Managing ethical behaviour in construction organizations in Asia:

How do the teachings of Confucianism, Taoism and Buddhism

and Globalization inuence ethics management?
Henry Suen
a,
*
, Sai-On Cheung
a
, Reuben Mondejar
b
a
Department of Building and Construction, City University of Hong Kong, 83 Tat Chee Road, Kowloon Tong, Hong Kong
b
Department of Management, City University of Hong Kong, Hong Kong
Abstract
An integrative model of Stead et al. (1990) helps managers understanding of why employees behave ethically or unethically in busi-
ness organizations and what they can do to inuence this behaviour. Steads model has been well received and widely used in the business
management sector. This paper discusses the key principles of Steads model in the context of construction organizations in Asia and how
the teachings of Confucianism, Taoism and Buddhism and Globalization inuence the understanding of ethical behaviours in Asian
organizations.
2006 Elsevier Ltd and IPMA. All rights reserved.
Keywords: Ethics; Confucianism; Taoism; Buddhism; Globalization
1. Introduction
The business profession is where free-wheeling capital-
ism ourishes, the get-rich-quick attitude given veneration
status, and the business malpractices have alerted certain
quarters of society, including law-makers, morality-watch-
ers, key business gures, and politicians. In the US, the
investigations of Enron and WorldCom brought the pub-
lics attention to the issue of ethics in corporate nance
and accounting [5]. In Japan, the Recruit scandal, which
involved highly placed politicians with gangsters, led to
the downfall of the Noboru Takeshitas government [6].
In the UK, the Maxwell case, employees pension funds
were milked by the company chairman to run his own
business empire was one of the worst scandals of the
20th century [20]. These have prompted the emergence of
ethics as an area of concern, which has brought about a
urry of talks oered by business management schools
and associations in major cities of the world.
In these talks, a frequently-asked question is: Why bother
so much about ethics, let alone its consequences? Managers,
whether in business or other professions, see rst and fore-
most prot, economic opportunities, and the exercise of
entrepreneurship. Why ask questions beyond that? Of
course, if one is not interested in the starting point of why
ethics is to be faced squarely, then one could also pretend
to have no diculty with the consequences of unethical
behaviours. Such a person would see no justication for
its study, see no problems, and ask no questions. It is not
to be denied that this type of person can be found today,
particularly in the construction sector where there is enor-
mous pressure to make money. Indeed, even to the detached
scholar, to talk about ethics by rst dealing with the persons
background and personality may be incomprehensible. Yet,
it does not require religious fanaticism for one to realize
that, because of the social nature of the person, ones own
world is unavoidably enmeshed with other peoples activi-
ties; his or her behaviour towards fellow human beings is
something that cannot be ignored. Ethics is necessary
because by it people are able to position themselves within
the web of interrelationships among other parts of created
0263-7863/$30.00 2006 Elsevier Ltd and IPMA. All rights reserved.
doi:10.1016/j.ijproman.2006.08.001
*
Corresponding author. Tel.: +852 3442 6542; fax: +852 2194 2169.
E-mail address: henry.suen@cityu.edu.hk (H. Suen).
www.elsevier.com/locate/ijproman
International Journal of Project Management 25 (2007) 257265
INTERNATIONAL JOURNAL OF
PROJECT
MANAGEMENT
reality. Managers, like all the rest of their fellowmen, must
go about their daily lives managing people aairs well. Bar-
nard, in his Functions of the Executive, gave great stress to
managing people and the inter-relationships between them,
with the managers primary role being to shape and guide
those sharing the same values in the organization [2].
Indeed, the incorporation of ethics and ethical behaviour
into business management training has been the subject of
discussion for more than a decade now. Sims pointed out
that the eective management of ethical behaviour requires
organizations ensuring both their managers and employees
know how to deal with ethical issues in their everyday work
lives [38]. Therefore, organizational members must rst
understand ethics and managing ethical behaviour is a crit-
ical social problem for managers.
1.1. Model of Stead
An integrative model developed by Stead et al. [39] (the
Model hereafter) on ethical behaviour in business organi-
zations has been invaluable in understanding the many fac-
tors which contribute to ones decision to behave ethically
or unethically. It also gives managers clues as to what they
can do to inuence ethical behaviour in business organiza-
tions. It has been well received and widely used in the busi-
ness management sector. Research over a period of more
than 25 years clearly support the conclusion reached by
Stead et al. that the ethical philosophies of management
have a major impact on the ethical behaviour of their fol-
lowers or employees [1,39]. The Model (Fig. 1 refers) iden-
tied ve key factors which are instrumental in
understanding ethical behaviour, namely individual fac-
tors, ethical philosophies and decision ideologies, ethical
decision history, organizational factors, and external
forces.
Fig. 1 demonstrates the relationships among the ve key
factors. The initial linkage reects the relationship between
the individual factors (personality and socialization) and
the development of ethical philosophy and decision ideol-
ogy. In essence, ones personality and background inu-
ence his or her ethical philosophy and ideology, which in
turn inuence his or her ethical decision history. For
instance, Westerners, with their minds being inuenced
by intellectual discipline cultivated in the logical tradition
of the HellenicJudaicChristian civilizations, they tend
to be more rational and rights conscious in dealing with
ethics dilemma than their Eastern counterparts, who tend
to concern more with keeping face and long-term rela-
tionships [31]. Therefore, ones background will likely
inuence his or her ethical decisions. Over time, the indi-
viduals ethical decisions and the nature of the reinforce-
ment that accompanies these decisions lead to his or her
ethical decision history [39].
As the individual enters and gains experiences in an
organization, his or her ethical behaviours are inuenced
by managerial philosophy and behaviour, the reinforce-
Individual Factors
Personality
Ego Strength
Machiavellianism
Locus of Control
Socialization
Sex Roles
Religion
Age
Work Experience
Significant Others
Past Reinforcement of
Ethical Decisions
Organizational Factors
Managerial Philosophy
Managerial Behaviour
Reinforcement System
Characteristics of the Job
Ethical
Philosophies
Utilitarianism
Rights
Ethical Decision
Ideologies
Situationist
Subjectivist
Absolutist
Exceptionist
Ethical Behaviour
in Organizations
Ethical Decision History
External Forces
Economic
Conditions
Scare Resources
Competition
Multiple
Stakeholders
Political & Social
Institutions
*Globalization
Religion:
*Confucianism
*Taoism
*Buddhism
Fig. 1. A model of ethical behaviour in business organizations (modied and adopted from Stead et al.) [39]. Key:
*
Modications (Applicable to Asian
Construction Organizations).
258 H. Suen et al. / International Journal of Project Management 25 (2007) 257265
ment system and the characteristics of the job itself. These
organizational factors, collectively, inuence the individ-
uals ethical behaviour. These factors do not exist in isola-
tion, but are heavily inuenced by outside forces, such as
economic conditions, scare resources, competition, politi-
cal and social institutions. Applying Whittys memetic
approach in organizational ethics, ones ethic behaviour
can be seen as a product constructed by an ongoing evolu-
tion of independent fragments of knowledge or experiences
(memes) competing for position and dominance. Accord-
ing to Whitty, this memetic approach allows us to describe
how human behaviour is driven by the same replicating
process that drives the biological world [47].
The process of construction project management oers
an excellent example to observe how the above-mentioned
factors come in play for several reasons. In the rst place,
the construction sector being one of the pillars of the
worlds economy has proven that products delivery within
a short time is possible with the concerted eorts of individ-
ual members and organizations of the project team. Sec-
ondly, the construction process is typically characterized
by its temporary multiple organizational setting where
members from dierent cultural backgrounds with dierent
skills and talents join together to achieve the same goal, has
the constant pressure to abide by what is considered
acceptable ethical behaviour the world over [10]. The prob-
lem is further complicated by the fact that the construction
market is increasingly globalized. Major players in con-
struction, small or large, local or oversees, join together
to participate in international, joint-venture construction
projects. In short, active construction organizations are
bound to observe and act according to ways considered
ethical by the international standards, more often than
not, Western in origin [9,32].
2. Aims and objectives
This paper attempts to examine the nature of ethics in
the context of construction organizations in Asia using
Steads model as the point of reference. In so doing, the fol-
lowing issues will be discussed:
Ethical issues and their relevance in construction.
The divergent approaches of East and West towards the
understanding of managerial ethics.
The teachings of Confucianism, Taoism and Buddhism.
The inuences of Globalization and International Con-
struction Projects on ethics management.
The implementation of recommendations for ethics
management in business organizations advocated in
Steads model.
3. Ethical issues in construction
The recent episodes of constructors unethical behav-
iour, such as corruption, overcharge and defective works
has drawn much unwanted attention to the issue of ethics
in the construction industry. In Hong Kong, the Salang-
ane case discovered some unqualied suppliers had
become approved contractors of the HKSAR government
by bribing local civil servants. The case involved a total
of HK$16.8 million worth of counterfeit locks [22]. The
Independent Commission Against Corruption (ICAC) said
that they were concerned with the rising number of corrup-
tion cases in the construction sector, which amounted to
11% of the total private sector complaints [43]. Taking note
of the ICACs remarks and complaints about business mal-
practices, in January 2001, the Chairman of the Construc-
tion Industry Review Committee (CIRC), Mr. Henry
Tang, submitted a report containing the Committees rec-
ommendations to improve the construction industrys pro-
fessional standard. One of the recommendations was to
foster an ethical culture by enhancing education and train-
ing on ethics for construction students and practitioners
[12]. In the US, FMI conducted a survey on ethical prac-
tices in construction in conjunction with the Construction
Management Association of America (CMAA) to gauge
ethical practices and concerns in the construction industry.
The ndings show that few companies make ethical issues
part of their mission statement (at least not to the point
of drafting ethical codes) and the construction profession-
als, whether they like it or not, will work with companies
that are unethical. In addition, there seems to be a sense
of powerlessness among the construction professionals
to improve ethics, because they believe that this is the
way its done in this business [17,18]. In the UK, in an
online survey on ethics in construction, the results reect
some interesting facts. Nearly half of the respondents
(48%) said that they would report corrupt practices
encountered in outside rms to the relevant authorities.
They went on to say that this becomes more dicult when
corruption is encountered within ones own rm. This
tends to suggest that commercial pressures, personal loyal-
ties, and a desire not to rock the boat make the issues less
clear cut [13]. These research studies shared a common goal
to enhance construction ethics and to heighten the aware-
ness of corruption prevention practices in the construction
industry. In fact, they have given rise to the recent empha-
sis on the inclusion of ethics in construction curricula
[18,21].
4. Divergent approaches of east and west
Ample studies have dealt with the topic of East and
West philosophies. In A Treatise on Ecacy: between Wes-
tern and Chinese Thinking, Francois argues that the dier-
ent ways Eastern and Western thinkers have dealt with
diplomacy reect important dierence in how the two cul-
tures understand human action in the world [19]. For
instance, the HellenicJudaeoChristian tradition of the
West puts great value on each human life, whereas in the
East the life of community, the corporation and the family
is of greater importance. They respect social harmony and
H. Suen et al. / International Journal of Project Management 25 (2007) 257265 259
consensus, and they perceive individual initiative and crea-
tivity is of less importance than the willingness to merge
ones personal identity in the life of the company (in Japan)
or of the family (in Chinese societies) [27]. Also, Asians fell
less concerned about the niceties of democratic procedure.
In his Eastern and Western Cultures, Lifu [25] compared the
modes of reasoning between Westerners and Asians, and
summarised that Asians tend to rely far less on categories
or on formal logic; it is fundamentally dialectic, seeking a
middle way between opposing thoughts. By contrast,
Westerners focus on salient objects or people, use attributes
to assign them to categories, and apply rules of formal logic
to understand their behaviour. In essence, the Western
style of thought is characterized as embodying the value
of individual distinctiveness or independence, while
the Eastern style of thought embodies the value of harmo-
nious social relations [34]. The following sections discuss
the divergent approaches of East and West in greater
detail.
4.1. Approaches of east
Peoples of the Orient the so called Orientals do not
necessarily have the same appreciation for the analysis of
the person. Just as the Eastern world does not have the
same application for Aristotelian logic as does the Western
world. It is not an uncommon remark in the West that the
Oriental is somewhat inscrutable [34]. In general, perhaps
because they have not passed through gigantic mental
upheavals (being reborn with the Renaissance or discov-
ering superiority in reason with the Enlightenment two
major events from which Orientals have been spared),
Oriental mentality stresses totality rather than rationality
[50].
As such, the Oriental tends to appreciate the whole
rather than the parts. From one point of view, it seems
to come close to what Aquinas describes as the whole per-
sonality doing the thinking, the willing, the feeling [4]. The
entire psyche is at work, though the localization of this
total attitude is not usually in the head, but in some focal
point of the body, often implied to be the heart or face. The
head is the symbol of Western mentality; the heart, face, or
some similar centre, the symbol of the Oriental. The Wes-
tern regards thought as a separate function most represen-
tative of the rational animal. The Oriental does not so
much think as he ponders, i.e. he fuses all his thinking, lov-
ing, feeling experiences into an inseparable unity. If for the
Oriental, not the head, but the totality of experience consti-
tutes what the West proudly calls reason, what then is the
Oriental symbol for this centrality and fusion? Some Orien-
tal scholars claim it is the heart: dierent though the
teachings of Shintoism, of the poetic art, and of Confucius
may be, they all aim ultimately at the comprehension of a
single heart [40]. The Chinese word Sin, though meaning
heart does not seem to mean exclusively the physical
heart. If that were the case, we would not have the totality
that is so representative of Eastern thought. Rather, the
heart means feeling, consciousness, or centre. This
most likely explains the tendency in Asiatic literature to
speak of bowels, entrails. Here again, this is not to be
strictly interpreted as a denite physiological organ, but
rather a symbolic metaphor, as when one says, My heart
bleeds for you.
Thinking and feeling, which in the West exist as a sepa-
rate entities, operate as a single force for Orientals. In Chi-
nese literature, one must rst subdue the intellect and then
proceed from conscious action to unconscious inaction.
This ight to unconsciousness justies why there is no need
for such a compact and coherent system, as can be found in
Aristotle, Augustine, or Thomas Aquinas. There is no
equivalent, for instance, of the concept of original sin in
man, which for Western thought explains ones tendency
towards unethical behaviour. The Zen contemplations dis-
pense with dogmas, books, and teachings, in order to reach
the conuent experience of universal oneness. For these
people, universal truth is beyond all divisions and distinc-
tions of what is pure or lthy [40].
4.2. Western mind
The Oriental mind, stressing centrality more than ratio-
nality, may be illustrated as follows: if experiences multiply
to a point where, like arrows, they seem to converge to one
central point, then the conclusion is true. At rst all these
arrows may y in dierent directions, as they do in the
mind of an investor who cannot decide in which business
venture he shall risk his money. When suciently numer-
ous arrows seem to concentrate in a given place, however,
the conclusion becomes true. Thus, the more arrows con-
verge, the truer the conclusion. In a sense, the head does
not take a leading role in drawing a conclusion. Rather,
it is the total consciousness, in what could be called think-
ing, willing, feeling, living all lumped together. Orientals
are generally at home in vagueness, indirectness, seeming
lack of focus. This is a mind-set that the Westerner is,
therefore, often bewildered, a mental thought pattern that
ows into international diplomacy, trade and investments,
business and economics [41]. This is perhaps because non-
head factors are inuencing the thinking. While the West-
erner is going from idea to idea, from cause to eect, the
Oriental is going from mood to mood [31]. It is on this
basis that once could posit that the Western mind, with
its intellectual discipline cultivated in the logical tradition
of the HellenicJudaicChristian civilizations, was able to
leapfrog to produce a highly industrialized civilization,
leaving behind China and most of the Orient, beginning
around the Middle Ages. It has only been in recent eco-
nomic history that parts of the Orient (Japan and the
Newly Industrialized Economies) have seen a surge in sci-
ence and technology, and only perhaps after these econo-
mies have learned, having been apprentices for sometime
and have now developed the art of imitating the West.
The Western mind, in the contrary, stressing rational-
ity; feeling, sentiment and desire must necessarily be
260 H. Suen et al. / International Journal of Project Management 25 (2007) 257265
excluded from rationality, if the conclusion is to be logi-
cally derived. It is, therefore, most heartening that from
time to time sparks of wisdom appear to temper the ven-
eration of rationality. In this regard, Herbert Simons suc-
cess in enshrining the idea of bounded rationality is a
reminder that the use of rationality is in fact imperfect,
incomplete, and truly constructed [37]. The Western mind
traditionally seeks to be logical; hence the ultimate in
inconsistency is to be accused of contradicting oneself.
And, even with the onset of Machiavellian politics and
the consequent repudiation of ethical norms in some
aspects of Western living, the Western mind in general
takes pride in consistency [33].
4.3. Ethics as science, east and west
Arguably, during the past two millennia, the West has
sped ahead in scientic culture and civilization. On the con-
trary, the Orient has produced little of what we now regard
as modern technical science, at least, so far. Consequently,
it lagged behind in getting itself attuned to the method of
science, including the use of science in the eld of ethics.
The explanation could be that Orientals were not meta-
physically prepared to do so, for the simple reason that
they lacked the mental discipline which Christianity
brought into the world, which was so essential for the pre-
cision that science demands. As already bought up earlier,
the Oriental mind does not enshrine causality as much as
Westerners do. The so-called science of I-Ching is not
based on causality, but on relationships, or co-existence,
or the fact that certain experiences began to coalesce or
jell. A conclusion is not reached by the head, but is per-
ceived by the whole psyche. Feelings aect the mind; reso-
lutions aect sensations in a vast interplay of physical,
conscious, unconscious, psychic, volitional elements. And
all seem to concentrate in some mysterious centre, which
is not necessarily the head.
This state of mental though patterns, so dierent
between Orientals and Westerners, presents some dicul-
ties to the teaching of ethics. Unifying the two is not easy.
Nevertheless, putting aside for a moment the dierences in
thought patterns and worldview assumptions, both East
and West recognize the evident reality of the interdepen-
dence among persons. This is particularly so with interna-
tional construction projects, the parties must be mentally
prepared to adopt a penetrating awareness of dierent cul-
tures and to adopt an attitude of respect and eagerness to
learn from those with dierent cultures. In other words,
both East and West need to learn from one another [26,46].
5. Teachings of Confucius
Confucius is one of the great thinkers of the East. His
essential teachings are generally board enough to have
borne reinterpretation through the ages as dierent cul-
tures and societies periodically updated their understand-
ing of his teachings to apply to the realities of their own
times. As such, any discussion on the Easts culture would
not be compete without understanding his teachings and
their inuences on Asia, in particular mainland China, Tai-
wan, Hong Kong, Singapore, Korea, Japan and a signi-
cant population [9]. Among his many teachings, the
teachings on jen (benevolence), li (code of behaviour),
and jia (family) are of great importance to the understand-
ing of ethical behaviour in business organizations in Asian.
5.1. Jen as foundation of social order
Confucius believed the moral foundation of social order
must rest on the primary virtue of humanity, that is,
humanity is to love people. In The Analects, Confucius
claimed that, it is only those who possess jen that are
capable of liking and disliking others. This means that
the necessary condition for one to be right in liking and
disking other is the virtue of jen one possesses. The essen-
tial point about jen can be found in Confuciuss answer
to ChungKunh (one of his disciples): love your fellow
men (XII.22) and doing ones best (XIII.19). Hence, rec-
iprocity and consideration are two essential qualities
expected in all relations among the Chinese [27].
5.2. Li as foundation of ethical behaviours
Confucius also pointed that the observance of the rites is
highly relevant for ethics management. Confucius was of
the view that li represents the criteria or standards for the
right act, any deviations from li would cause undesirable
outcomes and thus is far from being virtuous [24]. It is,
therefore, important that one should, unless there are
strong reasons to the contrary, observe them.
5.3. Jia as foundation of family
It is an important part of Confuciuss teachings the one
must love its Jia (family). In essence, the younger members
have to obey and respect the older members of a family.
With love and obedience starting from immediate core
members of a family, love for people outside ones family
is looked upon as an extension. This doctrine reinforces
the good virtue of obedience.
6. Taoism
Confucianism is the dominant philosophy that has
moulded the East culture. However, the study of Eastern
ethics would not be completed without mentioning Taoism
and Buddhism. While Confucianism emphasizes social
order and an active life, Taoism concentrates on individual
life and tranquility. The fundamental doctrines of Taoism
are embodied in the Tao-te-ching, which is a classic on
the teachings of Tao (the way) and Te (virtue). To fully
appreciate the philosophy of Taoism, one must, rst,
understand the three cardinal concepts of Tao, Freedom,
and Wu-wei [50].
H. Suen et al. / International Journal of Project Management 25 (2007) 257265 261
6.1. Tao as the way of life
Tao literally means the road, the way of life or living
naturally and correctly, exists before heaven and earth. It is
the mother and ancestor of all things, and is everlasting
and unchangeable. The teachings of Confucianism and
Taoism are both based on the same words, Tao and Te.
While Confucian takes a very positive attitude to live up
the way and to achieve virtue, Taoist adopts an eortless
and natural approach in following Tao. Taoist stresses that
by following the natural way, one will achieve a life of pace,
harmony and enlightenment. The natural way stands in
direct opposition to articial regulation, punishment and
ceremonies. Lao-tzu, the founder of Taoism, condemned
war, taxation, supercial knowledge and conventional
morality.
6.2. Attainment of freedom
As to the doctrine of Freedom, Taoist believes that
absolute freedom can be acquired only through the under-
standing of Tao and by the practice of Wu-wei [49]. Wu-
wei literally means non-action; but it implies a great deal
more than what it appears to mean. It is a Chinese version
of Ockhams Razor entities or principles should not be
unnecessarily multiplied [49]. While Ockhams razor is
directed primarily toward purely metaphysical and episte-
mological issues, the Taoists are concerned with an econ-
omy of action and a simplicity of life. However, the
Taoists are not philosophers like Bentham who was con-
cerned about the maximum good of the maximum number
of people. For them, eciency only a by-product or some-
thing incidental, and is not the main concern of their phi-
losophy [50].
7. Buddhism
The non-aggressive, moral and philosophical system
expounded by the Buddha, which demands no blind faith
from its adherents, expounds no dogmatic creeds, encour-
ages no superstitious rites, but advocates pure living and
thinking to the gain of supreme wisdom and divergence
from all evil, is call the Dhamma (popularly known as Bud-
dhism). An Indian Sakya Prince named Siddhartha Gau-
tama is the founder of the teachings of Buddhism, who
was born in the year 623 BC. He exhorted his disciples to
depend on themselves for their deliverance, for both purity
and delement depend on oneself. In the Parinibbana
Sutta, Siddhatta said: be ye islands unto yourselves, be
ye a refuge unto yourselves, seek not for refuge in others.
These signicant words are self-elevating [15]. They reveal
how vital is self-exertion to accomplish ones object and,
how supercial and futile it is to seek redemption through
benignant saviours. This concept of self-dependence is
compatible with the self-cultivation in Confucianism.
The way of life which he discovered was the Middle Path,
which is one of the salient characteristics of his teaching
[15]. The Buddhas Middle Path advocates neither the
extreme of asceticism nor that of austerity. For instance,
poverty is not to be valued nor is wealth to be devalued.
The teachings of Confucianism, Taoism and Buddhism
have been advocated and practiced in all walks of life in
Chinese society for over 2500 years. In summary, the teach-
ings concern fullling obligations according to ones social
position, which asks for the submergence of individualism
to preserve harmony in a community by placing greater
emphasis on harmony, order and loyalty. The teachings
are deeply embedded in Chinese culture and they inuence
a Chineses way of thinking and seeing things. These teach-
ings inuence a persons ethical system ones ethical phi-
losophies and behaviour patterns. Therefore, managers can
not aord to ignore the inuence of these teachings on
business organizations in Asia, especially in todays market
where international trade cooperation is the norm. In par-
ticular, the following doctrines are generally regarded as
having greater preponderance in Chinese culture:
Submitting to higher authority.
Middle Way approach to preserve harmony in ones
own community.
Maintaining good guan-xi (literally means relationship)
[11].
In short, the Chinese culture places greater emphasis on
harmony and loyalty, and being guided by ethics and virtue
rather than the rule of law. As a matter of fact, many of the
problems of international trade in Chinese society today
result from this aspect of Chinese culture [14]. Sims
regarded international trade and competition as one of
the challenges of ethical behaviour in organizations [38].
This is particular so for construction organizations, which
are under constant pressure to abide the international eth-
ical standard as the result of globalization. According to
Steads model, globalization is an external force factor
which plays a role in inuencing ones ethical behaviour.
The following section deals with the issues of globalization
and how they inuence ethical behaviour in construction
organizations, especially those in Asia.
8. Globalization and international construction projects
The globalization of the worlds economy has changed
the nature of many business activities. The business con-
struction has not spared the globalization wave. The
fast-growing international trade and developments, such
as the World Trade Organization (WTO) agreements,
European Union of Trade agreements and Asia-Pacic
Economic Cooperation (APEC) forum have contributed
to the globalization wave and it provides both opportuni-
ties and challenges to the construction industry. Construc-
tion companies, large or small, local or foreign, are
entering into international projects arena in order to diver-
sify and expand its market shares. They all share the same
belief that the globalized market is simply too big to miss.
262 H. Suen et al. / International Journal of Project Management 25 (2007) 257265
Facilitated by sophisticated communication technologies,
advanced project management techniques and fanned by
commercial incentives, large-scale projects (especially com-
plex infrastructure projects) are no longer local events but
international aairs involving parties from several or more
nations [9,32]. Notably, the development of the Hong
Kong International Airport, the design and construction
of the Olympic Stadium and other sports facilities in Bejing
for the hosting of 2008 Olympic Game, and the construc-
tion of the new Beijing International Airport. These pro-
jects would not be possible without hundreds and
thousands of contracting parties and experts from all over
the world, including the U.S., the UK, Australia, France,
Germany, Italy, etc. Indeed, international projects are
found not only in developed countries, but in developing
countries such as Vietnam, China, and South Africa [7].
As such, globalization has resulted in a sharp rise in the
number of international construction projects, which not
only called for a general adherence to international agree-
ments, but also required that the various participants in
the construction industry subscribe to a common under-
standing of the fundamental principles of correct ethical
behaviour in the multi-faceted pursuits of construction
contracting [32].
Previous research studies have attempted to examine the
dierent aspects of international construction projects,
including their characteristics and advantages. Turin iden-
tied international projects as large and complex, and
should be undertaken only by experienced, foreign contrac-
tors [42]. Ofori suggested that the construction industry
should make good use of international construction oppor-
tunities in order to embrace the development of: materials;
project documentation and procedures; human resources;
technology; and institutions [32]. Raftery et al. [35]
regarded international projects as opportunities for the
industry of developing countries to leap forward, through
joint ventures with construction companies of foreign
countries. Clark and Ip came to the view that international
projects provide an opportunity to develop expertise and
products by using the most up-to-date knowledge in a cost
eective manner [11]. These advantages, however, cannot
be materialized unless contracting parties can agree to a
common set of codes of ethics, which serves as the govern-
ing body for ethics management in the project [38,39].
Two hurdles immediate arise regarding ethics manage-
ment in international projects setting. Firstly, the parties
knowledge and experience in ethics and in management
are not homogeneous. Much time is needed for them to
get used to the local construction practices, legislation,
and ethics [14]. Secondly, as each party has its background
and personality, it would be a dicult task to align parties
dierences and to make them all work towards the same set
of objectives [44]. The problem is further complicated by
the fact that international projects are temporary in nature,
that is, people from dierent countries and with dierent
skills and talents come together to achieve the same goal.
Furthermore, social factors such as language barriers also
contribute to diculties in the ethics management in inter-
national projects. As a result, conicts are inevitable and
they may turn into unethical behaviours (corruption, over-
charge, not reporting the facts, etc.) if are not managed
properly and speedily. The eects of conicts have been
widely documented and common problems include pro-
gramme delay, break-down of business relationships, etc.
[23]. As such, managers of international projects are under
constant pressure to monitor their employees ethical
behaviours. As one of the most basic of management prin-
ciples states: if you desire a certain behaviour, reinforce
it.
9. Implementing Steads recommendations on ethical
management in business organizations in Asia
As Steads model indicates, individual factors and orga-
nizational factors have signicant impacts on ethical
behaviour of employees. Thus, managers cannot rely on
the integrity of the employee alone, they have to structure
the organizational context such that to promote ethical
behaviour. As Stead et al. stated, . . .ethical behaviour
needs managing and can be managed in business organiza-
tions [39]. In developing a system for managing ethical
behaviour, a rm may have to modify its structure, selec-
tion and training procedures, reporting system, and inter-
nal auditing procedures. These modications cannot be
made without support from the organizations authority
structure and culture [30]. As such, implementing ethics
management in an organization requires total commitment
and cooperation from top to bottom. The issue is more
complicated in construction organizations where conict-
ing goals, communication barriers and cultural clashes
are common. Thus, implementing those recommendations
made by Stead et al. will require special attention if they
are to be applied in construction organizations. The follow-
ing sections will deal with those recommendations and how
the teachings of Confucius, Taoism and Buddhism and the
issues of globalization (as above-mentioned) aect their
applications in construction organizations in Asia.
9.1. Managers as role model
As previously stated, implementing ethical management
systems on organizations requires the support of organiza-
tional culture and authority structure. Since the core values
of the organizational culture are formulated at the senior
management, and the authority to implement ethical man-
agement is given also by the senior management. Thus, eth-
ical behaviour begins at the top. However, Ranken pointed
out that it is not the organization itself that exerts moral
responsibility, but rather the individuals who occupy the
relevant positions [36]. In other words, in practice, the
managers of the organization are responsible for manag-
ing employees ethical behaviour on day-to-day basis. As
Stead et al. pointed out, managers cannot expect ethical
behaviour from employees if they do not behave ethically
H. Suen et al. / International Journal of Project Management 25 (2007) 257265 263
themselves [39]. Confuciuss teachings on the notion of
Jia (family) infer the doctrine of social status, which gives
every person a proper place in an organization and rein-
force the good virtue of obedience [48]. As such, the
employees have to obey and respect their managers. Such
a strong emphasis on social hierarchy can be found in Con-
fuciuss saying: Exemplary people concern themselves
with virtue, small people concern themselves with territory.
The ruling class thinks of law, the lower classes hope for
benevolence (IV.11). Therefore, managers are seen as role
models for their subordinates and the key to being an eec-
tive ethical role model for subordinates is to demonstrate
consistency in ethical philosophy and ethical behaviour.
In practice, that means a manager refuses to accept bribe
from contractors and to carry out unethical policies, and
monitors ethical behaviours within an organization. Given
the fact that corruption in construction is not uncommon,
ethics management systems should be such designed to
combat corruption, i.e. to develop strategies and guide
actions that encourage internal reporting of illegal, uneth-
ical, and illegitimate practices. This is commonly known
as whistleblowing. While whistleblowing includes disclo-
sures both internal and external to the organization, orga-
nizations benet when employees choose report internally.
Internal reporting facilitates early detection of misconduct
and creates opportunity for timely investigation and cor-
rective action. It also positions organizations to proactively
manage or even avoid public embarrassment [3,29].
9.2. Developing code of ethics
Stead et al. recommended developing codes of ethics as a
way of reinforcing an organizations ethical philosophy
[39]. However, in order for a code of ethics to be meaning-
ful, it must focus on the potential ethical dilemmas which
may be faced by employees; it must be communicated to
all employees; and it must be enforced. As mentioned
above, communication between the senior management
and workers on oor can be problematic due to the scale
of construction projects, especially in international con-
struction projects where hundreds of thousands of project
members working at the same time is not unheard of. It
is also worth mentioning language barrier is a live issue
in international construction projects. Broster succinctly
summarised this point: without understanding there can
be no friendship. If one wishes to understand a people
one must identify oneself with them. One must study their
language, customers and culture. . . and they will be ones
friend [1,8].
Individuals and organizations from dierent parts of the
world not necessarily share a common language and there-
fore managers must be prepared to develop a coherent set
of code of ethics. As mentioned above, the li is a body of
rules governing good ethical behaviours, i.e. what one
should do or not do. In Chinese society, the li has a higher
standing than fa, which concern with laws and their rein-
forcement in courts. As Donahey succinctly summarised,
over time the concept of fa and li has become confused
and the concept of maintaining the relationship and, there-
fore, face, has become part of the Chinese legal system
[16]. This is largely because the Chinese people prefer to
resolve conicts by non-adversary means rather than by lit-
igation. They are of the view that resorting to litigation
results in break-down of harmony between the disputants,
which is contrary to their belief that one should always
love his fellow men. This means that managers must
attend not only to the content of the code but also to the
process of determining that content. To be most eective,
a code should be developed in an open, participative envi-
ronment involving the employees as well as other stake-
holders. Most importantly, codes of ethics should not be
seen as lip service documents. They should focus primar-
ily on prot oriented issues while ignoring other critical
issues such as personal character matters and environmen-
tal problems [45]. In other words, codes of practice should
be realistic and human-focused. As such, it is advisable for
individual departments of a large, international organiza-
tion to develop their own specic codes which deal with
the unique ethical dilemmas the employees in that particu-
lar eld would face. However, these codes must be consis-
tent with the overall ethical management policies of the
organization.
10. Conclusion
Ethics management is an indispensable part of construc-
tion project management and requires a well-planned pro-
gram for its development and implementation. One way to
operationalize such eort for ethical behaviour is by creat-
ing structural mechanisms for managing ethics. Stead et al.
have suggested a number of structural mechanisms, includ-
ing monitoring ethical behaviour among employees, com-
municating ethical polices, ombudsman for reporting
ethical violations, ethical aide-de-camp for managers, and
internal audit committee, and newsletters and magazines
advocating ethical conducts. However, globalization in
construction means that managers and employees are not
necessarily stationed in their domicile but in dierent parts
of the world. Since construction professionals are working
under temporary organizational setting, which means, in
practice, setting up special units to support ethical con-
ducts faces certain technical problems. It is without doubt
that managing ethical behaviour in construction organiza-
tions is possible, but it is no easy task. This is especially in
construction organizations where they are constantly under
tremendous pressure to meet up international ethical stan-
dards and, at the same time, have to deal with the often
conicting goals of project members within the project
organization. Steads model provides invaluable insights
into the understanding and management in business orga-
nizations. It is argued that the Model is equally applicable
to construction organizations in Asia but managers must
be aware of the divergent approaches of East and West
and the issues of globalized economy.
264 H. Suen et al. / International Journal of Project Management 25 (2007) 257265
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