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Differences in the Ethical Orientations of Upper Level U.S. and Mexican Business Students
Jennifer E. Spencer
Victor E. Sower
Mitchell J. Muehsam
Sam Houston State University

ABSTRACT

This study is an investigation of cross-cultural ethical orientations of upper level business students from universities in Mexico and the United States using retail environment scenarios.  The study controlled for the potentially confounding variables of age, gender, retail experience, and type of university.  Significant differences in three ethical dimensions (customer-related, peer-related, work-related) were found to exist between US and Mexican students.  No significant differences were found in ethical orientations between students in secular and Catholic universities in the United States; however, significant differences were found in ethical orientations between secular and Catholic university students in Mexico.

Introduction

With today’s expanding global marketplace and the increasing tendency of multinational firms to transcend their borders and become transnational firms, universities should prepare their business students to not only work with other cultures, but to understand and acknowledge cultural differences in order to avoid ethnocentric attitudes and ethical dilemmas.  Geographical distances have become less significant restrictions to conducting business abroad given the advent of new technologies that bring the world closer together, new trade policies such as NAFTA, and international trade missions (Kullman, 1998).  Yet cultural differences still remain and business students are often not introduced to other countries' business practices prior to being thrust into the global arena.

Likewise, business organizations which fail to recognize and understand cultural differences can encounter difficulties when conducting business abroad.  Knowledge of cultural differences should enable organizations to better prepare to deal with host country employees, customers, and suppliers.

Mexico is one of the United States’ two nearest international trading partners and has emerged as the top buyer of U.S. products.  Mexican companies bought nearly 26.2% of U.S. exports in 1997 (Green, 1999) and with prospects for increasing business ventures and trade, it makes even more sense to understand the cultural differences that exist. The recent meetings between US President Bush and Mexican President Fox included extended discussions on trade between the two countries.  NAFTA’s primary goal is to reduce barriers to trade between the United States, Mexico, and Canada.  American firms seeking to expand into Mexico should not fall prey to the ethnocentric idea that trade with a bordering country will be  “business as usual” simply due to geographical proximity. In fact, there are many differences between even the closest of neighboring countries.  The results of this study should aid in the understanding of differing cross-cultural ethical orientations between future business leaders in the U.S. and Mexico, specifically retail managers.  The study excluded any normative values associated with any culture or belief system, but rather utilized a cultural relativistic approach.   

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Background

Ethical orientation, as used in this study, is defined as a measure of perceived ethical dilemma absent the influence of situational moderators.  A number of studies (Robertson and Fadil, 1991; Kohlberg, 1984; Schneider and Meyer, 1991) have proposed that situational moderators such as the number of crisis situations an individual confronts and the individual’s potential to react effectively in those situations moderate the individual’s ethical behavior.  Jones (1991) suggests that the intensity of the ethical dilemma with which an individual is faced can influence the individual’s ethical decision.  Ethical orientation falls between ethical values and ethical intent.  Ethical intent moderated by situational variables results in ethical behavior.  This is consistent with models such as those of Robertson and Fadil (1999) and Wines and Napier (1992) which link cultural values to ethical behavior through a path consisting of individual ethical values and ethical intent moderated by individual and situational variables.

Various studies have noted differences in cross-national ethical orientations, especially in the area of business.  For instance, Nyaw and Ng (1994) conducted a study that examines cross-cultural (Canadian and Asian) business students’ reactions to ethical dilemmas.  The study concluded that the national origin of the student does impact their reactions to particular ethical dilemmas.  Tsalikis and LaTour (1995) reported similar results in a study of American and Greek business students.  Others such as Preble and Reichel (1988), Lysonski and Gaidis (1991), and Tsalikis and Nwachukwu (1991) have compared American students’ ethical beliefs to those of students in Israel, Denmark, New Zealand, South Africa, and Nigeria (Nyaw et. al., 1994).  Of the many studies devoted to examining cross-national ethical orientations, Sower, Abshire, and Shankman's (1998) study was the only one found dealing specifically with the United States’ closest neighbor, Mexico.

Hofstede (1983) and Schwartz (1992) have identified significant differences in the cultures of the United States and Mexico.  Dubinsky, Jolson, Kotabe, and Lim (1991) cite a number of studies (Bartels, 1967; Ferrell and Gresham, 1985; Hunt and Vitell, 1986; Wotruba, 1990) finding that different cultures produce different expectations and dissimilar ethical standards.  Robertson and Fadil (1999) contend that individuals from different cultures view ethical issues differently. 

The purpose of this study is to investigate differences in the ethical orientations between the United States and Mexico using upper level business students as subjects.  Based on the studies cited above it is reasonable to expect that ethical orientations in the United States might differ systematically from those in Mexico.  The study controls for the potentially confounding variables of age, gender, education, experience, immigration, and type of university.

Methodology

This project could be termed a study in “applied ethics,” according to the definition by a report from the Hastings Center (1979): 

“Applied ethics is moral inquiry directed to making actual choices in moral conflicts . . . It cannot ignore the psychological, political, and other factors affecting human conduct; it also studies questions of institutional or social choice” (15).

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The instrument used for this study in applied ethics was derived from one by Dubinsky and Levy (1985) and consists of a series of hypothetical retail situations involving potential ethical dilemmas, with respondents ranking answers, via Likert scale to the following questions:

Do you believe the situation presents an ethical question for you?  That is, do you feel the situation pressures you into taking actions that are inconsistent with what you feel to be right?

The modified Dubinski and Levy instrument used in this study (Sower, et al., 1998) consists of three scales used for measuring different dimensions of possible ethical dilemmas (copy in Appendix). All are multi-item scales which “allow measurement errors to cancel out against each other and thus the reliability of the scale is increased” (Peter, 1979).  The three scales measure the ethical orientation of respondents toward peers, toward customers, and toward work.  The peer-related scale contains four items.  Examples of these items are “Pressure from fellow sales associates not to report theft,” “Take away sales from a fellow sales associate.”  The customer-related scale contains ten items.  Examples of these items are “Sell a more expensive product when a less expensive one would be better for the customer,” “Charge full price for a sale item without the customer’s knowledge.”  The work-related scale has eight items.  Examples of these items are “Hide merchandise that you want and are waiting for the store to mark down,” “Sign time sheet incorrectly for time worked.”  Answer choices are in the form of a Likert, 7-point rating scale, with answers ranging from 1, “Definitely No,” to 7, “Definitely Yes,” with 4 representing “Neutral.”  The survey instrument has been validated in previous studies using similar samples in Mexico, Canada, and the United States (Sower et.al., 1998).  This instrument is particularly appropriate for studying business ethics using students as subjects because it uses scenarios in a retail context with which students are likely to be familiar.  Some other instruments would be less well suited for student subjects because they use scenarios based on commercial transactions or strategic decision making which are likely to be less familiar to students.

The population of interest is upper level business students in universities in the United States and Mexico, specifically junior, senior, or graduate level students.  The choice of population controls for possible age and education effects.  The sample for this study was taken from two universities in the United States and two universities in Mexico.  Universities at least 250 miles from the U.S. – Mexican border were chosen in order to avoid sampling bias due to possible hybrid respondents.  The universities selected to participate were of similar student population size, 5,000 to 15,000, to maintain the homogeneity of the sample population.  One university in each country was Catholic-affiliated and one in each country was secular to control for possible differences due to type of university.  The schools in each country are sufficiently distant from one another (over 250 miles apart) to avoid respondents discussing the survey instrument with one another.  Responses utilized in this study were solicited only from students native to the country in which they attended university.  This was done to control for potentially confounding effects of immigration on ethical orientation.

The hypothesis for this study is stated as the null:

H_o:  American and Mexican business students will not react differently to potentially troublesome retail sales situations.

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The hypothesis was investigated for the three category scales representing the three dimensions of retail business ethics:  customer-related, peer-related, and work-related.

Questionnaire Validation

Collaborators at each of the four universities administered the questionnaire to business students in their classes who were natives of the country in which the university is located.  A total of 234 responses were obtained.  The overwhelming majority of respondents (99.1%) are upper level business students.  A 100% response rate was possible since the surveys were distributed in class and collected within the class period.  Validity and reliability of the instrument, including translation to Spanish (via a back-translation method), were previously assessed (Sower, et al., 1998) and found to be satisfactory.  Dubinsky and Levy (1985) established content validity and the Sower et al. study (1998) established content, construct, and external validity and reliability.

Cronbach’s alpha (Cronbach, 1951) was used to test for internal consistency reliability for each of the three scales.  It shows the degree to which scale items measure the same construct and is appropriate for use with 7-point Likert scale data (Sower, et al., 1998).  Nunnally (1978) suggests that alpha levels of .70 or higher represent good internal consistency reliability for basic research.  Alphas of .50 or .60 are sufficient for exploratory research such as this study.  Table I shows the alphas for all three scales for each of the universities.  Only one coefficient alpha (Mexico: Catholic-affiliated, peer related at .67) was below Nunnally’s suggested benchmark.  All others were in the .8 to .9 range indicating high levels of reliability.

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Results and Findings

ANOVA (Table II) found highly significant differences between U.S. versus Mexican responses for all three scales without taking into account university type or demographic factors (p <0.001).  For all three category scales, U.S. respondents had higher mean scale scores than the Mexican respondents.  These findings are consistent with those of Sower, Abshire, and Shankman (1998). (Note:  the terms “higher” and “lower” here do not imply a normative judgement of ethical orientation.  They are strictly used to denote a higher or lower numerical scale score.)  Therefore, it can be concluded that the ethical orientations of U.S. and Mexican business students are, indeed, different, thus rejecting H_o for peer-, customer-, and work-related scales.

The mean item scores for all items are below the scale neutral mid-point (4) for Mexico, and above the scale neutral mid-point for the United States.  For all but one of the items, the separation between the Mexican and US items means is greater than one scale point.

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Demographics of Survey Respondents

A summary of the demographic data for the respondents is presented in Tables III and IV.  Demographic data for this study can be broken down into 4 main categories based on the location and type of university: U.S. secular and Catholic; Mexico secular and Catholic. All four samples had a slight female majority.  The U.S. had a slightly greater proportion of older students but the ages varied over a very narrow range.  The overwhelming majority (99.1%) of respondents from all four categories were upper level business students.  A somewhat greater proportion of Mexican students, both Catholic and secular, had no retail experience as compared with the U.S. samples. In secular schools, 74% of students in Mexico had no retail experience as compared to 25% who did not in the United States.  Among Catholic schools the differences were much smaller, with 50% in Mexico having no retail experience and 42% in the U.S. having none.