Business & Society

Volume 48 Number 1
March 2009 39-59
© 2009 Sage Publications
Collective Versus 10.1177/0007650307299224
http://bas.sagepub.com
Individualist National hosted at
http://online.sagepub.com

Cultures
Comparing Taiwan and U.S.
Employee Attitudes Toward
Unethical Business Practices
Randi L. Sims
Nova Southeastern University

The business environment has increasingly expanded outside single nations

or regions of the world to encompass many differing countries. Along with
this expansion come business opportunities and challenges when facing busi-
ness practices and attitudes not so similar to our own. In studying how these
national cultural differences affect ethical decision making, managers and
employees alike gain an understanding and respect for those differing busi-
ness practices. This study considers the national cultural dimension of col-
lectivism versus individualism. Survey data were gathered from 252 full-time
employees working in the collective country of Taiwan and the individualist
country of the United States of America. Results indicate that employees
from the collective culture of Taiwan are more likely to indicate they would
make an unethical decision that benefits the organization and less likely to
openly question an unethical practice by their organization. Implications of
these findings are discussed.

Keywords: cross-cultural; ethics; collectivism; Taiwan

T he business environment has increasingly expanded outside single

nations or regions of the world to encompass many differing countries.
Along with this expansion come business opportunities and challenges
when facing business practices and attitudes not so common to our own.
Attitudes are of critical importance to the outcomes of the interaction

Author’s Note: I wish to thank Dr. Long-Chuan Lu of the National Chung Cheng University,
Taiwan, for his help in translation and data collection.

39
40 Business & Society

between individuals (Saks & Krupat, 1988) and are a basis for the relation-
ships we form with others. These attitudes of individuals or groups of indi-
viduals are shaped, in large part, by prior experiences and the socialization
process. Socialization is “an ongoing process by which people come to
adopt the attitudes, behaviors, and ways of seeing the world that are held by
the groups to which they belong and relate” (Saks & Krupat, 1988, p. 125).
When members of a group are well socialized, much of their behavior is
predictable to other group members, and relationships between group
members are positive. Our interactions with other members of the groups
to which we belong help us learn which attitudes and beliefs we should
hold to remain in good standing in the group (Saks & Krupat, 1988). When
members of a group act contrary to the expected behavior within that group,
conflict occurs, and the group may exert influence or pressure to bring the
behavior back in line with what is expected. Misbehaving individuals often
feel guilt or shame for their errors (Bedford, 2004) and act quickly to self-
correct to regain social approval. This socialization process is seen in some
form or another in all cultures of the world. What may differ between cul-
tures, however, are the specific sets of attitudes that influence or guide the
behavior of individuals and their relationships with others. “Relationships
are addressed in different societies in different ways. [Because] cultural val-
ues influence the nature of relationships within organizations, differences
could therefore be expected to exist among national cultures” (Jackson,
2001, p. 1268).
In studying how these cultural differences affect ethical decision making,
managers and employees alike gain an understanding and respect for those dif-
fering business practices. Awareness of how a culture influences the ethical
expectations within a society leads to deeper understanding of other societies
(Carroll & Gannon, 1997; Ford, Nonis, & Hudson, 2005; Robertson, 2000)
and respect for differences. This understanding and respect is vital for suc-
cessful business relationships (Hampden-Turner & Trompenaars, 1993; Lin,
1999; Pitta, Fung, & Isberg, 1999). The motivation behind ethical decision
making is often hidden deep within the cultural background of the individual.
“The most important habits that make up cultures have . . . [to do] with the eth-
ical codes by which societies regulate behavior” (Fukuyama, 1995, p. 35).
Because they share similar histories, members of a single national culture are
likely to share common attitudes and solve dilemmas in a way similar to oth-
ers from their own culture. This is demonstrated by the results from a study of
15,000 executives that indicate that the “culture of origin is the most important
determinant of values” (Hampden-Turner & Trompenaars, 1993, p. 4).
“Cultural values have evolved gradually and are embedded in the collective
 Sims / Collective Versus Individualist Cultures 41

memory of the people of a particular society” (Ali, Lee, Hsieh, & Krishnan,
2005, p. 3). These cultural values are often expressed in the ethical decision
making of individuals (Robertson, Hoffman, & Herrmann, 1999). “National
difference in ethical attitudes may be attributed to differences in cultural val-
ues that vary from one nation to the next” (Jackson, 2001, p. 1269). Because
there are value differences between national cultures, it is expected that there
will also be differences in the ethical decision-making process between
national cultures (Vitell, Nwachukwu, & Barnes, 1993; see also Buller, Kohls,
& Anderson, 1997; Marta, Attia, Singhapakdi, & Atteya, 2003; Sexty, 1998)
and differences in ethical codes of conduct (Beyer & Nino, 1999).
The interest in the study of business ethics across cultural and national
boundaries has grown tremendously during the past several years. This inter-
est parallels the trend toward multinational business dealings. For companies
conducting business outside their home country, it is acceptable neither to
simply adopt the ethical practices of the host country nor to unilaterally
enforce the ethical practices of the home country (Donaldson & Dunfee,
1999). A greater understanding of differing nations and cultures leads to
more positive interactions (Lin, 1999) and more successful business rela-
tionships (Moon & Franke, 2000; Palazzo, 2002) and may help “managers
develop tools to promote ethical behavior in their international workforce”
(Beekun, Stedham, & Yamamura, 2003, p. 268; see also Robertson &
Crittenden, 2003). “What may be commonplace and quite legal in one
country oftentimes is considered illegal or unethical in another” (Blodgett,
Lu, Rose, & Vitell, 2001, p. 190). Without the continued study of cross-
cultural ethical issues, businesses may be unprepared to continue the trend
toward a global economy. “As firms expand globally, a greater understand-
ing of the effects of culture on business ethics becomes increasingly impor-
tant” (Blodgett et al., 2001, p. 190).
This research study considers the cultural dimension of collectivism ver-
sus individualism. “Individualism versus collectivism as a dimension of
national cultures is responsible for many misunderstandings in intercultural
encounters” (Hofstede, 1997, p. 78) and may be the most important value
dimension across cultures (Carroll & Gannon, 1997). It has also been sug-
gested that the dimension of collectivism versus individualism may be the
“only universal value dimension with noteworthy replication in significant
occasions in different nations” (Smith, 1996, as cited in Karabati & Say,
2005, p. 88) and is a primary reason for national differences in ethical prac-
tices (Carroll & Gannon, 1997). The notion of individualism versus col-
lectivism dates back 300 years and has been studied and debated by
philosophers, historians, anthropologists, sociologists, and psychologists
42 Business & Society

(Triandis, 1995). The classification of a nation along the collective–individualist

dimension can be tied back to very early societal development within differ-
ing regions of the world. Migratory societies, always on the move for food
supplies, encouraged self-reliance and assertiveness, whereas sedentary soci-
eties, growing their own food and raising livestock, encouraged obedience
and responsibility (Kim, Triandis, Kagitcibasi, Choi, & Yoon, 1994). Even
with the evolutionary changes in the world’s food supply, many of these cul-
tural differences in values persisted geographically.
Cultures are classified as collective when the interests of the group out-
weigh the interests of the individual. Here, a person’s identity is based on
his or her membership in particular groups (Hofstede, 1997). Being disloyal
to one’s group (immediate and extended family, social, or work) is about
the worst thing a person can do in a collective culture. Employee actions are
designed to benefit his or her in-group, even if the individual himself or her-
self must suffer. “A behavior such as lying is acceptable for collectivists if
it benefits the ingroup” (Moon & Franke, 2000, p. 54; see also Swaidan &
Hayes, 2005). In a collective culture, supervisors manage groups, and
employment decisions are based on group membership and group achieve-
ments. In collective cultures, employees are loyal to their organizations
and, in turn, the organization provides protection. This loyalty between
employee and employer is absolute. The relationship is similar to those
found within families. The organization is like a parent and the employee
like a child. Poorly performing employees within collective cultures are not
terminated, just like a parent would not terminate a relationship with a
child. Instead, the employee may be reassigned to duties that are a better fit
with his or her skills (Hofstede, 1997).
Within individualist cultures, the interests of the individual (and his or
her immediate family) outweigh the interests of the group (extended fam-
ily, social, or work). A person’s identity is based only on the individual. In
individualist cultures, the relationship between employer and employee is
a contract based on mutual benefit. This contractual relationship may be
terminated by either party any time the relationship is no longer mutually
beneficial. Supervisors manage individuals in an individualistic culture,
and employment decisions are based on individual skills and personal
achievements. Employees look out for themselves and their immediate
families, not the organization (Hofstede, 1997). From the organization’s
perspective, individualist cultures can be described as an employee’s inde-
pendence from the organization. Those cultures that score high on this
dimension focus on work goals that stress individual achievements rather
than group achievements.
 Sims / Collective Versus Individualist Cultures 43

Table 1
Collective Versus Individualist Cultural Characteristics
Collective Individualist

Other interest Self-interest

Compliance Assertiveness
Harmony valued Conflict accepted
Interdependence Independence
Duties Rights
Relational Rational
Shame Guilt

Table 1 displays some general differences between the behaviors that are
valued within a collective culture and the behaviors that are valued within
an individualist culture. In a collective society, members are dutiful and
compliant; value harmony, interdependence, and relationships between
members; and place the needs and desires of others above their own. In an
individualist society, members are rational and assertive; value indepen-
dence, individual rights, and a good debate; and place their own needs and
desires above those of others. According to Hofstede (1997), the cultural
dimension of collectivism versus individualism ranges from a score of
almost zero, indicating a collective culture, to almost 100, indicating an
individualistic culture. The United States ranked first, with a score of 91.
The United States scored extremely high on the individualism dimension,
actually the highest of the 53 cultures studied by Hofstede, whereas Taiwan
ranked 44th, with a score of 17. This score of 17 for Taiwan is an indica-
tion of a very collective culture (Hofstede, 1997). In thinking of the history
of the settlement of the United States, it becomes apparent that to survive
such an untamed land, the people had to be self-reliant, assertive, and inde-
pendent, all characteristics of an individualist culture. Yet modern Taiwan
was populated, in large part, by Chinese farmers who were raised on the
teachings of Confucius. In part, Confucius espoused altruism and harmony
among individuals, characteristics of a collective culture. The cultural val-
ues of the early settlers of the United States and Taiwan remain apparent,
even today, in the people of those nations and are unlikely to substantially
change any time soon.
Given these key differences in the cultural values associated with indi-
vidualism and collectivism, it is expected that the ethical decision making
between individuals from each of these countries would likely also differ.
It is expected that employees within collective cultures would be more
44 Business & Society

likely to make decisions, even those that may be considered unethical, that
appear likely to benefit the organization and less likely to make unethical
decisions for their own personal benefit.
Prior research has found some support for this proposal. For example, in
studying U.S. marketers (an individualist society), Hegarty and Sims (1979, as
cited in Vitell et al., 1993) found a positive relationship between personal
desire for wealth and unethical behavior. Yet organizational profit was not
found to be related to increases in unethical behavior. So within an individu-
alist culture, marketers were found to be more likely to make an unethical
decision that offered self-benefit and not more likely to make an unethical
decision for their organization’s benefit. Likewise, Sims (2002b) found that
U.S. employees were more likely to report a tendency to use deception within
the workplace for personal gain than were employees in Israel (a moderately
collective society). Alternately, Teoh, Serang, and Lim (1999) found that
students in Indonesia (a collective society) were more likely to support uneth-
ical behavior that led to benefits for in-groups. In addition, Husted (2000) con-
cluded that instances of software piracy were related to the cultural dimension
of collectivism. That is, the more collective a nation, the more likely members
of that culture would illegally share copies of software. This illegal software
sharing can be seen as helping in-group members. Thus, individuals from a
collective culture were more likely to behave in an unethical manner if their
in-group members were to benefit from such unethical behavior. In addition,
Lim (2003) found that respondents in China and Singapore (both considered
collective cultures) viewed unethical decisions that were in the organization’s
interests as more ethical than when rating a similar decision rewritten with a
self-benefit or no-benefit outcome. As such, the current study proposes that
employees within collective cultures (in this case, Taiwan) would be more
likely to make an unethical decision that appears to benefit the company and
less likely to make an unethical decision that appears to offer personal bene-
fit. Alternately, it is proposed that employees within an individualist culture (in
this case, the United States), would be less likely to make an unethical deci-
sion that appears to benefit the company and more likely to make an unethical
decision that appears to offer personal benefit. Thus, the following hypotheses
will be tested:

Hypothesis 1: Employees within the collective culture of Taiwan are more likely
than employees within the individualist culture of the United States to make
an unethical business decision if it appears to benefit the organization.
Hypothesis 2: Employees within the individualist culture of the United States
are more likely than employees within the collective culture of Taiwan to
make an unethical business decision for personal benefit.
 Sims / Collective Versus Individualist Cultures 45

Hofstede (1997) explains that in collective cultures, people seek to main-

tain harmony. Direct confrontation is avoided and is considered rude and
undesirable. The relationship between people is very important and trust must
be achieved before any business transactions can be carried out (see also Ang
& Leong, 2000). The relationship between people is more important than the
task to be accomplished. “Personal opinions do not exist: they are predeter-
mined by the group” (Hofstede, 1997, p. 59). Even if someone did disagree, it
is highly unlikely that he or she would actually say so. Holding an opinion
that differs from the group is a sign of bad character (Triandis, 1995).
“Collectivists would rather avoid conflict in the first place, and, given conflict,
prefer that it not be brought into the open and thereby upset in-group har-
mony” (Weaver, 2001, p. 6). To maintain harmony, an individual within a col-
lective society would be unlikely to openly voice differing opinions or behave
in a manner that might cause conflict between members of his or her in-group.
Harmony between group members is of utmost importance. “Behaviors that
tend to destroy this sense of harmony are frequently classified as unacceptable
or unethical” (Carroll & Gannon, 1997, p. 9). This avoidance of confrontation
and importance of harmony between people within collective cultures is quite
different from the brutally honest approach often seen within individualist cul-
tures. Within individualist cultures, individuals are expected to openly share
their differing opinions. Individualism “encourages a generally adversarial
approach to conflict” (Carroll & Gannon, 1997, p. 6). The person who speaks
his or her mind is considered honest and is respected. Here, the task is more
important than the relationships among people. Within an individualist culture,
the truth is expected, even when it hurts. Dealing with conflict is a normal part
of living with others in individualist cultures (Hofstede, 1997). People are not
afraid of causing conflict or unease in others by disagreeing or speaking out
against behaviors or attitudes they oppose. Organization loyalty is less likely
to stop a manager within the United States from reporting wrongdoing or
injustice (Carroll & Gannon, 1997), yet the same cannot be said for managers
within a collective culture.
With these cultural differences in mind, it is expected that employees
from an individualist culture would be more likely to openly question the
organization about its unethical practices without regard to maintaining
harmony and the relationship between people. Yet “persons in collectivist
cultures more likely will comply with organizational demands because they
have internalized the group’s norms” (Weaver, 2001, p. 6). Thus, the fol-
lowing hypothesis is proposed:

Hypothesis 3: Employees within the individualist culture of the United States

are more likely than employees within the collective culture of Taiwan to
46 Business & Society

openly speak their minds about their organization’s unethical practices

without regard to the conflict it may cause.

“Next to harmony another important concept in connection with the col-

lective [culture] is shame” (Hofstede, 1997, p. 60). People within collective
cultures who violate social expectations often experience shame. These feel-
ings of shame stem from having broken society’s rules and the fact that others
will know about the transgression (Hofstede, 1997). Within a collective cul-
ture, an individual’s honor and self-esteem are dependent on following the
expectations and rules of society. Those who do not follow these expectations
experience shame not only for themselves but for their entire group (Triandis,
1995), thus the pressures to conform are great. In collective cultures, children
are socialized very early to conform to group expectations to avoid the horror
and shame of negative reactions by others (Carroll & Gannon, 1997). These
feelings of shame in collective cultures are slightly different from the feelings
of guilt often felt by individuals within individualist cultures when social
expectations are violated but may have the same ultimate outcome. It is not
necessary for others to learn about the transgression for an individual to expe-
rience guilt (Hofstede, 1997). In both cultures, the potential for negative feel-
ings based on an individual’s poor behavior may be related to an individual’s
decision to behave in a way that corresponds with society’s expectations.
“Guilt and shame subtly shape our behavior, often causing people to behave
so as to avoid experiencing them” (Bedford, 2004, p. 29).
Within this study, the respondents are faced with the opportunity to
openly lie to a client. The lie does not appear to offer any personal or orga-
nizational benefit like those proposed in Hypotheses 1 and 2. In addition,
the lie is likely to be uncovered within a matter of days, furthering the like-
lihood of another learning about the transgression. Within both collective
and individualist cultures, a blatant lie violates commonly expected social
rules. Honesty or trustworthiness may be one of the moral values com-
monly accepted universally (Schwartz, 2005). It is expected that employees
from both a collective culture (Taiwan) and an individualist culture (United
States) would avoid this type of unethical behavior. In doing so, the collec-
tive employees will avoid shame and the individualist employees will avoid
guilt. It is therefore proposed that the outcome of such a dilemma would not
differ between individualist and collective cultures. The individual from an
individualist culture would avoid a blatant lie that has no apparent benefit
to avoid guilt, and the individual from a collective culture would avoid a
blatant lie that has no apparent benefit to avoid shame. Thus, the following
hypothesis is proposed:
 Sims / Collective Versus Individualist Cultures 47

Figure 1
The Impact of Cultural Values on Ethical
Decision Making: A Proposed Model

Ethical
Cultural Values Decision Making

Dishonesty/
Self/Other Interest
Lying

Opposing
Conflict/Harmony
Wrong-doing

Hypothesis 4: There are no differences between employees within collective

cultures and employees within an individualist culture in expressed sup-
port for an unethical business decision to deceive when no apparent per-
sonal or organizational benefit is perceived.

Figure 1 displays this proposed relationship between cultural values and

ethical decision making.

Method

Procedures
Surveys were distributed to classroom groups of university business
students. Selection of groups was based on a convenience method, and
evening and weekend sections of courses were selected to ensure that the
students would all be employed full-time. Surveys that indicated less than full-
time employment were not included in the study. Respondents completed the
48 Business & Society

Table 2
Employment by Country (in percentages)
Taiwan United States
n = 95 n = 157

Position
Operational or administrative 28 24
Professional 18 27
Lower management 22 17
Middle or upper management 32 32
Industry
Service 46 44
Manufacturing 22 22
Government 16 15
Other 16 19

surveys during class time and returned them directly to the research associate
present. Participation was voluntary and respondents remained anonymous.
The U.S. sample used in this study was extracted from a larger sampling
(n ≈ 250) previously gathered to specifically match the Taiwan sample on
age, gender, and tenure. ANOVA indicated no significant differences between
the U.S. and Taiwan samples on these demographic characteristics. The sur-
vey was translated into Chinese by a bilingual research associate and back
translated into English by a second research associate (Brislin, 1980). It was
found that the original and back-translated English versions were identical in
meaning.

Participants
Taiwan. The Taiwan sample included 95 employees all working full-
time, primarily in the service (46%) and manufacturing (22%) fields. Table
2 provides a breakdown of the respondents’ positions and industries. The
respondents were 69% male, with an average age of 37 years and 9 years
of tenure with their current organization (see Table 3).

United States. The sample from the United States included 157 employ-
ees all working full-time, primarily in the service (44%) and manufacturing
(22%) fields. Table 2 provides a breakdown of the respondents’ positions
and industries. The respondents were 69% male, with an average age of 37
years and 7 years of tenure with their current organization (see Table 3).
 Sims / Collective Versus Individualist Cultures 49

Table 3
Respondent Demographics
Taiwan United States

Age (in years) 36.96 (6.02) 36.53 (6.55)

Tenure (in years) 9.02 (6.27) 7.65 (5.83)
Percentage male 69.5 69.4
Sample size 95 157

Note: Figures are averages. Standard deviations are shown in parentheses.

Measures
The questionnaire measured participant demographics and included six
paragraph-length ethical business dilemmas designed to gather information
from the respondents about their attitudes toward ethical decision making
(Sims, 1999). The use of dilemmas in cross-cultural ethical research has
been recommended by Lu, Rose, and Blodgett (1999) to better uncover dif-
ferences in ethical decision making between different national cultures.
Following the presentation of the dilemma, participants were asked which
of a series of five choices they were most likely to make if faced with this
dilemma. Four of these six dilemmas were used in hypothesis testing for
this study.

Withholding information to benefit the company. The first dilemma,

titled “Missing Information,” described a situation where the respondents
were placed in a position of ensuring the accuracy of organizational infor-
mation presented to a potential client. It appeared unlikely that the client
would choose to do business with the respondent’s firm if any negative
information were provided. The firm is in dire need of the business, having
been forced to lay off many excellent employees because of slow sales.
Incomplete information had already been provided to the potential client,
painting a picture of the firm better than reality. This is a category of dis-
honesty classified as concealment. “Concealment is intentionally withhold-
ing information under conditions designed to encourage the recipient that
all relevant information has been revealed” (Scott & Jehn, 1999, p. 314).
Asked to indicate what they were likely to do in this situation, respondents
were offered (randomly listed) five alternatives ranging from do nothing
(scored least ethical) to make sure the client received the complete report
(scored most ethical). Higher scores are considered more ethical.
50 Business & Society

Withholding information for personal benefit. The second dilemma,

titled “Group Project,” described a situation where the respondents were
placed in a position of being the holders of information that, if known,
could diminish how positively coworkers and top management view them.
The respondent has been given credit for an idea that was not his or her
own. Respondents are given the opportunity to correct the mistaken credit
using five randomly arranged alternatives ranging from openly accept
credit for the idea (scored least ethical) to give credit to the correct person
(scored most ethical). Higher scores are considered more ethical. This is a
category of dishonesty classified as concealment (Scott & Jehn, 1999).

Potential conflict in reporting discrimination. The third dilemma, titled

“Organizational Practices,” described a situation where the respondents
were aware of ongoing discriminatory practices within the company.
Knowledge of these practices was gained inadvertently, and it is unlikely
that anyone else would discover these practices. Respondents are given the
opportunity to instigate change using five randomly arranged alternatives
ranging from do nothing (scored least ethical) to openly question the prac-
tices and, if necessary, go public, insisting on changes (scored most ethi-
cal). Higher scores are considered more ethical.

No benefit in intentional deception. The fourth dilemma, titled “Shipping

Dates,” described a situation where the respondents are asked by a manager
(not their own) to intentionally lie to a client about the shipping date of an
order. No benefit (for either the respondent or the firm) is obviously gained
by such deception because such a lie will not actually get the product to the
client earlier. The lie appears only to cover the manager, who requested that
the respondent lie, for the short term. Respondents are given the opportunity
to act on the request by using one of five randomly arranged alternatives
ranging from call the client providing the falsified date (scored least ethical)
to call the client providing the accurate date (scored most ethical). Higher
scores are considered more ethical. This is a category of dishonesty classi-
fied as lying about beliefs. “It presents as fact information that the speaker
believes to be untrue” (Scott & Jehn, 1999, p. 314).

Results

Descriptive statistics for all study variables are displayed in Table 4.

 Sims / Collective Versus Individualist Cultures 51

Table 4
Ethical Decision Making by Culture
Collective Individualist
Dilemma Taiwan United States F Value

1. Missing information
(company benefit) 2.92 (1.34) 3.63 (1.00) 21.88**
2. Group project
(personal benefit) 2.95 (1.12) 2.95 (1.13) 0.00
3. Organizational practices
(potential conflict) 2.27 (0.94) 2.85 (1.09) 18.23**
4. Shipping dates
(lying; no benefit) 3.86 (1.13) 3.72 (1.06) 0.94
Sample size 95 157

Note: Figures are averages. Standard deviations are shown in parentheses.

**p ≤ .01.

Hypothesis 1
Hypothesis 1 proposed that employees within a collective culture would
be more likely to indicate they would make an unethical decision that
benefits the organization. This likelihood of making unethical decisions
to benefit the organization was measured using Dilemma 1, “Missing
Information.” The results of the ANOVA indicate that employees from
Taiwan, a highly collective culture, were significantly more likely to make
unethical decisions for the organization’s benefit (M = 2.92, SD = 1.34)
than employees from the United States, a highly individualist culture (M =
3.63, SD = 1.00, F = 21.88, p = .00). Thus, Hypothesis 1 is supported:
Employees within a collective culture are more likely to indicate they
would make an unethical decision that benefits the organization.

Hypothesis 2
Hypothesis 2 proposed that employees from individualist cultures would
be more likely to indicate they would make an unethical decision for per-
sonal benefit. This likelihood of making an unethical decision for personal
benefit was measured using Dilemma 2, “Group Project.” The results of the
ANOVA indicate that employees from the United States, a highly individ-
ualist culture, were not significantly more likely to make an unethical deci-
sion for personal gain (M = 2.95, SD = 1.13) than employees from Taiwan,
52 Business & Society

a highly collective culture (M = 2.95, SD = 1.12, F = 0.00, p = .99). Thus,

Hypothesis 2 is not supported: Employees within individualist cultures are
not more likely to indicate they would make an unethical business decision
for personal benefit.

Hypothesis 3
Hypothesis 3 proposed that employees from individualist cultures would
be more likely to speak their minds openly about their organization’s uneth-
ical practices without regard to the conflict it may cause. This decision to
speak one’s mind was measured using Dilemma 3, “Organizational
Practices.” The results of the ANOVA indicate that employees from the
United States, a highly individualist culture, were significantly more likely
to indicate they would report their organization’s unethical practices (M =
2.85, SD = 1.09) than employees from Taiwan, a highly collective culture
(M = 2.27, SD = 0.94, F = 18.23, p = .00). Thus, Hypothesis 3 is sup-
ported: Employees within individualist cultures are more likely to report a
tendency to openly question an unethical practice by their organization.

Hypothesis 4
Hypothesis 4 proposed that employees from collective cultures would be
no more or less likely to report that they would make an unethical decision
when no apparent personal or organizational benefit is perceived. This like-
lihood of making an unethical decision without apparent benefit was mea-
sured using Dilemma 4, “Shipping Dates.” The results of the ANOVA
indicate that employees from Taiwan, a highly collective culture, were not
significantly more or less likely to make an unethical decision without
apparent benefit (M = 3.86, SD = 1.13) than employees from the United
States, a highly individualist culture (M = 3.72, SD = 1.06, F = 0.94, p =
.33). Thus, Hypothesis 4 is supported: There are no differences in reported
likelihood of making an unethical business decision between collective and
individualist cultures when there is no apparent benefit.

Discussion

This study proposed that individuals from a collective culture would be

more likely to make an unethical decision if it appears to benefit the organi-
zation. It was expected that because employees from collective cultures may
be more loyal to their organizations, they would extend this loyalty if faced
 Sims / Collective Versus Individualist Cultures 53

with an ethical dilemma that indicated that the organization and coworkers
were in dire need of help that could be provided with the withholding of truth
from someone outside the group. “Lying is an acceptable behavior in collec-
tivist cultures, especially if it saves face or benefits the ingroup. [Conversely],
individualists see lying as breaking the contract and since contracts are very
important, this is a serious offense” (Triandis, 1995, p. 78).
Although we did find that respondents from a collective culture indicated
that they would withhold information if doing so appeared to benefit their
organization, we were hasty to declare that doing so would be less ethical than
telling the entire truth. In fact, what we mean is that researchers from an indi-
vidualist culture have rated withholding information to benefit the company as
less ethical than telling the entire truth. Smith and Hume (2005) found that
accountants from collective cultures (Mexico, Hong Kong, and Venezuela)
reported that it was more acceptable for an employee to lie to a customer to
protect the company than did accountants from individualist cultures (United
States, Netherlands, and New Zealand). Yet even in individualist cultures, the
whole truth is not always seen as the most ethical option. Americans have a
phrase, little white lies, to illustrate the point that the whole truth is not neces-
sarily always better than withholding information. It would be interesting to
study how individuals from a collective culture would ethically evaluate the
choices offered for this dilemma. Telling the whole truth that may hurt a
member of one’s group may be considered much less ethical than withholding
the truth from an out-group member.
It is important for organizations working across national borders to have
a good understanding that employees from collective cultures may be more
willing to withhold the truth from out-group members to benefit in-group
members than might be expected from employees from individualist cul-
tures. It may be that training programs or codes of ethics (see Weaver,
1993) could be developed specifically addressing this type of situation.
Coughlan (2005) discusses the importance of organizational ethics codes in
helping employees justify the ethical decisions they make. This justification
to in-group members could be very important in saving face for employees
from collective cultures. For example, if collective employees realize the
potential damage to the organization’s reputation for such dishonesty, they
may be more willing to accept that withholding the truth to out-group
members does not really help in-group members. Scott and Jehn (2003) dis-
cuss the implications of such employee dishonesty on the stakeholder’s
image of an organization. Given that the entire organization may suffer the
consequences of a poor reputation, honesty to out-group members may
become the expected standard even within a collective culture. “Increased
54 Business & Society

realization of the consequences that organizational actions cause can help

curb harmful deeds” (May & Pauli, 2002, p. 112). In addition, research
findings suggest that employees who have bonded with their organization
are more likely to follow the ethical rules set (Sims, 2002a). Thus, it could
be expected that the bonded collective employee would be willing to follow
newly established patterns of ethical behaviors. It is likely much easier to
change the interpretation of expected benefits for an ethical or unethical
decision than it is to change the values associated with national culture.
This may be where the focus of organizational training and ethical expec-
tations should start. The collective employee could learn that to protect his
or her in-group and employer, he or she must be honest with out-group
members to protect the reputation of the organization, which could be
irreparably harmed by his or her dishonesty.
The second hypothesis also tested differences between collective and
individualist cultures for concealment or withholding information, but this
time withholding information was for self-benefit. It was proposed that
employees from an individualist culture would be more likely to withhold
information for personal benefit than would employees from a collective
culture. The findings did not support this hypothesis. Employees from both
cultures indicated identical responses. It appears that both groups report
similar views about withholding information for self-benefit. It was
expected that employees from collective cultures would place the group’s
needs above their own, but what we also found was that although employ-
ees from individualist cultures may place their own needs above others’,
they do not report they would withhold the truth for self-benefit more
than those individuals from collective cultures. Fukuyama (1995) would
explain this finding as part of the social habits of all individuals. “These
habits in turn guarantee that human beings never behave as purely selfish
utility maximizers” (p. 41). Dishonesty has a negative connotation within
individualist cultures. It may be that although an employee from an indi-
vidualist culture would like to blatantly lie to further his or her own inter-
ests, actually reporting in writing the desire to do so may be less desirable.
The reliance on self-reporting in this situation is clearly a study limitation.
As proposed, the findings indicate that employees from an individualist
culture were more likely to openly question the unethical practices within
their company than employees from a collective culture. The tendency for
Americans to speak their minds is one of the most basic characteristics and
highly valued right of their culture. It is not surprising, therefore, that this ten-
dency persists during ethical conflict. This may be especially true given that the
unethical behavior in question is one of discrimination. In highly individualist
 Sims / Collective Versus Individualist Cultures 55

cultures, treating everyone equally is considered very important. This differs

from the attitude common in collective cultures where rights differ by the
group in question (Hofstede, 1997). Perhaps within the collective culture of
Taiwan, employees believe that the organization is well within its expected
behavior to treat members of one employee group different from another. In
addition, although the results indicate that employees within an individualist
culture view “telling” as more ethical and the better choice from among the
alternatives presented, telling is not always considered the best way to handle
every situation within the individualist culture. Again, Americans have an
expression to demonstrate that telling is not always the best practice: tattle-
tale. This refers to the negative connotation that telling sometimes has. The
situation has to be severe enough to tell. Examples of severity include safety
issues or instances of extreme unfairness, such as in the dilemma presented.
It is likely that employees within a collective culture would also consider
telling the best alternative for issues of safety and perhaps even unfairness,
yet it is possible that the dilemma did not describe an unfair situation from
the cultural perspective of collectivism. Perhaps the issue of moral intensity
(Jones, 1991) should be considered in the future when studying cross-cultural
differences in ethical decision making. “Organizational members are likely to
vary their intentions to act ethically or unethically based on the probability of
harm and social consensus dimensions of moral intensity” (May & Pauli,
2002, p. 112). For example, in studying employee whistle-blowing intentions
in the collective culture of Korea, Park, Rehg, and Lee (2005) found mixed
results. In some situations there was a relationship between collective
employee attitudes and an intention to blow the whistle, and in other situa-
tions there was no such relationship (see also Zhuang, Thomas, & Miller,
2005). It may be that there were differences in the moral intensity of the sit-
uation concerning the whistle-blowing dilemmas. This is an interesting area
that would also benefit from future research. From a practical perspective, it
may be that it is unrealistic to expect employees from a collective culture to
report incidences of organizational wrongdoing, because doing so would
cause disharmony within the organization and conflict with their cultural val-
ues of harmony and relationship building. Within a collective culture, a hot-
line or grievance box would not be as effective as within an individualist
culture where speaking one’s mind is highly valued. Instead, changes in
processes and procedures could accommodate some ethical differences
between national cultures. Within a collective culture, a watchdog group or
ethics officer could be assigned to oversee specific decisions and not assigned
as investigators just when an employee has made a complaint. An organiza-
tion should not depend on its collective employees to speak out against
56 Business & Society

wrongdoing. Instead, wrongdoing within the organization established within

a collective culture must be discovered using alternate means. This is yet
another interesting area that could benefit from additional research.
The last hypothesis proposed that there would be no differences in the deci-
sion making of employees from collective and individual cultures when there
was no apparent benefit for the deception. This may be the most telling of the
findings of this study. It seems as if the ethical value of honesty for honesty’s
sake is shared by both the individualist and collective cultures of America and
Taiwan. When left on their own, without influence of their in-groups, employ-
ers, or personal levels of greed, employees within both samples indicated that
they would be as likely to tell the truth to the client presented in the dilemma.
This also corresponds with the finding by Blodgett et al. (2001), who deter-
mined that there were no differences in the ethical sensitivity of Taiwan and
American sales agents toward the customers. It appears that the impact of
shame in the collective culture, which stems from others’ learning that some-
one has broken society’s rules, and guilt in the individualist culture, which
stems from internal conflict from having broken society’s rules, both result in
similar behavior when honestly dealing with customers. Here we found a
report of fair and honest treatment of customers no matter the national culture
of the employee. This one area of ethical agreement may help in finding
common ground for international companies concerned with creating an ethi-
cal workforce across national boundaries.
The use of self-reported likelihood of action based on dilemmas is a lim-
itation in this study. There is always the possibility of social desirability
bias when studying ethical issues. In addition, research based on the use of
hypothetical situations with a convenience sample may not be as generaliz-
able as research based on actual experience or with a random sample.
Much of the business ethics literature is written from the perspective of
American businesses by American researchers. Although not necessarily bad
given the far-reaching effects of American industry, the perspective is from a
highly individualist culture. Actually, the United States is the most individu-
alist country in the world (as rated by Hofstede, 1997). Theories proposed
and recommendations made based on the research results from this individ-
ualist society are not only presumptuous but may be erroneous. “In individu-
alist societies the norm is that one should treat everybody alike” (Hofstede,
1997, p. 66). This expectation of equity and individual rights is at the core of
most of the conclusions resulting from the study of ethical issues in business.
Yet “the vast majority of people in our world live in societies in which the
interest of the group prevails over the interest of the individual” (Hofstede,
1997, p. 50). Thus, the basic assumptions underlying much of the research
 Sims / Collective Versus Individualist Cultures 57

and theory coming from American samples and from American businesses do
not match well with the majority of people in our world. Instead of continu-
ing to view the ethical issues in business from only an individualist perspec-
tive, we should also consider the alternate collective perspective. Perhaps it is
not more ethical to tell the truth to an outsider to the detriment of our own
people or to offer the same treatment to every group. These are difficult
notions to contemplate from an individualist background, as they go against
the very nature of our upbringing, just as the individualist expectations go
against the very nature of the upbringing of the collectively raised individual.
It is no wonder Hofstede (1997) considers the value differences between col-
lective and individualist societies to be responsible for so many misunder-
standings within cross-cultural interactions.
Although this research study does indicate that there are some similarities
in the ethical decision making of employees from collective and individualist
cultures, the differences are notable and can be explained by Hofstede’s
(1997) theory of international cultures. The differences between collective
and individualist cultures are quite large, and it is expected that these differ-
ences will continue for a long time. With the continued trend toward a global
economy, it is clear that a thorough understanding and respect for these cul-
tural differences in how they affect the ethical decision making and attitudes
of employees becomes necessary for continued successful relationships and
are, as such, a viable area of continued research.

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Randi L. Sims is currently a professor for Nova Southeastern University, located in Fort
Lauderdale, Florida. She obtained her doctorate degree in business administration from
Florida Atlantic University. Her teaching and research interests lie in the fields of ethical deci-
sion making, business ethics, organizational behavior, and academic dishonesty. She has pub-
lished in numerous journals, including Journal of Business Ethics, Journal of Education for
Business, Educational and Psychological Measurement, International Journal of Value Based
Management, and Journal of Psychology.