Moral philosophies of marketing managers A comparison of American, Australian, and Malaysian cultures

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1 The research register for this journal is available at The current issue and full text archive of this journal is available at European Journal of Marketing 36,7/8 768 Received March 2000 Revised August 2000 Moral philosophies of marketing managers A comparison of American, Australian, and Malaysian cultures Kiran Karande Old Dominion University, Norfolk, Virginia, USA C.P. Rao Kuwait University, Kuwait, and Anusorn Singhapakdi Old Dominion University, Norfolk, Virginia, USA Keywords Moral responsibility, Ethics, Australia, Malaysia, USA Abstract A recent article pointed out that ``past research has paid relatively little attention to the sources of individuals moral philosophies from either a conceptual or an empirical standpoint and investigated the determinants of idealism and relativism among American marketers. A literature review indicates that there is even less theoretical and empirical crosscultural investigation of moral philosophies. As more and more companies are expanding into foreign markets, problems related to cross-national ethics and social responsibility are becoming increasingly prevalent. Therefore, this study proposes a framework explaining the differences in the idealism and relativism of American, Malaysian, and Australian marketers based on: country differences (cultural differences and differences in economic and legal/political environment); corporate ethical values; and gender and age of the marketer. Results indicate that there are differences in the level of idealism and relativism exhibited by marketers from the three countries. Irrespective of country, corporate ethical values are positively related to the idealism and negatively related to the relativism of marketers. Also, irrespective of country, women are more idealistic than men, and relativism increases with age. Implications are offered and avenues for future research suggested. Introduction Globalization forces have been sweeping global and individual country economies. This emerging economic order has made it imperative for many businesses to deal with overseas market environments. Issues such as global warming, child labor, green marketing, software piracy, protection of intellectual property rights, and patent infringement have acquired increased prominence as a consequence of these globalization trends (Czinkota and Ronkainen, 1998). However, these issues do not have the same importance in every country. Vast differences exist across countries in terms of their economic development, cultural standards, legal/political systems, expectations regarding business conduct (Wotruba, 1997), and enforcement of policies (Mittelstaedt and Mittelstaedt, 1997). European Journal of Marketing, Vol. 36 No. 7/8, 2002, pp # MCB UP Limited, DOI / The authors thank Mohd. Rashid Ahmed and Zabid Md. Rashid, Universiti Pertanian Malaysia, Malaysia; and Muris Cicic, University of Wollongong, NSW, Australia for their assistance in the data collection for this study. They also thank Janet Marta fo her comments.

2 Consequently, what may be considered illegal in one country may be customary or even acceptable in others (Czinkota and Ronkainen, 1998). Under such circumstances, understanding how marketers in different countries make ethical judgments about business situations involving ethical dilemmas is important. It is well accepted in the business ethics literature that managers apply ethical guidelines based on their personal moral philosophies when confronted with ethical issues (Singhapakdi et al., 1999). Moral philosophy refers to the principles or rules that people use to decide what is right or wrong (Ferrell and Fraedrich, 1997). Personal moral philosophy is depicted as one of the important factors influencing ethical decision making in established models of business ethics (e.g. Hunt and Vitell, 1986; Trevino, 1986; Ferrell and Gresham, 1985). Ethical judgments may be explained parsimoniously by two aspects of personal moral philosophies, idealism and relativism (see also Schlenker and Forsyth, 1977). These two dimensions of moral philosophies have been extensively used in the business ethics literature and have been shown to influence important variables in ethical decision making such as perceived ethical problem (Hunt and Vitell, 1986), ethical intention (Singhapakdi et al., 1999), ethical sensitivity (Sparks and Hunt, 1998), perceived importance of ethics and social responsibility (Singhapakdi et al., 1995), ethical judgement (Vitell and Singhapakdi, 1993), and perceived moral intensity (Singhapakdi et al., 1999). In a recent article, Singhapakdi et al. (1999, p. 22) commented that ``past research has paid relatively little attention to the sources of individuals moral philosophies from either a conceptual or an empirical standpoint and they investigated the determinants of idealism and relativism among American marketers. There is even less theoretical and empirical cross-cultural investigation of moral philosophies. The present study focuses on crossnational differences in idealism and relativism, and proposes a framework explaining the variation in idealism and relativism of Australian, American, and Malaysian marketers by country differences (including cultural differences and differences in economic and legal/political environment), corporate ethical values, and gender and age of the marketer. From a managerial perspective, an understanding of the extent to which marketers from different countries apply the rules of idealism and relativism, and why they apply these rules to a varying degree across countries, is useful. It helps managers comprehend the underlying thinking (philosophy) of marketers from different countries in evaluating ethical actions. In the international context, such an understanding can be used by corporate managers to develop training programs as well as develop codes of ethics that will enhance the ethical environment in corporations. This study also provides input on how corporate ethical values are related to the idealism and relativism of marketers, and how gender and age influence the extent to which one is idealistic and relativistic, which has implications in terms of developing management policies/organizational culture, and planning of ethics training programs. Philosophies of marketing managers 769

3 European Journal of Marketing 36,7/8 770 This research is organized as follows: first, we review the literature on moral philosophies. In the second section, we present the theoretical foundation of the study and develop the hypotheses. In the third section on methodology, details about the sample, the measures (including their reliability and validity), as well as measurement equivalence of the idealism, relativism, and the corporate ethical values scales (Steenkamp and Baumgartner, 1998) are provided. Next, results are discussed. In the fifth section, managerial implications are provided, and finally, limitations of the study and recommendations for future research are given. Literature review Business ethics theorists generally agree that when faced with decision situations having ethical content, managers apply ethical guidelines based on moral philosophies (e.g. Ferrell and Gresham, 1985; Hunt and Vitell, 1986). Social psychologists also consider moral philosophies or ``personal ethical systems to be important factors influencing an individual s ethical judgements. In particular, Forsyth (1980) identified two aspects of moral philosophy, relativism and idealism, as important predictors of moral judgement. Relativism ``rejects the possibility of formulating or relying on universal moral rules when drawing conclusions about moral questions (Forsyth, 1980, pp ). According to Forsyth (1992): Relativists generally feel that moral actions depend upon the nature of the situation and the individuals involved, and when judging others they weigh the circumstances more than the ethical principal that was violated. Those who exhibit high relativism can be described as skeptics, and they generally feel that moral actions depend upon the nature of the situation and the principle involved. On the other hand, those who exhibit low relativism believe that morality requires acting in ways that are consistent with moral principles, norms, or laws. Idealism is defined as the degree to which individuals ``assume that desirable consequences can, with the right action, always be obtained (p. 175). Idealism describes the individual s concern for the welfare of others. Highly idealistic individuals believe that harming others is always avoidable, and they would rather not choose between the lesser of two evils that will lead to negative consequences for other people. Those who are less idealistic feel that harm is sometimes necessary to produce good (Forsyth, 1980, 1992). Idealism is not based on an embrace of moral absolutes; rather, it involves values related to altruism and a sense of optimism in considering responses to moral issues (Singhapakdi et al., 1999). Therefore, idealism and relativism are conceptually independent, and individuals may be high or low on either dimension (Forsyth, 1992). It is important to highlight how idealism and relativism reconcile with many of the schools of thought related to moral philosophy that researchers have developed over the last several decades (for example, teleology, ethical

4 skepticism, ethical egoism, utilitarianism, and deontology), as well as other frameworks of moral thought (e.g. ``Survey of ethical attitudes by Hogan (1970, 1973) and cognitive moral development by Kohlberg (1976)). Forsyth (1980) argued that idealism and relativism together capture many other conceptualizations of moral philosophy. For example, high relativism-low idealism individuals exhibit ethical egoism, which espouses that no moral standards are valid except in reference to one s own behavior, and defines right or acceptable actions as those that maximize a particular person s self-interest as defined by the individual. High relativism-high idealism individuals exhibit idealistic skepticism which argues that morality should focus on ``a contextual appropriateness not the `good or the `right but the `fitting with all actions based on love of others (Fletcher, 1973, p. 186). Low relativism-high idealism individuals exhibit the moral philosophy of deontology, which focuses on the preservation of individual rights and on the intentions associated with a particular behavior rather than on its consequences. In deontological philosophy, there is some universal moral rule that is absolute in determining right from wrong. The statements endorsed by low relativism-low idealism individuals are similar to the teleological thought, which stipulates that acts are morally right or acceptable if they produce some desired result, such as the realization of self-interest or utility. Low relativism-low idealism thought is also compatible with utilitarianism, which defines right or acceptable actions as those that maximize total utility, or the greatest good for the greatest number of people. Forsyth (1980) also argued that the relativism scale shared a common foundation with another frequently used measure of moral thought Hogan s ``Survey of ethical attitudes (Hogan, 1970, 1973). Further, he also stated that while Kohlberg s (1976) cognitive moral development approach relies on the stage of moral development based on self-generated thoughts, the idealismrelativism approach takes advantage of completely different criteria idealism in evaluating consequences, and moral relativism when describing variations in moral thought (Forsyth, 1980). Therefore, an individual who displays postconventional moral reasoning as classified by Kohlberg could endorse any one of the philosophies characterized by any of the four combinations of idealism and relativism. Many ethics studies testify to the fact that idealism and relativism affect different aspects of ethical decision making. Forsyth (1992) proposed that idealism and relativism can influence business ethical decisions. Sparks and Hunt (1998) found that relativism was negatively related to ethical sensitivity of marketing research professionals where ethical sensitivity is the ability to recognize that a decision-making situation has ethical content. Singhapakdi et al. (1999) found that among marketing professionals idealism has a positive effect and relativism a negative effect on perceived moral intensity. In another related study, more idealistic and less relativistic marketers were found to perceive ethics and social responsibility to be more important than did their counterparts (Singhapakdi et al., 1995). Empirical research has also shown that Philosophies of marketing managers 771

5 European Journal of Marketing 36,7/8 772 more idealistic and less relativistic marketers tend to exhibit higher honesty and integrity than less idealistic and more relativistic marketers (Vitell et al., 1993). Further, the deontological norms of marketers are influenced positively by idealism and negatively by relativism (Vitell and Singhapakdi, 1993). In summary, there is extensive literature demonstrating that idealism and relativism influence ethical decision making. Theoretical foundation and hypotheses In this section, it is proposed that the variation in idealism and relativism of marketers is explained by country differences (including cultural differences and differences in economic and legal/political environment), corporate ethical values, and individual characteristics of gender and age. Figure 1 summarizes the proposed framework. Country differences Cultural differences. In this section, cultural differences among the three countries and their influence on idealism and relativism are described based upon Hofstede s (1983) and Hofstede and Bond s (1988) five dimensions of culture. Hofstede s typology is relevant for our study because it captures culture along five different dimensions, and has been widely used in studying marketing and managerial issues, and specifically ethical decision making (e.g. Vitell et al., 1993; Singhapakdi et al., 1994). Individualism/collectivism. Individualism implies: A loosely knit social framework in which people are supposed to take care of themselves and of their immediate families only; while collectivism is characterized by a tight social framework in which people distinguish between in-groups and out-groups; they expect their in-group (relatives, clan, organizations) to look after them, and in exchange for that they feel absolute loyalty to it (Hofstede, 1980, p. 45). In other words, individualism indicates the extent of non-dependence on the organization. Marketers in collectivistic countries (such as Malaysia) would be expected to be more loyal to their organizations because of greater dependence, and therefore concerned for their organization s wellbeing when making decisions. Idealistic individuals assume that desirable consequences can, with the right action, always be obtained, feel that harming others is always avoidable, and would rather not choose between the lesser of two evils that will lead to negative consequences for other people (Forsyth, 1992). In other words, in trying to make the right decisions, idealistic individuals are likely to look after the welfare of others and society in general, and consequently, marketers from individualistic countries are likely to be less idealistic than those from collectivistic countries. Alternatively, collectivistic managers, in order to protect the organization, might be tempted to act in ways that will harm others, thus influencing idealism negatively. In other words, individualism could impact idealism in both directions.

6 Philosophies of marketing managers 773 Figure 1. Theoretical frameworks for idealism and relativism

7 European Journal of Marketing 36,7/8 774 Relativism rejects the possibility of formulating or relying on universal moral rules when drawing conclusions about moral questions. Collectivistic managers might be more prone to attribute their actions to situations or circumstances in order to take care of their organization and colleagues because relativists generally feel that moral actions depend upon the nature of the situation and the individuals involved. In other words, they are likely to be more relativistic than individualistic managers. Consistently, the more individualistic managers, with no pressures of loyalty, might have fewer reasons to attribute actions to circumstances. In other words, managers from collectivistic countries are likely to be more relativistic than those from individualistic cultures. Masculinity/femininity. Hofstede (1980) defined masculine cultures, such as the USA and Australia, as those that value material success and assertiveness more, and the less masculine cultures, such as Malaysia, as those that place more value on qualities like modesty, humility, benevolence, interpersonal relationships and concern for the weak, which may contribute to marketers idealism and relativism. For example, in making decisions, the more ambitious and competitive marketers from countries ranking high on masculinity might be tempted to respond to pressure for greater efficiency at all costs. Therefore, they may be more willing to consider taking actions that are harmful to others more than those who come from less masculine cultures, and therefore show relatively less idealistic tendencies. As for relativism, the more competitive and ambitious marketers from masculine cultures would be expected to attribute actions to the situation in order to achieve greater efficiency and show superior performance, which can be contrasted with those from less masculine cultures who would have less motivation to do so. Thus, masculinity can be expected to be positively related to relativism. Power distance. Power distance is the degree to which the members of a group or society accept that ``power in institutions and organizations is distributed unequally (Hofstede, 1980, p. 45). Individuals from cultures with high power distance (such as Malaysia) usually accept the inequality of power, perceive differences between superiors and subordinates, are reluctant to disagree with superiors and believe that superiors are entitled to privileges (Hofstede, 1983). In contrast, those from cultures with lower levels of power distance are less likely to tolerate class distinctions, are more likely to prefer democratic participation and are not afraid to disagree with superiors. Consequently, marketers from high power distance countries are likely to perceive a need to minimize disagreement with superiors and satisfy superiors, by trying to act in ways that will not harm others and raise controversies. In other words, power distance is positively related to idealism. By a similar argument, in determining the rightness of decisions, marketers from high power distance countries might be more prone to attribute certain actions to situations so that they can satisfy their superiors, and therefore are likely to be more relativistic than those from low power distance countries.

8 Uncertainty avoidance. Hofstede (1980, p. 45) defined uncertainty avoidance as: A characteristic of culture that defines the extent to which people within a culture are made nervous by situations that they consider to be unstructured, unclear, or unpredictable, and the extent to which they try to avoid such situations by adopting strict codes of behavior and a belief in absolute truths. The risk-taking orientation of marketers from low uncertainty avoiding countries would lead them to take actions in order to improve efficiency and performance, even if they were harmful to others. On the other hand, the more conservative managers from the high uncertainty avoiding countries would not take actions that would be questionable (and risky). In other words, managers from the uncertainty avoiding cultures are likely to be more idealistic than those from low uncertainty avoiding countries. Along the same lines, the risktaking managers from low uncertainty avoidance countries would be prone to attributing certain actions to the situation and therefore be more relativistic than those from the high uncertainty avoidance countries. Confucian dynamism. Confucian dynamism is a work ethic that values thrift, persistence, ordered relationships and having a sense of shame (Hofstede and Bond, 1988). They stated that individuals in countries ranking high on Confucian dynamism tend to adhere to the more future-oriented teachings of Confucius; those from countries ranking low on Confucian dynamism tend to be more present- and past-oriented. Marketers from cultures ranking high on Confucian dynamism have a strong sense of shame and are likely to be wary of actions that are improper or disgraceful. Marketers from high Confucian dynamism countries would, therefore, avoid any actions that are harmful to others and bring disrepute to the company. In other words, they would exhibit greater idealism than marketers from low Confucian dynamism countries. Alternatively, it is also possible that marketers from high Confucian dynamism countries might be sensitive to the shame arising out of inferior performance (within the company) and might, therefore, believe that greater efficiency and profits are important, even at the cost of harming others. In other words, Confucian dynamism on idealism could influence idealism in both directions. Using similar arguments, it can be argued that in order to avoid shame, managers from the high Confucian dynamism cultures might be tempted to attribute actions to the situation and therefore be more relativistic. Consistently, those from low Confucian dynamism countries might be less concerned about the shame of low performance and be less relativistic. Table I summarizes Hofstede s ranking of the three countries on five dimensions of culture (Hofstede, 1980; Hofstede and Bond, 1988). In general, Australians and Americans are ranked higher on individualism and masculinity, and lower on uncertainty avoidance and power distance than Malaysians. On Confucian dynamism, the USA and Australia are ranked very close but no ranking was available for Malaysia. Based on masculinity, power distance, Malaysian marketers would be expected to have higher idealism than those from Australia and the USA. Based on uncertainty avoidance, Malaysian Philosophies of marketing managers 775

9 European Journal of Marketing 36,7/8 776 marketers would be expected to have lower idealism than those from Australia and the USA. Further, based on individualism and Confucian dynamism, differences in idealism of marketers from the three countries could be in both directions. Similarly, Australian and American managers would be expected to exhibit higher relativism than Malaysian managers, based on individualism and masculinity, and Malaysian managers would be expected to exhibit higher relativism than Australian and American managers, based on power distance, uncertainty avoidance, and Confucian dynamism. Differences in economic and legal/political environment. The impact of differences in economic development and the legal/political environment among nations has been noted by scholars (e.g. Mittelstaedt and Mittelstaedt, 1997; Wotruba, 1997). In the context of protection of intellectual property (IP), Mittelstaedt and Mittelstaedt (1997, p. 21) noted that ``it is clear that protecting an IP by excluding others from its use is viewed differently in developing and developed countries and: Although this often seems to be a purely economic issue, many developing nations also have cultural traditions that serve to reinforce the LDC s economic interests. For example, for the ``public good, many developing nations neither allow patents by their own nationals nor recognize patents of others for such goods as medicines or food products (Ehrbar, 1992). From another perspective, Laczniak and Murphy (1993, p. 216) noted that: ``... in many less developed countries, pressures on organizations to succeed are often more fierce than in a developed country setting. Laczniak and Murphy (1993) further explained that in order to achieve primary needs, firms in less developed countries might have to take actions that will lead to immediate financial improvement and stability. They argued that it is not until financial security has been attained that the firms will start to pay attention to such secondary needs as ``to be perceived as a good corporate citizen and conduct business ethically (p. 216). These studies suggest that in ethical situations, managers from developing countries and developed countries are likely to apply different criteria to gauge the ethicality of a situation, and thus exhibit different moral philosophies. In general, managers from developed countries are more likely to believe that actions should be taken without harming others, than those from developing countries. Also, managers in developing countries are likely to believe that moral actions depend upon the Country Power distance Individualism Masculinity Uncertainty avoidance Confucian dynamism Table I. Scores (and ranks) for the three countries on Hofstede s dimensions Australia 36 (41) 90 (2) 61 (16) 51 (37) 31 (11-12) Malaysia 104 (1) 26 (36) 50 (25-26) 36 (46) n/a USA 40 (38) 91 (1) 62 (15) 46 (43) 29 (14) Notes: Ranks range from 1-53 for all dimensions except Confucian dynamism 1-20 Source: Hofstede (1980) and Hofstede and Bond (1988)

10 situation, and therefore likely to be more relativistic than managers from developed countries. With regard to the legal/political environment, the relationship between the legal environment and moral philosophies has been implicitly noted by many business ethics scholars. For example, Beauchamp and Bowie (1993, p. 4) noted that ``Law is the public s agency for translating morality into explicit social guidelines and practices and stipulating offenses. Dunfee (1996, p. 318) stated that the legal system is sometimes required to nurture or to implement the moral preferences of society, particularly with reference to universal moral prohibitions against physical harm. He also stated that where moral views have not converged toward a sufficiently broad consensus, the law may help to bring about a change in attitude. Therefore, the legal/political framework within a country can be expected to impact a manager s moral philosophy, and idealism and relativism. The legal/political systems vary across countries both in terms of content and enforcement (e.g. Vogel, 1992; Wotruba, 1997). Vogel (1992) noted that in spite of globalization, the norms of business (as well as business and academic interest) in ethics were substantially higher in the USA than in other advanced capitalist countries such as western Europe and Japan. He attributed it to the distinctive institutional, legal, social, and cultural environment in the USA that contributes toward a stringent enforcement of law. In another relevant study, Wotruba (1997) stated that: ``undoubtedly there are some less developing countries for which comprehensive legislation on restrictive practices has yet to be enacted. And even in such countries where legislation does exist, enforcement is often negligible (Newman, 1980). In the context of this study, the legal/political systems (including the existence, specificity, as well as the enforcement of laws) can be expected to be different across the three countries. For example, there is evidence that in the USA the legal/political systems are well-developed (e.g. Vogel, 1992), and that in Malaysia they are evolving (e.g. Gupta and Sulaiman,1996). Although there is no academic research on the regulatory environment in Australia, it can be expected to be different from that in the USA and Malaysia. Marketers from countries with more stringent legal/political environments are more likely to believe that desirable consequences can, with the right actions, always be obtained, and therefore are more idealistic. Also, they are more likely to believe that morality requires acting in ways that are consistent with the law, and therefore exhibit less relativism than managers from countries with less stringent legal/political environments. In the context of this study, Malaysian marketers are likely to be more relativistic and less idealistic than Australian managers, and Australian managers are likely to be more relativistic and less idealistic than American managers. In summary, based on cultural differences and differences in economic and legal/political environment, we expect Australian, Malaysian, and American marketers to exhibit different levels of idealism and relativism. It is not possible to hypothesize the direction of differences because multiple aspects of Philosophies of marketing managers 777

11 European Journal of Marketing 36,7/8 778 country differences influence marketers idealism and relativism, at times in conflicting ways. Thus, the following hypothesis was formulated: H1a. There are differences in the idealism exhibited by marketers in Malaysia, Australia, and the USA. H1b. There are differences in the relativism exhibited by marketers in Malaysia, Australia, and the USA. Corporate ethical values In addition to country factors, most models of ethical decision making posit that organizational factors such as an organization s ethical values influence a manager s ethical decision making (Hunt and Vitell, 1986, 1993; Ferrell and Gresham, 1985; Trevino, 1986). Many researchers believe that, in addition to the individual moral standards, unethical standards are affected by organizational pressures (e.g. Ford and Richardson, 1994). Hunt et al. (1989) defined corporate ethical values as: A composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization. Corporate ethical values can be expected to influence the moral philosophy of managers because they reflect a shared understanding regarding what is correct behavior and how ethical issues will be handled in the organization (DeConinck, 1992). In other words, corporate ethical values influence the standards that delineate the ``right things to do and the things ``worth doing (Jansen and Von Glinow, 1985). Corporate ethical values have also been shown to influence managerial performance. For example, organizational success is enhanced when ethical standards of an organization are widely shared (Hunt et al., 1989). Similarly, Weeks and Nantel (1992) found that well-communicated codes of ethics led to higher ethical standards and superior job performance of salespeople in the USA. The corporate ethical values-moral philosophy relationship also depends upon the enforcement of the code of ethics. Well enforced consequences for misconduct, and not just stated organizational concern, are likely to make managers consider the morality of their actions (e.g. Laczniak and Inderrieden, 1987). Because acting ethically is rewarded and acting unethically is punished, marketers working in companies with higher corporate ethical values are more likely to believe that desirable consequences can, with the right actions, always be obtained. Consequently, they are likely to be more idealistic than those managers who work in companies with lower corporate ethical values. In a recent study of American marketers, Singhapakdi et al. (1995) showed corporate ethical values influence managerial perceptions. They found that managers in organizations with high levels of corporate ethical values tended to assign a higher level of importance to certain elements of corporate ethics and social responsibility. In a study specifically related to ours, Singhapakdi et al. (1999) argued that marketers in organizations with higher levels of ethical values should have a higher moral standard, on average, than those in

12 organizations with lower levels of ethical values, and therefore be more committed to finding ethical solutions to moral problems (i.e. be more idealistic) and rely more on rules and guidelines (i.e. be less relativistic). They found a positive corporate ethical values-idealism relationship but an insignificant relationship between corporate ethical values and relativism. Therefore, we hypothesize that: H2a. Corporate ethical values are positively related to the idealism of managers. H2b. Corporate ethical values are negatively related to the relativism of managers. Philosophies of marketing managers 779 Gender Researchers have identified gender as an important demographic variable influencing an individual s ethical decisions (e.g. Singhapakdi et al., 1999). For example, in a meta-analysis using data from more than 20,000 respondents in 66 samples, Franke et al. (1997) found that women are more likely than men to recognize that a business practice involves a moral issue. From a theoretical perspective, Gilligan (1982) argued that men and women differ in their moral reasoning, and identified characteristics of men and women that influence their ethical attitudes and behavior. She stated that men are more likely to adhere to the ``ethic of justice by emphasizing rules and individual rights, whereas women are more likely to adhere to the ``ethic of care by emphasizing relationships and compassion. In a recent study of American marketers, Singhapakdi et al. (1999) found even though women were found to more idealistic and less relativistic than men, the gender effect was non-significant and small, and therefore makes an investigation into this issue more important. Based on Gilligan s (1982) work, it can be argued that ``the ethic of caring exhibited by women would lead them to believe that taking actions that are detrimental to others is avoidable; therefore, women exhibit greater idealism. Men, on the other hand, tend to be more ``independent, masterful, assertive, and instrumentally competent (Eagly and Wood, 1991, p. 309), and therefore could attribute certain actions to circumstances in order to demonstrate their competence. With a more communal character, women might have no motivation to do so. In other words, men would be expected to be more relativistic than women. These arguments are compatible with the observations of Forsyth et al. (1988, p. 244) that ``the ethic of caring appears to be conceptually similar to the idealism dimension of moral philosophies and ``may also be inversely related to relativism if individuals feel that caring for others is a fundamental moral principle. These differences are also consistent with arguments made in the section on the effect of cultural differences about the effect of masculinity/ femininity on idealism and relativism. Therefore, we hypothesize that: H3a. Women tend to be more idealistic than men. H3b. Women tend to be less relativistic than men.

13 European Journal of Marketing 36,7/8 780 Age The relationship between age and moral philosophy can be explained using different theoretical perspectives. For example, Kohlberg s (1981) cognitive moral development theory contends that an individual s cognition, emotion, and judgment may change as he or she moves through stages of moral development. It can be argued that age and ethical behavior should be related because as individuals move through stages of moral development, moral development occurs mainly due to life experiences. Other researchers have reasoned that people tend to become more ethical as they grow older (Terpstra et al., 1993), which can be explained by the argument that as people age they tend to become less concerned with wealth and advancement and more interested in personal growth (Hall, 1976). From another perspective, age and work experience are highly correlated, and because of their experience, older managers tend to be exposed to a variety of ethical problems and become more sensitive to the harm that ethical transgressions can do to the organization and its stakeholders (Singhapakdi et al., 1999). They argued that more senior managers may therefore be less willing to make exceptions to ethical guidelines and be more committed to produce desirable outcomes. Therefore, we hypothesize that: H4a. A marketer s age is positively related to his or her idealism. H4b. A marketer s age is negatively related to his or her relativism. Methodology Sample A self-administered questionnaire was used as the data collection technique for all three groups of marketing practitioners. For the American group, national mailing lists of professional members of the American Marketing Association (AMA) were used as the sampling frame. A random sample of 2,000 US practitioner members with primary areas of interest in marketing and sales management were mailed questionnaires. Of the 1,997 delivered, 453 responded for a response rate of 22.7 per cent. The response rate is comparable to previous marketing ethics studies that have also used AMA mailing lists (e.g. Hunt and Chonko, 1984). For the Australian sample, a mailing list of recipients of the Australian Marketing Institute magazine was used as the sampling frame. The questionnaire was included in the magazine and 500 questionnaires were returned. Since questionnaires were not directly mailed to the sample in Australia, the response rate could not be assessed. For the Malaysian group, the sampling frame consisted of companies listed on the Kuala Lumpur Stock Exchange and respondents were managers responsible for making marketing decisions. A total of 350 questionnaires were mailed to a random sample from the list, of which 156 replied for a response rate of per cent. The questionnaire was administered in English for all three samples. Because Malaysia and Australia are members of the British Commonwealth, English is a well understood language, particularly in the business setting.

14 The non-response bias for the US sample was assessed with an analysis of variance between the ``early and ``late respondent groups (Armstrong and Overton, 1977). There were no statistical differences between the early and late respondents. For the Australian and Malaysian sample, the non-response bias based on early and late respondents could not be assessed as this information was not coded at the time of data collection. After eliminating incomplete questionnaires, 369 responses from the USA, 120 from Malaysia, and 487 from Australia were used. Table II summarizes the profile of the three samples. Philosophies of marketing managers 781 Measures Idealism and relativism. The ethics position questionnaire (EPQ) developed by Forsyth (1980) was used to measure moral philosophies (see the Appendix). The EPQ consists of two ten-item scales to measure idealism and relativism. A nine-point Likert scale was used for measurement, with 1 indicating ``completely disagree and 9 indicating ``completely agree. For this study, eight USA Malaysian Australian Characteristics sample sample sample of respondents (per cent) (per cent) (per cent) Sex Male Female Age group < > Industry USA and Australia Wholesale or retail 12 2 Manufacturer or construction Services Communications 9 34 Advertising or public relations 7 6 Marketing consulting 18 5 Other 2 22 Malaysia a Consumer products 37 Diversified 4 Construction 3 Trading services 28 Finance 11 Properties 13 Plantation 3 Mining and primary resources 1 Note: a This categorization of industries is appropriate in the Malaysian context Table II. Profiles of respondents in the US, Malaysian, and Australian samples

15 European Journal of Marketing 36,7/8 782 of the ten relativism items were used. The other two items were concerned with a specific ethical issue about lying (``No rule concerning lying can be formulated; whether a lie is permissible or not permissible totally depends upon the situation and ``Whether a lie is judged to be moral or immoral depends upon the circumstances surrounding the action ) and were judged to be inappropriate for use with other, more general items. For each respondent, the idealism and relativism scores were computed by summing the items. The convergent and discriminant validity of the idealism and relativism measures was also assessed. Each scale was judged to have convergent validity if it exhibited unidimensional factor structures and had significant factor loadings (p < 0.01) greater than 0.5 for all indicators of the construct. Two items on the idealism scale (``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 and ``Moral actions are those which closely match ideals of the most `perfect action ) and one item on the relativism scale (``There are no ethical principles that are so important that they should be a part of any code of ethics ) were dropped because of low factor loadings. The scales were judged to have good discriminant validity if the confidence interval around the correlations did not contain one (Anderson and Gerbing, 1988). Further, discriminant validity was assessed by comparing the fit with the correlation between the two constructs, as opposed to being free. If idealism and relativism are correlated then there should be a significant improvement in fit with the model without constraints. For all three countries, the correlation values ranged from 0.15 to 0.07, and 95 per cent confidence intervals did not contain the value of one. There was no statistical difference in the fit based on a chi-square test. Therefore, the idealism and relativism scales can be assumed to exhibit discriminant validity. The reliability of the measures was assessed using Cronbach alpha which ranged from , well above the recommended level of 0.70 (Nunnally, 1978). Corporate ethical values, gender and age. The corporate ethical values (CEV) scale developed by Hunt et al. (1989) was used in this study to measure corporate ethical values. The scale was designed to reflect ``a composite of the individual ethical values of managers and both the formal and informal policies on ethics of the organization (Hunt et al., 1989). The CEV scale has five items (see The Appendix) and was measured using a nine-point Likert scale with 1 =``completely disagree and 9 = ``completely agree. For each respondent, the CEV score was obtained by summing all CEV items (with items 1 and 2 reverse-coded). A high CEV score means that the manager works in an organization with higher corporate ethical values. The CEV scale exhibited good convergent validity with all factor loadings significant and greater than 0.5 for all three countries. Cronbach alphas for the CEV scale were 0.69 for the Malaysian sample, 0.81 for the Australian sample, and 0.86 for the American sample. Gender was measured as a dichotomous variable and age was measured in four categories.

16 Measurement equivalence of the idealism, relativism, and CEV scales The cross-national measurement equivalence of the three scales was established in three steps. First, using confirmatory factor analysis, the fit of the proposed structure for each country was assessed[1]. Second, configural equivalence (similarity of dimensionality of the construct and significance of factor loadings) was assessed using multi-group analysis with factor loadings and error variances allowed to vary for the three countries[2] (Steenkamp and Baumgartner, 1998). Third, metric equivalence, which measures the invariance of factor loadings and error variances, was assessed by measuring the improvement in fit (chi-square) with two successive analyses that constrained factor loadings and error variances to be equal[3] (Bollen, 1989). Based on the results of the individual country convergent and discriminant validity, reliability analysis, and multi-group analysis, the three scales can be assumed to show cross-cultural equivalence, and therefore can be used to measure mean differences in idealism and relativism of American, Malaysian, and Australian marketers. Philosophies of marketing managers 783 Results Multivariate analysis of variance (MANOVA) was performed using idealism and relativism items as dependent variables, and the country of residence, corporate ethical values, gender, and age as independent variables. MANOVA results show that overall country of residence, corporate ethical values, gender, and age significantly explain differences between marketers from the three countries in their idealism and relativism (F = based on Wilks lambda, p < ). H1a and H1b state that there are differences in the level of idealism and relativism exhibited by marketers from the three countries. Univariate analysis of variance (ANOVA) identified significant cross-country differences between marketers on both idealism (F = 20.68, p < ) and relativism (F = 12.80, p < ). Therefore, both hypothesis H1a and H1b were supported. To illustrate the differences, average scores were computed for marketers from the three countries on idealism and relativism. As shown in Table III, there are significant differences in idealism scores of marketers from the three countries (t = 3.36, p < 0.01 between Australian and Malaysian marketers; t = 6.06, p < 0.01 between American and Malaysian marketers; and t = 4.39, p < 0.01 between Australian and American marketers). Malaysian managers (mean Mean idealism t-values score Australia Malaysia USA Australia Malaysia a USA a 6.06 a Note: a Differences significant at the 1 per cent level Table III. Mean idealism scores and t-values for paired comparisons

17 European Journal of Marketing 36,7/8 784 idealism score = 61.28) are found to be significantly more idealistic than Australian managers (mean idealism score = 57.37), who in turn are significantly more idealistic than American managers (mean idealism score = 53.85). As shown in Table IV, there are significant differences in relativism scores of marketers from the three countries (t = 3.11, p < 0.01 between Australian and Malaysian marketers; t = 4.93, p < 0.01 between American and Malaysian marketers; and t = 3.02, p < 0.01 between Australian and American marketers). Malaysian managers (mean relativism score = 40.69) are found to be significantly more relativistic than Australian managers (mean relativism score = 36.96), who in turn are significantly more relativistic than American managers (mean relativism score = 34.46). The above analysis suggests that various country factors might play a differential role in determining the idealism and relativism of marketers. For example, the economic environment and political/legal environment might be having a greater impact on the relativism of marketers. On the other hand, cultural variables such as collectivism, power distance, and Confucian dynamism might be having a relatively greater influence on the idealism of marketers. Since this is the first cross-cultural investigation into moral philosophies of marketers, more work is needed investigating cross-national differences in moral philosophy. H2a states that corporate ethical values positively influence managers idealism and H2b states that they negatively influence relativism. Results indicate corporate ethical values have an influence on both idealism and relativism, with F statistics of and 9.94 (p < for both F s). Therefore, H2a and H2b are supported. These results can be contrasted with those of a similar study by Singhapakdi et al. (1999), where they found that idealism was significantly influenced by CEV but not relativism. H3a states that women are more idealistic than men, and H3b states that women are less relativistic than men. Mixed results were obtained for these hypotheses. While significant gender differences were found on idealism (F = 7.57, p < 0.001), differences in relativism were non-significant. The mean idealism score for men was and that for women was The lack of gender differences on relativism might be a reflection of the fact that women managers in our sample might be as aggressive and competitive as male managers, thus motivating them to a similar degree to attribute certain actions to circumstances. In a similar context, with a sample of American marketers, Mean relativism t-values score Australia Malaysia USA Table IV. Mean relativism scores and t-values for paired comparisons Australia Malaysia a USA a 4.93 a Note: a Differences significant at the 1 per cent level

18 the gender-relativism relationship was also found to be non-significant by Singhapakdi et al. (1999). H4a and H4b hypothesize the effect of age on idealism and relativism. While significant age effects were found on relativism (F = 11.38, p < 0.001), age effects on idealism were non-significant. Mean relativism scores for the four age groups were for the under 30 age group, for the age group, for the age group, and for the 50 and over age group. A closer analysis of the idealism results indicates that although the results are not significant at the 5 per cent level, the mean idealism scores were 55.93, 57.40, 57.70, and from the youngest to the oldest age groups, which are in the hypothesized direction. The direction of results is consistent with that found in earlier studies for the level of work experience by Singhapakdi et al. (1999). Philosophies of marketing managers 785 Implications The findings of this study investigating the variation in moral philosophies of idealism and relativism has potential implications for international companies. Many companies have increased their presence in overseas markets using a variety of methods such as opening subsidiaries, joint ventures, exporting, and licensing. Whether it is an employee in a subsidiary, a joint venture partner, or an exporting partner, it is essential for an international manager to understand the ethical thinking processes of the managers, and their moral philosophies (idealism and relativism) because they can potentially result in unethical acts. In the international marketing arena, cultural, economic, and other differences between international buyers and sellers create the potential conflicts of values, especially in the areas of marketing ethics and social responsibility. Our findings have implications in terms of measures that can be taken to reduce such conflicts, in the interest of establishing enduring international business relationships. This study identified cross-cultural differences in idealism and relativism, and explained their variation across managers with cultural differences and differences in economic and legal/political environment; differences in corporate ethical values; and gender (only on idealism) and age (only on relativism) differences. Even though moral philosophies are individual characteristics, our study shows that the societal environment (cultural, political/legal), as well as the corporate environment, influences the manner in which people evaluate and judge unethical actions, which means that society in general and, more specifically, organizations can shape the moral philosophies of individuals, thereby influencing ethical behavior. The findings of this study can be incorporated in ethics training programs. First, through training international managers can be made aware that people differ in their thinking with regards to ethics and social responsibility, specifically, in terms of idealism and relativism. Second, they can be made aware of the potential reasons for the differences, such as culture, economic and legal/political environment, corporate ethical values, and individual differences. More specifically, scenarios and cases can be developed that