The Asian economic crisis which began in July 1997 has led to many discussions regarding its genesis. 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. 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. 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. This poses a major challenge to the extent that even businesses in the West have been criticized for their limited adoption of CESR. 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.
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 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. However, extant knowledge of Asian business practices may furnish insights into the role of CESR in the region. As observed by de George, 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. Additionally, Brunner and Taoka suggested that comparative research indicate Chinese to place more emphasis on building relationships than their American counterparts; while Alston 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. The construct has been found to correlate negatively with CESR in Western research. 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.
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