Monday, March 21, 2011

Research Paper on Business Ethics

Research Paper on Business Ethics

The Asian economic crisis which began in July 1997 has led to many discussions regarding its genesis (e.g., Asian Development Outlook, 1998; Fischer, 1998). A frequently mentioned cause of the crisis is the lack of transparency in Asia. Rather than arms-length transactions between independent parties, many commercial negotiations in the region are believed to be tinted with and tainted by political and other vested interests (Asian Development Outlook, 1998; The Straits Times, 1998). Indeed, allegations of nepotism, corruption, crony capitalism, and collusion may have contributed to the downfall of Asian governments in Japan, Thailand, and Indonesia.

Besides strengthening their banking and financial sectors to address the crisis, Asian economies have been urged to do business in a cleaner and more ethical manner with better corporate governance (The Straits Times, 1998). Towards this end, present and potential businesspeople and executives in Asia must be favorably predisposed towards a high level of corporate ethics and social responsibility (CESR et al., 1996). This poses a major challenge to the extent that even businesses in the West have been criticized for their limited adoption of CESR (Robin and Reidenbach, 1987). Accentuating the difficulty is the fact that this commitment depends on the cultural, institutional, and organizational environments under which managers operate as well as their personal characteristics (Ferrell and Gresham, 1985; Hunt and Vitell, 1986; Stajkovic and Luthans, 1997).

Despite the increasing research attention paid towards CESR in the West, its theorizing and empirical analysis in Asia is limited. A notable exception was McDonald and Pak (1996) who found that neutralization and self interest were the most significant factors considered by business managers in Hong Kong, Malaysia, New Zealand, and Canada in resolving ethical business dilemmas. Instead, researchers have tended to focus their efforts on how foreign enterprises can adapt to Asian business practices (e.g., Tung, 1982; Wongtada, 1993). However, extant knowledge of Asian business practices may furnish insights into the role of CESR in the region. As observed by de George (1997), although CESR is not a popular nor well-known notion in much of Asia, businesses that can see through unethical practices in Asia are likely to profit from this insight.


Specifically, it may be useful to examine how such cultural factors as guanxi and mianzi, constructs so intimately related to Asian (particularly Chinese) business, may impact CESR beliefs. Guanxi is generally conceived as the interpersonal connections which an individual attempts to cultivate with relevant parties, while mianzi or face relates to the need to preserve one's social standing. These factors tend to be studied in the Chinese culture although they are not necessarily exclusive to the East. For instance, the "old boys' club," a notion familiar in the West, shares some characteristics as guanxi. However, it is documented that in Chinese communities, both guanxi and mianzi are practiced for long-term personal relationships (Abramson and Ai, 1997; Osland, 1989). Additionally, Brunner and Taoka (1977) suggested that comparative research indicate Chinese to place more emphasis on building relationships than their American counterparts; while Alston (1989) has touted! guanxi as an Asian value. Given the prevalence of these fundamental factors in this region, we argue that they are important considerations in influencing CESR beliefs among Asians.

In addition, we analyze the impact of Machiavellianism on CESR beliefs in Asia. Machiavellian denotes at least an amoral (if not immoral) way of manipulating others to accomplish one's objectives (Hunt and Chonko, 1984). The construct has been found to correlate negatively with CESR in Western research (Rayburn and Rayburn, 1996; Singhapakdi, 1993). Whether this relationship holds in an Asian setting will be assessed in this study along with the more indigenous cultural variables of guanxi and mianzi.

Moreover, it would be beneficial to assess whether beliefs in CESR vary across Asian countries. Possibly, such cross-national differences may arise between Asian countries with different business philosophies and macro-economic management approaches. For example, Hong Kong is known to have a more liberal and laissez faire attitude towards business than Singapore, even though both were former British colonies and are Chinese-dominated. Likewise, the relative impact of the three explanatory variables of interest on CESR beliefs may differ between Asian nations.

Finally, while it may be useful to obtain insights from managers who deal with such issues in their work, it would also be helpful to analyze these issues from the perspective of business undergraduates for at least three reasons. First, while they may lack first-hand knowledge given their relative inexperience, their responses are not likely to be completely arbitrary. This is because such undergraduates would have been exposed to the basic issues involved in this study in their course work. Second, the focus of this research is on theory testing of relationships between constructs. To the extent that the variables of concern are likely to vary within the undergraduate population, their use is justifiable and may also control for such background conditions as company size, job classification, and other factors which may impact the findings if executives were employed instead. Third, should data among youths support the hypotheses, there would be important long-term impli! cations for the cultivation of stronger beliefs in CESR in the region.

Thus, this study has three objectives. First, we examine the impact of guanxi, mianzi, and Machiavellianism on the CESR beliefs of Hong Kong and Singapore business undergraduates. Second, we investigate whether Hong Kong and Singaporean youths vary in their CESR beliefs. Third, we determine whether nationality interacts with guanxi, mianzi, and Machiavellianism in predicting CESR beliefs.

The remainder of this paper is organized as follows. The literature review next outlines the four concepts of concern in this study as well as formulates hypotheses relating the impact of the explanatory variables on CESR beliefs. Next, the research method employed in the study is detailed, followed by the results of the survey. Finally, implications of the findings are discussed and directions for future research suggested.

Corporate ethics and social responsibility
Corporate values define the standards that guide the external adaptation and internal integration of organizations (Schein, 1985). Corporate ethical values help establish and maintain the standards that delineate the "right" things to do and the things "worth doing" (Jansen and Von Glinow, 1985). Such ethical values require the organization or individual to behave in accordance with carefully thought-out rules of moral philosophy. These include honesty and full disclosure, and engaging in practices that do not break or bend the rules for the sake of profit maximization. These values are considered to be a composite of individual ethical values of managers and both the formal and informal policies on ethics of the organization (Hunt et al., 1989). In turn, such ethical standards can influence individuals' choices and lead to actions that benefit their organizations (Conner and Becker, 1975).

Social responsibility concerns the social contract between business and the society in which it operates. Steiner (1972) proposed that "at any one time in any society, there is a set of generally accepted relationships, obligations and duties between the major institutions and the people. Philosophers and political theorists have called this set of common understandings `the social contract"' (p. 18). This, he felt, forms the basis of social responsibility. It is a set of generally accepted relationships, obligations, and duties that relate to the corporate impact on the welfare of the society. It includes considering others besides stockholders (e.g., employees) when deciding how a business should be run, and going beyond profit as a goal for a business.

Social responsibility has been found to affect organizational effectiveness (Kraft, 1991a, 1991b; Zahra and LaTour, 1987). Socially responsible organizations and their managers accord greater importance to the interests of a society, to the extent that they may supersede those of the business. They are thus not guided purely by the financial doctrine of maximizing shareholder value (Hunt et al., 1990). Hence, social responsibility and ethical values are closely related. Kraft and Jauch (1992) employed both constructs simultaneously in their organizational effectiveness menu, a device for stakeholder assessment. Singhapakdi et al. (1996) extended this stream of research by developing a scale to measure CESR. Called PRESOR (Perceived Role of Ethics and Social Responsibility), the inventory comprises general statements about the importance of ethics and social responsibility to an organization's overall effectiveness.

For over 2000 years, the Chinese culture has inculcated the values of collectivism and order in its conduct of social and business events. For instance, Confucius in the sixth century BC provided a code on the ties between an individual to his/her family and the society based on their respective roles and positions in the environment. A consequence of such a collectivistic culture is guanxi or interpersonal connections (Hwang, 1987), considered as one of the critical interpersonal relationship values in a Chinese society (Kao, 1993; Osland, 1989) and, until recently, a vital ingredient for the success of East Asian economies (Montagu-Pollock, 1991).

Guanxi refers to the cultivation of special relationships or connections. The Chinese believe that one's existence is influenced by relationships with others and that one cannot change the environment but must harmonize with it. Therefore, to succeed in a competitive environment, it is necessary to develop a network to support and protect each other from adversity. With guanxi, one becomes an "insider," and negotiations can proceed smoothly. Adversity may come in the form of out-group members who are considered to be less dependable and trustworthy than members of the in-group (Lee and Lo, 1988; Leung, 1988; Li, 1992). Thus, this mindset has led the Chinese to develop interpersonal connections among members of the in-group to overcome problems and get things done. Indeed, Leung et al. (1995) found guanxi to be an underlying feature in Chinese business.

There are several distinctive characteristics of a guanxi relationship. Although guanxi is usually within families and friends, it may be extended to strangers who share a similar context such as coming from the same school or village. Guanxi relationships are not necessarily limited to established role-based relationships such as doctorpatient or teacher-student relationships. Yang (1994) suggested that the basis of a guanxi relationship can range from kinship (e.g., family and friends) to non-kinship (e.g., doctor-patient) to native-place (e.g., strangers from the same village or province) ties. For the latter, individuals from the same village or speak the same dialect have an affinity for one another even though they have no prior personal relationships, and can be counted on to do a favor. For non-kinship relationships, guanxi may go beyond the fiduciary relationship. It may include obligation by the patient to the doctor for having saved his life. Such obligation go! es beyond the payment of medical fees. It includes gifts during festive occasions as well as acceding to favors asked by the doctor. For the doctor, guanxi extends his obligation to not only treat his patient, but also to others recommended by his patient even though he may already have a full list of patients.

Further, a guanxi relationship has overtones of unlimited exchange of favors (Pye, 1982, 1986), where both parties are committed to each other on a long-term basis by an unspoken code of reciprocity. Such reciprocity, or bao, requires individuals to make an effort to repay favors. If favors are not repaid, the relationship becomes difficult and social harmony cannot be sustained (Hsu, 1971). In such exchange relationships, there is usually a stronger and a weaker party where the latter calls on the former for favors. Often, before such requests are made, gifts are given. The stronger party is thus obligated to reciprocate by fulfilling the subsequent request. One such example is Avon in China. When it encountered initial difficulties in convincing the Chinese government on the benefits of direct marketing, it approached a local banker known for his guanxi with the Chinese government for help. Through his connections, he successfully introduced Avon to the government (pull! ed guanxi) and thereupon, Avon obtained its licence. To reciprocate, Avon made him an equity partner. In the case of non-kinship guanxi such as teacher-student relationships, the repayment of loyalty is from the student to the teacher for having educated him. Yang (1994) recounted how a meat seller, upon recognizing his school teacher buying meat at his store, went out of his way cut out the best lean meat.

Such reciprocation underscores possible unethical practices. Yang (1994) reported that in Chinese communities, gifts and banquet invitations were often extended to superiors to ensure that an individual is assigned lighter and easier work or receive better work evaluations. Chan, Madsen, and Unger (1984) observed that despite so-called uniformity in resource allocation under the communist regime, villages would give gifts to senior Chinese cadres in return for extra fertilizers, bricks, and nails so that their village can perform better than others who received less. These examples suggest that guanxi practices can be exploited to enhance an individual's or single group's interest, and not necessarily for the greater good of the society.

Further, underlying such reciprocity is the Confucian principle of loyalty in which such ties demand the exchange of aid. Guanxi may arise out of renqing (favor), where an individual, usually the stronger party, provides resources to another, the weaker party, to tide him over during difficult times (Gabrenya and Hwang, 1996). The weaker party then becomes indebted and loyal to its benefactor, especially given Chinese' recognition of "long-term" relationships and the emphasis of extending and harmonizing the relationship into the unforeseeable future (Yum, 1988). As a consequence, integrity can be compromised. Personal loyalties become more important than organizational affiliation or legal standards in such guanxi relationships (Alston, 1989). Evidence of such compromise is furnished by Yang (1994). She contended that there is a heavy dose of instrumental gain-andloss calculation and means-ends concerns for material gain particularly when guanxi is based on renqing. The ! indebtedness of one party to another may elicit instrumental calculations involving money and bribery. The Asian economic crisis is one such example where personal relationships between parties and the state of poor corporate governance led to massive bank loans issued not on the basis of project feasibility, but on personal favors extended and owed to these parties. Several Indonesian projects were funded by banks on the basis of the relationship between the politically-aligned owners and the banks.

Another characteristic of guanxi is its ability to smooth bureaucratic delays and open opportunities (Alston, 1989; Luo and Chen, 1997). Those wanting to develop a business presence in Chinese communities cultivate long-term relations with those in key positions (Leung et al., 1996; Pye, 1986; Tai, 1988). Difficulties expressed are ironed out by the influence of a strongly connected party. Guanxi therefore becomes an informal solution to bureaucracies and inefficiencies. For instance, guanxi is practiced by Charoen Pokphand, a Thai conglomerate with extensive business in China. It employs "power brokers" who have strong ties with the government. Their job is to be among the first to learn of new government regulations, smoothen the path for new projects, and iron out differences when disputes occur (Yong, 1992).

The practice of guanxi to smoothen bureaucracies and gain a competitive edge opens up the possibility of unethical practices. There is a common saying in the Chinese business community that an individual in a capacity to make key decisions may declare to a negotiating party that he needs to yanjiu (study) the proposal. In Chinese, the words yanjiu for "study" is also a homonym of the words "cigarettes and liquor." Therefore, the suggestion is that the individual is asking for an inducement (in the form of cigarettes and liquor) to render the service and smoothen the negotiation.

The etiquette involved in guanxi, especially in gift giving, also implies unethical overtones to hide the instrumental nature of the relationship. As in the yanjiu example above, gifts are suggested rather than outwardly communicated so that no one can be accused of overtly asking for inducements. When gifts are given, they are done well in advance of making or acceding to a favor, again so that no one will be accused of bribery. Finally, gifts are given discretely, usually delivered to the individual's home and in the absence of his or her colleagues. Such etiquette suggests that the art of guanxi requires much shrewdness among those practicing it. Again, the benefits of guanxi are to an individual and not necessarily for the good of the society. Anecdotal examples of Chinese businesspeople driving big cars and living in huge homes beyond what they can command from their salary are testimony to how guanxi can be exploited for individual as opposed to social interests.

The foregoing discussion demonstrates that guanxi is likely to have a negative impact on CESR beliefs. The loyalty and reciprocity it implies is to another member of the in-group, with little consideration for "the greater good." Indeed, some of the practices involved in establishing and maintaining a guanxi relationship, such as gift giving and a possibly unlimited exchange of favors, can be considered unethical. "Pulling guanxi," while overcoming market inefficiencies, has been known to obligate and shame foreign businesses into providing special considerations for the Chinese (Osland, 1989). Eiteman (1989) and Chu (1991) found that Chinese businesses may extract many concessions from foreign parties by showing their influence. Hence, Hi predicts that:

Another critical Chinese value is face. Evidence shows that face is an important consideration among Shanghainese (Lockett, 1988) as well as Hong Kong managers (Redding and Ng, 1982). Face can be conceptualized in two ways - lian and mianzi (Hu, 1944). Lian refers to the confidence of the society in the integrity of an individual's moral character. Losing lian would make it impossible for the individual to function properly within the community. In this paper we are concerned with mianzi which refers to the prestige and recognition one gets from others through success and ostentation. Thus, mianzi concerns the projection and claiming of public image (Ting-Toomey, 1988).

Given the collectivistic and hierarchical nature of Chinese interpersonal relationships, face management is important in maintaining and preserving harmony. The Confucian principle of forgiveness embodied in the maxim "Do not do unto others that which you would not wish others to do unto you" is practiced by Chinese in face preservation when one avoids hurting another person's face in social interaction, especially in public (Bond and Lee, 1981). Leung (1987) argued that the Chinese believe it is more effective to resolve disputes through negotiation and compromise rather than through confrontation. Consistent with this argument, he found that Hong Kongers preferred mediation over adjudication in dispute processing, while Americans had no strong resolution preference. Additional empirical support is provided by Trubinsky et al. (1991) who found that Taiwanese prefer styles of conflict resolution that involved obliging, avoiding, compromising, and integrating (finding a jo! int solution) more than Americans. Chinese also prefer the use of mediators to avoid and resolve conflict and minimize loss of face than direct approaches favored in the West (Bond et al., 1985).

On the surface, it would appear that face saving is positively related to CESR. Performing CESR activities would seem to project a good face for a Chinese manager by enhancing his or her public image. Yet, Zabid and Alsagoff (1993) found that divulging confidential information was perceived by Malaysian executives to be ethical since it usually involved intimate interpersonal relations (e.g., between spouses, other immediate siblings, or the head of the family). Thus, the information revealed enhanced the informant's status, indicating that he or she was the privy receptor of such knowledge. This is consistent with the argument that in Chinese conversations, individual views and opinions must yield to the protection of face and the observance of status differences (Bond and Lee, 1981).

As with the case of guanxi, such evidence indicates that it is in-group recognition that matters among Asians. Zabid and Alsagoff (1993) showed that the in-group perceptions of success and ostentation that accord face to an individual may derive from not holding CESR beliefs, let alone having strong ones. This is in line with Gao, Ting-Toomey, and Gundykunst's (1996) argument that engaging in face-saving behavior may not be compatible with honest or truthful interactions. To a Chinese, withholding information to the appropriate time with the appropriate persons is a more desirable process than honesty and truthful communication should such information embarrass another individual. Consistent with the Chinese rule of "Honor the hierarchy first, your vision of truth second," most Chinese would sacrifice their credibility to save face. There is empirical evidence of such facesaving motivations underlying unethical practices. Yao (1987) found that as Chinese considered mianzi! more important than honesty in a task, they avoid embarrassment and criticism by covering up their mistakes. Instead, mistakes are concealed via fabrications and procastinations. McDonald and Kan (1997) reported that relative to expatriate American and British managers, local Hong Kong managers tended to believe more in such face-related behaviors as protecting dishonest employees, minimizing personal error, and not engaging in whistle blowing. Local Hong Kong managers also believed more strongly than their expatriate counterparts in such unethical practices such as nepotism, insider trading, and bribery. Similarly, McLeod and Garment (1987) found that compared to Canadians, Chinese viewed lying as morally less wrong. Based on these findings, H2 predicts that because of face saving, ethics and social responsibility may be compromised so that others are not embarrassed.

Machiavellianism is characterized by aggression, manipulation, exploitation, and deviousness to achieve personal or organizational objectives (Calhoon, 1969). Individuals high in Machiavellianism (called high Machs) have an immoral reputation of manipulating others to accomplish their own objectives, regardless of others' feelings. Research has shown that high Machs have less ethical behavior than low Machs (Rayburn and Rayburn, 1996; Singhapakdi, 1993; Singhapakdi and Vitell, 1990, 1991). McMurry (1973) argued that ambitious executives who employ Machiavellian tactics to stay in power develop calculated alliances with superiors, peers, and subordinates. Such behavior includes others within and without the organization who may be exploited to achieve such executives' goals.

Initial empirical support from an Asian Chinese perspective that Machiavellianism negates CESR beliefs comes from a study by the China Association for Promoting Democracy (The Straits Times, 1997a). It found that a significant proportion of Chinese youths agreed with such statements as "I use you, you use me" (57%). Some 63% believed in telling lies to accomplish something; 43% would rather betray others than let others betray them; and 52% believed that one need not pay heed to conscience and morality when competition becomes stiff. Hence, H3 states:

Country effects
How do Asians, particularly the Chinese ones of interest in this study, perceive the role of corporate ethics and social responsibility? Traditionally, one of the highest achievements in Confucianism is to render meritorious service and scholarship (Yu, 1996). This includes saving others in distress and benefiting the world by good deeds. However, the Chinese culture is also particularistic - individuals value and attach to particular relationships such as those between family members - but, unlike Western cultures, are less likely to identify with universalistic abstractions of community and society (Parsons and Shils, 1951). In addition, Armstrong (1996) observed that cultures with higher levels of individualism as opposed to collectivism placed greater importance on ethical problems. Therefore, Asian Chinese may generally not place much emphasis on CESR in their business dealings.

However, within the region, variations in CESR beliefs may be expected to occur. Hong Kong companies have been found to be unwilling to develop codes of conduct to cover ethical problems with regard to offering and accepting advantages, insider trade, conflicts of interest, and the use of privileged information for fear that they may jeopardize business success (Ho, 1995). Westwood and Posner (1997) reported that Hong Kong managers rated providing public service and value to community less important compared to their U.S. counterparts. Lim (1993, p. 89) described Hong Kongers as having more initiative to "maneuver, wheel, and deal," while Singaporeans are less likely to engage in unethical activities as there are stringent laws governing the conduct of business in the Republic. Singapore consistently ranks lowest in corruption among Asia-Pacific countries, although Hong Kong is also viewed as being clean (Lasserre and Probert, 1998). Further, Hong Kong has traditionally a! dopted a laissez faire attitude in running its economy, while Singapore is viewed as being more tightly controlled and regulated. Such heavy penalties imposed on offending citizens in almost all circumstances may have an unintended effect of ensuring that minimal offense is committed (Lim, 1993).

Social upbringing may also lead to less ethical behaviors among Hong Kongers relative to Singaporeans. Yee (1992) observed that the long hours Hong Kong parents put in at their workplace at the expense of spending time with their children may have resulted in children forming "negative attitudes towards the world and developing) inhibited personalities and negative concepts of their self and others - exploitative attitudes towards society which may corrupt further into social alienation, deviancy and crime" (p. 226). In contrast, Yee (1992) contends that positive parental concern and encouragement of their children remains the practice in Singapore. Similarly, Kau and Yang (1991) observed that in spite of rapid social changes, moral standards have remained stringent in Singapore. Thus, H4 posits:

In addition, Hong Kong has much closer economic ties to China than Singapore, given its greater volume of trade, investment, business, and commercial activity with the mainland. For example, Hong Kong's major trading partner is China, of which it is now part. China accounts for 35% of its exports and is its leading supplier (Economic Intelligence Unit, 1998a). In contrast, Singapore's main trading partners are the U.S., Malaysia, Hong Kong, Japan, and Thailand (Economic Intelligence Unit, 1998b). It is well documented (Alston, 1989; Hendryx, 1986) that business dealings with many Chinese enterprises, both public and private, involve much guanxi and mianzi. Additionally, Emmons (1991) found that Hong Kongers were worried about the handover and had a high need for security. They were concerned about losing personal and family wealth under the administration of the People's Republic of China (Lee, 1982; Kuan 1991). Such anxiety as a result of the handover may have augmented ! guanxi and mianzi practices to preserve wealth and safety. Hence, the closer economic, social, and political ties may result in a tighter embrace of guanxi and mianzi with their consequent greater negative effects on CESR beliefs for Hong Kong than Singaporean business undergraduates.

Moreover, in Hong Kong, "everybody dreams of becoming a boss" (Lim, 1993, p. 45). Hong Kongers have a greater sense of entrepreneurship and innovation than Singaporeans (World Competitiveness Yearbook, 1998). They also score higher on achievement orientation (Shively, 1972). Lee (1991) attributed this to their philosophy of wu hao zhi shu (never fall behind others). Indeed, such an orientation has led Waters (1995) to describe Hong Kongers' ambition to be "like gold diggers in the old America West, getting rich quick, and spending it" (p. 150). In contrast, Singaporeans have been said to lack the drive to achieve and the go-get-it-spirit of Hong Kongers (The Straits Times, 1997b). Further evidence is provided by Lee (1991) who found that Hong Kongers have a high passion for money, while Lee et al. (1979) found material success to be an extremely important source of life satisfaction among Hong Kongers. In contrast, only 15% of Singaporeans chose wealth as something they w! anted most in life (Kau and Yang, 1991). Materialism has been found to be negatively correlated with higher ethical standards (Muncy and Eastman, 1998). Added evidence is furnished by the World Competitiveness Yearbook (1998) which showed that on competitiveness and adapting to new challenges, Hong Kong outranked Singapore, whereas on corporate social responsibility, Singapore ranked 6th compared to Hong Kong's 27th. Given the positive association found between achievement orientation and Machiavellianism earlier documented, we can expect that the negative effects predicted for this factor on CESR should also be greater for Hong Kong than Singaporean business undergraduates. Further evidence of Machiavellianism among Hong Kongers is furnished by Ralston et al. (1993). Thus, H5 states:

Respondents were 75 and 102 Chinese business undergraduates from Hong Kong and Singapore respectively. Respondents were told that the survey was about their beliefs on different business practices and that their responses would help in understanding how the youths of today feel about businesses. As there were no right or wrong answers, their honest opinions were sought. The questionnaire took about eight minutes to complete. A debriefing was then conducted in which respondents were informed what variables were studied and hypotheses guessing ascertained. No respondent guessed the true purpose of the research.

Corporate ethics and social responsibility
The 13-item PRESOR scale developed by Singhapakdi et al. (1996) was used to measure respondents' belief in CESR. An average score was computed across the items, with higher scores reflecting stronger beliefs in CESR.

A nine-item Likert-type scale was employed to measure guanxi (see Appendix). The items covered various aspects of guanxi including knowing the right people, maintaining a network of relationships, being in the "inside" circle, returning favor for favor, gift giving, and cooperation. Given the adequate reliability (alpha = 0.82), an average of the scores obtained was used in the analyses. A higher score indicates greater belief in guanxi.

A four-item scale was used to measure mianzi. The items included respecting elders/superiors, avoiding embarrassment in social interactions, avoiding public confrontation, and being considerate of other people's feelings. The items had an alpha of 0.62. Given the few items and the exploratory nature of this construct, the alpha obtained renders the scale reliable for further analysis (Nunnally, 1967, p. 226). An average score was computed, with higher scores reflecting greater belief in mianzi.

The 20-item Mach IV scale (Christie and Geis, 1970) was used to measure the extent to which respondents had a Machiavellian personality. An average score across the items was used in the analyses, with higher scores implying more Machiavellian tendencies.

This was coded as a dummy variable (Hong Kong=1, Singapore=0).

To account for differences arising from cultural factors such as social acquiescence and courtesy, responses were standardized by respondents, across items, on both the mean and standard deviation (Douglas and Craig, 1983). Each respondent has a mean of zero and a standard deviation of one across items. Using standardized scores provides relative, rather than absolute, insights into the relationships between the variables concerned. Table I provides the raw descriptive statistics of the variables for both countries as well as for Hong Kong and Singapore individually. Overall and for each sample, respondents held relatively stronger beliefs for the Eastern constructs of guanxi and mianzi than for the more Western values of CESR beliefs and Machiavellianism (t's > 8.91, p's < t =" 4.94," r =" 0.18,"> 0.10). These results provide tentative support for Hi and H3 but not H2.

To furnish more conclusive evidence for the hypotheses, a multiple regression was run with CESR as the dependent variable. Guanxi, mianzi, Machiavellianism, and nationality served as independent variables, along with the interactions between nationality and guanxi, mianzi, and Machiavellianism. Table III provides the regression results. It shows that the overall regression was statistically significant (adjusted R^sup 2^ 0.85, F(8,168) = 124.94, p <> -3.0, p's <> 0.22, t's > 2.7, p's < style="text-align: justify;">___________________________________________________________
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