West Africa scored high on power distance; the United States and the Netherlands scored low. Most Asian countries were more collectivist than individualistic; the United States ranked highest among all countries on individualism. Germany and Hong Kong rated high on achievement; Russia and the Netherlands rated low. On uncertainty avoidance, France and Russia were high; Hong Kong and the United States were low. And China and Hong Kong had a long-term orientation, whereas France and the United States had a short-term orientation.