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collectivists perform better working with other members of their in-group than with members of

out-groups or alone. Erez and Somech (1996) have found that individualism-collectivism has amoderating effect on group performance loss.

The individualism-collectivism dimension is actually a syndrome of attributes that differentiate

cultures. Recent work has begun to break down individualism and collectivism into horizontaland vertical components (Triandis, 1995; Chen, Meindl, and Hunt, 1997; Triandis, Chen, and

Chan, 1998). The horizontal dimension of individualism-collectivism focuses on the sameness ofthe self with respect to others. The vertical dimension of individualism-collectivism focuses on

the differences or uniqueness of the self with respect to others. We can thus define fourpossibilities: horizontal collectivism, vertical collectivism, horizontal individualism, and vertical

individualism.

Horizontal collectivism is focused on cooperation with others. It is especially concerned with therelationship of the self to interdependent others. In contrast, vertical collectivism is focused on

duty to the group as a whole. Horizontal individualism deals with an independent self, which

views him or herself as the same as others. The vertical individualist views the independent selfas fundamentally different from other individuals.

Triandis and colleagues relate individualism and collectivism to morality in a number of ways.First, Triandis & Bhawuck (1997) argue that deviations from group norms are much less

tolerated by people in collectivist cultures than by people in individualist cultures. Second, incollectivist cultures, morality is defined in terms of the good of the ingroup, which means the

maintenance of solidarity. Finally, in individualist cultures, equity is preferred over equality,while in collectivist cultures, equity is preferred in dealing with outgroups only, but equality is

preferred in dealing with the ingroup (Triandis, 1994a, 1994b). Given these initial ideas, it islikely that a more thorough examination of the relationship of individualism-collectivism to

morality should prove quite fruitful.

A MODEL OF CROSS-CULTURAL BUSINESS ETHICS

The literature includes several models of the ethical decision-making process, but surprisingly,these models do not provide for a specific role attributable to societal culture (Rest, 1986;

Trevino, 1986; Jones, 1991). Trevinos (1986) comes closest by explicitly including situationalfactors as a moderator of the relationship between moral reasoning and ethical behavior. Trevino

(1992) later argues that Kohlbergs cognitive moral development theory could be used as aframework to study the influence of societal culture on business ethics. This paper builds on

Trevinos (1986, 1992) model because it allows for, although does not explicitly include, societalculture as a situational variable in the ethical decision-making process. In addition, preliminary

research provides support for her model (Trevino and Youngblood, 1990; Trevino, Butterfield,and McCabe, 1998; Wimbush, 1999).

This paper proposes that culture at the societal level, specifically individualism-collectivism, is

another situational factor that moderates the relationship between each of the links in the Trevino

(1986) model. The rest of the paper examines the elements of ethical dilemma, moral

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development, business behavior, and their relationship to individualism-collectivism in greater

detail.

Ethical Dilemma

The Trevino (1986) model, like many other causal models in business ethics, begins with theethical dilemma faced by the businessperson (Brady and Hatch, 1992). There is a causal

relationship between the ethical dilemma and the moral reasoning that results. In other words,this element deals with how and why certain issues are included within the domain of morality

and others are not. The domain of morality refers to the set of activities that are subject tojudgments of right and wrong.

Haidt, Koller, and Dias (1993) have shown that the domain of morality is culturally dependent.

Although activities that harm others physically and psychologically are condemned almost

universally, there is a large group of harmless or victimless practices that may be accepted or

rejected within the domain of morality. Around the world, there appear to be at least three main

codes of moral conduct: the ethics of autonomy, the ethics of community, and the ethics ofdivinity (Shweder, 1990). According to Haidt, Koller, and Dias (1993), the ethics of autonomy is

based on the independent self. The purpose of moral regulation is to increase the autonomy and

choice of the individual. Much of the Western morality is phrased in terms of harm to

autonomous individuals and involves the delineation of rights and justice. In contrast, for the

ethics of community, the self is conceived as a role played with respect to a larger interdependent

group. The central violation of the ethics of community is disrespect. The last moral code is the

ethics of divinity, in which the self is conceptualized as a spiritual entity trying to achieve

holiness. Immorality is conceived in terms of violations of the holiness code. The reaction to

violations of ritual pollution is disgust (Haidt, Koller, and Dias, 1993). This later code is less

common in modern economies than the former two. The problem for a cross-cultural model ofbusiness ethics is to determine why certain practices are included within the domain of morality

of a given culture, while other practices remain excluded.

The moral domain varies significantly according to culture. The individualism-collectivism

dimension affects the inclusion of business practices within the moral domain. Harm, rights, andjustice form the basis for an individualistic ethics, while in collectivist countries duty, hierarchy,

and interdependency are at the crux of what is moral or not (Shweder, 1990). Specifically, onewould expect that for issues that deal with group well-being such as job security, collectivists are

more likely to show concern than individualists, given the same stage of moral reasoning (Nyaw& Ng, 1994: 550). Thus, we propose:

Proposition 1: Given similar levels of moral development, managers from

collectivist cultures are more likely to perceive as unethical, business practices

that adversely affect group welfare than managers from individualist countries.

The horizontal and vertical dimensions of individualism-collectivism also have a significant

impact on the perception of issues as moral. Chen, Meindl, and Hunt (1997) note that the ethicsof horizontal collectivism is focused on interpersonal behaviors, while the ethics of vertical

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collectivism is focused on the behavior of the individual with respect to the organization. The

ethics of vertical collectivism is very similar to the ethics of community mentioned by Haidt,Koller, and Dias (1993). Similarly, one would expect both horizontal individualists and vertical

individualists to be especially sensitive to issues relating to the impact of the organization on theindividual. According to the typology of Haidt, Koller, and Dias (1993), this is the ethics of

autonomy, whose purpose is to increase the autonomy of the individual, without harming others.These issues may very well fall beyond the vision of what is ethical in the collectivist countries.

A sense of these different kinds of issues can be had from Josephsons (1989) QuestionablePractice Inventory.

These questionable practices can be divided into six groups, depending on who is the villain or

perpetrator of the questionable practice and who is harmed by the questionable practice. Thus,we would expect vertical collectivists to be more likely to perceive as unethical those practices in

which the organization is the victim. Horizontal collectivists would be more likely to perceive asunethical those practices in which the relationships between employees are threatened. Both

horizontal and vertical individualists will characterize as unethical those practices that affect

adversely the interests of individuals. Given that collectivists generally give preference to the in-group over the out-group, one would expect that collectivists would be less sensitive to issues inwhich harms inflicted by the organization (in-group) on the larger community or customers (out-

group) than would be individualists. Based on these distinctions, we propose:

Proposition 2: Individuals from cultures characterized by horizontal

collectivism will be less tolerant of questionable business practices that affect

the relationships between employees than will be individuals from other

cultures.

Proposition 3: Individuals from cultures characterized by vertical collectivism

will be less tolerant of questionable business practices dealing with the impact

of employees behavior on the firm and owners than will individuals from other

cultures.

Proposition 4: Individuals from cultures characterized by horizontal or vertical

individualism will be less tolerant of questionable business practices dealing

with the impact of the firm on the employee than will individuals from other

cultures.

Proposition 5: Individuals from cultures characterized by horizontal or vertical

individualism will be less tolerant of questionable business practices dealing

with the impact of companies on their customers than will be individuals from

other cultures.

Moral Development

This element of Trevinos (1986) model focuses on the theory of moral development proposedby Lawrence Kohlberg (1969, 1971), which has been widely used in research to examine the

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reasons individuals use in making moral judgments (Snarey, 1985). Kohlberg's work has also

been used extensively in business ethics research (see Trevino (1992) for a review).

Kohlberg proposed that as people mature and acquire more education and experience, their moralreasoning develops according to a well-defined sequence of stages. Each successive stage

requires more complex thinking and involves the individual's consideration of an increasinglywide range of persons and institutions. Kohlberg divides moral development into three major

levels and six stages: pre-conventional (stages 1 and 2), conventional (stages 3 and 4), and post-conventional or "principled" (stages 5 and 6) reasoning. The pre-conventional level focuses on

the self, while the conventional level focuses on the in-group of family, friends, and peers.Finally, the post-conventional level focuses on society or humanity in general.

There exists some evidence that moral reasoning as conceived by Kohlberg is related to culture

(Snarey, 1985; Rest, 1984). The individualist/collectivist dimension has an implicit conceptualrelation to the Kohlbergian levels of moral development. Kohlbergs stage progression is based

on a sociomoral perspective of expanding awareness of the impact of decisions on the individual,

the in-group, and society (Colby & Kohlberg, 1987). Stage 2 has been called a form ofprimitive individualism by Triandis (1995) because morality depends upon the harms andbenefits of action for the individual decision-maker. This form of moral reasoning in terms of the

consequences of action for the independent self is characteristic of individualism.

Proposition 6: Other things being equal (age, sex, etc.), the more a culture is

characterized by individualism, the more likely that individuals from that

culture will use stage 2 moral reasoning than will individuals from other

cultures.

One would expect that groups from collectivist cultures would be characterized more by

reasoning at the conventional level than would groups characterized by individualism. Stage 3specifically focuses on morality as a function of a behavior's relation to its consequences for

one's in-groupextended family, work companions, etc. Stage 4 evaluates the morality of onesdecision in terms of its compliance with duties to observe uphold the law and order. Thus, we

hypothesize:

Proposition 7: Other things being equal, the more a culture is characterized by

collectivism, the more likely individuals from that culture will use conventional

moral reasoning than will individuals from other cultures.

In contrast, one would expect to find greater post-conventional reasoning in culturescharacterized by individualism because of its focus on impartial rules and principles that apply to

all. In individualist cultures, personal identity is based on the independent self, rather than theinterdependent self (Hofstede, 1997; Earley and Erez, 1993). Gilligan (1982) demonstrates that

the conception of the individual as an independent self is closely related to the rights conceptionof morality that informs Kohlbergs post-conventional level of moral reasoning (stages five and

six). Thus, we would expect individualistic cultures to exhibit greater frequencies of Kohlbergspost-conventional reasoning than collectivist cultures.

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Proposition 8: Other things being equal, the more a culture is characterized by

individualism, the more likely individuals from that culture will use post-

conventional moral reasoning than will individuals from other cultures.

Ethical Behavior

The last element of Trevinos (1986) model consists of the actual behavior that occurs as a result

of the ethical decision-making process. Blasi (1980) reviewed the literature on the relationshipbetween moral reasoning and behavior and found that there is moderate relationship between the

two. However, the relationship between moral reasoning and behavior is moderated by othervariables. Trevino (1986) identifies many of the variables that moderate the consistency between

moral judgment and moral behavior. Specifically, she includes the individual characteristics ofego strength, field dependence and locus of control as well as the situational characteristics of

immediate job context, organizational culture, and the characteristics of the work.

Societal culture should also moderate the relationship between moral reasoning and moral

behavior. We expect people from individualist cultures to exhibit a stronger consistency betweenmoral reasoning and moral behavior than people from collectivist cultures. As Iwao and Triandis(1993) have shown, collectivists tend to accept the discrepancy between their public and private

selves. Individualists view this difference as hypocritical and try to reduce such discrepancies.Thus, individualistic cultures exert pressure on individuals to present oneself in public as one is

[in private] (Iwao and Triandis, 1993: 430). Therefore we propose:

Proposition 9: The greater the individualism of a given culture, the more likely

people from that culture will display consistency between moral reasoning and

moral behavior than will people from collectivist cultures.

CONCLUSION

In this paper, we have examined some of the ways that the individualism-collectivism dimensionmay influence the ethical decision-making of managers as typified in the Trevino (1986) model.

This effort differs from prior ones (Wines & Napier, 1992; Vitell, Nwachukwu, & Barnes, 1993;Cohen, Pant, & Sharp, 1996; Vidaver-Cohen and Nelson, 1994; and Carroll & Gannon, 1997) by

focusing more narrowly on a single dimension of culture as it relates to a specific model ofethical decision-making. The advantage of this approach is that it makes work on cross-cultural

business ethics tractable by analyzing only a single cultural dimension. On the other hand, it maytrivialize the very complex nature of the subject it intends to treat (Geertz, 1973). Yet at this

point in the development of a cross-cultural business ethics, it may be the only way that willproduce managerially relevant knowledge because it does lend itself to testing. While we await

the development of more refined, quantitative indices of the vertical and horizontal dimensions,useful cross-cultural studies in business ethics may be fruitfully conducted on the basis of

appropriate cultural comparisons regarding specific aspects of the ethical decision-makingprocess.

References available from the author.

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