Marketing ethics: a comparison of American and Middle-Eastern marketers

International Business Review 8 (1999) 611–632www.elsevier.com/locate/ibusrev

Marketing ethics: a comparison of Americanand Middle-Eastern marketers

Ashraf Attia a, Mahesh N. Shankarmaheshb,Anusorn Singhapakdic,*

a Marketing Department, School of Business, State University of New York at Oswego, Oswego, NY13126, USA

b School of Business, College of William and Mary, Williamsburg, VA 23187–8795, USAc Marketing Area, College of Business and Public Administration, Old Dominion University, Norfolk,

VA 23529-0220, USA

Abstract

This study compares the moral philosophies, ethical perceptions and corporate ethical valuesof American and Middle-Eastern marketers. Hypotheses are developed on the basis of theirrespective national and organizational cultures. Using a sample of marketing practitioners fromboth countries, empirical support is found for the hypothesis that Middle-Eastern marketersare more likely to be idealistic than their American counterparts. However, no significantdifferences are found on the relativistic dimension of moral philosophy. Also, American mar-keters are found to have higher ethical perception than Middle-Eastern marketers. Finally,contrary to our hypothesized direction, some support is found to indicate that Middle-Easternmarketers are more likely to have higher corporate ethical values than American marketers.Implications of the findings are discussed. 1999 Elsevier Science Ltd. All rights reserved.

Keywords:Marketing ethics; USA; Middle East

1. Introduction

One of the first to recognize the importance of cultural factors in marketing ethicswas none other than Bartels (1967) who contended that “contrasting cultures of dif-ferent societies produce different expectations and become expressed in the dissimilar

* Corresponding author. Tel.:+1-757-683-5129; fax:+1-757-683-5639.E-mail address:[email protected] (A. Singhapakdi)

0969-5931/99/$ - see front matter. 1999 Elsevier Science Ltd. All rights reserved.PII: S0969 -5931(99 )00022-0

612 A. Attia et al. / International Business Review 8 (1999) 611–632

ethical standards of those societies” (p. 23). In recent years, more and more compa-nies are expanding into foreign markets, and the problems of cross-cultural ethicsare becoming more prevalent (e.g. Murphy & Laczniak, 1981; Tsalikis & Fritzsche,1989). Consequently, the relevance of social responsibility and ethics issues in cross-national contexts has come to be of significant interest to scholars. As companiesand their managers have to deal with their counterparts in different countries, there isa need to understand each others’ ethical decision-making processes. Several theoriesexplaining the process of ethical decision-making have been developed (e.g. Hunt &Vitell, 1986; Ferrell & Gresham, 1985). Culture has been featured as a major factorin ethical decision-making in these marketing-ethics theories. Two ethical decisionmaking theories often referred to in the marketing-ethics literature, namely those ofFerrell and Gresham (1985) and Hunt and Vitell (1986) included culture as a keyconstruct. In the contingency model of Ferrell and Gresham (1985), cultural environ-ment is posited to influence the ethical issue in question which in turn precedesindividual ethical decision-making. Hunt and Vitell (1993) considered culturalenvironment as one of the antecedent environmental variables of the ethical decision-making process.

Although there is no dearth of literature dealing with the perceptions and opinionsof American managers in regard to marketing ethics issues (e.g. Mayo & Marks,1990; Reidenbach & Robin, 1990), there are not many studies that examine the cross-national (or cross-cultural) context. Even as marketing scholars have been forayinginto cross-cultural comparisons of ethical perceptions in recent years (e.g. Kennedy &Lawton, 1996; Tsalikis & LaTour, 1995), some of the politically and economicallyimportant and culturally distinct geographic regions such as the “Middle-East” haveattracted little attention so far. The economical and political significance of therelationship between the US and countries of the Middle-East cannot be overstated.In 1994, Middle-Eastern countries accounted for 21% of the petroleum productsvolume supplied to the US (US Department of Commerce, 1995). There is also alarge presence of US based multinationals in the Middle-East. Therefore, ethicsresearch in the Middle-Eastern region can broaden the scope and application of ethi-cal-decision making models. Such research can also assist practitioners to becomemore oriented about other cultures.

The main purpose of this study is to explore the cross-national nature of marketingethics decisions in the Middle-Eastern context. Specifically, the objective is to com-pare US and Middle-Eastern marketers in terms of moral philosophies, ethical per-ceptions, and corporate ethical values. These variables constitute important compo-nents of the marketing-ethics theories such as those of Hunt and Vitell (1993) andFerrell and Gresham (1985). To date, there has been no empirical work on culturaldifferences between American and Middle East marketing practitioners regardingtheir moral philosophies or other aspects of ethical decision-making. Previous studiesconcerning ethical attitudes in the Middle-Eastern region have been few and farbetween. Rawwas, Vitell and Al-Khatib (1994) examined the ethical beliefs andideologies ofconsumersin the Middle-Eastern region. Handy (1990) performed aninvestigation into the education and development of 200 Middle-Eastern executivesin notably successful organizations. The executives listed and ranked the ten most

613A. Attia et al. / International Business Review 8 (1999) 611–632

important factors contributing to their success. Ethics was listed as the fourth mostimportant factor and many respondents mentioned the deep influence of Islamic reli-gion on their success (Handy, 1990). Thus, there may well be significant value inpractitioners studying ethics as a requirement for successful business developmentin the Middle-East. Our study intends to focus on Middle-Eastern ethics issues.

The rest of the paper is organized as follows. In the next section, the theoreticalfoundation is established and hypotheses are built taking into consideration the vari-ous aspects of cultural differences between the US and the Middle-East. Then, thesample and methodology are explained. Finally, the results of the study are presentedand the findings are discussed along with relevant implications.

2. Theoretical foundation and hypotheses

2.1. Hofstede’s cultural typology

Hofstede’s cultural typology has been extensively used by authors exploring cross-cultural ethics (e.g. Nyaw & Ng, 1994; Singhapakdi, Vitell & Leelakulthanit, 1994;Tsalikis & Nwachukwu, 1991). In this subsection, Hofstede’s dimensions are brieflyreviewed and American and Middle-Eastern societies are contrasted along thesedimensions. According to Hofstede (1984), culture can be defined as “the collectiveprogramming of the mind which distinguishes the members of one category of peoplefrom those of another” (p. 389). Hofstede provided four major cultural dimensionsthat can be used to distinguish people of one society from those of another. These areindividualism-collectivism, uncertainty avoidance, power distance and masculinity-femininity. According to Hofstede’s typology, in individualistic cultures such as theUS, individuals are concerned primarily with their own interests, whereas in collec-tivistic societies such as Middle-Eastern countries, individuals see themselves asmembers of a larger group with which they exchange loyalty and obligation forsocial protection. Furthermore, Hofstede defined uncertainty avoidance as the extentto which those in a culture become nervous by situations that are unstructured andunpredictable and therefore attempt to avoid these situations by adopting strict codesof behavior. Societies such as those of the Middle-East that are strong in uncertaintyavoidance tend to be emotional, security-seeking and intolerant. Conversely, culturessuch as the US that are weak in uncertainty avoidance tend to be more tolerant, risk-accepting and less emotional. In addition, Hofstede defined power distance as theextent to which individuals in a society accept inequality in power and consider itas normal. According to Hofstede, countries with a larger power distance such asthose of the Middle East are more likely to accept inequality in power and authoritythan those from a country with a smaller power distance such as the US. Finally,according to Hofstede, masculine cultures such as the Middle Eastern countries andthe US are those that value material success and assertiveness more than nurturanceand caring that are characteristic of feminine cultures. To conclude, Middle Easternpeople are different from Americans along three dimensions, even as they share the


same classification along the dimension of masculinity-femininity. Table 1 providesa compact summary of these cultural contrasts.

2.2. Moral philosophies

Marketing-ethics theorists such as Ferrell and Gresham (1985), Hunt and Vitell(1986), and Ferrell, Gresham and Fraedrich (1989) generally agree that marketerswill apply ethical norms and guidelines based on different moral philosophies (orpersonal ethical systems). Singhapakdi, Kraft, Vitell and Rallapalli (1995) addedthat social psychologists also consider moral philosophies to be significant factorsinfluencing ethical judgements of individuals. According to Forsyth (1980), ethicaljudgements may be explained by taking into account two aspects of moral philo-sophies, idealism and relativism. He definedidealismas “the degree to which individ-uals assume that desirable consequences can, with the right action, always beobtained”, andrelativismas “the extent to which an individual rejects universal moralrules when making ethical judgments” (p. 175–6). Relativists weigh the circum-stances of the situation more than the ethical principle that was violated, whereashighly idealistic individuals see that harming others are always avoidable and theywould not choose between the lesser of two evils leading to negative consequencesto other people (Forsyth, 1992).

In previous empirical marketing-ethics studies, moral philosophies were found toinfluence ethical decisions. For example, Vitell, Rallapalli and Singhapakdi (1993)found that less relativistic and more idealistic marketers tended to exhibit higherhonesty and integrity compared to more relativistic and less idealistic marketers.Consistently, Vitell and Singhapakdi (1993) inferred that ethical judgements anddeontological norms of marketers can be partially explained by personal moral philo-sophies. In particular, the authors articulated that both dimensions of moral philo-sophies influence deontological norms of marketers: idealism influences deontologi-cal norms in the positive direction, whereas relativism influences deontological normsin the negative direction. Although they concluded that a marketer’s moral philo-sophies do affect ethical judgements, they also found that the extent of influencevaries with the situation. In a comparative study between the US and Thailand,Singhapakdi et al. (1994) found Thai marketers to be both more idealistic and morerelativistic than American marketers. Singhapakdi et al. (1995) empirically estab-lished that idealism positively influences a marketer’s perception of the importanceof ethics and social responsibility in achieving organizational effectiveness, whereas

Table 1Summary of cultural typology: the Middle-East vs the US

Power distance Individualism Masculinity Uncertaintyavoidance

Middle East Large Low individualism Masculine StrongUS Small High individualism Masculine


relativism negatively influences the marketer’s perception of the importance of ethicsand social responsibility in achieving organizational effectiveness.

While comparing American and Middle-Eastern marketers regarding their idealismand relativism, since the Middle-Eastern culture is stronger in uncertainty avoidance,larger in power distance, and low in individualism, it is expected that it would placemore importance on codes of behavior. Strict adherence to the laws of Islamic reli-gion in the Middle-East would also reinforce deontological norms and codes of con-duct in the personal ethical systems ofindividuals. Therefore, we argue that Middle-Eastern marketers will be more idealistic since adherence to the moral absolutes ofidealism represents not only a reduction in uncertainty but also increases the senseof collectivistic loyalty to the encompassing group or society. In addition, we contendthat Middle-Eastern marketers are more likely to follow formal rules relative to theirAmerican counterparts. Consequently, by definition, they are likely to be less rela-tivistic than American marketers. This reasoning is consistent with the argumentsmade by Vitell, Nwachukwu and Barnes (1993, pp. 756–7). Thus, the followinghypotheses are offered:

Hypothesis 1: Middle-Eastern Marketers will be more idealistic than Amer-ican Marketers.

Hypothesis 2: Middle-Eastern Marketers will be less relativistic than Amer-ican Marketers.

2.3. Perceived ethical problem

Ethical perception is concerned with an individual’s recognition of a moral issue,and the realization that he or she is a moral agent (Jones, 1991). Ethical perceptionis the catalyst driving the entire ethical decision making process (Hunt & Vitell,1986). A person that does not recognize an ethical issue will not employ ethicaldecision making schemata, but will instead use other criteria like economic ration-ality (Jones, 1991).

As mentioned earlier, of the four cultural dimensions of Hofstede (1984) measuredin the context of organizations in different countries, the US and the Middle-Eastdiffer substantially with respect to individualism, power distance and uncertaintyavoidance. In a recent empirical study of Australian, Malaysian, and Singaporeanmanagers, Armstrong (1996) found a strong link between individualism and per-ceived importance of ethical problems. In collectivistic societies, the individual is“outer directed,” and controlled by the need to save face by meeting the group’srequirements (Armstrong, 1996). Also, managers in societies characterized by lowpower distance are less likely to accept their superiors’ questionable practices(Nyaw & Ng, 1994). Vitell et al. (1993) argued that marketers in a society that ishigh in uncertainty avoidance would be less likely to perceive ethical problems than


their counterparts in a country which is low in uncertainty avoidance. Americanmanagers characterized by high individualism, low power distance and low uncer-tainty avoidance are less likely to conform to informal pressures than Middle-Easternmanagers characterized by low individualism, high power distance and high uncer-tainty avoidance.

Moreover, there is overwhelming empirical research in support of the higher levelsof ethical perception of American managers and business students when compared tothose from other countries. Examples of such studies include comparisons of ethicalperceptions of American and New Zealand business students (Okleshen & Hoyt,1996), American and Ukrainian business students (Kennedy & Lawton, 1996), Amer-ican and Greek business students (Tsalikis & LaTour, 1995), American and Nigerianbusiness students (Tsalikis & Nwachukwu, 1991), American and British managers(Robertson & Schlegelmilch, 1993), American and Thai marketers (Singhapakdi etal., 1994), American, Taiwanese and Australian business students (Allmon, Chen,Pritchett & Forrest, 1997), American and Taiwanese automotive salespeople(Honeycutt, Siguaw & Hunt, 1995), and American and Taiwanese managers(White & Rhodeback, 1992). Therefore, the following hypothesis is positied:

Hypothesis 3: Middle-Eastern marketers are less likely to perceive ethical prob-lems than American Marketers.

2.4. Corporate ethical values

That organizational culture has a tremendous impact on the ethical standards ofindividuals has been well established in the literature. According to Robin and Reid-enbach (1987), a key factor in developing successful socially responsible and ethicalmarketing programs is management’s ability to integrate core ethical values into itsorganizational culture. Hunt, Wood and Chonko (1989) mentioned that the centraldimension of organizational culture is corporate ethical values defined as “a com-posite of the individual ethical values of managers and both the formal and informalpolicies on ethics of the organization.” The authors concluded by saying that a strongpositive relationship exists between corporate ethical values and organizational com-mitment. Weeks and Nantell (1992) found that well communicated codes of ethicsled to increased ethical standards and superior job performance of sales people inthe American context. Singhapakdi et al. (1995) empirically established that corpor-ate ethical values positively influence a marketer’s perceptions of the importance ofethics and social responsibility in achieving organizational effectiveness.

Mudrack and Mason (1996) found that organizational interests supersede conven-tional individual ethics for both “self-interested”, and “non self-interested” individ-uals. The contention that organizational pressures, and not individual moraldeficiencies, account for unethical standards is widely held by several authors (e.g.Posner & Schmidt, 1984; Wahn, 1993; Gottlieb & Sanzgiri, 1996; Ford & Richard-son, 1994). An organization that seeks to foster an ethical environment will not onlyhave a professional code of ethics, but also the willingness and commitment to


enforce it. Managers consider modifying the morality of their actions not just onstated organizational concern, but only when specific sanctions are attached formanagerial misconduct (Laczniak & Inderrieden, 1987). A large number of majorAmerican firms distribute codes of ethics to all employees, and use legal and humanresources departments to communicate codes of ethics (Robertson & Schlegelmilch,1993). The use of legal departments points to the seriousness regarding the enforce-ment of codes of ethics.

The moral climate in American society seems to be at a high pitch with increasedawareness at all levels ranging from the general public to business students to practic-ing managers. Stark (1993) points to an “ethics boom” with over 75% of America’smajor corporations actively attempting to build ethics into their organizations, and90% of America’s business schools providing some sort of ethical training. Althoughthe US shares a common Judeo Christian heritage with most other capitalist nations,even these countries consider the current level of American interest in business ethicsto be “excessive” (Okleshen & Hoyt, 1996). Aggressive journalism (Okleshen &Hoyt, 1996), heightened business and academic interest, increased expectations ofpenalties for unethical behavior, and re-evaluation of confidence in institutions(Gottlieb & Sanzgiri, 1996), are some of the major factors that contribute to the“ethics boom.” On account of strict adherence to the deontological norms and societalcodes of behavior derived from the Islamic faith and the generally high uncertaintyavoidant nature of the Middle-Eastern society, it can be expected that Middle-Easternorganizations will also place a high premium on corporate ethical codes. Marketingand other business managers need to understand Islam and its basic laws as a practi-cal business necessity (Abbasi, Hollman & Murrey, 1989; Marriott, 1986).

Even as both societies have the tendency to hold formal codes of ethics in highregard, one has to look at the informal organizational climate influencing the actualadherence to ethical codes. The ethical climate of the organization, that is the subcul-tures within the organization including the opinion of one’s peers and immediatesuperiors, greatly affects the ethicalness of an individual moral agent (Verbeke,Ouwerkerk & Peelen, 1996). Managing the informal climate is pivotal, and havingformal codes of ethics is necessary but not sufficient in building an ethical organiza-tion (Soutar, McNeil & Molster, 1994; Falkenberg & Herremans, 1995). Thebehavior of one’s superiors is cited as the primary influence for unethicalness bymanagers in many countries (Posner & Schmidt, 1987; Gupta & Sulaiman, 1996).To analyze which of the two groups of managers will tend to conform with informalpressures, one will have to examine the cultural and organizational aspects. Tuncalp(1988) mentioned that decision-making is highly centralized in Middle-Easternorganizations with most decisions being made by the owners on the basis of theirexperience and intuition. Such a highly centralized structure combined with high-power distance and collectivistic nature of the Middle-Eastern culture makes it veryunlikely that individuals would take an independent stand in the face of unethicalpractices. In a three country study of Taiwan, Australia, and the US, Allmon et al.(1997) found that aligning with the company’s interests seemed to be the preoccu-pation of the collectivist Taiwanese. In collectivistic societies, individual ethics willtend to hover around the norms established by peer groups and social consensus


thereby yielding to informal pressures to conform to existent unethical practices.Hence, the following hypothesis is presented:

Hypothesis 4: American organizations are more likely to have higher corporateethical values than Middle-Eastern firms.

3. Methodology

3.1. Sample

3.1.1. American marketersA self-administered questionnaire was used as the data collection technique for

American managers. For the American group, a national mailing list of professionalmembers of the American Marketing Association (AMA) was used as the samplingframe. A total of 2000 target respondents were sampled from a list of over 14,000US practitioner members with primary areas of interest in marketing managementand sales management. Of the 1997 delivered, 453 responded resulting in a responserate of 23%. 446 complete responses were usable. The response rate is comparableto previous marketing ethics studies that have also used AMA mailing lists (e.g.,Hunt & Chonko, 1984).

The characteristics of the sample are summarized in Table 2. About half of theUS respondents were men (51%), with the majority (37%) being between 30 and39 years old. Overall, the respondents were highly educated with 30% having anundergraduate degree and 63% having some graduate education. The majority ofrespondents were in middle management positions. The respondents represented vari-ous industries with the largest group from the service sectors.

3.1.2. Middle-Eastern marketersAt the outset, it should be mentioned that conducting marketing research in the

Middle-Eastern region is a challenging task. As a matter of fact, Tuncalp (1988)mentioned four environmental factors which influence the level of research activityin Saudi Arabia, which can be generalized to all Middle East countries. First, mostof the local companies have not set up marketing departments, the primary conduitfor marketing research. Second, there is a shortage of organizations and professionalswho can provide a research capability. Third, the decision making framework is acentralized one. Most decisions are made by the owners based upon their experienceand intuition. Finally, the cultural environment encompassing religion, language, cus-toms, social etiquettes and laws constitute a strong barrier toward conductingresearch. Even as these barriers are diminishing in recent years with advances intechnology and relative convergence of business practices as witnessed by more localcompanies setting up marketing departments and more international organizations


Table 2Profile of respondents

Americans (%) Middle Easterns (%)

Sex:Male 51.4 88.1Female 48.6 11.9

Age:Under 30 17.0 47.330 to 39 36.9 40.340 to 49 29.7 7.750 to 59 13.0 4.760 and over 3.4 0

Educational Level:High school or less 1.4 9.9Some college 6.1 22.1Bachelors degree 29.8 59.5Some graduate school 13.3 5.3Masters degree 42.7 3.1Doctorate 6.8 0

Job Title:President/Owner 18.0 7.6Vice President 11.6 3.1Corporate MGR/Direct 17.0 3.1Division/Product MGR 28.4 16.8District Manager 14.3 11.5Junior Analyst/Sales 7.7 50.4Others 3.0 7.6

Industry:Wholesale/Retail 11.0 55.8Manufacturer/Construction 16.6 21.0Services 33.4 11.6Communications 8.7 4.3Advertising/Public relations 7.0Marketing 17.3 0.7Education 2.2Others 3.8 2.2

Years of Experience:Less than 10 years 29.4 73.910 to 19 years 38.7 18.920 to 29 years 21.3 5.030 to 39 years 7.9 2.940 to 49 years 2.2 0.050 to 59 years 0.3 0.0More than 60 years 0.2 0.0

conducting marketing research in the area, significant differences continue to existin the form of cultural barriers.

In the Middle-Eastern context, the questionnaire was translated to the formal Ara-bic language by a bi-lingual expert. It is noteworthy that although the three Middle-


Eastern countries investigated in this study, namely, Egypt, Jordan and Saudi Arabiause informal versions of the Arabic language in speech with different accents, whenit comes to written Arabic, all the three nations use a standardized formal version(Beeston, 1970). After the original translation, another bi-lingual expert verified thetranslation independently. Finally, a marketing consultant based in the Middle-Eastchecked the cultural and professional appropriateness of the translated Arabic ques-tionnaire. Data-collection was accomplished through convenience samples from threeMiddle Eastern countries: Egypt, Jordan, and Saudi Arabia. According to Tuncalp(1988), researchers are obliged to use a non-probability sampling since it is verydifficult to draw a probability sample in the Middle East. Tuncalp added that col-lecting data through personal or telephone interviews, or through mail are extremelydifficult and unsuccessful. The non-probability sampling method is the “most appro-priate” in the Middle-Eastern context (Tuncalp, 1988). Parasuraman (1986) also con-tended that convenience sampling seems appropriate for data-collection in Middle-Eastern countries.

One hundred and thirty-eight questionnaires were collected and 134 of them wereusable. The country-wise breakdown is as follows: 63 from Egypt, 63 from Jordan,and eight from Saudi Arabia. All the three countries share a common culture drivenby a uniform religion and language. In his cultural typology, Hofstede grouped allthe Middle-Eastern countries into one category. For the sake of comparison with USmarketing practitioners, we too combine the marketing practitioners of the threeMiddle-Eastern countries into one group. As seen from Table 2, most of the respon-dents in the Middle-Eastern sample were men (88%) with the majority less than 40years old (88%). Concerning the education level, 60% of the respondents were hold-ers of undergraduate degrees. Half of the respondents (50%) were junior analysts orsales representatives. Finally, 58% of the respondents were employed in thewholesale/retail industries.

A comparison of the profiles of American and Middle-Eastern respondents indi-cates an increased degree of differences. For example, 88% of Middle-Easternrespondents were male compared to only 51% for the American sample. In the con-text of gender differences, it is noteworthy that Hofstede (1984) classified the MiddleEastern culture as more masculine than the American culture. In addition, althoughthere is a difference in gender distribution between the two groups, given the mixedfindings regarding the role of gender as a determinant of marketing ethics decisions(e.g. Chonko & Hunt, 1985; Hegarty & Sims, 1978; Singhapakdi & Vitell, 1990)and the fact that the sample distribution represents the actual profile of managers incorporations in the two societies, we regard gender in-equivalence between the twosamples to be less of a concern in our study.

Another demographic difference between the Middle-Eastern and Americangroups is in the occupation dimension. While 50% of Middle East respondents ident-ified themselves as junior analysts or sales representatives, only 8% of Americanrespondents fell under that category. This discrepancy will have to be considered inthe practical context of the Middle-Eastern society where most local companies donot have sophisticated marketing departments or marketing professionals and thewords “sales” and “marketing” are used interchangeably (Tuncalp, 1988). Marketing


in the Middle-East is mainly concentrated on sales related activities and this is thenature of business operations in these countries. Other demographic differences (age,educational level, industry type, and years of experience) between the Middle-Easternand American groups can be attributed to the differences in the occupation dimensionas sales representatives tend to be younger with lower education levels and feweryears of experience compared to their counterparts at the middle and upper echelonsof the organization.

3.2. Measuring instrument

3.2.1. Moral philosophiesThe Ethics Position Questionnaire (EPQ) developed by Forsyth (1980) was used

to measure moral philosophies (See Appendix A). The EPQ consists of a twenty-item scale with items 1–10 measuring idealism and items 11–20 measuring relativ-ism. Following Forsyth’s (1980) approach, a nine-point Likert scale was used formeasurement purposes with “1” representing “Completely Disagree” and “9” rep-resenting “Completely Agree.” For each respondent, the idealism score was com-puted by adding the scores of all idealism items together. A high score indicatesthat the respondent tends to favor “moral absolutes” when making moral judgements,whereas a low score indicates that the respondent does not tend to favor “moralabsolutes” when making moral judgements. Similarly, the relativism score was com-puted by adding the scores of all relativism items together. Accordingly, a high“relativism” score indicates that the respondent tends to rely less on universal moralrules when making moral judgements, and a low score indicates the opposite.

3.2.2. Ethical perceptionsEthical perception was measured using an instrument consisting of two scenarios

involving ethical situations. Scenarios are commonly used as part of research instru-ments in marketing ethics studies (e.g., Laczniak, Lusch & Strang, 1981) and aregenerally considered a good solution to improve the quality of data from question-naires (Singhapakdi, Vitell & Kraft, 1996). Also, the use of scenarios helps to stan-dardize the social stimulus across respondents, and at the same time makes decision-making situations more real (Alexander & Becker, 1978, p. 103). The two scenariosused in this study (See Appendix B) represent areas of marketing such as salesmanagement and retailing. These scenarios were adapted from Dornoff and Tank-ersley (1975).

After exposure to each scenario, respondents were asked whether the situationdescribed in the scenario involved an ethical problem. This was measured by askingthe respondents the extent to which they agreed or disagreed with the statement “Thesituation above involves an ethical problem” on a nine point Likert scale with 1representing “Completely Disagree” and “9” representing “Completely Agree.” Ahigh score indicates that they perceive an ethical problem in the situation.


3.2.3. Corporate ethical valuesThis construct was measured using the approach of Hunt et al. (1989) (See Appen-

dix B) in order to capture three broad-based perceptions: (A) the extent to whichemployees perceive their managers acting ethically in their organizations, (B) theextent to which employees perceive their managers as concerned about ethical issuesin the organization and (C) the extent to which employees perceive that ethical(unethical) behaviors are rewarded (or punished) in their organizations. A nine-pointLikert scale was used for the measurement of the corporate ethical values with a“1” representing “Completely Disagree” and a “9” representing “Completely Agree.”

4. Results and discussion

All hypotheses were tested using Analysis of Variance (ANOVA) in order to findany significant differences between the two groups regarding their moral philo-sophies, ethical perceptions, and corporate ethical values. The ANOVA results alongwith the group means for all marketing ethics variables are summarized in Table 3.

4.1. Moral philosophies

On “idealism,” the first dimension of moral philosophy, Middle-Eastern marketershave higher mean scores (69.59) than American marketers (62.56). The differencesare significant at the 5% level. Therefore, hypothesis H1 is supported. With respectto “relativism,” the second dimension of moral philosophy, American Marketers havelower means scores (45.27) than Middle-Eastern marketers (47.13). However, thedifferences of means are not statistically significant. Therefore, hypothesis H2 isnot supported.

Table 3Analysis of variance: American vs Middle Eastern marketing professionals

Variables Means F-ratio Sign level

Americans Middle Easterns

Personal moralphilosophiesIdealism 62.56 69.59 27.31 0.000Relativism 45.27 47.13 1.24 0.266Perceived ethical problemScenario 1 7.61 6.17 41.79 0.000Scenario 2 8.09 6.11 75.58 0.000Corporate ethical values 33.72 35.12 3.65 0.057


4.2. Ethical perceptions

For both the scenarios, American marketers (means scores 7.61 and 8.09respectively) perceive the situation to involve an ethical problem more than Middle-Eastern managers (mean scores 6.17 and 6.11 respectively). The differences are sig-nificant at the 5% level for both scenarios. Therefore, hypothesis H3 is supported.

4.3. Corporate ethical values

For this construct, contrary to our hypothesis, Middle-Eastern marketers havehigher mean scores (35.12) than American marketers (33.72). The differences ofmeans are significant at the 90% confidence level. Therefore, hypothesis H4 is notsupported.

On the basis of our results, Middle-Eastern marketers are more idealistic thanAmerican marketers. That is, Middle-Eastern marketers are more likely to accept theabsolutism of idealism than American marketers. The results do not provide supportfor any differences between the two groups with respect to the dimension of relativ-ism. The results from the first two hypotheses are quite interesting in that Middle-Eastern marketers rank higher than their US counterparts in both idealism and relativ-ism although there are no statistically significant differences with respect to relativ-ism. It is noteworthy that idealism and relativism are not opposite poles of a moralphilosophy continuum. While idealism denotes concern for the welfare of others,relativism points to judging the morality of actions based on the situation at hand(Forsyth, 1992). It is quite possible that an individual can pay close attention tosituational factors while making a moral judgment in order to avoid potential harmto others. Thus, there is no inherent conflict between relativism and idealism. Thehigher score of Middle-Eastern marketers with respect to idealism is along hypothes-ized lines and can be attributed to the overwhelmingly deontological leanings ofMiddle-Eastern societies. This is not surprising as the Middle-Eastern countriesinvestigated in the study are influenced by strict Islamic laws. As a matter of fact,Luqmani, Yavas and Quraeshi (1987) classify Middle-Eastern countries such asSaudi Arabia as “religious dominant” as opposed to “culture dominant” as they seekto point out the pervasive influence of religion on all other aspects of Middle-Easternculture. The authors articulated in the following manner:

The Islamic laws known as sharia are the master framework to which all legis-lation, existing and proposed, is referred and with which it must be compatible.The sharia is a comprehensive code governing the duties, morals and behavior ofall Muslims, individually and collectivelyin all areas of life, including com-merce… In Western legal terminology, the absolute and irrevocable injunctionsin the Quran, are analogous to code laws. (Luqmani et al., 1987, p. 61).

Thus, both the high idealism of Middle-Eastern marketers at the individual leveland deontologism at the collective level have the “absolute and irrevocable” Quranicinjunctions as their common source. High idealism of Middle-Eastern marketers is


also consistent with the collectivistic nature of Middle-Eastern societies where everyindividual strives not just for his or her own welfare but for the welfare and harmavoidance of the society at large. However, it is still puzzling that Middle-Easternmarketers also have higher relativism scores than US marketers although the differ-ences are not significant. Relativism has its origins in teleology or situational ethicswhich is far removed from deontologist absolutes. One possible explanation can bethat since Middle-Eastern societies are high in power distance exemplified by reign-ing monarchies in polity, the individuals involved in a moral action and their societalstatus may play a role in moral judgment. After all, relativists judge the morality ofan action based on the situation and the individuals involved (Forsyth, 1992).

The results of the first two hypotheses can also be analyzed in the context ofForsyth’s (1992) taxonomy of personal moral philosophies. The taxonomy groupsfour kinds of ideologies based on the combination of low and high levels of idealismand relativism. The four categories are situationists (high relativism, high idealism),subjectivists (high relativism, low idealism), absolutists (low relativism, highidealism) and exceptionists (low relativism, low idealism). Since the findings of thisstudy on relativism are not clear-cut, on the basis of idealism alone, US marketerscan either be subjectivists or exceptionists. Likewise, Middle-Eastern marketers caneither be situationists or absolutists. While previous studies analyzing aspects ofMiddle-Eastern culture (e.g. Luqmani et al., 1987) have pointed to its absolutistnature, prior research in the US context has highlighted its exceptionist nature (e.g.Singhapakdi et al., 1994). Although exceptionists are aware of the role of moralabsolutes in ethical judgment, they are pragmatic and utilitarian making exceptionsto ensure the best for all concerned (Forsyth, 1992).

According to our findings regarding Hypothesis 3, Middle-Eastern marketers areless likely to perceive ethical problems than American marketers under the two scen-arios. Clearly, within their cultural context, these situations are not likely to beregarded as containing ethical content. This finding is consistent with the conclusionsof a number of earlier studies that American respondents have higher ethical percep-tion compared to respondents from several other countries (e.g. Tsalikis & Nwa-chukwu, 1991; Robertson & Schlegelmilch, 1993). Since ethical perception is influ-enced by the environment (Hunt & Vitell, 1993), ethical awareness in a society suchas the US can be high as a result of heightened media interest in ethical issues.However, an increase in ethical perception does not automatically lead to an increasein ethical behavior. Forsyth and Berger (1982) contended that even differences inmoral judgment do not necessarily imply differences in moral behavior. Thus, thefindings only point to the need to make more formal inquiries on the environmentalinfluences that affect ethical perception in the Middle-East.

The results of Hypothesis 4 provide some support (at the .10 level) to indicatethat Middle-Eastern organizations have higher corporate ethical values compared toAmerican firms. A possible explanation for this unexpected finding could be thatthe encompassing deontological norms of the Middle-Eastern society with its moor-ings in Islamic laws are reflected in both formal and informal aspects of Middle-Eastern organizations. Our original argument was that even though organizations inboth cultures value formal codes of behavior, when there is pressure from the top


to violate these codes, employees from collectivistic societies such as those of theMiddle-East would tend to toe the official line rather than those from individualisticcultures such as the US. The results indicate that there is no such pressure and alllevels of organization are significantly influenced by the overall deontological normsof the larger society. Moral absolutists such as Middle-Eastern societies usually havea strong belief in the primacy of the organization and such beliefs can be traced toorganizational systems and consistent exposure to pervasive code of ethics(Giacalone, Fricker & Beard, 1995). As Luqmani et al. (1987) indicated, since bothindividuals and collectivities are influenced by the overall deontologist norms of thesociety, organizations may not be an exception to that. Thus, organizational codesof ethics may also be implemented strictly in the spirit of absolutism fostering highcorporate ethical values in Middle-Eastern organizations.

5. Limitations

The results of this study should be appreciated in the context of the difficultiesof conducting international marketing research, particularly on a sensitive topic suchas marketing ethics. While this exploratory study is just one comparison betweenAmerican and Middle-Eastern marketers, the larger issue is one of general cross-cultural differences in terms of business/marketing ethics. Caution should be exer-cised in attempting to generalize the findings of this study because of its limitations.One limitation of this study concerns the demographic differences across the twosamples regarding gender, age, occupation, educational level, industry, and yearsof experience. Although these demographic measures cannot always be identicallyinterpreted across cultures and the sample is quite representative of the organizationalmake-up in the two societies, one cannot rule out the possibility that the results ofthis study may be attributed to these differences. Another limitation arises from theway the two samples were collected: a random sample in the US vs a non-randomsample in the Middle-East even as non-random sampling seems to be the only wayout in this region as explicated by Tuncalp (1988) and Parasuraman (1986). A thirdlimitation is that the Middle-Eastern sample size is relatively low when comparedto that of American respondents. A larger sample, although difficult to collect in theMiddle-Eastern region, would have been desirable.

Methodological issues such as multiple item measures instead of single item meas-ures for the constructs will have to be addressed in future. Future studies shouldalso use more rigorous methods to examine cross-cultural measurement equivalence(Hulin, 1987) than the scale translation/verification method employed in this study.Although we believe in the cross-cultural applicability of the scenarios and verifiedthe same with a local marketing consultant, scenarios developed in the context ofother countries (other than the US) can also be used to improve cross-cultural val-idity. Such studies will improve the universal applicability of ethics concepts. Theapproach used in this study is essentially “Pseudo–Etic” (Triandis & Marin, 1983)with the scenarios developed in one culture (US) applied in another culture (theMiddle-East). Although the “Pseudo–Etic” approach helps to identify more cultural


differences than those that occur by chance, future studies should adopt a morefruitful “Etic plus Emic approach” by employing ethical scenarios developed in othercountries as well (Triandis & Marin, 1983). Future studies need to address not onlythe above-mentioned issues related to methodology but can also extend the scopeof this study by exploring other marketing-ethics concepts such as “perceived moralintensity” (Jones, 1991) and “ethical intention.” Measures of ethical intention, whichis mid-way between ethical perception and ethical behavior in marketing ethics mod-els, can shed more light on whether ethical perception actually translates intobehavioral intent.

6. Managerial implications

The practical implications of this study are quite wide-ranging. Keeping in mindthat the Middle-Eastern region has been consistently ignored in cross-national com-parisons of ethics and values, this study fills a significant gap. Results of this studyindicate fundamental differences in moral ideologies between US and Middle-Easternmarketers. While Middle-Eastern marketers come across as moral absolutists deriv-ing their personal moral philosophies from the encompassing deontologist mores ofthe society, US marketers are more of the teleologist type (Giacalone et al., 1995)placing more importance on situational aspects. This difference is moral ideology isin fact an indication of an overall difference in value orientation of US and Middle-Eastern marketers. It is quite necessary for international marketers in such situationsto avoid a culture-clash. Forsyth (1992, p. 468) noted the following:

Individuals in the business community must operate within the limits thatsociety places upon them; so long as these limits are violated, ethical and valueconflicts will continue to disrupt our economic system, and endanger both thereputation and the effectiveness of business.

The above observation is of more relevance to international marketers. Inter-national marketers should refrain from using “Self Reference Criterion (SRC)” orunconscious reference to one’s own values in making decisions (Cateora, 1996). Thefollowing sequence of steps have been suggested to avoid using the SRC:

Step 1: Define the business problem in home country cultural norms.Step 2: Define the business problem in foreign country cultural norms.Step 3: Isolate the SRC influence in the problem and examine it carefully to seehow it complicates the problem.Step 4: Redefine the problem without the SRC influence and solve for the opti-mum business goal situation. (Lee, 1966, p. 106–11)

Both US marketers operating in the Middle-East and Middle-Eastern marketersoperating in the US can apply the above steps to analyze cross-cultural ethical situ-ations. For example, from a US marketer’s perspective, the ethical issue at hand


should be defined from the teleologist or exceptionist perspective (US) and then thedeontologist or absolutist perspective (Middle-East). It is noteworthy that excep-tionists do recognize the importance of deontologist norms but do not hesitate tomake exceptions when the situation demands. However, such exceptions would notbe acceptable to moral absolutists. Thus, to avoid the SRC, US marketers in theMiddle-East will have to essentially adopt a deontologist approach in accord withMiddle-Eastern surroundings. After all, the Middle-Eastern situational factorsdemand adopting a deontologist approach and a teleologist, by definition, should nothave a problem accommodating situational constraints in ethical judgment even ifit means adopting a deontological perspective to match the situation!

The findings in this study that American marketers have higher ethical perceptionthan Middle-Eastern marketers does not imply that American marketers can resortto less ethical ways in functioning in the Middle-Eastern context. In fact, people aremore critical of unethical actions of foreign managers than local managers, especiallyin domestic settings (Tsalikis & Nwachukwu, 1991). Moreover, Bowie (1990)stresses the need to adhere to universal moral principles rather than adopt host coun-try standards. Also, the ethical climate, organizational culture, and the society’s over-all moral climate are not static factors by any means. In any country, changes takeplace over time, and sometimes even at a rapid pace. For example, business ethicswas considered to be an “oxymoron” in the US in the 1960s; increased awarenessof ethical issues began only in the 1970s with the explosion of scandals like Waterg-ate and bribery in high places (De George, 1987). In this age of faster diffusion ofmanagement practices due to advancement in technology and increased mobility ofmanagers, the discrepancies in ethical standards between countries might narrowdown faster than one might expect.

In fostering an ethical environment in their subsidiaries in the Middle-East, USbased multinationals need to focus on formal corporate codes of ethics as formalcodes are strictly adhered to by employees of Middle-Eastern organizations. How-ever, such codes should keep in mind the essential differences in culture and context.Results of our study indicate that Middle-Eastern and American managers differednot only in the idealistic dimension of moral philosophy but also in their perceptionsof whether the scenarios involved an ethical issue or not. Therefore, before proceed-ing on to imbibe a formal code of ethics, the basic perceptual differences need tobe addressed. In order to successfully conduct business in the Middle-East, US multi-nationals need to understand the essential nature of cultural differences especiallythe Islamic religion and its basic laws as these permeate the ethical attitudes of thesociety as a whole including its organizations.

Differences in ethical perceptions among managers from different countries tendto diminish with systematic ethical training (Okleshen & Hoyt, 1996). Since ethicaldecision making involves ethical perceptions under different ethical situations, andthere are differences in across countries along this dimension, the rationale for thesedifferences should be explored and incorporated into the ethical training ofemployees. Ethical training should sensitize employees to differences in environmen-tal factors across nations, and expose them to situations likely to occur in differentenvironments. Specifically, employees from all nations must be familiarized with the


company’s position on certain ethical issues under different environmental con-ditions. Cross-cultural interaction during such training programs can also provideopportunities to eliminate mutual perceptual biases that mainly arise from mediaportrayals which entertain more than educate (Abbasi & Hollman, 1993).

Acknowledgements

The authors thank AT and C (Arab Training and Consulting) for the assistancein the data collection in the Middle East. All authors contributed equally.

Appendix A. Ethical ideologies

(1) A person should make certain that their actions never intentionally harmanother even to a small degree.

(2) Risks to another should never be tolerated, irrespective of how small the risksmight be.

(3) The existence of potential harm to others is always wrong, irrespective of thebenefits to be gained.

(4) One should never psychologically or physically harm another person.(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 conse-

quences of the act against the negative consequences of the act is immoral.(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.(11) There are no ethical principles that are so important that they should be a

part of any code of ethics.(12) What is ethical varies from one situation and society to another.(13) Moral standards should be seen as being individualistic; what one person

considers to be moral may be judged to be immoral by another person.(14) Different types of moralities cannot be compared as to “rightness.”(15) Questions of what is ethical for everyone can never be resolved since what

is moral or immoral is up to the individual.(16) Moral standards are simplypersonalrules which indicate how a person should

behave, and are not to be applied in making judgments of others.(17) Ethical considerations in interpersonal relations are so complex that individ-

uals should be allowed to formulate their own individual codes.(18) Rigidly codifying an ethical position that prevents certain types of actions

could stand in the way of better human relations and adjustment.


(19) No rule concerning lying can be formulated; whether a lie is permissible ornot permissible totally depends upon the situation.

(20) Whether a lie is judged to be moral or immoral depends upon the circum-stances surrounding the action.

Items 1 through 10 are idealism items. Items 11 through 20 are relativism items.Source: Forsyth (1980)

Appendix B. Marketing ethics scenarios

B.1. Scenario 1: over-eager salesperson

A young man, recently hired as a salesman for a local retail store, has been work-ing very hard to favorably impress his boss with his selling ability. At times, thisyoung man, anxious for an order, has been a little over-eager. To get the order, heexaggerates the value of the item or withholds relevant information concerning theproduct he is trying to sell. No fraud or deceit is intended by his actions, he is simplyover-eager.

Action: The owner of the retail store is aware of this salesman’s actions, but hasdone nothing to stop such practice.

B.2. Scenario 2: failure to honor a warranty

A person bought a new car from a franchised automobile dealership in the localarea. Eight months after the car was purchased, he began having problems with thetransmission. He took the car back to the dealer, and some minor adjustments weremade. During the next few months he continually had a similar problem with thetransmission slipping. Each time the dealer made only minor adjustments on the car.Again, during the 13th month after the car had been bought, the man returned tothe dealer because the transmission still was not functioning properly. At this time,the transmission was completely overhauled.

Action: Since the warranty was for only one year (12 months from the date ofpurchase), the dealer charged the full price for parts and labor.

Source: Dornoff and Tankersley (1975)

Appendix C. Corporate ethical values scale (Hunt et al., 1989)

Managers in my company often engage in behaviors that I consider to be unethical.(Reverse-score item)

In order to succeed in my company, it is often necessary to compromise one’sethics. (Reverse-score item)

Top management in my company has let it be known in no uncertain terms thatunethical behaviors will not be tolerated.

If a manager in my company is discovered to have engaged in unethical behavior


that results primarily inpersonal gain(rather than corporate gain), he or she willbe promptly reprimanded.

If a manager in my company is discovered to have engaged in unethical behaviorthat results primarily incorporate gain(rather than personal gain), he or she willbe promptly reprimanded.

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Marketing ethics: a comparison of American and Middle-Eastern marketers

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