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Article
Publication date: 1 June 2015

Ron Berger

This paper aims to present the evolution of Chinese business ethics and CSR policy. China currently has business ethics and corporate social responsibility (CSR) concerns…

Abstract

Purpose

This paper aims to present the evolution of Chinese business ethics and CSR policy. China currently has business ethics and corporate social responsibility (CSR) concerns primarily because its economy is in evolution. As the Chinese economy is in transition from the late 1970s from a command–Communist economy to a more hybrid system Beijing model (a system based on a capitalist market controlled through bureaucracy), much has to be understood if one wants to participate in its vast economic potential.

Design/methodology/approach

The study is based on the building of a model that depicts the evolution of business ethics in China as a base for further research.

Findings

With the rapid development of the Chinese economy, opportunities are opening up to Chinese entrepreneurs and connected officials. This has led to money worship and, in some cases, thorough unethical behavior. The uncertain and ever-changing rules of the game generate opportunity for business ethics and CSR problems. This wealth creates temptation and incentives to cut corners to get rich fast. Much research has tried to explain business ethics in China through the understanding of Guanxi (Chinese social network of reciprocal business relations common in Confucian cultures), but in my view, the evolutionary aspect of it is missing to explain the present and future situation. Whereas considerable research has dealt with the growth of Chinese industries in recent years, the key relationship between changes in its economy and shifts in Chinese business ethics has been neglected. This paper presents the evolution of Chinese business ethics and CSR policy.

Originality/value

The paper illustrates the evolution of Chinese business ethics and how one has to adapt if one wants to succeed in its ever evolving and maturing market. A model is presented that can assist in future research in the area.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 8 no. 2
Type: Research Article
ISSN: 1754-4408

Keywords

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Article
Publication date: 12 August 2014

Ron Berger and Ram Herstein

This article aims to present a historical overview of the evolution of business ethics in China and highlights the ways in which its ethical structure lags behind its…

Abstract

Purpose

This article aims to present a historical overview of the evolution of business ethics in China and highlights the ways in which its ethical structure lags behind its rapid economic expansion. Understanding Guanxi, the Chinese social network of reciprocal business relations common in Confucian cultures, has long been recognized as one of the major success factors when doing business in China (Hwang et al., 2009). Recognizing the significant impact of Guanxi and its influence on everyday dealings in China is, thus, crucial for Western firms. Whereas considerable research has dealt with the growth of Chinese industries in recent years, the key relationship between changes in its economy and shifts in Chinese business ethics has been neglected although it impacts the ways Westerners, in particular, both clinch deals and judge Chinese firms. The implications of this disparity for global business are discussed.

Design/methodology/approach

The discussion draws on the academic literature and the researchers’ experience in how business and business ethics are conducted between Western and Chinese firms. This paper presents a content analysis of theoretical articles and compares them to conceptual and empirical approaches, with an emphasis on a pragmatic approach to fostering a better understanding of the evolution of Chinese business ethics and its implications on business practices.

Findings

Maps the evolution of business ethics in China and need to adapt to an ever changing business environment.

Originality/value

This study offers a new insight to the evolution of Chinese business ethics and highlights its importance in business interactions. It illustrates the co-evolution of business ethics in parallel with the advancement of the Chinese economy. This paper is the first paper that addresses the issue of the evolution and formation of Chinese business ethics and links it to economic progress and opening up to the West.

Details

Management Research Review, vol. 37 no. 9
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 28 October 2014

Ron Berger

The purpose of this paper is to illustrate the evolution of Chinese business ethics over time and how it impacts business. While much research attention has been directed…

Abstract

Purpose

The purpose of this paper is to illustrate the evolution of Chinese business ethics over time and how it impacts business. While much research attention has been directed toward China and its various industries, the Chinese diamond industry has been largely neglected. This industry is the second in size and fastest growing globally. It is interesting to examine its evolution over time and how external factors affect the firms’ business ethics behavior.

Design/methodology/approach

Exploratory field work involving the interview of major players was undertaken, complemented by extensive desk work, was used to create a base for future in-depth research of the secretive Chinese diamond industry.

Findings

A paradox was identified in the Chinese diamond industry, namely, that while Chinese businesses tend to follow a relational governance model, China’s diamond industry tends to use rational mechanisms of governance and exchange, a paradox that is explained by mitigating factors.

Research limitations/implications

Future studies should use a quantitative questionnaire with a larger set of Chinese diamond firms to further examine the paradox found. Future studies could also examine whether the transformation from a system based on social networks to a system based on market forces as found in the Chinese diamond industry is an indicator of an ethical and business evolution of the whole Chinese industry. This may illustrate the rationalization of the Chinese economy and its progression toward Western models of exchange as it further opens up to the West.

Originality/value

This paper is a pioneering work on the business ethics and strategy implemented by firms in the Chinese diamond industry.

Details

Chinese Management Studies, vol. 8 no. 4
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 20 March 2007

Jamal A. Al‐Khatib, Stacy M. Vollmers and Yusin Liu

The purpose of this study is to examine the effects of Chinese executives' preferred ethical ideologies and Machiavellianism on their perceived appropriateness of…

Abstract

Purpose

The purpose of this study is to examine the effects of Chinese executives' preferred ethical ideologies and Machiavellianism on their perceived appropriateness of negotiation tactics as they operate in a nation transitioning from a planned economy to a market economy.

Design/methodology/approach

A self‐administered survey of a sample 300 Chinese managers with budgetary and personnel responsibilities in Tianjin, China was obtained for the purpose of the present study. A series of regression analyses were conducted to test the proposed relations.

Findings

Results from the regression analyses provided partial confirmations for the proposed relationships. Idealism influenced perceptions of false promises, traditional competitive bargaining, and attacking an opponents' network. Perceptions of traditional competitive bargaining, attacking an opponent's network, and inappropriate information gathering were significantly influenced by relativism. Machiavellianism influenced perceptions of traditional competitive bargaining and misrepresentation of information.

Research limitations/implications

Given the existing impediments to sampling and data collection in China, the sampling method used is non‐probabilistic, which calls for consideration of the results as exploratory. The present study's sample is drawn from the Northeastern region of China and since ethical beliefs and orientation in China varies by region, the results of the present study cannot be generalized to the total population of China.

Originality/value

The present study aims to provide the following contribution. First, as most studies in the negotiation ethics literature are focused in Western cultural contexts, this study attempts to fill this gap by investigating the negotiation ethical values of executives from Eastern culture. Second, global firms' executives can better understand the ethical mindset of their Chinese counterparts and utilize this knowledge to efficiently and effectively manage the negotiation process with their counterparts in this important market. Third, public policymakers and researchers can also benefit from this study by understanding the external validity and the degree of ethnocentrism of not only their own code of ethics but also the validity of a universal code of ethic.

Details

Journal of Business & Industrial Marketing, vol. 22 no. 2
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 27 September 2011

Guangyou Liu

The purpose of this paper is to test whether significant differences in ethical reasoning exist between Chinese accountants and managers when facing an ethical dilemma…

Abstract

Purpose

The purpose of this paper is to test whether significant differences in ethical reasoning exist between Chinese accountants and managers when facing an ethical dilemma. Further tests are conducted to identify what professional contextual factors and personal value preferences can be introduced to explain the ethical reasoning differences observed.

Design/methodology/approach

Three research questions are raised and related hypotheses are developed and tested by the use of a defined issue test (DIT) instrument containing four hypothetical scenarios of different dilemmatic issues, and a Rokeach values survey questionnaire adapted to suit the Chinese business culture.

Findings

The findings and conclusions include: Chinese managers and accountants are not significantly differentiated in terms of ethical reasoning levels measured by the overall DIT instrument, however, the break‐down results of the DIT individual dilemmatic scenarios shows that significant differences exist between the two professional types in three out of four scenarios. Second, gender and frequency of making compromises are two significant contextual determinant of ethical reasoning levels of managers but not those of accountants, and for the accountants, no significant contextual factors are observed in the current study. Third, in determining the impacts of value preferences on ethical reasoning levels, the four‐factor classification approach produces a more contrasting result than the seven‐factor classification approach.

Research limitations/implications

The selection of the four scenarios in the DIT instrument is subjective according to the designation of the test, and Chinese business profession's ethical ideologies might differ among different regions. However, these research limitations might inspire further ethics research on cross‐regional comparisons in China and other emerging economies.

Practical implications

In Chinese surging markets, appropriate socio‐economic order can only be maintained by highly ethical reasoning and conduct on the part of business managers and accountants. The current results and findings would help to identify what factors and value preferences weigh more, in order to improve the professional ethicality.

Originality/value

This paper contributes to the research literature of business ethics by adding a managers‐accountants comparative study on ethical reasoning differences, especially the ethicality of two different professions in emerging economies; further, it includes contextual factors and value preferences in identifying those determinants of ethical reasoning differences.

Details

Asia-Pacific Journal of Business Administration, vol. 3 no. 2
Type: Research Article
ISSN: 1757-4323

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Article
Publication date: 13 September 2011

Jessica Li and Jean Madsen

The purpose of this paper is to examine Chinese employees' perceptions on their ethical decision making in relation to the workplace guanxi context in state‐owned…

Abstract

Purpose

The purpose of this paper is to examine Chinese employees' perceptions on their ethical decision making in relation to the workplace guanxi context in state‐owned enterprises (SOE).

Design/methodology/approach

Using a qualitative method, two rounds of interviews were conducted with 18 participants in two SOEs “to explore Chinese employees” ethical perceptions and experiences in the workplace. A qualitative thematic strategy was adopted to analyze and interpret the data.

Findings

The authors identified three major themes on SOE employees ethical decision making in relation to workplace guanxi: the ethical self; malleable ethical standards; and submission to authority. The authors derived a conceptual framework to outline the relationship between the invisible hand of guanxi and the SOE employees' ethical decision making.

Originality/value

The paper contributes to the business ethics literature by presenting a three‐dimensional profile and a conceptual framework for Chinese business ethics research. It provides an in‐depth understanding of a complex dynamics of guanxi and its impact on employees' ethical decision‐making behavior.

Details

Journal of Chinese Human Resources Management, vol. 2 no. 2
Type: Research Article
ISSN: 2040-8005

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Article
Publication date: 1 March 2003

P.C. Wright, W.F. Szeto and S.K. Lee

Focuses on the economic changes necessary and the present state of business ethics in China. Explores the ethical precepts held by a sample of Chinese professionals…

Abstract

Focuses on the economic changes necessary and the present state of business ethics in China. Explores the ethical precepts held by a sample of Chinese professionals enrolled in a management development program in mainland China. A benchmark is created that not only measures the present state of business ethics, but looks at perceived change over the last five years. From these data, guidelines are developed which are of use to policy makers and to executives who wish to employ, or to conduct business with Chinese nationals.

Details

Management Decision, vol. 41 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 March 2002

Jeffrey R. Cohen, Laurie W. Pant and David J. Sharp

In a world of increasingly global commerce, individual managers frequently migrate permanently to a new place of work. Over time, they acculturate—they learn and acquire…

Abstract

In a world of increasingly global commerce, individual managers frequently migrate permanently to a new place of work. Over time, they acculturate—they learn and acquire the values of their host culture. The differences between national cultures' norms concerning the morality of questionable (by North American norms) accounting practices, and the ways in which individuals' beliefs about the morality of such action change as they settle into a new culture, are not well understood. This paper presents an exploratory study of the acculturation process with respect to accounting ethics of Chinese managers moving to Canada for an extended period of time. We test for two effects: first, for differences in ethical perceptions and intentions between members of the two cultures resident in their country of birth, and second, the effect of a significant acculturation effect on the Chinese group resulting from their living in Canada and studying in a North American MBA program for approximately one year. We find two acculturation effects. First, Chinese managers perceived a questionable cost accounting allocation to be more ethical than the Chinese in Canada. Although there was no significant difference in an overall measure of morality, investigation of this effect among various moral schema identified some perceptions of utilitarianism, moral Tightness and self‐interest to be significantly different among those Chinese who had spent one year in Canada compared to those in China, and closer to the beliefs of the Canadian‐born managers. We also found an acculturation effect relating to intention to take a questionable action. While there was no significant difference in intention between the Canadian‐born and Chinese in China, the newly‐arrived Chinese in Canada were significantly more willing to take the questionable action. This result was robust to controls for social desirability bias, gender and work experience. We conclude that reasoning processes differ between Chinese and Canadian managers, and are affected by an intense one‐year acculturation process (the first year of a North American MBA program). However, the acculturation process of the Chinese in Canada appeared to result in their greater willingness to undertake a questionable cost allocation than either their Canadian‐born or Chinese in China colleagues.

Details

Review of Accounting and Finance, vol. 1 no. 3
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 1 November 1996

Kam‐hon Lee

States that, although it differs from that practised in the West, moral consideration is a key factor in making strategic moves for business people in Chinese society…

Abstract

States that, although it differs from that practised in the West, moral consideration is a key factor in making strategic moves for business people in Chinese society. Substantiates this claim based on evidence from business history in China, overseas Chinese business practice and Chinese experiences today. Then, deliberates on the management implications of this phenomenon for people who want to do business with Chinese and in China.

Details

Management Decision, vol. 34 no. 9
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 7 October 2013

Mingzhi Liu

The purpose of this study is to investigate the effect of Chinese auditors' personal values (guanxi and ethical orientations) on their ethical reasoning (ethical judgments…

Abstract

Purpose

The purpose of this study is to investigate the effect of Chinese auditors' personal values (guanxi and ethical orientations) on their ethical reasoning (ethical judgments and behavioral intentions). In addition, this study aims to explore the joint effect of guanxi and ethical orientation on auditors' ethical reasoning.

Design/methodology/approach

This study is based on a field survey of 191 auditors working in Certified Public Accounting (CPA) firms that operate in the People's Republic of China (China).

Findings

The main findings indicate that guanxi and relativism orientations negatively associate with, while idealism orientation positively associates with, auditors' ethical judgments and behavioral intentions. However, when decomposing the overall ethical judgment into three judgment groups, the main effects of guanxi and ethical orientations on auditors' ethical judgments become marginal and those effects fully hold only when using acceptability as criteria to judge questionable behavior in the vignettes. In addition, the results of the joint effect of guanxi and ethical orientations indicate that guanxi orientation weakens both the positive effect of idealism and the negative effect of relativism orientations on auditors' ethical reasoning.

Originality/value

This study contributes the literature by investigating the ethical reasoning of auditors in a country with a relatively weak legal system that relies on guanxi (literally, interpersonal relationships and connections) culture to operate business. Furthermore, this study extends the literature by documenting the moderating effect of guanxi orientation on the relation between auditors' ethical orientation and their ethical reasoning.

Details

Managerial Auditing Journal, vol. 28 no. 9
Type: Research Article
ISSN: 0268-6902

Keywords

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