Attitudes toward consumer and business ethics among Canadian and New Zealand business students: an...

JIM FISHER, DAVID TAYLOR and SAM FULLERTON

ATTITUDES TOWARD CONSUMER AND BUSINESS ETHICSAMONG CANADIAN AND NEW ZEALAND BUSINESS

STUDENTS: AN ASSESSMENT OF 28 SCENARIOS

(Accepted 10 May 1999)

ABSTRACT. Recent initiatives in business curricula have included emphases on globalbusiness and ethics. This paper combines these issues by comparing the ethical predis-position of business students in New Zealand with their Canadian counterparts. A sampleof 360 students indicated that students in both countries generally hold high expectationsfor the behaviour of both business and consumers. Of the 28 scenarios evaluated, fiveexhibited significant differences between the two groups. In four cases, students from NewZealand expressed less tolerance for the questionable business practices, and in the otherone the situation was reversed. Despite the relative congruence of attitudes exhibited by thestudents of the two countries, the fact that differences do exist is testimony to the increasedrisk inherent to international business.

KEY WORDS: business ethics, Canada, consumer ethics, marketing, New Zealand,students

INTRODUCTION

As we approach the next millennium, we have witnessed an increasedemphasis on both global business concerns and business ethics. Eachof these areas poses many challenging decisions for strategists, and thiscombination represents perhaps the most difficult challenge that today’smulti-national corporations will face (Duerden, 1995). Cowton and Dunfee(1995) recently conducted a survey of business faculty in the UnitedKingdom, Asia, and the United States; the results indicated that there isgeneral agreement that the purview of business ethics must also focus oncompanies and incidents outside of the American domain. Yet, interna-tional business ethics has been given little coverage in the typical businesscurriculum.

Another shortcoming has been the lack of attention given to consumertransgressions; virtually every study which purports to measure ethicalpredisposition has focused on the attitudes which consumers holdregarding perceived breaches of acceptable conduct on the part of business.

Teaching Business Ethics3: 155–177, 1999.© 1999Kluwer Academic Publishers. Printed in the Netherlands.

156 JIM FISHER ET AL.

Only recently have efforts been made to assess the consumer side of thebuyer/seller dyad.

The majority of studies have evaluated ethical predisposition of somerelevant group within a single country. However, there has been compara-tively little effort to compare two or more countries via the administrationof identical surveys. This is true despite the fact that there have beenmany cross-cultural studies which evaluated differences and similaritiesin behavioural characteristics of the various countries’ consumers. Thisstudy seeks to address this deficiency by evaluating responses of businessstudents from two countries: New Zealand and Canada.

ETHICAL BEHAVIOUR

Ethics has been variously defined as a system of moral principles, rulesof conduct recognised in respect to a particular class of human behaviour,values relating to human conduct, the rightness and wrongness of certainactions, and “just” or “right” standards of behaviour between parties in asituation. Doing “the right thing” may therefore be equated to behaving inan ethical manner. It does not mean doing what is legal; rather it gener-ally presupposes legal conduct and requires behaviour which is morallycorrect (though that begs for an answer to the question as to whether anillegal action might in fact be viewed as an ethical action). Of course thedilemma is that what is ethical is not necessarily congruent with a firm’soften stated objective of maximising profits, especially in the short run.Also problematic is the fact that there is not universal agreement on exactlywhat constitutes “the right thing”.

CONSUMER ETHICS

In comparison to the scrutiny given to the behaviour of the marketer,little attention has been focused on the buyer (Vitell and Muncy, 1992).Yet, for any relationship between the buyer and seller to flourish, mutualtrust is a prerequisite (Solomon, 1992). Any breach of ethical conductby either side of the buyer/seller dyad will disrupt the relationship andproduce exchanges which are unproductive and ineffective (Morgan andHunt, 1994). It is apparent, however, that researchers have begun to take acloser look at consumer transgressions in the marketplace.

Early research focused on illegal behaviours such as shoplifting andother fraudulent behaviours, perhaps because of their direct economicimpact on business (Cox et al., 1993; McShane and Noonan, 1993; Lo,

ATTITUDES TOWARD CONSUMER AND BUSINESS ETHICS 157

1993). But consumer ethics – like business ethics – transcends legalbehaviour; it involves doing the right or morally correct thing. As such,consumer ethics has been defined as the “rightness as opposed to thewrongness of certain actions on the part of the buyer or potential buyerin consumer situations” (Dodge, Edwards and Fullerton, 1996).

Consumers apparently impose relatively high standards regarding thebehaviour of their peers in retail situations. Yet, there are individualswho are more tolerant of perceived transgressions and there are situationsfor which the prevailing line of thinking is to “let the seller beware”. Inassessing these situations and transgressions, a taxonomy was developedby Fullerton, Kerch and Dodge (1996). Using their “Consumer EthicsIndex”, they identified four groups which were labelled: permissive, situ-ationalist, conformist, and puritan. An important finding within the contextof that study was that age was directly related to intolerance of theperceived abuses, thus one would anticipate that a survey of universitystudents would likely be comprised of individuals in the more tolerantgroups.

One issue which seems to impact the acceptance of consumer transgres-sions is the impact on the victim. Muncy and Vitell (1992) found that the“degree of harm” was related to the level of acceptance. Dodge, Edwardsand Fullerton (1996) identified two latent factors – “direct economicconsequences and indirect (imperceptible) economic consequences” – andthe fact that actions in the indirect economic consequences factor werenot as strongly condemned as were those which had direct economicconsequences on the marketer.

BUSINESS ETHICS

Business ethics has sarcastically been referred to as an oxymoron(Townley, 1992). Most business people would take offence at such a char-acterisation while recognising that decisions in many grey areas mustbe made with a great deal of individual discretion. The lack of specificstandards and enforceable codes of conduct produce a variety of attitudesand decisions regarding the efficacy of certain questionable practices. Yet,there is general agreement that ethical behaviour helps assure short termcustomer satisfaction and long term viability for the organisation (Abrattand Sacks, 1988).

In the developing era of relationship marketing, it would seem logicalthat the surest way to bring any relationship to a premature conclusion isto commit a perceived breach of ethical conduct (Edwards and Goodell,1994). Unfortunately, not everyone agrees on just what constitutes such


a breach (Fullerton, 1993). Indeed, the above emphasises that there is noreal consensus on the definition of business ethics. This lack of consensus,however, has not inhibited research efforts in this area.

Many identify the emphasis on the bottom line as the fundamentaldriving force which renders ethical behaviour secondary to economicperformance. In the United States, for example, a survey of recent HarvardMBA graduates was cited as proof that America’s next generation ofbusiness leaders will readily forego behaviour which is morally correctif other more tangible benefits are likely to accrue (Badaracco and Webb,1995). Yet, the bulk of the studies which have focused on college studentsindicate that they are generally ethically predisposed, especially whenevaluating the actions of others (Beltramini et al., 1984). Among thestudies which have looked at college students are those which have foundthat younger students, business majors, and males are less ethically predis-posed (Fullerton, 1993). Also, students tend to be somewhat cynical asto what others would do. They may feel that certain actions are appro-priate, yet they doubt that executives, when faced with the decision toimplement these behaviours, will respond in ethically consistent ways(Stephenson, Galbraith and Grimm, 1995). But executives feel that theyare unfairly maligned and that the negative perception of their behaviour isnot congruent with their actual behaviour (Laczniak, Berkowitz, Brookerand Hale, 1995).

ETHICS: A GLOBAL PERSPECTIVE

There has been a spate of recent research which has assessed businessethics in a single country. Well documented are those efforts which havefocused on American business practices, yet a number of other countrieshave been the sites for such cross-sectional studies. Also apparent in recentpublications have been studies which compare two or more countries, oneof which is typically the United States.

SINGLE COUNTRY STUDIES

One recent study was initiated because of concerns regarding question-able “commercial activities” by businesses in Western Australia. However,it was reported that the populace was quite indifferent to these allegedabuses. Still, a number of people pointed to the need to make an effortto reduce these abuses and a series of lectures was delivered to busi-ness students (Small, 1995). In another study which addressed Australian


issues, Skubik (1995) delineated several characteristics which make thedevelopment of an international code of ethics difficult at best. Foremostis the problem which faces the manager who has to make decisions whichconflict with either the home country or the host country.

The results of a study of Malaysian students were somewhat discon-certing. Those respondents indicated a belief that business ethics seemed tobe of “secondary” importance. More promising is the sample’s indicationthat business curricula should place greater emphasis on ethical valuesin an effort to influence management’s decision-making process (Alam,1995). In drawing generalisations about developing countries, a studyfocusing on South Africa indicates that the integration of ethics intoeveryday business practices is a goal which is not easily accomplished(Rossouw, 1994). In Japan, ethical behaviour is strongly influenced by reli-gious and social considerations (Taka, 1994); the implication is that othercultures with divergent customs and social mores would possess differentattitudes regarding potential ethical dilemmas (Kohls and Butler, 1994).

COMPARATIVE STUDIES

One interesting study compared the American ethos to that of Russia. Asthe Russians have moved to further develop a market-based economy,many citizens have expressed dismay regarding perceived breaches ofethics on the part of business. The study points out that opinions ofAmerican consumers are not consistent with those held by their Russiancounterparts (Puffer and McCarthy, 1995). Another cross-cultural studycontrasted the ethical attitudes of managers in the Republic of Ireland,the United Kingdom, and the United States (Alderson and Kakabadse,1994). Reputed to be the first formal study of Irish ethical predisposition,it highlights the fact that there are differences among managers in thethree countries, that the efficacy of an international code of ethics is calledinto question, and that multinational management teams might ameliorateconcerns about inappropriate business practices.

In a study which did not include the United States, Nyaw and Ng (1994)evaluated the extent to which business students in Japan, Hong Kong,Taiwan, and Canada differed in their opinions about the appropriateness ofspecific questionable actions. Their results indicated that there are signi-ficant differences of opinion on many of the scenarios depicting potentialethical dilemmas. DeGeorge (1994) delineated the operationalisation ofinternational ethics by companies headquartered in the US, Japan, Europe,and Eastern Europe. Some researchers express a belief that the ethicalorientation indigenous to any country is based on culture and religion;


therefore, countries which are in close geographical proximity and alsoshare common cultures will cluster together when assessing ethical predis-position. Managers in Europe seem to exhibit attitudes which differ fromthose American counterparts, yet there is a great deal of similarity amongthe Europeans irrespective of the country of citizenship (Schlegelmilch andRobertson, 1995). These results were not consistent with those of a similarstudy which looked at ethical behaviour in the US as well as three Asiancountries; in this case, the patterns exhibited by the Japanese, Korean, andTaiwanese managers were more diverse (Fritzsche et al., 1995).

Another study was undertaken with the objective of identifying ethicalproblems in Australia. The survey of business managers cited the use ofgifts, favours, and entertainment as undue influence within the business-to-business market (Armstrong, 1992). In drawing conclusions, the authorindicated that the perceived severity of such abuses – if indeed an actionis deemed unacceptable at all – is likely dependent upon the culture of thecountry where the study takes place. This presumption provides credenceto the belief that there are differences from country to country and supportsefforts to perform cross-cultural studies which facilitate the comparisonof populations from different countries in our increasingly global market-place. But not every comparative study has documented this difference. Incomparing students in Western Australia, Israel, and the United States.Small (1992) concluded that the three groups “tended to share similaror identical values in their attitudes toward business ethics” and furtherindicated that these “commonalties support the view that business ethicsand business practices are similar throughout the western world.” Whippleand Sands (1992) found that the differences between men and womenwere greater than those found when comparing citizens of the UK toAmericans. Thus, there is a body of evidence which refutes the beliefthat ethical predisposition will vary substantially from country to countrythereby creating a dilemma for researchers as well as practitioners.

Despite some evidence to the contrary, the literature tends to supportthe premise that there are meaningful differences in ethical predisposi-tion from country to country. But, as indicated in the previous paragraph,there are some contradictions. Perhaps the citizens of different countriessharing a common heritage and religious orientation possess attitudeswhich are congruent. Thus, we might anticipate similar attitudes whencomparing the British to the Americans and differences when comparingthe Japanese to the Australians. Regardless, it highlights the importanceof continuing this stream of research by evaluating various behaviours incountries throughout the world.


OBJECTIVES

The logical conclusion which emanates from a review of the literature isthat fundamental differences regarding acceptable and unacceptable beha-viours exist. As has been recommended, additional research should bedirected toward gaining a better understanding of the ethical predispositionof individuals in the global marketplace. It is this recommendation whichprovides direction for this project.

The basic objective of this phase of the research is to obtain results froma sample which will provide insight about ethical predisposition of busi-ness students in two English-speaking countries separated by some 16,000kilometres. Though the intent is to soon add significantly to this sample andto include additional countries in the evaluation, some important funda-mental results should emanate from this phase of the planned researchproject. As such, the specific objectives include: the evaluation of thesample on their ethical predisposition regarding potentially questionablepractices and the identification of differences between the New Zealandand Canadian strata. Additionally, the roles played by age and genderare scrutinized by comparing different demographic groups within eachcountry as well as like demographic groups across countries.

METHODOLOGY

The initial step was the development of a data collection instrument whichincluded both components of ethics: business ethics and consumer ethics.The initial development of the business ethics component comprised19 scenarios used in a study by Fullerton (1993). The consumer ethicscomponent employed 15 scenarios developed by Fullerton Kerch andDodge (1996). Each set was reduced to 14 by virtue of the exclusion ofscenarios which were deemed unapplicable in situations outside of theUnited States. Two versions of the survey were developed. The only differ-ences were in regard to spelling (behavior vs. behaviour) and wording(apartment vs. flat). As such, the questionnaires were deemed to be tech-nically identical. The final 28 scenarios evaluated are included in theappendix (The Canadian version is used to illustrate the specific items;the New Zealand version had slight modifications from what is shown).

The two samples were obtained by distributing the self-administeredsurvey to students enrolled in the general undergraduate business coursesat the University of Waikato, Hamilton, New Zealand, and amongaccounting and business students at Wilfrid Laurier University, Waterloo,Ontario, Canada. Evaluation of the scenarios was implemented by using


a balanced six-point scale which used polar adjectives of acceptable andunacceptable, i.e., 1 – acceptable; 6 – unacceptable. Overall ethical predis-position was measured by calculating the sample mean for each of the28 scenarios concerning the consumer and business ethics components.Means were also computed for each scenario for each of the countries.Items where respondents of the two countries differed significantly wereidentified using a two sample t-test.

RESULTS

Consumer Ethics

The initial sample of New Zealand students comprised 209 respondents;and the Canadian sample comprised 151 students. A review of the resultson the consumer ethics dimension provides evidence which supportsmany previous studies which indicate that business students are gener-ally inclined to reject questionable behaviours on the part of consumers;however, they are considerably more tolerant than their older counter-parts in the marketplace. The grand mean of 3.35 for the 14 items maybe compared to the results of the earlier study by Fullerton, Kerch andDodge (1996) which produced a grand mean of 4.48. As speculatedearlier, the sample of university students is disproportionately comprisedof “permissives” and “situationalists” as identified with the aforemen-tioned study’s taxonomy. In the aforementioned study, permissives werecharacterized by grand means of 3.64 or less. On the six point scaleemployed for each of the 14 scenarios, 5 were on the acceptable side (mean< 3.5) for both New Zealand and Canadian students.

Similar results were in evidence when looking at those actions whichare viewed as unacceptable. Eight scenarios were deemed slightly unac-ceptable (3.5<mean< 4.5). Only one was classified as unacceptable (4.5≤ mean), this by Canadian students only, and that was the act of inflatingan insurance claim. These results are in Table I.

Some intriguing insight emanates from the comparison of responses ofthe New Zealand and Canadian students. The grand mean reflects the factthat the overall predisposition is very close for the two groups of students;the mean for the New Zealand respondents was 3.31 and for the Canadianrespondents the mean was 3.40. The difference was not statistically signi-ficant. But the use of this aggregate statistic obscures some meaningfuldifferences between groups, though it is interesting that both means areless than the scale mid-point of 3.5. Only two of 14 consumer-oriented


TABLE I

Comparison of samples: Consumer ethics (from highest to lowest significance)

Action Mean

New Zealand Canada

Inflate insurance claim 4.03 4.60*

Keep extra change 3.52 3.64

Misrepresent age – senior discount 3.89 4.02

Sold frequent flyer ticket 3.33 3.03*

Misrepresent child’s age – discount 3.33 3.61

Return worn clothing 3.60 3.83

Information from retailer 1.75 1.77

Purchase mismarked item 2.62 2.70

Quoted cheaper price to negotiate deal 2.59 2.80

Less than truthful on surveys 3.88 3.74

Exaggerate quality at garage sale 3.80 3.85

Coupons for items not purchased 3.99 3.89

Return merchandise to wrong store 4.11 3.99

Repeated visit to buy limited quantity 1.92 2.09

Grand mean 3.31 3.40

* Statistically different between the New Zealand and Canadian samples at the 5%level.

scenarios exhibited statistically significant differences between the meansfor the New Zealand and Canadian students.

While both groups expressed a belief that it was unacceptable to artifi-cially inflate an insurance claim, Canadian students were far more criticalthan New Zealand students (4.60 vs. 4.03). However, Canadian respond-ents believed it was more acceptable to sell a frequent flier ticket comparedto those in New Zealand (3.03 vs. 3.33). Two scenarios which were notsignificant on an overall basis do indicate significant differences whenexamined by gender. Female respondents in Canada were more critical ofthe practice of keeping too much change from a shop assistant than theirfemale counterparts in New Zealand (4.03 vs. 3.46). The second scenariorelates to making repeat visits to a shop which has purchase limits ongoods. This time it was New Zealand male students who found this practicemore acceptable than Canadian male students (1.62 vs. 2.08).

The tenuous nature of global business decisions is exemplified bythe results. While general ethical predisposition is quite similar for the


two groups, the use of aggregated data tends to obscure more mean-ingful differences between the two countries. Previous research using thesame set of scenarios has documented differences among many countries.However, the scenarios where the differences have been documented arenot systematic. For example, the differences between New Zealand andGermany were more pronounced and encompassed a different (and larger)array of behaviours. So despite cross-cultural similarities, multi-nationalcorporations must gather information from research or local experts inorder to better understand the inherent risks likely to be encountered whencrossing national borders.

Business Ethics

The overview of the results of the business ethics dimension supportsprevious studies – that business students are generally inclined to rejectquestionable behaviour on the part of business. On the six point scaleemployed for each of the fourteen scenarios, in half of the cases the totalsample’s average response fell on the acceptable side (<3.5). The grandmean of the fourteen scales was at 3.34. It can be seen from Table II thatof the seven acceptable actions, five were only slightly acceptable (2.5≤mean< 3.5) and two were deemed acceptable (1.0≤ mean< 2.5). Themost acceptable scenario concerned the use of celebrity endorsers as atactic when advertising a firm’s products.

Similar results are in evidence when looking at those actions which areviewed as unacceptable. Six of the seven scenarios were deemed slightlyunacceptable (3.5≤mean< 4.5). Only one was classified as unacceptable(4.5 ≤ mean). This business practice involved the export of an unsafeproduct to countries lacking regulations on product safety. These resultswhich were taken without regard to a respondent’s residence are presentedin Table II.

The comparison of the responses of New Zealand students to those ofCanadian students again provides some interesting insights. The initialevaluation of the grand means for each stratum (3.36 for New Zealandand 3.30 for Canada) shows very similar concern for potential breachesof ethical conduct on the part of business. The evaluation of individualscenarios indicates that there are more similarities than differences. Of thefourteen issues evaluated, there were only three where statistical differ-ences between the two groups could be documented. In each of thesecases, the Canadian students were more tolerant of the specific behaviourthan were their New Zealand counterparts. The relatively small differencebetween the country means coupled with the lack of a systematic differ-ence in regard to the set of 14 scenarios confound any effort to declare


TABLE II

Aggregate sample means on business ethics scenarios

Action Mean

Unsafe product overseas 4.71

Deceptive sales price 4.25

Illegal pharmaceutical product 4.21

No sold sign for real estate 4.07

Disaster pricing 3.76

Bait and switch 3.74

Higher prices for poor 3.61

Children’s toll phone number 3.37

Tax shift/Transfer pricing 3.29

Comparison advertising 2.83

Exclusive distribution 2.39

Delay new product entry 2.39

Cheap foreign labour 2.29

Celebrity endorser 1.78

Grand mean 3.34

one country to be more or less ethically predisposed than the other. Thus,a detailed look at the three aforementioned scenarios will better provideinsight into the lack of congruence in the comparison of the two countries.

The three scenarios where the Kiwis exhibited greater concern includethe passing of increased overhead such as cost of insurance and thefton to poorer customers by way of increased prices. The New Zealandstudents were much more critical of the tactic while Canadian studentsresponded on the acceptable side of the scale. Similar results involvedthe short term raising of prices in response to supply and demand shocksin the aftermath of a natural disaster. While both groups disagreed withthis action, the New Zealand respondents were more critical. The finalexample involves a scenario where both groups voiced approval, but theNew Zealand approval was not as strong. This action involved the use ofathletes or other celebrities to endorse products, perhaps in itself somewhatreflective of the recent debate on and move towards professionalism in


TABLE III

Business ethics comparison of samples (from highest to lowest significance)

Action Means Significance

New Zealand Canada

Higher prices for poor 3.81 3.33 0.005

Celebrity endorser 1.88 1.65 0.036

Disaster pricing 3.88 3.55 0.044

Cheap foreign labour 2.26 2.34 NS

Children’s toll phone number 3.23 3.56 NS

Transfer pricing/tax shift 3.29 3.30 NS

Exclusive distribution 2.37 2.42 NS

Deceptive sales price 4.32 4.39 NS

Bait and switch 3.72 3.76 NS

No sold sign/real estate 4.12 4.01 NS

Illegal pharmaceutical product 4.16 4.29 NS

Unsafe product overseas 4.63 4.81 NS

Delay new product entry 2.42 2.35 NS

Comparison advertising 2.94 2.68 NS

Grand mean 3.36 3.30

NS = Not significant.

sport in New Zealand. The results for all fourteen scenarios are providedin Table III.

(a) Gender Based DifferencesHaving identified nine statistically significant differences between femaleand male respondents in Canada and five in new Zealand, the authorscompared the responses of New Zealand and Canadian females, and NewZealand and Canadian males. The results are provided in Table IV. Overall,the responses of both the New Zealand and Canadian female studentswere very similar and the same applies for responses from males. Previousstudies have generally indicated a greater concern on the part of womenwhen questioned about the appropriateness of a variety of “questionable”business actions. And though female respondents in both countries were infact more critical (than their male counterparts) of breaches in ethical beha-viour, Canadian female students appear slightly more conservative than theNew Zealand females. The single scenario where a statistically significant

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TABLE IV

Statistically significant gender based differences: Business ethics

Action Females Males

New Zealand Canada Significance New Zealand Canada Significance

Mean Mean Mean Mean

Children’s toll phone number 3.14 3.83 0.01 3.34 3.30 NS

Disaster pricing 4.20 3.93 NS 3.48 3.25 NS

Cheap foreign labour 2.48 2.71 NS 2.00 2.02 NS

Transfer pricing/Tax shift 3.73 3.72 NS 2.73 2.94 NS

Exclusive distribution 2.45 2.32 NS 2.25 2.46 NS

Higher prices for Poor 4.23 3.92 NS 3.37 2.84 0.03

Celebrity endorser 1.99 1.91 NS 1.72 1.40 0.03

Deceptive sales price 4.49 4.64 NS 4.11 4.23 NS

Bait and switch 3.77 4.03 NS 3.67 3.55 NS

No sold sign/Real estate 4.33 4.22 NS 3.87 3.83 NS

Illegal pharmaceutical product 4.23 4.64 NS 4.06 3.99 NS

Unsafe product overseas 4.90 5.18 NS 4.33 4.51 NS

Delay new product entry 2.44 2.64 NS 2.38 2.10 NS

Comparison advertising 3.28 3.00 NS 2.55 2.40 NS

Grand mean 3.55 3.62 3.13 3.06

NS = Not significant.


difference was found concerned provision of a toll number for childrento call Santa Claus. For this scenario the mean response for the Canadiansample fell just on the unacceptable side of the scale’s midpoint, with theNew Zealand mean just on the acceptable side. Similar overall findingsapply when comparing the grand means for the two male groups. NewZealand males appear marginally more critical as characterized by theirslight higher grand mean. Two scenarios exhibited statistically significantdifferences, they concerned the use of celebrity endorsers and levyinghigher prices on poorer customers to defray increased costs of theft andinsurance. Both strata found each action to be somewhat acceptable, withthe Canadian students more in favour than their New Zealand counterparts.

(b) Age Based DifferencesA review of the results of Table V indicates five significant differencesbetween New Zealand and Canadian students in various age groups. Inter-estingly, four of the differences involve students between the ages of 21and 25; one concerns students above 25; and there were no differencesdocumented between the countries for students under the age of 21.

In all cases New Zealand respondents were more critical than Cana-dians. Those practices where differences were documented were disasterpricing, higher prices for poorer areas, no sold sign on real estate property,celebrity endorsers, and delaying new product entry. Only the last twoactions evoked favourable responses from both countries’ respondents.

DISCUSSION

In general terms, today’s students exhibit a relatively high degree ofconcern about the ethical treatment of consumers. Some of the scenariosquestioned the appropriateness or inappropriateness of activities that wereactually illegal. Many authors have long argued that ethical behaviour mayindeed encompass illegal activities if the objective is worthy. A scenarioin this research that addressed this phenomenon was the smuggling of anillegal prescription drug into the physician’s home country in an effort to(illegally) benefit the patient. The fact that the respondents deemed each ofthe illegal activities to be unethical would seem to indicate that future busi-ness leaders are not likely to accept illegal practices. This study providessome evidence that supports the premise that ethical predisposition is influ-enced to an extent by an individual’s country of residence. The difference isnot universal, however, and could perhaps be described as situational. Thefact that the observed differences between the two countries were not signi-ficant in twenty-three of the twenty-eight scenarios would seem to indicate

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TABLE V

Statistically significant age-based differences: Business ethics

Action Means

<21 21–25 ≥26

NZ Canada Sig.* NZ Canada Sig.* NZ Canada Sig.*

Disaster pricing – – – 3.96 3.43 0.02 – – –

High prices for poor – – – 3.84 3.22 0.01 – – –

Celebrity endorser – – – 1.99 1.58 0.00 – – –

No sold sign/Real estate – – – 4.26 3.79 0.02 – – –

Delay new product entry – – – – – – 2.90 1.96 0.03

* Significant at P≤ 0.05.


that the two groups have much more in common than not. One premiseoffered in previous research is that ethical predisposition is a function ofculture and religion (Kohls and Butler, 1994). To the extent that manyCanadians and New Zealanders share a common heritage, such similar-ities might be expected. It is conceivable that greater differences wouldbe found if the focus was on the different subcultures in each country.For example, it would seem appropriate when scrutinising New Zealandto look at the European, the Maori, and the Asian groups. For Canada, thefocus might be on differences among those groups with European, NorthAmerican Indian, and Asian heritage. Still, we would be remiss if we failedto emphasize the fact that there were some meaningful differences betweenthe Canadian and New Zealand students.

The documented differences indicate that commercial organisationswhich operate in several countries face various and differing risks fromone country to another. Such differences may be attributed to a multitude offactors such as moral standards, cultural influence, economic sufficiency,religious tenets, personal experiences, and attitudes towards business. Inaddition, differences based on gender and age were also identified andmight be extrapolated to suggest greater emphasis on the difficulties inestablishing and maintaining relationships with customers and clients inthe future.

Attitudes regarding consumer transgressions in the marketplace reflectone measure of risk that the marketer is likely to encounter. The mostobvious concerns are the extent to which these attitudes impact onconsumer behaviour and the fact that attitudes are not universal. Whilethis study looked only at university students and is not generalizable to thepopulation at large, it does support the belief that marketers who targetyounger segments may be more susceptible to questionable actions onthe part of those consumers. The relatively low grand mean reflects atolerant attitude and is consistent with the findings of Fullerton, Kerch andDodge (1996) that younger consumers are more likely to be classified as“permissives” and therefore less concerned about the rights of business.

This research is consistent with many earlier efforts which docu-mented a greater concern on the part of women regarding both consumerand business behaviours which might be deemed inappropriate. As thenumber of women entering business continues to grow and as they achievepositions with increased decision-making responsibility, it is conceiv-able that there will be an increased emphasis on ethical behaviour andconsumer well being. This in turn could suggest that eventually all decisionmakers, regardless of gender, will gravitate towards the ethical side ofthe continuum. The benefits to business could include among other things


a diminished need for government intervention in order to regulate andrestrict certain business activities.

Though this research looked only at students, it generally supports thepremise that ethical concern is positively correlated with age, a conclusionwhich has emanated from numerous prior studies by a bevy of researchers.The attitudes of the younger groups, while still critical of breaches of ethicsare not held as strongly as are those held by the older students. As thisgroup of young decision makers ages, irrespective of gender, it is likelythat they will grow less tolerant of what they perceive to be abuses in themarket place. Of course, most of these students will enter the workforcein an entry level position with little authority attached. As they move upthe corporate ladder however, their attitudes are likely to grow strongerthereby increasing the likelihood that future decisions may be made withconsumer/client welfare in mind.

These variations impact many dimensions of corporate activity.Marketers face different risks from both consumers and competitors whenthey cross national boundaries. Human resource managers may be subjectto a variety of local standards of conduct in making routine staffingdecisions. No function is immune. Consider the following example fromthe accounting profession. As international business continues to grow, andfinancial institutions become more and more global in their outlook, onehears calls for internationalising financial reporting. Indeed, recent yearshave witnessed a considerable growth in exposure drafts directives andstandards emanating from such institutions as the International AccountingStandards Committee and the European Union. It cannot be emphasisedtoo strongly that as we continue to contemplate greater and greater stand-ardisation, it must be understood that what is acceptable in one countrymay be deemed inappropriate in another. It must be remembered thatethical behaviour is a nebulous concept, one which is not predicated uponthe legal system, and one which is not necessarily congruent with a firm’soften stated objective of short term profit maximisation. Perhaps then,rather than pursuing the costly, and at times lengthy and ineffective pathtowards standardisation, the accounting profession might be better servedby accepting that differing ethical behaviours do arise among countries. Inso doing, the concepts of standardisation and perhaps also harmonisation,could be replaced by equivalence. This accepts that practices and rules thatare developed and applied within any jurisdiction are the best available atthe time, and are the most in keeping with customs, social mores, andethical considerations. As a result they should be seen as the equivalent to,though not congruent with those rules and practices similarly developedelsewhere in the world.


It must be acknowledged that influences such as those observed in thisstudy are not confined to the two countries surveyed. Expanding the scopeof the study to include additional scenarios would likely identify otherdifferences between the countries. Further expanding it to evaluate addi-tional countries would likely indicate that such differences are not limitedto those found in this study. Indeed, the differences observed here mightnot exist in comparison between New Zealand and Australia, or Canadaand the UK. Conversely the differences may be even more pronounced.Thus, the call for additional comparative research seems warranted. Morecountries and more behaviours should be subjected to scrutiny.

CONCLUSION

An analysis of the two countries indicates that while they are similar inmany respects, there are also major differences in ethical predisposition.The respondent’s country of residence appears to influence attitudes inregard to five of the twenty-eight scenarios. There is also tentative evid-ence that it is possible that differences and similarities documented in thisstudy might not be duplicated in studies which include additional coun-tries. Future research should therefore include larger samples, a samplingframe which emphasises the general public and members of the businesscommunity (rather than being limited to students), additional countries,and additional ethical dilemmas. This study has shown that gender can bea factor, and this – as well as age – should also be examined in futureresearch. Only then will we gain a more complete understanding of theobstacles and opportunities which exist in our increasingly interdependentinternational marketplace.

APPENDIX

Consumer Ethics Scenarios

A co-worker was given too much change from the shop assistant at the cornerdairy and kept it.

A friend had a fire at his apartment. In reporting the losses to the insurancecompany, your friend included items he never owned and inflated the value ofitems that were lost.

You have seen other people misrepresent their age to take advantage of asenior citizen discount.


You have seen other people misrepresent their children’s ages to take advantageof a child’s discount.

A friend of yours finds an item that was obviously mismaked at a cheaperprice. Rather than notifying the store, your friend purchased the product at theincorrect price.

Some people will go to a retailer to get information on a specific productand then use this information to purchase this product from a less expensivesource (i.e. a catolog).

Some people will go to the same store repeatedly in order to take advantage of anoffer which limits the amount that can be purchased per visit.

Someone you know has sold a frequent flier ticket to a friend despite specificairline rules which prohibit such a sale.

Through the grapevine, you hear that a neighbor returned a product to astore where it was not purchased.

Someone went to purchase a television set and in order to get a betterdeal, told the salesperson that another retailer was selling the same set at muchcheaper price. The retailer, without checking, matched the lower price.

At the supermarket, the person in front of you redeems coupons for itemsthat were not purchased.

In order to sell an item at their garage sale, your neighbors exaggeratedthe item’s quality.

People you know have been less than truthful on surveys.

Friends of yours have purchased clothing. After wearing the clothing, theysee it at another shop for a substantially lower price. They return the originalpurchase and buy the clothing at the store offering the lower price.

Business Ethics Scenarios

A manufacturer agrees to supply a retailer with a desirable product. In return fora guarantee of a large initial purchase by the retailer, the manufacturer agrees notto sell to any other retailers within that trade area.

A retailer advertised a portable, name-branded color television for $199. Whenthe customers arrived at the store, they found that the retailer had sold out of


the bargain television. An attempt was then made to sell the customer a moreexpensive television.

Supply and demand dictate prices in the marketplace. After a recent hurricane inFlorida and an earthquake in Los Angeles, many stores were closed. With thesupply of many products down and demand up, many prices rose substantially.Prices on some products were three to eight times their normal price. Retailersargued that price is a function of economic conditions and refused to lower theirprices.

A grocery chain has shops both in a wealthy suburb and a poor suburbwith high incidence of crime. Insurance premiums, vandalism, and theft make itmore expensive to operate in the poorer area. These expenses are passed on tothe customers. As a result, customers in the poorer suburb pay more for identicalproducts than their wealthier counterparts pay.

People have a great admiration for sports heroes. A marketer often usesthese athletes to endorse products because of the belief that such an endorsementwill increase the demand for those products.

A company has developed a new product which will render one of its oldproducts obsolete. The company has a large inventory of the old products so itdelays the introduction of the new technology until it has sold off the existingstock of the old product.

A manufacturer has a large stock of products which have been sold inCanada for several years. The government has recently ruled that the productis unsafe and required its recall from Canadian shops. Rather than discard theold product, it is exported and sold in countries which don’t have such strictregulations on product safety. The manufacturer argues tht this action is good forthe company’s shareholders and the Canadian economy.

A real estate agency sells a desirable house in a nice neighborhood. Theagency does not put up a “SOLD” sign because they want people to continue tocall. When potential buyers do call, they are informed that the house is sold andinformed as to the availability of other houses listed by the agency.

A manufacturer does business in several countries. In allocating expensesto the various international operations, it is a common practice to assign highercosts in countries with high tax rates. As a result, the facilities that are locatedin low tax countries show larger profits. The net result is that the manufacturerreduces its total tax liability by “shifting” profits to low tax countries.

A Canadian doctor believes that a particular experimental phamaceuticalproduct could benefit some of his patients. The drug is illegal in Canada because


it has not been certified by the government. It is legal and readily available inthe United States. The doctor acquires a supply of the product in the US andsmuggles it into Canada. He then distributes it to his patients.

A company advertises a 900 number for children to call and talk to SantaClaus. The call is ninety-nine cents a minute and the advertiser tells children toask their parents before phoning Santa.

In order to hold down the costs of manufacturing a product, a companyhas shifted part of the production from Canada to a plant in Mexico. The lowerlabor cost results in lower prices to consumers.

A company advertises it’s product on television by giving the brand nameof a competing product and indicating a particular issue where its product isconsidered to be superior to the competing product.

A retailer of men’s and women’s clothing raised its prices two weeks ago.Today, prices were dropped to their former level and the retailer is advertising its“sale” prices.

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Jim FisherCurtin University of TechnologyAustralia

David TaylorUniversity of WaikatoNew Zealand

Sam FullertonEastern Michigan UniversityUSA

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