Situational Ethics Across
Robertson
Borders: A Multicultural
Examination
ABSTRACT. Managers throughout the world
regularly face ethical dilemmas that have important,
and perhaps complex, professional and personal
implications. Further, societal consequences of
decisions made can be far-reaching. In this study, 210
financial services managers from Australia, Chile,
Ecuador and the United States were queried about
their ethical beliefs when faced with four diverse
dilemmas. In addition, the situational context was
altered so the respondent viewed each dilemma from
a top management position and from a position of
economic hardship. Results suggest a complex
interaction of situation, culture and issue when
individuals make ethical judgments. Specifically,
Chileans were found to have different beliefs about
sex discrimination and child labor dilemmas when
compared to their colleagues from the other three
nations. Chileans and Australians also disagreed on the
bribery dilemma. Anglo managers were more likely
than Latin American managers to change their ethical
responses when the situation was altered. For multi-
national firms interested in maintaining healthy ethical
climates, the findings suggest that culturally contin-
gent ethical guidelines, or policies adapted to the local
customs, must be considered. Further, managers must
remain aware of issues related to specific situations,
both internal and external, that would cause sub-
ordinates to alter their moral judgment.
KEY WORDS: culture, dilemmas, situational ethics
Introduction
With expanded international trade, the ethical
dimension of managerial decision-making, as
distinguished from the economic element of
managerial decision-making, has become a major
concern for corporate leaders, organizational
researchers, policy makers, and society as a
Journal of Business Ethics 38: 327–338, 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
Christopher J.
William F. Crittenden
Michael K. Brady
James J. Hoffman
whole. Today’s dynamic business environment has
created a situation where managers must struggle
to determine right from wrong in different
cultural contexts. The rapid globalization that has
occurred in recent years has led to an increase
in ethical complexity for managers of multi-
national firms (Velasquez, 2000). Moreover, the
magnitude of the particular issues that have
become controversial, such as sexual discrimina-
tion and internet privacy, has been compounded
by varying perceptions of morality.
From a cross-cultural research perspective,
there is strong evidence that documents cultural
differences of managers from different nations
(Hofstede, 1997; Ronen, 1986; Trompenaars,
1994). Notable differences have been found in
such aspects of culture as perceptions of power,
concern for time, ability to cope with uncer-
tainty, regard for material goods, display of
emotions, openness to change, and group
orientation (i.e. Adler, 1983; Hofstede and Bond,
1988). However, little has been done to analyze
specific ethical differences across borders
(Geletkanycz, 1997; Robertson and Fadil, 1999;
Trompenaars, 1994). Indeed, the field of business
ethics lacks empirical research in general, which
has resulted in a call for additional empirical
studies to help validate existing theories (Hosmer,
2000; Robertson, 1993). In a recent ground-
breaking cross-cultural study of corruption by
Husted (1999), it was concluded that ethicality
is linked to macro-level measures such as GNP
per capita, power distance, masculinity and
uncertainty avoidance. Despite these findings,
there is still a need to consider, and ultimately
isolate, the specific moral issues that drive ethical
decision-making (Davis et al., 1998; Jones, 1991;
Robertson, 1993). There is also a need to
328 Christopher J. Robertson et al.
consider the situational context of the decision
as an additional relevant factor (Hoffman et al.,
1998).
Thus, it would be valuable to examine the
effect of cultural values on a person’s moral
judgment while simultaneously employing specific
ethical issues and situations. The objective of this
study is to close this gap in the literature by
examining the variation in ethical responses
across 1) diverse cultural groups and 2) different
situational contexts. Since our focus is to test this
relationship at the international level, we have
developed a methodology that is appropriate for
use in a cross-cultural context.
Specific research questions based on prior
research will be developed in the next section.
This is followed by a description of the methods
and results of the study. A discussion of future
research directions, limitations, and managerial
implications concludes the paper.
Culture, the moral issue, and the situation
For clarification, it should be noted that the term
ethics refers generally to the study of whatever is
right and good for humans (Donaldson and
Werhane, 1996). This is similar to the word
moral, which has been used synonymously with
ethics in prior research (Donaldson and Werhane,
1996; Jones, 1991). We use the term moral
judgment to reflect the respondents’ beliefs
surrounding each ethical issue. Thus, the moral
norms implied in this study will not be deemed
true or false, but rather normatively valid or
invalid (Habermas, 1979). Also, when we refer
to the term situational ethics, we are describing
the numerous situational factors associated with
an ethical dilemma. An ethical dilemma is a
situation when an individual can see two sides
to an issue, with no clear moral right or wrong
that dominates a plausible decision.
One factor that may influence how a person
reacts to different ethical dilemmas is the indi-
vidual’s cultural perspective. In the business ethics
literature the notion of cultural relativism has
been frequently debated (Donaldson, 1989).
Cultural relativism refers to the equality of ethics
across all cultures. Essentially, this concept infers
that one culture’s ethical standard is not better
than any other cultural standard. For example, if
bribery is acceptable behavior in Mexico, cultural
relativism would suggest that the U.S. intolerance
of bribery is no more or less ethical than the
Mexican tolerance of bribery. Indeed, there are
clearly immoral issues, such as bribery, which
transcend all cultures, yet carry a varying degree
of moral weight across cultures. While some
scholars have rejected cultural relativism as too
extreme (Abratt et al., 1992), an understanding
of the “relative” morality of each culture
regarding specific issues can be helpful in the
determination of how moral issues vary across
societies (Vitell et al., 1993).
Factors such as religious beliefs, traditions,
rituals, and habits all help make up a nation’s
culture, but are often extremely difficult to
measure due to their complexity as well as the
potential existence of diverse subcultures.
Nevertheless, Hofstede (1980, 1997) has devel-
oped four cultural dimensions that help facili-
tate an understanding of differences across
cultures. These dimensions are individualism,
uncertainty avoidance, masculinity, and power
distance. It should be noted that Hofstede and
Bond (1988) developed a fifth dimension,
Confucian Dynamism, which deals with time
perceptions. However, this variable was not
included in the present study due to a lack of
prior research which related it to ethical-decision
making (Husted, 1999).
The four cultural dimensions of Hofstede are
well established in the literature and have repeat-
edly been shown to be valid and reliable
(Geletkanycz, 1997; Hofstede, 1997; Hofstede
and Bond, 1984; Shane, 1995). While Hofstede’s
dimensions are generally applied at the national
level, research has indicated that they also exist
at the individual level (Dorfman and Howell,
1988; Triandis et al., 1988). These findings are
logical since an argument can be made that in
addition to there being cultural differences
between members of different cultures, there
are also subcultural and individual differences
among members of a single culture. Thus, what
applies at the cultural level may, or may not,
apply at the individual level (Chen et al.,
1998).
 Situational Ethics Across Borders
Hofstede’s initial dimension is called individ-
ualism, with its polar opposite collectivism.
According to Hofstede (1980, p. 213): “individ-
ualism describes the relationship between the
individual and the collectivity which prevails in
a given society. It is reflected in the way people
live together – for example, in nuclear families,
or tribes; and it has all kinds of value implica-
tions.” Essentially, people with individualist traits
tend to exclusively focus on caring for themselves
and their immediate families. In contrast, col-
lectivists have an extended or societal focus.
Hofstede’s (1980) second dimension, uncer-
tainty avoidance, indicates the extent to which
members of a society feel threatened by uncer-
tain and ambiguous situations. People who score
high along this dimension try to avoid uncertain
situations by attaining greater career stability and
establishing more rules and policies. Strong
uncertainty avoidance cultures are more tolerant
of unfairness and tend to believe in absolute
truths, whereas weak uncertainty avoidance
cultures tend to be less affected by ambiguity and
less tolerant of inequality and rules.
The third dimension developed by Hofstede
(1980) is called masculinity, with its inverse
femininity. This dimension is based on measure-
ments of the degree to which cultural values are
“masculine.” Typical masculine values according
to Hofstede’s research are assertiveness, the
acquisition of material things, and a lack of
concern for others.
The fourth dimension from Hofstede’s (1980)
original study is power distance. This dimension
indicates the degree of human inequality per-
ceived as normal within a culture. Inequality,
which typically exists in the boss-subordinate
relationship, occurs in such areas as wealth,
power, and prestige. The power distance dimen-
sion reflects the extent to which members of a
society accept the unequal distribution of power
in organizations and institutions. People who
possess large power distance values are accepting
of gaps in power and believe that there is an order
of inequality in the world and that everybody has
a predetermined place. Small power distance
people are unaccepting of inequality and believe
that power should be distributed evenly.
With respect to the countries in the present
329
study (i.e., Australia, Chile, Ecuador, and the
United States), Hofstede’s (1980) research
revealed both cultural similarities as well as
notable distinctions. For instance, the Australian
and U.S. values were on the same end of the
continuum on three of Hofstede’s four dimen-
sions (all but Uncertainty Avoidance). Chile and
Ecuador also scored similarly on all but one
dimension (Masculinity). Yet the differences
between the Anglo (Australia/U.S.) and Latino
(Chile/Ecuador) groups were quite dramatic. For
example, the U.S. and Chile differed on all four
dimensions. Since prior research has suggested
that cultural distinctions along Hofstede’s dimen-
sions can lead to differences in moral judgment
and decision outcomes (Vitell et al., 1993), it
would be consistent to presume that this pattern
will continue in the present study. That is, there
is reason to believe that variation exists relative
to the ethical judgments of individuals from
diverse cultural backgrounds.
To examine the variation in ethical responses
across both cultures and situations, research
questions were developed and tested regarding
four important yet diverse ethical issues:
1) Environmentalism, 2) Bribery, 3) Sex
Discrimination, and 4) Child Labor. These issues
were carefully chosen from the list of globally
questionable business practices used by Josephson
(1989) in his global ethics training workshops.
The issues were later validated by Husted et al.
(1996) in a study of managers from the U.S.,
Mexico and Spain (each issue ranked in the top
ten for all three nations), and they deal with core
beliefs that touch humanity around the world
(Donaldson and Werhane, 1996; Boatright,
1995). Both Josephson (1989) and Husted (1999)
determined that these issues vary in their relative
ethical importance from culture to culture. Based
on this premise the following research question
is proposed:
Research Question 1: Will variation exist in
issue-contingent ethical judgments across
nations with diverse cultural backgrounds?
Research on ethical decision-making has been
mixed when the issue of the context of the
ethical dilemma has been confronted. Some
330 Christopher J. Robertson et al.
scholars (e.g., Treviño, 1986; Dubinsky and
Loken, 1989) have concluded that individuals
will react similarly regardless of the specific
circumstances. However, a more popular view is
that an individual’s beliefs about a certain
dilemma will vary dramatically when the situa-
tional influences are altered (i.e., Rest, 1986;
Hunt and Vitell, 1986). The debate has clearly
swayed in the direction of these situational
ethicists. Weber (1990) found that modes of
ethical reasoning are altered when different
ethical issues confront corporate managers. Jones
(1991) argued that “moral intensity,” or the
personalized impact of a specific moral issue,
would significantly influence ethical decision-
making and behavior. Similarly, Jones and Ryan
(1997) concluded that people heavily rely on the
opinions of referent groups in dealing with moral
issues. In Hoffman et al.’s (1998) study of 171
managers it was concluded that levels of ethical
response were varied when faced with a situation
where one’s own economic well being was at
stake as opposed to the survival of the organiza-
tion. While evidence from the literature supports
the expectation for variation in ethical responses
when the situation is altered this notion has yet
to be tested in a multicultural context. Stated
formally,
Research Question 2: Will individuals vary their
ethical responses to diverse ethical dilemmas
when the situational context of the
dilemmas is altered to affect the individual’s
personal economic well being?
The study
Sample
The population of interest in this study was
organizational members with diverse cultural
backgrounds. The sample consisted of managers
from four nations that work for a large multi-
national financial institution. Through the use
of one multinational firm we not only controlled
for the effects of organizational culture (Hofstede,
1997) but we also sampled managers who had
professional exposure to other cultures as well as
experience dealing with diversity within their
own cultures (Chen et al., 1998). The sample
consisted of managers at all levels of the organi-
zation and an effort was made to query an equal
number of men and women.
Procedures and measures
A survey instrument was utilized to collect
demographic, cultural, and ethical data from the
respondents. To prevent any distortions in
meaning across cultures (Alreck and Settle, 1995),
local nationals in Ecuador and Chile translated
the survey into Spanish. To ensure accuracy,
the instrument was then back-translated by a
bilingual English speaker and compared to the
original. During the translation process, any
potential loss of meaning in the vignettes was
avoided by adapting the language to local idioms.
To provide some control over non-response bias,
a small sample of non-respondents was subse-
quently contacted. Our analysis revealed no
variance between respondents and non-respon-
dents.
The instrument consisted of two key sections.
The first section contained basic demographic
characteristics, which included nationality, age,
educational level, and gender. These variables
were included to account for any differences that
may exist between an individual’s cultural back-
ground and responses to the given ethical
dilemmas. Research has indicated that a person’s
age may be related to his or her ethical behavior.
Kohlberg’s (1984) theory of moral development
essentially suggests that individuals move through
different stages of morality as they age, with
higher stages indicating a higher level of morality.
Age is therefore measured as a continuous
variable with respondents self reporting their
ages. Educational level, which was measured in
years, also has been found to have a significant
influence on an individual’s moral development
and was thus included as a control feature
(Kohlberg, 1984). There have been a number of
studies which indicate that women and men
differ in their perceptions of certain ethical issues
(see Beltramini et al., 1984). Since some of the
issues examined in this study are sensitive to a
 Situational Ethics Across Borders
person’s gender, such as the sex discrimination
issue, the impact of gender on the ethical
scenarios in this study also was controlled.
The second section of the survey contained
four vignettes (see Appendix for the vignettes
used in the study). Many studies in the field of
business ethics have utilized vignettes because of
their many advantages and this has become one
of the dominant methods in this field (i.e.,
Fritzsche and Becker, 1984; Premeaux and
Mondy, 1993). When compared to single ques-
tions, vignettes allow the researcher to inject a
greater amount of information and detail into
ethically sensitive issues and this facilitates higher
quality data (Alexander and Becker, 1984;
Hoffman et al., 1998; Premeaux and Mondy,
1993). The purpose of the vignettes was to
obtain data to measure the dependent variables
(i.e., moral judgments), thus a vignette was
designed to represent each of the four ethical
dilemmas.
According to Rest (1986), after a person has
recognized an ethical situation, a moral judgment
is made. In the establishment of a moral
judgment and prior to actually engaging in an
ethical decision, the decision maker balances
moral factors against other related factors, with
special attention paid to self-interest (Boatright,
1995). The dependent variables in this study
were measures of moral judgment – which leads
to moral intentions and ultimately to ethical, or
unethical, behavior. This variable is therefore not
a measure of actual behavior, but rather a moral
and/or psychological antecedent to behavior.
From a measurement standpoint, the higher an
individual’s score on a given question, the higher
that person’s moral judgment surrounding the
ethical issue at hand. A typical question reads as
follows, “If you were President of Star would you
pay the bribe?” This was followed by a seven
point scale ranging from one (definitely would)
to seven (definitely would not). A second
question was then asked which alters the situa-
tional context of the decision. For the vignette
involving the Star Manufacturing Corporation
the question was, “If you were a Star employee
and might lose your job if the bribe is not paid,
would you favor paying the bribe?” Each
vignette followed with a similar questioning
331
format where the respondent was placed in the
position of a top manager, followed by a situa-
tion involving the potential for personal
economic hardship.
The vignettes were block-rotated, or alter-
nated in order of appearance, and randomly
distributed among respondents (i.e. Subject 1 =
V1, V2, V3, V4; Subject 2 = V2, V3, V4, V1;
etc.). This design is consistent with prior studies
that have employed vignettes, or decision
scenarios, in the data collection process (Pablo,
1994). This quasi-experimental design was
selected to control social desirability bias, inde-
pendent variable variance, and error variance
while strengthening internal and external validity
(Keppel and Zedeck, 1989).
The vignettes employed in this study were
designed to reflect actual business situations.
Much attention was given in the design phase
in order to ensure that the vignettes were free
from gender, racial, and other biases. The
vignettes were pretested using 188 undergraduate
business students, from a variety of cultural
backgrounds, to ensure that each scenario was
indeed recognized as an ethical dilemma. The
resulting percentages of positive recognition from
the pretest phase (Environmentalism = 95%,
Bribery. = 78%, Sex Discrimination = 81%, and
Child Labor = 94%) were deemed valid and
reliable. Recent research has revealed that, in
business ethics studies, the use of a student sample
is representative of an organizational population
(i.e. Wyld et al., 1993).
Data analysis
The first research question was tested using a
one-way analysis of variance (ANOVA) tech-
nique in order to determine if any variation
existed across the four subgroups (Delery and
Doty, 1996). A total of eight ANOVAs were run
(4 countries × 2 responses). Follow-up Scheffé
tests were performed to test for specific signifi-
cant differences. The second research question
was tested by performing a Paired-Samples t-test
approach, which was intended to reveal differ-
ences in means between dilemma responses for
each national group.
332 Christopher J. Robertson et al.

Results In order to test the first research question,

Descriptive statistics
Out of a total of 520 surveys distributed (120
each to Australia and Chile, 100 to Ecuador, and
180 to the United States), 234 surveys were
initially returned, a response rate of 45%.
However, twenty-four expatriates were identified
across the four groups and were subsequently
dropped from the sample in order to capture a
pure cultural sample from each nation. The final
usable sample was therefore 210. The sample sizes
and response rates were as follows: Australia n =
65 (54%); Chile n = 55 (46%); Ecuador n = 45
(45%); and the United States n = 45 (25%). The
lower response rate in the U.S. may very well be
attributable to the abundance of survey research
that is performed in this country which has led
to a lower interest in survey participation by
professionals. A summary of the demographics
is presented in Table I.
The mean age was approximately 32 years and
there was a slightly higher proportion of men
(58%) to women (42%). The average years of
education was 15.80 years. In many countries,
the number of years required to earn the equiv-
alent to an U.S. Bachelor’s degree varies, so this
data point must be interpreted with caution.
whether variation exists across diverse cultural
groups, eight separate ANOVAs were performed
(the results appear in Table II). In two of the four
ethical dilemmas significant differences were
revealed. This lends support to research question
1. Specifically, when respondents were placed in
the CEO position, cultural differences were
found in the sex discrimination (F = 5.87, p <
0.01) and child labor (F = 9.36, p < 0.001)
dilemmas. In both of the vignettes, follow-up
Scheffé tests revealed that the Chilean group
scored significantly lower than managers from
Australia, the U.S., and Ecuador.
The personal economic hardship situation
(indicated by the term unemployed in Table II)
also uncovered two significant differences: child
labor (F = 11.17, p < 0.001) and bribery (F =
4.68, p < 0.01). Scheffé tests revealed a similar
pattern with respect to the child labor issue, as
Chilean managers scored lower than the other
three groups. However, in the bribery dilemma,
post-hoc tests showed that Chileans scored sig-
nificantly higher than their Australian counter-
parts when faced with a situation of personal
financial hardship.
The second research question confronted the
influence of varying the situation on responses to
diverse ethical dilemmas. The results from paired

TABLE I
Descriptive statistics: Means and standard deviations

Variable Chile Australia U.S.A. Ecuador Overall

(n = 5) (n = 65) (n = 45) (n = 45) (N = 210)

Age 31.44 (8.37) 33.77 (8.91) 32.85 (9.29) 30.84 (7.17) 32.33 (8.40)
Gender (in %) 68 m (32 f) 65 m (35 f) 51 m (49 f) 42 m (58 f) 58 m (42 f)
Education 15.31 (2.60) 15.97 (2.71) 16.59 (1.56) 15.40 (2.50) 15.80 (2.46)
Sex discrimination 03.79 (1.52) 04.97 (1.91) 04.80 (1.96) 05.03 (1.90) 04.62 (1.86)
Unemployed 03.81 (1.50) 03.96 (1.92) 03.71 (2.10) 04.07 (2.06) 03.89 (1.88)
Child labor 04.37 (1.70) 05.49 (1.73) 05.31 (1.83) 06.09 (1.91) 05.29 (1.75)
Unemployed 04.43 (1.51) 05.85 (1.53) 06.06 (1.59) 05.72 (1.71) 05.50 (1.70)
Environmentalism 03.90 (1.79) 04.70 (1.86) 04.69 (1.90) 04.41 (1.95) 04.43 (1.89)
Unemployed 03.83 (1.69) 04.25 (1.98) 03.93 (1.95) 03.55 (2.01) 03.93 (1.91)
Bribery 03.95 (1.67) 03.69 (2.22) 03.87 (2.09) 04.39 (2.31) 03.94 (2.08)
Unemployed 04.26 (1.57) 03.12 (2.11) 03.29 (1.99) 04.11 (2.29) 03.68 (2.06)

Note: With the exception of Gender all figures are means followed by standard deviations in parentheses. Gender
is reported in percentages with m = male and f = female.
 Situational Ethics Across Borders 333

TABLE II
Results of one-way analysis of variance comparing ethical belief a

Variables Source 0Df Sum of Mean 00F Post-hocb

squares squares Scheffé results

Sex discrimination Between 003 058.58 19.52 05.87** AUS > CHL
CEOc Within 205 682.55 03.33 USA > CHL
Total 208 741.13 ECU > CHL
Unemployed Between 003 003.54 01.18 00.33
Within 203 732.13 03.61
Total 206 735.67
Child labor Between 003 076.57 25.52 09.36*** AUS > CHL
CEO Within 204 556.12 02.72 USA > CHL
Total 207 632.69 ECU > CHL
Unemployed Between 003 085.04 28.35 11.17*** AUS > CHL
Within 201 510.20 02.54 USA > CHL
Total 204 595.24 ECU > CHL
Environmentalism Between 003 022.56 07.52 02.14
CEO Within 203 712.18 03.51
Total 206 734.73
Unemployed Between 003 012.67 04.22 01.16
Within 203 739.51 03.64
Total 206 752.18
Bribery Between 003 012.99 04.33 00.99
CEO Within 203 884.31 04.36
Total 897.30
Unemployed Between 003 056.63 18.87 04.68** CHL > AUS
Within 203 818.32 04.03
Total 206 874.95

** p < 0.01; *** p < 0.001

a
N varies from 203 to 208.
b
Post-hoc multiple comparison (Scheffé) tests revealed significance in two-tailed tests at a minimum of
p < 0.05. Only significant results are presented in this column. For example, AUS > CHL for the Sex
Discrimination/CEO dilemma, the first result reported, means that the Australian group scored significantly
higher than the Chilean group on the first question of this dilemma. Thus the Chilean managers had a lower
ethical concern than the Australian managers on this issue.
c
CEO refers to the first question posed to respondents in the vignette where they are placed in the position
of the prime decision-maker in an organization whereas Unemployed refers to the second question where personal
economic well-being is at stake.

samples t-tests, by country, are presented in
Table III. Interestingly, no significant differences
were found within the Chilean group. However,
the Australian and U.S. groups were quite dif-
ferent. The Aussies lowered their ethical response
significantly on three of the four dilemmas, all
but child labor, when the situation was altered
from CEO to potentially unemployed. In the
U.S. group, three of the four tests came up
significant in the hypothesized direction. Oddly,
this group significantly increased its child labor
score when faced with a situation of unemploy-
ment. The Ecuadorian group lowered its moral
responses when faced with a situational change
334 Christopher J. Robertson et al.

TABLE III
Results of raired samples t-tests (N = 210)

Variable Sex discrimination Child labor Environmentalism Bribery

CEO Unemp CEO Unemp CEO Unemp CEO Unemp

Chile 3.79 03.81 4.37 04.43 3.90 3.83 3.95 04.26

t-value –0.11 –0.27 0.33 –1.76
Australia 4.97 03.96 5.49 05.85 4.70 4.25 3.69 03.12
t-value 04.11*** –1.83 2.26* 04.05***
U.S.A. 4.80 03.71 5.31 06.06 4.69 3.93 3.87 03.29
t-value 03.36** –2.62* 2.38* 03.10**
Ecuador 5.03 04.07 6.09 05.72 4.41 3.55 4.39 04.11
t-value 03.09** 01.90 2.47* 01.14

Note: 1. Bold parameter estimates represent significant relationships.

2. CEO refers to vignette question 1 and Unemp refers to vignette question 2.
* p < 0.05; ** p < 0.01; *** p < 0.001.

in the sex discrimination and environmental
dilemmas. Thus, it appears that cultural and
personal values interact when confronted with a
dramatic change in the situational context of a
moral dilemma. In the next section, potential
explanations for the current results will be
explored and future research streams will be
presented.
Discussion
The objective of this study was to examine the
diversity in ethical response to a range of ethical
dilemmas in varying cultural and situational
contexts. Two research questions were posed in
order to extend prior research in this area that
has received little empirical attention by man-
agerial and sociological scholars (Robertson,
1993). The first question asked whether or not
culture matters when individuals are faced with
different ethical issues. Based on our results, the
answer to this question appears to be yes,
depending on the issue. The results from the
Child Labor dilemma revealed that Chileans had
less concern about this issue, regardless of the
context, when compared to managers from
Australia, Ecuador, and the U.S. Similar results
were found regarding sex discrimination when
respondents viewed the situation in the role of a
CEO. However, Chileans were more morally
concerned than Australians about bribery when
in a situation of personal financial hardship. Thus,
it clearly appears it is not only the culture and
the dilemma that alter an individual’s response,
but also the situation.
This view is further confirmed when exam-
ining the second research question. The second
research question inferred that individuals will
alter their ethical beliefs when faced with a sit-
uation of personal financial hardship. The results
also support this thesis. That is, respondents
demonstrated a propensity to change their ethical
pattern of response when the question was
altered to reflect a change in the economic
situation. Yet, the issue and culture again appear
to play a major role in the cognitive moral
process. Both the U.S. and Australian groups
significantly lowered their responses to three of
the four dilemmas (all except child labor) when
placed in a position of unemployment. Similarly,
the Ecuadorians altered their responses on two
of the dilemmas. Only the Chileans were stead-
fast in their moral values, given a change in the
situational context. These situational findings
suggest, in diverse cultural contexts, desperate or
pressure filled conditions can lead to a weakening
of moral behavior. In turn, weakened moral
 Situational Ethics Across Borders
behavior can lead to a rationalization effect,
whereby otherwise morally questionable actions
or decisions are deemed not so unethical. While
earlier studies (i.e. Hoffman et al., 1998) have
documented this movement in values when the
situation is varied, this is the initial exploration
of how culture tends to play a role in situational,
issue-contingent, ethics.
Although the findings reveal some consistency,
a number of interesting differences were also
uncovered. For instance, why is it that Chileans
are more likely to remain true to their values
when compared to their South American
neighbors from Ecuador? Could the influences
of past or current government regimes be a
factor? Perhaps it is the strong influences of
varied immigrants and settlers (e.g., German and
Yugoslav in the South of Chile)? Why did North
Americans, but not Australians, significantly
increase their scores regarding child labor when
placed in a position of unemployment? Is there
an empathetic dimension to the U.S. moral
philosophy when faced with family issues?
These questions address some of the poten-
tially rich areas for future research. Relatedly, are
there other issues, globally or within a domestic
context, which will remain constant in managers’
minds despite a change in the situation?
Exploring different cultures would clearly add
value to this budding research stream. European,
Asian, and African values juxtaposed against the
current findings would add more pieces to this
moral/cultural puzzle. A deeper analysis of the
values and beliefs of the people from the cultures
sampled in the present study also would be
beneficial in the quest for why some of these
patterns have surfaced. An examination of a
variety of other ethical dilemmas also would be
a welcome addition to this body of knowledge.
Vignettes could be developed, and tested, in
order to study salient dilemmas such as internet
privacy, racism, age discrimination and insider
trading (Husted et al., 1996).
Any study that involves a sensitive topic and a
multinational sample is bound to have some
limitations. The lack of recognition of certain
335
ethical dilemmas by some respondents in the
pretest phase may indicate that some problems
could be present in the interpretation of the
targeted dilemma in each vignette (for example
the Bribery vignette had 78% dilemma recogni-
tion). Social-desirability bias may be a factor that
has tainted responses of some individuals in the
present study. However, every effort was made to
reassure respondents that their responses would
be kept perfectly anonymous (including a drop
box and a letter sanctioned by a university’s
human subject committee). While arguably a
strength of our research design, the use of one
firm could also be considered a weakness as
behavioral norms may vary across firms and
industries.
A number of managerial implications exist
based on the findings of this study. First, top
management must understand that the ethical
climate of a multinational organization can be
extremely fragile. Indeed, our results suggest that
ethical beliefs and moral decision-making are
dependent on the situational circumstances faced
by culturally diverse managers. Therefore, the
current results may impact the communications,
performance objectives, and control systems
applied across multinational settings. Second, the
information revealed could be helpful to
managers in multinational firms that are in the
process of developing corporate codes of ethics
(Robertson and Fadil, 1999) and/or reviewing
staffing and training practices as they relate to
ethical issues. Precise, culturally contingent
guidelines could be created that consider some
of the diversity in values and beliefs across
borders. Further, actions and corrective steps
taken by managers will likely take on substan-
tially more significant roles in establishing, main-
taining, or stabilizing a multinational firm’s
ethical environment. Overall, it is hoped that the
results of this study have added value to the
limited list of empirical studies that have focused
on cross-cultural ethics. Moreover, this study has
identified a number of salient future research
endeavors for ethical scholars.
336 Christopher J. Robertson et al.

Appendix: Vignettes

Please note that vignette titles and subtitles were not included with the survey that was distributed to respondents.

Environmentalism (Oil revenue versus preserving the rain-forest)

Solar Oil Company, a multinational oil exploration firm, has been granted permission by the government of a
small Latin American country to drill for oil in the Amazon Basin region of the country. The local firms that
are currently involved with the oil industry lack the machinery and modern technology of the firms from more
industrialized countries. While Solar possesses the required technology, successful exploration would require
the clearing of a vast amount of land in the jungle, resulting in the significant destruction of tropical
rain-forest.
The vice-president in charge of oil exploration is confident that the oil reserves in this area are substantial
and he wants to begin full-scale drilling as soon as possible even though environmental damages would be
considerable. The local government currently lacks stringent environmental protection laws and would likely
look the other way if oil reserves were in fact discovered.
1. If you were the President of Solar would you go ahead with the project?
2. If you were a Solar employee and might lose your job if this project is not approved, would you favor the
project?

Bribery (Smoothing delays at customs versus losing key customers)

Star Manufacturing Corporation is the subsidiary of a large multinational firm located in a nation far away
from its home country. Star is the maker of various automobile and machine parts. Since the new president
began with Star three months ago there has been extreme difficulty in getting large shipments out of customs.
Star’s local legal consultant suggested that if the president paid a bribe to the local officials then there would be
no more problems with customs. Apparently this is a custom which is acceptable in the local culture.
The president is not sure what to do. On one hand paying the bribe will free up equipment that is much
needed for the production process. Deadlines are being missed and key customers have threatened to find another
supplier. On the other hand the president does not feel comfortable giving a bribe even though it may be
acceptable and legal in the local country.
1. If you were President of Star would you pay the bribe?
2. If you were a Star employee and might lose your job if the bribe is not paid, would you favor paying the
bribe?

Sex Discrimination (Skilled and experience versus the male connection)

Emma Jones is a sales associate for a large construction materials distributor in a nation where no sex
discrimination laws currently exist. She has worked for the firm since her graduation from a local university
four years ago. The owner of the company, Russ Stevens, explained to Emma that although she has excellent
sales skills he couldn’t transfer her to the more lucrative city center territory because he needs someone who
knows the local clients better. Subsequently, Russ interviewed a man, Bob Francis, who has less experience
than Emma, for the city center position. Russ’s justification for interviewing Bob was that all of the major
inner city clients are men and Russ believes that a male sales representative would be a better fit for the position.
Russ fears the threat of lost sales if he moves Emma to the city center territory. Although Russ wants to hire
Bob, who he believes will at least maintain the current sales level, he also feels that Emma deserves the job.
1. If you were Russ would you hire Bob for the city center position?
2. If you worked for this construction firm and might lose your job if a woman is hired, would you favor
hiring Bob for the new position?
 Situational Ethics Across Borders 337

Child Labor (Maintaining low costs versus potential damage to competitive position)
A large multinational manufacturing company recently opened up a factory in Central America. During a trip
to the new factory the chief executive officer noticed that a large percentage of the factory workers were young
children between the ages of six and twelve. After conversations with a few of the local managers the CEO
realized that there is no local law against the employment of children. It was also discovered that these children
are hired because they will work for about one-half of the national minimum wage, which keeps factory labor
costs very low. Further, many of these children are supporting their families because their parent(s) are either
unable to work or earn an insignificant amount of money.
The Human Resource Manager has devised a plan which may solve the problem. First, all children will
continue to receive their wages, but in place of working they will attend the company school. Upon the
completion of their formal education the children will be guaranteed a job with the firm. Next, adults will be
hired for the vacant positions at the national minimum wage, with preference given to the parents of children
who worked for the company. The CEO is not sure what to do: implement a potentially costly plan or continue
to let the children work.
1. If you were the CEO, would you let the children continue to work?
2. If you were an employee of this firm and might lose your job if the children are allowed to work, would
you be in favor of letting the children continue to work?

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Christopher J. Robertson* and William F. Crittenden
General Management Group,
College of Business Administration,
Northeastern University,
313 Hayden Hall,
Boston, MA 02115
E-mail: c.robertson@neu.edu
E-mail: w.crittenden@neu.edu
Michael K. Brady
Department of Marketing,
The Carroll School of Management,
Boston College,
Chestnut Hill, MA 02467-3808
E-mail: bradymp@bc.edu
James J. Hoffman
Department of Management,
College of Business,
Texas Tech University,
Lubbock, TX 79409-4320
E-mail: hoffman@ba.ttu.edu
*Send all correspondence to Christopher J. Robertson.