Cultural Effects on Business Students’ Ethical Decisions: A Chinese Versus American Comparison

Abstract

The authors used a corporate code of ethics to create 18 scenarios for examining cultural effects on ethical decisions of Chinese versus American business students. Four cultural differences were hypothesized to contribute to overall less ethical decisions of Chinese students. The results support the hypothesis and indicate strong cultural effects on 5 areas of the code: (a) accurate accounting records, (b) proper use of company assets, (c) compliance with laws, (d) trading on inside information, and (e) reporting unethical behavior. Business educators and corporate ethics trainers should be aware of these cultural effects, and provide more coverage and special emphasis on these areas when they have Chinese students or entry-level personnel.

Keywords:

• Chinese
• code of ethics
• cultural differences
• cultural effects
• ethical decisions

Notes

*p < .05.

**p < .01.

***p < .001.

*p < .05.

***p < .001.

1. A publicly traded company may disclose the code in its annual report, on its website, or state that the code is available upon request. A company that has not adopted the code of ethics is required to provide an explanation.

2. These areas are in accordance with the Sarbanes-Oxley Act and the NYSE and the NASDAQ ethics requirements.

3. The world average for each Hofstede cultural dimension is calculated by this study as the mean score of the 74 countries and regions reported in Hofstede and Hofstede (2005).

4. At the time the surveys were filled out, 30 out of the 86 Chinese students had accepted the offer to continue their undergraduate study at the authors’ university, and came to the United States a few months later. One student had accepted a similar offer from another university in the United States. More than 10 students were in the process of applying for graduate programs in the United States and other Western countries. The majority of the rest of the students indicated that they had planned to pursue an advanced degree in Western countries after graduation.

5. To explore whether the differential sample sizes (86 Chinese participants vs. 228 American participants) affected the study results, we randomly selected 86 out of the 228 American participants and repeated the logit regression analysis. Results based on the same sample size of 86 American and 86 Chinese students also strongly supported the hypothesis (i.e., CULTURE had a z statistic of 4.91 and Prob. > z was .000).