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International Marketing Review 18,2 188

A typology of international consumers' ethical beliefs

Culture, personality and morality

Received July 1997 Mohammed Y.A. Rawwas Revised November 1997 Department of Marketing, University of Northern Iowa, Cedar Falls, USA September 1998 September 1999 Keywords International marketing, Consumer behaviour, National cultures, Ethics November 1999 March 2000 Abstract With business becoming more international, marketers need to understand the ethical Accepted May 2000 beliefs of foreign consumers because of their effect on the outcomes of market expansion strategies. The ethical judgments of US consumers have been examined, but few studies have investigated similar attitudes in foreign-national settings. To understand the various types of consumer ethics, this exploratory study classifies ethical beliefs by linking Hofstede's cultural taxonomy to personality and ethics. This classification is achieved by comparing ethical judgments of consumers from eight different countries the USA, Ireland, Austria, Egypt, Lebanon, Hong Kong, Indonesia, and Australia. Labels for the emergent cultural personality types are also developed. Strategic implications for marketers are then discussed.

Introduction Since a primary objective of marketers is to satisfy the culturally learned needs of their targeted customers, global marketers must understand the habits, customs and inherent ethical differences of their customers before marketing their products in a foreign country (Kramer and Herbig, 1994). Having respect for and an understanding of another culture as well as the ability to set aside one's own cultural mores generally distinguishes successful international marketers from their less successful counterparts. Perhaps the biggest problem faced by multinational firms is learning how best to market their products and treat customers in emerging global markets (Miles, 1995). This is because the cultural and ethical values of consumers can vary entirely from those of a multinational firm's home country. Cultural and ethical differences can exercise tremendous effects on the form, content and consequences of marketing communications (McDonald, 1994). Multinational firms face a continual imperative to struggle with these culturally-driven differences in how consumers will respond to a given marketing mix (Jeannet and Hennessey, 1992). Mayo (1991) found that one of the reasons why first-time exporters fail in their efforts to enter international markets is their inability to understand foreign business practices and ethics. Kung (1997) contends that ethics has an indispensable role to play in the process of globalization. The objective of this manuscript is to organize the ethical beliefs of international consumers into
International Marketing Review, Vol. 18 No. 2, 2001, pp. 188-209. # MCB University Press, 0265-1335

This research was partially funded by a project grant from the American Marketing Association and the Graduate College of the University of Northern Iowa.

classes. Academic researchers may use this classification to systematically investigate and develop theories related to international consumer ethics. Hunt (1991) notes that generating classes usually represents the first step in theorizing. Marketing practitioners may use these groupings to better understand international consumer ethics; thus enabling them to develop different strategies when dealing with consumers of various cultures. For example, some cultures like to follow rigid rules and regulations which oblige marketers to write down their policies on more locations (such as product packages, flyers and posters) than cultures which follow informal rules. Published research investigating consumer ethics includes: prescribed normative guidelines for consumers through the outline of a consumer code of ethics (Stamfl, 1979), strategies for combating consumer abuse (Fullerton et al., 1996; Schubert, 1979), consumer views about the ethicality of various consumer behaviors (Vitell and Muncy, 1992; Muncy and Vitell, 1992; Kallis et al. 1986; Moschis and Powell, 1986), ethical beliefs of elderly consumers (Vitell et al., 1991), consumer ethics in cross-cultural settings (Rawwas et al., 1994, 1995; Rawwas, 1996), and consumer materialism. In addition, several general marketing ethics theories have been developed (for example, Ferrell et al., 1989; Hunt and Vitell, 1986, 1992; Ferrell and Gresham, 1985). As the globalization of business continues, the need arises to understand the influence of culture on consumer ethics. But marketers have by no means exhaustively examined the perplexing dynamics surrounding consumer ethics. This manuscript tries to extend Hofstede's cultural typology to ethics. The next section will develop the hypotheses by linking culture and personality to ethics. Hypotheses development Hofstede's cultural typology A unique culture exists whenever a group of people share distinctive beliefs, norms and customs. According to Hofstede (1979; 1983), societies differ along four cultural dimensions: power distance (PDI), uncertainty avoidance (UAV), individualism (IND), and masculinity (MAS). According to Hofstede, PDI is the degree to which weak individuals in a society accept injustices in power and view it as normal. Although various injustices occur in every society, different cultures accept varying degrees of it. UAV is defined as the extent to which people within a culture can cope effectively with vague, obscured and unstructured situations, and the degree to which these individuals adopt rules, ideals and norms that help them clear such ambiguities. IND is the extent to which individuals in a society are concerned mainly with their personal interests and the welfare of their families. Collectivist cultures (COL), in contrast, view individuals as part of a larger group, such as an extended family or tribe. MAS is the degree to which individuals in a culture expect men (rather than women) to be forceful, ambitious, competitive, materialistic and strong. Table I summarizes the links among culture, personality and ethics.

Culture, personality and morality 189

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International Marketing Review 18,2

Individual type Functionalists

Deferents

Survivors

Enthusiasts

Conservationists

Achievers

Table I. A summary of the development of theoretical models of the influence of culture and personality on consumers' ethical beliefs (C?P?E) Hofstede's typology Small PDI and weak UAV Large PDI and strong UAV Small PDI and strong UAV Large PDI and weak UAV Weak UAV and FEM Hofstede's cultural traits (C) Give little importance to superiors, resort to collegues for guidance, accept risk and vague situations Accept inequality in power, obey blindly superiors' orders, avert risk, and avoid vague situations Give little or no concern to superiors, no interest in taking risk, take advantage of others, and postpone things to do Obey superiors' orders and accept little/un-known situations Concerned about environment's conservation, accepts challenge, some stress and conflict among individuals Emphasize earnings, competition, advancement and challenge. Economic growth is preferred to environment conservation Derived personality traits (P) Forceful, materialistic, and strong Active, aggressive, emotional, securityseeking and intolerant Dependent, hesitant, and cautious Expected behavior and favored moral philosophy (E) Follow informal standards of rules and regulations. Apply pragmatic ethics Completely obey rules and regulations. Adopt rules, ideals and norms that help clear ambiguities Obey laws but not superiors' directives. Moderately follow formal rules of ethics Formal, traditional, and nostalgic Assertive, rational and realistic Weak UAV and high MAS Great goal-attainer, forceful, famous, leader, materialistic, strong and fast Apply utilitarianism

Countries classified by Hofstede and included in this study Ireland, USA, Australia

Egypt, Lebanon

Austria

Do not adhere completely Hong Kong, Indonesia to directives and superiors' orders. Moderately follow formal rules of ethics Apply a blend of idealism Indonesia and utilitarianism

Ireland, USA, Australia, Hong Kong

(Continued)

Individual type Situationists

Hofstede's typology Strong UAV and MAS Strong UAV and FEM Small PDI and high COL

Hofstede's cultural traits (C) Act upon favorable circumstances (i.e. beneficial and attainable goals) Comparable social roles for both sexes, avoid vague relationships, and little conflict among individuals Sustain informal relationships with both superiors and group members, cooperative but do not necessarily follow rules Completely respect superiors' orders and group members, enthusiastically cooperative, positive, helpful, disciplined Follow superiors' orders, interest in own career, concerned with own interests Make things happen, completely independent

Derived personality traits (P) Modest-goal attainer, ambitious, status conscious, and upwardly mobile Cooperative, friendly and emotional Casual, friendly and simple

Expected behavior and favored moral philosophy (E)

Countries classified by Hofstede and included in this study

Apply a blend of idealism Austria and utilitarianism Apply idealism Egypt, Lebanon

Absolutists

Easygoers

Moderately apply Machiavellianism

None

Followers

Large PDI and COL

Positive, helpful and disciplined

Slightly apply Machiavellianism

Indonesia, Egypt, Lebanon

Diplomats

Large PDI and IND Small PDI and high IND

Cautious, independent and tactful Impulsive, experimental and determined

Moderately apply Machiavellianism Immensely apply Machiavellianism

None

Leaders

Australia, USA, Ireland, Austria

Note: PDI=Power Distance; UAV=Uncertainty Avoidance; FEM=Feminine; MAS=Masculine; COL=Collectivism; IND=Individualism; C=Culture; P=Personality; E=Consumer Ethical Beliefs

Culture, personality and morality

Table I.

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Culture and ethical beliefs Values are a major dimension of culture. Values are ``basic convictions that people have regarding what is right and what is wrong. These values are learned from the culture in which the individual is reared, and they help direct the person's behavior'' (Hofstede et al., 1990). Cultural values influence how people think and behave. Recently unified West Germany and East Germany are illustrative. While nationals from each country asserted that they are identical people and share the same heritage, they discovered how different they were when the ``Wall,'' dividing West and East Germany, tumbled. While Western nationals are competitive and vie for high achievement and success, Eastern natives are laid back, less well-disciplined and care less about impressing their superiors. The work values of managers hailing from various cultures have been studied and significant differences have been found to exist among them (Hofstede et al., 1990). US managers tended to be highly pragmatic and to strive for high achievement and competence. The managers also emphasized profit maximization, organizational efficiency and high productivity. By comparison, Australian managers focused on high morals and concern toward others and placed lower emphasis on achievement, success, competition and risk taking. Differences in the US and Australian managerial practices may be attributable to differences in their prevailing cultural values. Hofstede's typology shows how cultures can be described in terms of pairs of dimensions. His pairing of UAV and PDI has placed many Nordic and Anglo citizens in the small PDI and weak UAV quadrant. Individuals belonging to such cultures are labeled as ``functionalists.'' They tend to take personal risks, use common sense, and place little faith in authority figures (Hofstede et al., 1990). Aristotle's theory of ethics may describe the moral beliefs of this group. It notes that the goal of the moral life is the self-perfection of the individual human being. Many philosophers address this goal as ``human flourishing.'' Human flourishing is the overall end of human life. In order to attain this goal, one should take charge of one's own life. One needs to use practical reason to determine what ought to be done in the concrete situation. Practical reason is the use of judgement, rather than formalized rules, by the individual to determine the morality of a concrete situation. This moral judgement can vary from person to person, and certain judgements can have larger roles in the lives of some persons than others (McGee, 1992). Several examples show how the functionalists use practical reason to judge the ethicality of a situation. Although suicide is unacceptable in many cultures, a growing number of people in the USA have begun to call for the legalization of euthanasia and assisted suicide (Fiesta, 1997). As a matter of fact, Oregon is the only place in the world with a specific law permitting assisted suicide (Marker, 1999). Another example of functionalists' pragmatism is Bill Clinton's success in the 1992 and 1996 presidential elections. Against his evident ethical sloppiness, US voters weighed his commitment to domestic reform and

concluded that a vote for him was reasonable (Economist, 1996). This suggests that functionalists tend to be pragmatic when making serious decisions. By contrast, most Latin American, Latin European, Mediterranean, and Far Eastern countries lie in the high PDI and strong UAV quadrant. People in these clusters are identified as ``deferents.'' Hofstede suggests that a strong UAV is related to a strong superego. However, in a high PDI environment, this superego is personified in the form of an authority figure (the father or the boss). Deferents are hardworking, obedient and tend to yield to the opinions and directives held by others perceived as superior. For example, in many Japanese organizations, working overtime is a ritual of obedience and subservience (Herbig and Palumbo, 1994). Deferents also rely on an authority figure to establish rules and long-range plans that can shield them against anxieties about the future (Lowenstein, 1967). In Japan, for example, vandalism and shoplifting are both rare, and violent-crime is well below that of most Western countries. In 1988, there were 1.2 homicides per 100,000 people in Japan, compared with 8.4 in the USA. In fact, Japanese authorities have little or no concern that sidewalk vending machines, carrying beer and whisky, will undermine efforts to enforce the legal drinking age of 20 (Laver and Shimizu, 1991). It appears that deferents closely follow rules, do what is socially correct and proper, and judge ideas in terms of right or wrong. Germanic nations feature a weak PDI and strong UAV. Members of such cultures are identified as ``survivors'', because they tend to weigh various actions such as following (or not) their superiors' orders or prevailing rules and then choose those that help them achieve their goals. A questionable behavior is judged to be ``good'' as long as the individual can get away with it. Recently, a German company sent 95,000 tons of household plastic rubbish to Pyongyang, North Korea, with little consideration for the morality, safety and environmental sensitivity of its action (Williamson, 1997). Another example is that France and Germany allow their companies to treat bribes to foreign officials as business expenses (Gopinath, 1996). In fact, Germany is reluctant to sign legislation for Transparency International to expose international business corruption (Darwent, 1996). In a recent study, Austrian consumers were found to ignore moral rules when a situation permitted them to do that (Rawwas, 1996). This suggests that survivors do not tend to be very strict in following rules. Asian and Sub-Saharan African countries are typically characterized by Hofstede as strong in PDI and weak in UAV. Such individuals are identified as ``enthusiasts'' because they willingly accept superiors' orders and tolerate risk. Although the powerful person decides what happens, enthusiasts are willing to accept some risk by not completely adhering to directives, orders and ethical standards. Integrity, fairness and high standards are highly advocated by leaders in Indonesia (Abeng, 1997), but some officers chose a different route when they accepted bribes from Wal-Mart, a giant US-based retailer (Mammarella, 1997). Similarly, while offenses are severely punished in Singapore, Senior Minister Lee Kuan Yew tolerated some risk when he received

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unsolicited discounts from a real-estate developer (Hiebert, 1996). This suggests that enthusiasts do not consistently abide by rules formulated by their societies. Although many testable hypotheses are implied, the one offered below will expand our understanding of how culture affects the ethical practices of consumers. Based on Hofstede's typology and the above studies, the following hypothesis is formulated (Please note that ``stringent'' involves the wilful acceptance of ethical standards. ``Pragmatic'' involves the individual determination of accepting ethical standards. ``Moderate'' lies between these two extremes.): H1: Deferents will be more stringent in obeying rules and regulations than one functionalists. Enthusiasts and survivors will moderately follow rules and standards. Different consumers follow different ethical/moral philosophies. Two philosophies commonly followed are idealism and utilitarianism. Idealism focuses on the specific actions (i.e. means) or behaviors of an individual. According to idealists, the inherent goodness or badness of an action should allow one to determine the ethical course of action. Behaviors are judged on whether they infringe individual rights. The Golden Rule do unto others as you would have them do unto you characterizes idealism. However, utilitarianism focuses on the consequences (results) of actions or behaviors. Maximizing good rather than right is the standard. An act is correct only if it produces, for all people, a greater balance of positive consequences than other available alternatives. According to Hofstede, a combination of UAV and MAS offers the strongest predictor of the ``need for achievement.'' A low UAV indicates a willingness to accept unusual risks; a high MAS denotes the importance of achieving success. Both traits are characteristics of US entrepreneurs. Anglo and some Asian countries have also been classified in this quadrant. Individuals within such cultures are identified as ``achievers.'' According to Hofstede, a culture of ``masculine risk-takers'' emphasizes earnings, competition, advancement and challenge. It encourages individual decision making and the accrual of wealth and belongings. Economic growth is preferred to environmental conservation; life within this culture is hurried, and the label ``time is money'' applies here. Achievers are characterized as tunnel-oriented, aggressive and competitive. Rules and regulations in these societies where achievers prevail are only formulated in case of absolute necessity, because people take pride in the fact that many ethical conflicts can be solved without standard rules (Hofstede, 1980). Bentham's utilitarian theory may best delineate this group. It states that the goal of life is to create as much satisfaction as possible. The moral act is that one which produces ``the greatest satisfaction for the greatest number.'' Bentham considers that the rightness of an act depends on its unforeseeable consequences. Thus, moral judgements are always subject to change as new consequences come into focus. Further, Bentham believes that there could be no

absolute moral rules other than the utilitarian ones. He asserts that those (the idealists) who condemn the gratification of certain desires and follow definite rules are mistaken (Grassian, 1981). Several examples show how the achievers apply utilitarian theory in their dealings with others. In a poll of 5,000 US students, the majority responded that the greatest authority in matters of truth is ``their gut instinct, whatever feels right, whatever turns them on, whatever is relative, negotiable'' (Kidder, 1992). In the Philippines, Vice President Joseph Estrada has never lost an election, even though his extra-marital affairs are legendary (Lopez, 1998). He is now the leading contender for president. Filipino voters want a president who can manage the distressed economy and keep his hands off the country's assets. They claim that corruption is a sin against the people, while infidelity is a sin against one person the wife. They say that they prefer a philanderer who is able to help the poor rather than a faithful spouse who declines to work for the common good (Lopez, 1998). This suggests that achievers have a tendency to maximize the good rather than the right. They compare all possible options and select the one that promises the best result (i.e. utilitarianism). Most Latin American and Asian countries fall within the strong UAV and feminine (FEM) quadrant. These cultures may be labeled as ``absolutists.'' Individuals from these cultures emphasize cooperation, affiliation and security. They are encouraged to be group decision makers; success is usually achieved in terms of human contacts and social welfare. Business in China, Taiwan and Korea is conducted according to the values and principles of Confucianism (Martinsons and Westwood, 1997). Human relations are shaped by factors such as paternalism, titles, thrift, cordiality, and ultimate respect for seniority. Obedience to hierarchy is obligatory (Lewis, 1996). The importance of human relationships and societal welfare encourages absolutists to act in what they view as an appropriate, proper and consistent manner. Their innate need for security means that absolutists follow formal rules and standards. To achieve this attitude, absolutists tend to focus on the intentions (or means) associated with particular behavior and on the rights of the individual (i.e. consistent with the idealistic moral philosophy). A few Latin American and Germanic countries, along with Japan, lie in the strong UAV and MAS quadrant. These cultures may be called ``situationists.'' They judge a condition as appropriate if it provides benefit and certainty. Depending on the circumstance, situationists follow formal standards which focus on the rights of individuals (i.e. idealism) to clarify ambiguous situations and/or informal principles which accentuate the ``greatest good for the greatest number of people'' (i.e. utilitarianism). Rawwas (1996) found that the majority of Austrians manipulate both relativistic and idealistic principles to reach an ethical decision. Indonesia and certain Nordic and African countries are weak in UAV and FEM. They are labeled as ``conservationists'', because they willingly bear unfamiliar risks, while being concerned about their societies and environmental preservation. Because conservationists do take risks, they tend to apply

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utilitarianism. However, their gentler side (feminine) makes them apply idealism. It seems that conservationists may apply both moral philosophies to a greater or lesser degree. A good example is that of The Netherlands. Although euthanasia and assisted suicide are illegal in that country, they are widely practiced (Marker, 1999). In addition, bioethicists and moral philosophers have recently made a distinction between ``human beings'' and ``persons,'' with only persons enjoying the right to life. This theory has allowed people in The Netherlands to kill babies born with birth defects (Smith, 1998). These two examples show that, although conservationists try to be idealistic by banning questionable activities, they may still adopt such practices when it is ``good'' for society. Although several testable hypotheses are implied, the one below may extend our knowledge of culture's effect on moral philosophy. Based on the above studies and discussion, the following hypothesis is offered: H2: Compared with absolutists, achievers will accentuate utilitarianism and downplay idealism in their dealings with others. Conservationists and situationists will believe in a blend of both moral philosophies in managing moral issues. Hunt and Chonko (1984, p. 30) noted that ``the label Machiavellian [is] becoming a negative epithet, indicating at least an amoral way of manipulating (i.e. selfinterest seeking with guile) others to accomplish one's objectives.'' But equating ``Machiavellian'' with extreme labels like ``dishonest'' or ``deceitful'' is inappropriate. Instead, Machiavellian persons might more appropriately be described as possessing a kind of cool detachment that makes them less emotionally involved with others or with saving face in potentially embarrassing situations. Therefore, the more Machiavellian the individual, the more aloof (i.e. less helpful to others) he/she is likely to be. It is therefore appropriate to examine the possible influence of this construct on consumers' ethical beliefs. Wealthy countries have higher IND scores than poorer countries. Many Nordic, Germanic, and Anglo countries lie in the small PDI and high IND quadrant. Individuals who belong to such cultures are labeled as ``leaders'', because they are relatively independent from in-groups and are usually less dependent on powerful others (Hofstede, 1980). The theory of motivation may best describe this group. It asserts that the pursuit of individual pleasure is the sole human motive. One should seek only to maximize one's own pleasure. Others' pleasure is important only if they are seen as a means to the satisfaction of one's own enjoyment. Thus, self-interest does not lead one to a concern for the interests of others (Grassian, 1981). Several studies have found that people in individualistic societies are less apt to follow formal moral rules. For example, Chonko and Hunt (1985) found that codes of ethics are often developed by US corporations, but never referred to in solving moral issues. In the same manner, Robin and Reidenbach (1987) observed that most codes of ethics of US firms have no effect on modifying

behavior. Verma (1985) found a relationship between individualism and the willingness of people to violate norms. Morris et al. (1994) argue that individualistic people are motivated by self-interest and achievement of personal goals (i.e. Machiavellianism). On the other hand, many Asian, African and Mediterranean countries lie in large PDI and low IND quarter. Individuals belonging to these countries are identified as ``followers.'' These individuals support the common welfare, protect the interests of their members, and expect respect and loyalty in return (Hofstede et al., 1990). They submit to the opinions and directives of their superiors. In such cultures, there is an emphasis on sharing, cooperation, group harmony and a concern with group welfare (Morris et al., 1994). For example, although Compaq of Japan authorized its dealers to buy direct from its factories, it has discovered that many of them preferred to purchase from their usual wholesalers, even though the price was much higher. The reason is to preserve old business relationships even old school friendships (Thornton, 1994). Followers tend to closely follow rules and do what is correct and in the best interests of their society's welfare. Katzen (1993) argues that Japan has been built on the concept of trust, as it has been demonstrated by the very little shrinkage (0.5 per cent of sales) in the huge department stores. Spain, France, Italy, Belgium and South Africa are characterized as large in PDI and high in IND. This group is labeled as ``diplomats.'' The reason is that, while privacy is important to them, they tend to respect superiors' orders and group members. Because diplomats tend to respect formal rules and regulations while pursuing their own interests, they incline to be not very Machiavellian. The coexistence between the Europeans and Afrikaners in South Africa has produced a unique society. A culture that is neither individualistic nor collectivistic; it is both. Costa Rica is the only country characterized as small in PDI and low in IND. This group has been identified as ``easygoers'', because its members look after each other and attempt to have a casual relationship with their superiors. Easygoers, who are collectivist, exhibit some proclivity toward Machiavellian behavior, because they do not follow formal rules and standards. Possible differences in the behaviors of easygoers and diplomats are not tested due to a lack of data. Although the above discussion implies many testable hypotheses, the one suggested below offers the opportunity to expand our understanding of the effects of culture on Machiavellianism. Based on Hofstede's study and the above findings, the following hypothesis is formulated: H3: Followers will believe in Machiavellianism to a lesser degree than leaders. Methodology Sample A focus group of marketing professors and students selected eight countries that represent Hofstede's cultural typology. In the past three years, a total of 1,636 completed surveys were collected from these countries; the USA (n =

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188); Ireland (n = 193); Austria (n = 149); Egypt (n = 348); Lebanon (n = 290); Hong Kong (n = 167); Indonesia (n = 120); and Australia (n = 181). These countries, along with their respective Hofstede's cultural classification, are shown in Table I. English was the language used in all surveys. Responses were collected through convenience sampling procedures. Specifically, university students intercepted consumers in major shopping centers located in the central business districts of major cities in all eight countries. Interviewers were instructed to contact every nth consumer who passed them, with ``n'' selected on a random basis by the interviewer. Interviewers did not count passers-by, while they were approaching a potential respondent or during the interview itself. Once the interview was completed, counting on an ``n'' basis resumed. While the mall intercept method does not always provide representative samples, shopping mall customers constitute a major share of the market, and, therefore, generally comprise an adequate sampling universe (Tull and Hawkins, 1990). Most of these respondents were between 20 and 49 years of age, professionals and college graduates. A series of t-tests revealed no differences between various cultures with respect to the demographic variables (such as gender and age) tested. Table II shows the demographic characteristics of the samples from each country.
Australia Egypt Lebanon Ireland Hong Kong Austria USA Indonesia (%) (%) (%) (%) (%) (%) (%) (%) 1. Age 20-29 30-39 40-49 50 and above 2. Job title Professionals Managers Employees 3. Gender Male Female 4. Marital status Married Not married 5. Education High school or less Some college College graduate Graduate degree 33.5 41.5 17.0 8.0 27.4 43.0 29.6 63.6 36.4 64.8 35.2 14.8 13.6 48.3 23.3 44.4 44.1 8.6 2.9 24.4 52.4 23.2 57.8 42.2 60.0 40.0 24.1 9.1 44.0 22.8 42.8 40.0 11.4 5.8 40.6 37.8 21.6 29.3 70.7 68.3 31.7 2.8 7.2 49.5 40.5 37.6 40.9 9.2 12.3 31.9 47.9 20.2 50.5 49.5 47.3 52.7 8.9 30.5 48.9 11.7 48.5 49.1 2.4 0.0 30.3 31.9 37.8 65.6 34.4 52.9 47.1 10.3 6.1 67.8 15.8 41.0 41.5 13.4 4.1 26.8 38.5 34.7 45.9 54.1 55.0 45.0 17.6 36.8 30.1 15.5 43.9 38.5 13.8 3.8 40.6 28.0 31.4 46.3 53.7 54.5 45.5 11.2 47.5 37.6 3.7 43.5 45.0 11.5 0.0 39.0 27.0 34.0 51.8 48.2 52.5 47.5 8.3 11.1 75.9 4.7

Table II. Characteristics of respondents

Measures The instrument was divided into four sections. The first section included questions dealing with one's beliefs concerning 18 consumer situations having ethical implications. Five questions were altered to reflect actual practices in the cultures of interest (see Appendix). A factor analysis model with Varimax rotation was performed on the 18 variables to identify those which account for most of the variance of each scale. Four factors were identified after dropping two questions due to poor loadings. The first dimension was ``actively benefiting from illegal activity.'' The most significant characteristics of these actions are that they are: . almost universally perceived as illegal; and . initiated by the consumer (i.e. changing price tags on merchandise in a store). The second dimension, labeled as ``passively benefiting at the expense of others,'' could arise when consumers take advantage of sellers' mistakes (i.e., not saying anything when the waitress miscalculates the bill in their favor). The third dimension, labeled as ``actively benefiting from a questionable action,'' could occur when consumers are actively involved in actions that may or may not be perceived as illegal (i.e. not telling the truth when negotiating the price of a new automobile). The fourth dimension is ``no harm/no foul.'' In this regard, consumers perceive that the consequences of their actions produce little or no harm and, therefore, they may be considered permissible. The second section contains questions related to the predominant ethical ideology. These questions consist of two scales, each containing ten items (see Appendix). One scale is designed to measure idealism, which is the acceptance of moral absolutes, and the second is designed to measure utilitarianism, which is the rejection of universal moral principles. The third section contains questions related to Machiavellianism. These questions contain 20 items with ten items worded in a Machiavellian direction and the other ten worded in the opposite direction (see Appendix). The last section contains demographic questions. Method To determine whether the ethical beliefs of the eight nationality groups differ with respect to the variables of interest, multivariate analysis of variance (MANOVA) was used. MANOVA is a useful technique, where there are multiple metric criterion variables and one categorical predictor variable (Green, 1978), such as is the case with the eight nationality categories of the current study. Multiple discriminant analysis (MDA) may be used in conjunction with MANOVA to facilitate determining the direction and intensity of relationships (Tatsuoka, 1971). While MANOVA tests the departure from the null hypothesis, MDA determines the combination of the variables which maximize the departure from the null hypothesis. Thus, studying the contribution of each criterion variable to the discriminant function

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can enhance the understanding of the differences across the eight nationality groups. For variables entered in the MDA, the univariate F-test indicates any significant differences among the group means. The MANOVA results for the eight nationality groups are summarized in Table III. The seven criterion variables significantly differ across the groups. The Scheffe test shows which groups differ from others. The characteristics differentiated among the groups with regard to their ethical beliefs are ranked in order, as shown in Table III. If differences exist among groups, the evidence would suggest that firms should customize their strategies dealing with consumer ethics. Results Consumer ethical practices In general, functionalists, deferents, enthusiasts, and survivors differed in their perceptions of the constituents of appropriate behavior in the marketplace (see Table III). While deferents were found to wilfully obey rules and regulations, functionalists were observed to be more pragmatic. Enthusiasts and survivors were found to adopt moderate strategies when obeying rules and regulations. This finding provides general support for H1. Specifically, the factors differentiated among the studied groups with regard to their ethical beliefs are ranked in order below: (1) The factor that best discriminated among the four groups was ``actively benefiting from questionable action.'' This shows that differences in ethical beliefs clearly exist when the practice is questionable. Table III shows that functionalists (USA = 2.61; Australia = 2.55; Ireland = 2.81) tend to tolerate questionable practices more than deferents (Egypt = 1.62; Lebanon = 2.15). However, this tolerance did not go very far beyond the average point (2.5). Enthusiasts (Hong Kong = 2.48) and survivors (Austria = 2.44) tend to adopt moderate strategies. The Indonesian sample did not fully support the hypothesis. (2) The ``passively benefiting'' factor was the second best discriminator among the cultures. Scheffe test shows that deferents differed from the other three groups. Table III shows that functionalists (USA = 2.78; Australia = 2.49; Ireland = 2.69) tend to accept ``passively benefiting'' practices more than deferents (Egypt = 1.50; Lebanon = 2.07). Enthusiasts (Hong Kong = 2.55; Indonesia = 2.17) and survivors (Austria = 2.52) show moderate beliefs. Although this activity cannot be considered completely unethical, deferents tend to be strict in following rules and regulations. Hofstede (1983) argues that members of cultures which strongly avoid uncertainty and keep small power distance (i.e. deferents) tend to follow their superiors' directives and orders, and other rules and standards that would guide them through ambiguous situations. (3) ``No harm/no foul'' factor comes next in importance. Scheffe tests indicated differences between deferents and the other three groups; survivors and

Canonical loading 2 3 4

Australia Egypt 1 2

Leb. 3

Meansa Ireland Hong Kong Austria USA Indonesia Scheffe 4 5 6 7 8 test

(1) Actively benefiting from questionable action 0.91145 0.20497 0.24787 0.06393 0.000

2.5488

1.6231

2.1477

2.8088

2.4799

2.4415 2.6056

2.1518

(2) Passively benefitting (3) No harm/no foul

0.55182 0.13304 0.15076 0.44346 0.000 0.23282 0.08753 0.92838 0.06445 0.000

2.4890 3.3411

1.5043 3.6767

2.0690 2.7872

2.6891 3.7259

2.5479 3.2391

2.5201 2.7793 3.2340 3.5438

2.1652 2.9243

(4) Utilitarianism (5) Machiavellianism (6) Actively benefiting from illegal activity (7) Idealism Multivariate
a

0.20060 0.47066 0.08292 0.30964 0.000 0.16561 0.84902 0.10930 0.17120 0.000

3.3841 2.9052

2.8855 2.6295

3.2037 2.8111

3.6059 3.0248

3.5287 3.0167

3.4920 3.3639 2.8801 2.7827

3.4381 2.8288

2 3 8 6 5 2 3 8 3 8 6 5 1 2 3 2 7 3

d d d d d d d d d d d d d d d d d d

3865174 65174 5174 4 4 3816547 16547 47 651724 1724 24 24 24 3718654 54 7386154 54 54

0.15452 0.17874 0.27430 0.03664 0.000 0.09805 0.26434 0.07094 0.80038 0.000 MANOVA 0.0001

1.4107 3.7962

1.4387 4.4411

1.3552 4.0562

1.6485 3.7566

1.4830 3.5723

1.4955 1.5266 3.6960 3.7582

1.3869 4.0149

3d4 8d5 3 d 56471 2 d 5647183

Notes: For the scales of the first four constructs: ``1'' corresponds to ``strongly believe it is wrong'' and ``5'' corresponds to ``strongly believe it is not wrong''. For the scales of the remaining constructs: ``1'' corresponds to ``completely disagree'', and ``5'' corresponds to ``completely agree''. ``d'' denotes ``different from''

Culture, personality and morality

Table III. Determinants of attitudes of consumer ethics in rank order (MANOVA and multiple discriminant analysis)

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International Marketing Review 18,2 202

functionalists; enthusiasts and functionalists; and even within the functionalists groups. Table III shows that functionalists (USA = 3.54; Australia = 3.34; Ireland = 3.73) are likely to accept ``no harm/no foul'' practices more than deferents (Lebanon = 2.79). The Egyptian sample did not fully support the hypothesis. Enthusiasts (Hong Kong = 3.24; Indonesia = 2.92) and survivors (Austria = 3.23) show moderate acceptance of the above practice. Again, when an activity is morally questionable, cross-cultural attitudes significantly differed. (4) However, when the activity is perceived as undoubtedly illegal, differences among groups were substantially lessened. In responding to ``actively benefiting from illegal activity'' questions, only one deferents group (Lebanon = 1.36) is found to differ from a functionalists group (Ireland = 1.65). Because deferents are not risk takers, they place high importance on following rules and standards. They are more likely to be intolerant of any deviations from group rules, norms and ideals than are the other three groups. In contrast, because functionalists are entrepreneurs by nature and value success, affluence and prosperity, they become more competitive. Consideration for one's fellow human beings apparently becomes a questionable value when confronted with increasing challenges. People are more likely to feel pressured and work harder to strive to succeed. This may allow them to be more pragmatic in applying rules and standards. Idealism and utilitarianism Concerning ethical ideology, the findings generally support H2 that differences exist among conservationists, achievers, situationists and absolutists related to their idealism beliefs. Table III shows that absolutists (Egypt = 4.44; Lebanon = 4.06) were found to be the most idealistic group and differed from achievers (Australia = 3.80; Ireland = 3.76; Hong Kong = 3.57; USA = 3.76) and situationists (Austria = 3.70). Conservationists (Indonesia = 4.01) also scored high on idealism (next to absolutists) and differed from one achiever country. With respect to utilitarianism beliefs, the findings partially support the hypothesis. They revealed that both absolutist countries (Egypt = 2.89; Lebanon = 3.20) scored less than achiever countries (Australia = 3.38; Ireland = 3.61; Hong Kong = 3.53; USA = 3.36). Conservationists (Indonesia = 3.44) and situationists (Austria = 3.49) did not reveal any differences from achievers and absolutists. Results also show that situationists and conservationists tend to follow idealism more and utilitarianism less than other groups. Apparently, when a culture encourages individual decision making, wealth and materialistic possessions, high achieving individuals tend to be more relativistic and less idealistic. They may prefer those moral rules that allow them to compare all possible alternatives and select the one that yields the best outcome (i.e. utilitarianism) over those that focus on the means associated with particular behavior (i.e. idealism).

Machiavellianism The findings also support H3. Leaders (Australia = 2.91; Ireland = 3.02; Austria = 2.88; USA = 2.78) were found to accept Machiavellianism more than followers (Egypt = 2.63; Lebanon = 2.81; Hong Kong = 3.02; Indonesia = 2.83) (see Table III). Hofstede (1983) has found that people within wealthy countries (leaders) have higher individualism scores, and people within poorer countries (followers) have higher collectivism scores. Leaders tend also to have greater personal initiative, ambition and success. They also tend to ignore formal rules and standards. However, followers tend to have less individual initiative, drive and fulfilment; but they tend to closely follow rules and regulations. Conclusions and implications With business becoming more international, profiles and ethical values of consumers of various cultures can become tools for strategic choices in marketing board-rooms. An enhanced sensitivity to cultural variables is needed for decisions as to how to target international consumers. However, national cultural and ethical differences are often treated at the level of intuitive feelings, sometimes even as party jokes. The findings imply that a marketing strategy dealing with consumer ethics must be established in a manner that satisfies the cultural expectations of consumers. Marketers who voluntarily adhere to the spirit of ethics and morality are more likely to maintain a loyal consumer following. The results revealed significant differences between the various cultural groups in terms of their ``ethical beliefs,'' ``moral philosophies,'' and ``Machiavellianism.'' The results show that, while functionalists tend to be more pragmatic, deferents are inclined to have more stringent ethical beliefs. With respect to moral philosophies, it is found that, while absolutists are more idealistic, achievers tend to be more relativistic. Absolutists are willing to treat others in the same way that they expect others to treat them. They may judge their behavior on the basis of whether it infringes individual rights or universal rules and act accordingly. Further, the results reveal that leaders tend to be more Machiavellian than followers. Various specific implications follow from these results. In this study, all countries exhibited similar high ethical standards when the practice was clearly unethical. However, some countries were found to be more tolerant than others when the behaviors were questionable. Nevertheless, this tolerance did not go beyond the safe zone. As Kerlin (1997) puts it: ``Like politics, all ethics are local''. Marketers should be prepared to encounter a variety of differing value structures but neither should international firms insist that behavior of the host country be measured according to home-country standards (Hardman and Heidelberg, 1996), nor should they pronounce their morality as being superior to that of their host countries. Firms should recognize that different cultures try to achieve ethicality by adopting different avenues. Accordingly, various strategies need to be implemented when dealing with consumers of different cultures.

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International Marketing Review 18,2 204

In dealing with deferents, formal rules and standards need to be established as guidance for this group of consumers. Deferents like to avoid uncertainties by knowing marketers' expectations. For example, marketers may write down merchandise return and refund policies, and satisfaction guarantee strategy on various locations such as product packages, receipts, and in advertisements. However, when transacting with functionalists, one location might be enough to mention such policies. Moreover, because functionalists tend to follow informal rules and standards, marketers may mention the policies during the purchase exchange process or in commercials. Another implication is that marketers need to consider culturally-based differences in consumers' moral judgement when developing standards of ethical conduct. They may attempt to focus on idealism when dealing with absolutists and on utilitarianism when performing business with achievers. In targeting achievers, marketers need to understand that these cultures focus on ends rather than means. This group may tolerate products if they promise benefits to the majority of people, while causing some discomfort to few others. For example, an airplane which can carry more passengers, charge lower fares, but produce slightly more noise than regular ones may be acceptable. However, similar practices should not be exercised with absolutists. For them, if this noise causes harm to one individual, then it may not be acceptable. Further, marketers can succeed if they can offer the absolutists more of those things they value. If absolutists regard morals, ideals and standards, they want firms to honor their words and complaints. For example, upon receiving complaint of damaged goods, marketers may send replacements to consumers without questioning their integrity. While these activities need to be practiced with both achievers and absolutists, marketers may follow them to a greater extent in the idealistic cultures. Only those marketers with sound products and honest messages are expected to achieve success. They need to have a clear consumer service policy (such as refunds) to be stated in their catalogs. For example, L.L. Bean guarantees its products to provide 100 per cent satisfaction. In fact, consumers are encouraged to return any item purchased for full refund at any time if it proves otherwise. Marketers should keep their promotional messages informative, functional and moral. Moreover, relationship marketers or customer-intimate firms do not pursue one-time transactions; they cultivate long-term relationships. They specialize in satisfying unique needs, which often only they recognize, through a close relationship with customers. Maurice Roger, CEO of Parfums Christian Dior, points out that the 1990s were the decade of family values and customer-intimacy (Echikson, 1995). Many marketing practices are ``ethnocentric,'' that is, they assume the cultural environment of the product's country-of-origin can be transferred ``lockstep'' to the targeted international market. More cultural understanding in applying marketing activities is needed. Free market capitalism as practiced in the USA, for example, is an idea deeply rooted historically and culturally in individualism. ``Everybody for himself'' is supposed to lead to the highest

common good, according to Adam Smith (1937). If this concept is forced upon traditionally collectivist society, followers will be confused between two systems; one is stressing the welfare of the community above the individual, and the other focuses on individual achievement and aspiration. Followers will be less certain whether to shop in their traditional neighborhood stores that focus on delivering trust and service or in the newly established stores that focus on beating the competition. To improve these relationships, causemarketing may be a beneficial strategy in attracting local consumers. Followers may be enticed when a foreign firm supports a local cause such as sponsoring events that raise money for the homeless, for charity, or for a community service. Roper Starch Worldwide found that 66 per cent of consumers claimed they would switch brands if the purchase supported a cause of concern to them (Smith and Stodghill, 1994). Future research avenues may include more cultural variables and countries in one study. For example, the Confucian dynamic dimension of culture has been recently receiving more attention from researchers (for example, Nakata and Sivakumar, 1996). It is a range of positive values, including hard work, thrift and regard for relationships, and negative values, such as reciprocation, ``face''' and tradition (Bond et al., 1987). Further, with new technological advances and increasing expansion into foreign markets, marketers need to rely on more comprehensive studies. The results may assist marketers to formulate better strategies, customize products and packages, and develop messages that fit the needs and wants of international consumers.
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Scale description/traits Consumer ethics scale (Muncy and Vitelle, 1992) I. Actively benefiting from illegal activity 1. Changing price-tags on merchandise in a store 2. Giving misleading price information to a clerk for unpriced item 3. Drinking a can of soda in a supermarket without paying for it II. Passively benefiting 1. Getting too much change and not saying anything 2. Not saying anything when the waitress miscalculates the bill in your favor III. Actively benefiting from questionable action 1. Not telling the truth when negotiating the price of new automobile 2. Breaking a bottle of salad dressing in a supermarket and doing nothing about it 3. Paying a nominal charge for an international call 4. Lying about a child's age to get a lower price 5. Returning damaged merchandise when the damage was your fault IV. No harm/no foul 1. Taping a movie off the television 2. Using computer software or games you did not buy 3. Recording an album instead of buying it 4. Tasting grapes in a supermarket and not buying any 5. Taking an ashtray or other ``souvenir'' from a hotel or restaurant 6. Returning merchandise after trying it and not liking it Coefficient alpha (range)

0.6 to 0.83

0.6 to 0.82 0.6 to 0.75

0.6 to 0.77

Table AI.

Machiavellian scale (Christie and Geis, 1970) 0.6 to 0.71 1. Never tell anyone the real reason why you did something unless it is useful to do so. 2. The best way to handle people is to tell them what they want to hear. 3. One should take action only when sure it is morally right. 4. Most people are basically good and kind. 5. It is safest to assume that all people have a vicious streak and it will come out when given the chance. 6. Honesty is the best policy in all cases. 7. There is no excuse for lying to someone else. 8. Generally speaking, people won't work hard unless they're forced to do so. 9. All in all, it is better to be humble and honest than to be important and dishonest. 10. When you ask someone to do something for you, it is better to give the real reasons for wanting it to than give reasons which carry more weight. 11. People who get ahead in the world lead clean, moral lives. 12. Anyone who completely trusts others is asking for big trouble. 13. The biggest difference between criminals and others is that the criminals are stupid enough to get caught. (Continued)

Scale description/traits 14. 15. 16. 17. 18. 19. Most people are brave. It is wise to flatter important people. It is possible to be good in all respects. Barnum was wrong when he said that there's a sucker born every minute.a It is hard to get ahead without cutting corners. People suffering from incurable diseases should have the choice of being put painlessly to death.a 20. Most people forget more easily the death of their father than the loss of their propertya

Coefficient alpha (range)

Culture, personality and morality 209

Ethics position questionnaire (Forsyth, 1980) I. Idealism scale 0.7 to 0.87 1. A person should make certain that their actions never intentionally harm another even to a small degree. 2. Risks to another should never be tolerated, irrespective of how small the risks might be. 3. The existence of potential harm to others is always wrong, irrespective of the benefits to be gained. 4. One should never psychologically or physically harm another. 5. One should not perform an action which might in any way threaten the dignity and welfare of another individual. 6. If an action could harm an innocent other, then it should not be done. 7. Deciding whether or not to perform an act by balancing the positive consequences of the act against the negative consequences of the act is immoral.a 8. The dignity and welfare of people should be the most important concern in any society. 9. It is never necessary to sacrifice the welfare of others. 10. Moral actions are those which closely match ideals of the most ``perfect'' action.a II. Utilitarianism scale 0.6 to 0.84 1. There are no ethical principles that are so important that they should be a part of any code of ethics.a 2. What is ethical varies from one situation and society to another. 3. Moral standards should be seen as being individualistic; what one person considers to be moral may be judged to be immoral by another person. 4. Different types of moralities cannot be compared as to ``rightness.'' 5. What is ethical for everyone can never be resolved, since what is moral or immoral is up to the individual. 6. Moral standards are simply personal rules which indicate how a person should behave, and are not to be applied in making judgments of others. 7. Ethical considerations in interpersonal relations are so complex that individuals should be allowed to formulate their own individual codes. 8. Rigidly codifying an ethical position that prevents certain types of actions stands in the way of better human relations and adjustment.a 9. No rule concerning lying can be formulated; whether a lie is permissible or not permissible totally depends upon the situation. 10. Whether a lie is judged to be moral or immoral depends upon the circumstances surrounding the action. Note: aDropped items

Table AI.