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.

The major concerns that arise in business are related to the effectiveness of compliance policies and the influence of the management, the ultimate focus of the company and its relation to ethics, and the relationship of employee loyalty and ethics. Compliance policies refers to the established standard of ethical conduct that employees within a company must always follow. Effective compliance policies maintain a level of ethicality that employees must meet in all aspects of their business, and the reason why these compliance policies are effective is due to their enforcement and the importance placed upon them by the management (Institute of Business Ethics 4). The influence of the management on the employees is like that of a parent on a child; both must foster strong ethical values and serve as role models for the subordinate whether an employee or a child. This will encourage and influence the employees to follow the same ideal which will most likely create a more responsive staff. The focus of the company is always demonstrated during employee training; if the employer is only focused with sales and revenues and does not address ethics then the employee will develop a disregard for conduct use any means necessary to meet their superior’s goals. However, if the employer focuses on incorporating strong ethics into everyday business, then the employee will follow suit and do the same. Lastly, its is proven that the loyalty of an employee to their company is directly related to their company’s strength in ethics (Kuttner 27). Statistically, forty percent of employees who say their superiors are persons of high moral integrity are also truly dedicated to their company. Though this may seem low, it is considerably higher than the insubstantial six percent who are loyal to superiors with low moral integrity (Center for Business Ethics 1). These major issues in business ethics have been the ultimate success or the ultimate downfall of even the most powerful corporations and must not go unheeded.

There are numerous benefits of the utmost importance that a company can gain through strength in ethics and are essential in today’s volatile market. Organizations that place a considerably high importance on ethical conduct are statistically more successful than companies who do not when comparing companies of the same trade (Acton 23). Since the majority of potential customers believe that strong ethics are a necessity, these people obviously do not wish to associate themselves with persons of low moral integrity. Therefore, if a company places high importance on strong ethics and executes its compliance policies correctly, then its employees will be persons of high moral integrity and thus attract more business. The consequences of ethical misdeeds range drastically in severity depending upon the particular misconduct and who it effects. Companies cited for ethical misdeeds have suffered everything from damaged reputations and loss of business to decreased market values and demoralized employees (Kuttner 24). It is these devastating consequences that have resulted in business failure most often through bankruptcy which could quite possibly lead to criminal charges.

Perspectives of particular businesses on their ethical integrity are most commonly provided by unbiased benchmark studies, whose ratings are based upon employee and customer responses. Benchmark studies provide information on many aspects of business, and one of the many topics under question is the ethical conduct of a company. These studies are the results of various surveys given by multiple organizations and include perspectives on senior officers, ethical violations, and integrity of the workforce to name a few (Acton 36). These studies provide the general public with an ethics reference based on national averages to consult when dealing with any aspect of business and can have positive or negative effects on the industries in question depending upon their results.

Strength in ethics is obviously an extremely valuable asset to a successful company in any industry because its largest consequence is an overall increase in business, which is the true livelihood of any company. Companies must maintain a high level of moral conduct in today’s unpredictable market because a superior reputation is one of the few things that can be created and maintained without effect by the uncontrollable. With able competition at its highest, a seemingly small aspect of business such as ethics is very often the deciding factor when considering multiple companies of strong bearing. The unforgiving effects of ethical integrity will overthrow companies with a disregard for morality, and thus effective standards of ethical conduct are inevitably the future of all successful companies in modern business.