Researchers have studied marketing ethics from several perspectives. Few studies, however, have analyzed supervisory reactions to unethical behavior by salespeople. The results of this study using a 2 × 3 factorial design showed that the performance level of the salesperson and the consequences of the salesperson''s actions influenced some types of discipline used by a sample of 246 sales managers. The findings both support and contradict prior research on how sales managers respond to unethical sales force behavior.

Findings from prior research show that there is a general tendency to discipline top sales performers more leniently than poor sales performers for engaging in identical forms of unethical selling behavior. In this study, the authors attempt to uncover moderating factors that could override this general tendency and bring about more equal discipline for top sales performers and poor sales performers. Surprisingly, none were found. A company policy stating that the behavior in question was unacceptable nor a repeated pattern of (...) unethical behavior offset the general tendency to treat top sales performers more leniently than poor sales performers. In an attempt to dig deeper to find a significant moderating effect, two follow-up experiments were conducted. In the first follow-up experiment, a specific training program designed to communicate top management's desire to treat ethical matters equally based on the severity of the act had no effect on equalizing the discipline between top sales performers and poor sales performers. In the second follow-up experiment, a stronger company policy that specified a prescribed level of punishment also failed to equalize the discipline. A superior sales performance record appears to induce more lenient forms of discipline, despite the presence of other factors and managerial actions that are specifically instituted to produce more equal forms of discipline. The answer to the question posed in the article title is, "apparently very strong!". (shrink)

Guanxi in China is a very ancient concept embedded in the Confucian concept of life and one that is a ‚hot' topic in that it is currently attracting increasing attention from both Western and Chinese scholars. One aspect of Guanxi which has been the subject of most of the research of late is the influence of Guanxi on firm performance. However, relatively few studies have examined how Guanxi at the individual level is transferred into a firm to influence its financial (...) performance. This study first reclassifies Guanxi into obligatory, reciprocal, and utilitarian types at the individual level as a means to clarifying the confusion brought above from previous studies. It then provides a conceptual framework in which to systematically characterize the link between Guanxi at the individual level and organizational dynamics: that is, how is Guanxi at the individual level shifted to a firm and how does it affect organizational dynamics of that firm at the organizational level. Finally, it provides a deeper understanding of the financial implications of Guanxi to business firms in China. (shrink)

Despite the rising interest in environmental strategies, few studies have examined how managerial cognition of such strategies influences actual innovation capability development. Taking a managerial cognition perspective, this study investigates how managers’ perceptions of institutional pressures relate to their focus on proactive environmental strategy, which in turn affects firms’ realized innovation capability. The findings from a primary survey and three secondary datasets of publicly listed companies in China reveal that managers’ perceived business and social pressures are positively associated with their (...) focus on proactive environmental strategy, which consequently fosters innovation capability development. Moreover, state ownership and government administrative control weaken the impact of managerial focus on proactive environmental strategy on innovation capability. These findings have important implications for how managerial cognition supports environmental strategy and organizational capability building under the influence of institutional pressures and government intervention. (shrink)

We present two studies that examine the effects of guanxi on multiple social groups from the perspective of Chinese business people. Study 1 (N = 203) tests the difference in perceived effects of six guanxi contextualizations. Study 2 (N = 195) examines the duality of guanxi as either helpful or harmful to social groups, depending on the contextualization. Findings suggest guanxi may result in positive as well as negative outcomes for focal actors and the aggregate.

As a transitional economy, Vietnam has undergone tremendous changes over recent decades within a ‘fusion’ context that blends both traditional and modern values from its complex history. However, few studies have explored how contemporary issues in the context of Vietnam have brought both obstacles and skillful initiatives to managerial approaches to doing business. We draw on the concepts of social trust and institutional theory to explore how informal institutions such as religious forces can contribute to the development of individual trust (...) and whether individuals are willing to extend trust beyond familial networks. We contribute to the notion of a moral conception of trust by exploring how Buddhism in particular has initiated distinctive managerial approaches in the context of Vietnam, in response to dilemmas of social trust. Our findings highlight that as an informal institution, engaged Buddhism yields significant impact on the formation of social trust. We carried out in-depth interviews in Vietnam with 33 organizational leaders who were Buddhist practitioners, using thematic analysis to elucidate our findings and arguments. The study reveals how the incorporation of Buddhist principles has fostered context-sensitive, non-extreme, and reflexive managerial approaches to enhance morality as a response to social trust issues. (shrink)

This paper represents an effort to distinguish between two types of guanxi prevalent in mainland China: favor-seeking guanxi that is culturally rooted and rent-seeking guanxi that is institutionally defined. Different rules of maneuvering the two types of guanxi are identified in light of Chinese cultural and business ethics. Strategies for entering guanxi in mainland China are also suggested.

Guanxi (literally interpersonal connections) is in essence a network of resource coalition-based stakeholders sharing resources for survival, and it plays a key role in achieving business success in China. However, the salience of guanxi stakeholders varies: not all guanxi relationships are necessary, and among the necessary guanxi participants, not all are equally important. A hierarchical stakeholder model of guanxi is developed drawing upon Mitchell et al.’s (1997) stakeholder salience theory and Anderson’s (1982) constituency theory. As an application of instrumental stakeholder (...) theory, the model dimensionalizes the notion of stakeholder salience, and distinguishes between and among internal and external guanxi, core, major, and peripheral guanxi, and primary and secondary guanxi stakeholders. Guanxi management principles are developed based on a hierarchy of guanxi priorities and management specializations. The goal of this application of instrumental stakeholder theory is to construct, for Western business firms in China, a means to reliably identify guanxi partners by employing the principles of effective guanxi. These principles are described in the form of testable propositions that advance social scientific research in this area of international business ethics. (shrink)

Three factors considered to potentially influence salespeople's intentions to behave unethically are empirically examined. Although moral judgment is commonly considered a precursor to moral intentions, the effects of cognitive moral development and perceived competitive intensity on moral intentions are not well understood. Results suggest that all three factors influence salespeople's intention to behave unethically. Implications and directions for future research are provided.

Corporate anti-corruption initiatives can make a substantial contribution towards curtailing corruption and advancing efforts to achieve the United Nations’ Sustainable Development Goals. However, researchers have observed that underdeveloped assumptions with respect to the conceptualization of corruption and how firms respond to corruption risk impeding the efficacy of anti-corruption programs. We investigate the relationship between the perceived level of corruption in foreign host countries and the organizational structure of subsidiary operations established by multinational corporations. Foreign host market corruption is disaggregated into (...) two components—private and public corruption. We employ an uncertainty-based perspective grounded in transaction cost theory to focus upon the distinct mechanisms through which private and public corruption can each be expected to impact a foreign subsidiary’s organizational structure [wholly-owned subsidiary or a joint venture with a local partner]. We expect that each type of corruption fosters a different type of uncertainty which predominates in shaping the MNC’s choice of foreign subsidiary investment structure. Hypotheses are developed and tested with a sample of 187 entries into 19 foreign host markets. Each type of corruption was found to exert a distinct effect upon the organizational structure of foreign subsidiaries. More precisely, while heightened perceived levels of public corruption were found to motivate MNCs to invest through a JV with a local partner rather than a WOS, more pronounced private corruption precipitated the opposite outcome. (shrink)

"Guanxi" involves interpersonal obligations, which may conflict with other obligations people have that are based on general or abstract moral considerations. In the West, the latter have been widely accepted as the general source of obligations, which is perhaps tied to social changes associated with the rise of capitalism. Recently, Western ethicists have started to reconsider the extent to which personal relationships may form a distinct basis for obligation. In administration and management, salient bases for decision-Making include deontological, consequentialist and (...) personalist ethics. The first may be reflected in a bureaucratic approach, the second in a price system, and the third in arrangements like "guanxi". Each has positive and negative aspects, but problems arise when they lead to conflicting obligations, as may occur for an office holder who has some obligations based in deontological considerations and others based in personal relationships. This is a type of conflict of interest. Such conflicts have been considered in the West, and remedies proposed. Problems arise especially in cases where it is not clear how to prioritise different obligations, and this has been noted as a difficulty in the Chinese legal system. Questions that need to be answered include not only questions about how to deal with conflicting obligations, but also questions about what institutions to accept as giving rise to obligations. Institutions themselves may be problematic not only because of their consequences for economic productivity, but because they are internally incoherent, and this may be manifested in frequent conflicts faced by office holders. (shrink)

"Guanxi" involves interpersonal obligations, which may conflict with other obligations people have that are based on general or abstract moral considerations. In the West, the latter have been widely accepted as the general source of obligations, which is perhaps tied to social changes associated with the rise of capitalism. Recently, Western ethicists have started to reconsider the extent to which personal relationships may form a distinct basis for obligation. In administration and management, salient bases for decision-Making include deontological, consequentialist and (...) personalist ethics. The first may be reflected in a bureaucratic approach, the second in a price system, and the third in arrangements like "guanxi". Each has positive and negative aspects, but problems arise when they lead to conflicting obligations, as may occur for an office holder who has some obligations based in deontological considerations and others based in personal relationships. This is a type of conflict of interest. Such conflicts have been considered in the West, and remedies proposed. Problems arise especially in cases where it is not clear how to prioritise different obligations, and this has been noted as a difficulty in the Chinese legal system. Questions that need to be answered include not only questions about how to deal with conflicting obligations, but also questions about what institutions to accept as giving rise to obligations. Institutions themselves may be problematic not only because of their consequences for economic productivity, but because they are internally incoherent, and this may be manifested in frequent conflicts faced by office holders. (shrink)

Although it seems that ethics and religion should be related, past research suggests mixed conclusions on the relationship. We argue that such mixed results are mostly due to methodological and conceptual limitations. We develop hypotheses linking Cornwall et al.’s (1986, Review of Religious Research, 27(3): 266–244) religious components to individuals’ willingness to justify ethically suspect behaviors. Using data on 63,087 individuals from 44 countries, we find support for three hypotheses: the cognitive, one affective, and the behavioral component of religion are (...) negatively related to ethics. Surprisingly, one aspect of the cognitive component (i.e., belief in religion) shows no relationship. Implications for research and practice are discussed. (shrink)

The leader–member relationship has been identified as a key determinant of successful working relationships and business outcomes in China. A high-quality leader–member relationship helps managers and employees to meet the demands they face and gives them the opportunity to develop socially, emotionally and morally. Such relationships form the basis of the overall well-being and success of the organisation. This article contributes to relationally oriented leadership theories and more specifically to the leader–member exchange theory by examining the theory in the context (...) of Western expatriate managers and Chinese employees in China. The first aim of the study is to analyse the similarities and differences between the LMX theory, which owes its origins to Western corporate experience, and the social and moral norms of guanxi, a crucial element in the Chinese value system. Since Westerners and Chinese people can give different interpretations to guanxi, the second aim of the article is to discuss the ethical challenges to the Western manager arising from guanxi. The findings of this study have implications not only for China, but also for other Chinese communities where guanxi is endorsed and practised. (shrink)

. This paper explores the relationship between gift giving, guanxi and corruption through a study of the relationships between UK manufacturing companies in China and their local component suppliers. The analysis is based on interviews in the China-based operations of 49 UK companies. Interviews were carried out both with senior (often expatriate) staff and with local line managers who were responsible for everyday purchasing decisions and for managing relationships with suppliers. The results suggest that gift giving is perceived to be (...) a significant problem in UK-owned companies in China. However the relationship between these payments and established understanding of gift giving within guanxi-networks appears to be weak. Gift giving appears to be associated with illicit payments, corruption and the pursuit of self-interest. Firms seek to reduce the incidence of illicit transactions by changing staff roles, instituting joint responsibilities, which include the separation of different aspects of sourcing/purchasing, ineasing the involvement of senior staff in the process and through the education of employee and suppliers. (shrink)

Research into the ethics of personal selling and sales management has continued to increase in volume and importance. Because there is now a diversity of opinions and findings in this literature, an assessment of the status of existing knowledge is needed to provide focus and clarity. There have been no comprehensive reviews of the studies of ethics and salespeople, sales managers or sales management, despite recent attention from researchers, practitioners and the general public. The purpose of this review is to (...) comment upon the more significant research in the sales ethics field with the objective of providing insight into the extent and direction of this knowledge, to evaluate the basis upon which it is founded, and to suggest areas of exploration that may be useful for increasing our understanding of it. (shrink)

Using U.S. listed firms during the period from 1971 to 2010, this paper investigates the effect of religion on corporate cost behavior. We find that religion mitigates cost stickiness induced by agency or behavioral biases of managers. This result holds for several robustness tests that address endogeneity concerns. The mitigating effect of religion on cost stickiness is through the channel of reducing top managers’ overconfidence and optimistic bias regarding future demand change and promoting managers’ adherence to fiduciary responsibilities and consideration (...) of shareholder benefits. Further evidence shows that the reduction in cost stickiness caused by religion increases firm value. Overall, our findings suggest that religion reduces the wedge between a firm’s actual and optimal resource commitments, which helps to improve firm value and resource allocation efficiency. (shrink)

Using U.S. listed firms during the period from 1971 to 2010, this paper investigates the effect of religion on corporate cost behavior. We find that religion mitigates cost stickiness induced by agency or behavioral biases of managers. This result holds for several robustness tests that address endogeneity concerns. The mitigating effect of religion on cost stickiness is through the channel of reducing top managers’ overconfidence and optimistic bias regarding future demand change and promoting managers’ adherence to fiduciary responsibilities and consideration (...) of shareholder benefits. Further evidence shows that the reduction in cost stickiness caused by religion increases firm value. Overall, our findings suggest that religion reduces the wedge between a firm’s actual and optimal resource commitments, which helps to improve firm value and resource allocation efficiency. (shrink)

A major challenge in global sales research is helping managers understand sales ethics across countries. Addressing this challenge, our research investigates whether a few demographic variables and psychographic variables reduce unethical sales behaviors (USBs) in Canada, Mexico, and the USA. Further, using literatures associated with business ethics, national culture, and customer orientation advocacy, we hypothesize why sales managers should expect similarities and differences in USBs between countries. We tested hypotheses using a sales contest scenario and six USBs, examining survey responses (...) from 948 business-to-business salespeople of a multinational company’s sales force in Canada, Mexico, and the USA. The results reveal that several psychographic variables (such as commitment, relationship to sales manager, and achievement need) affect salespeople’s tendency to engage in USBs differently in each country. In addition, business ethics, individualism, and customer orientation advocacy associated with each country can be used to anticipate similarities and differences in USBs between countries. This research offers important theoretical contributions and implications for more effectively managing sales forces and reducing USBs across countries. (shrink)

There is strong theoretical support for a relationship between various characteristics of religiousness and attitudes towards business ethics. This paper examines three frequently- studied dimensions of religiousness (fundamentalism, conservatism, and intrinsic religiousness) and their ability to predict students' willingness to behave unethically. Because prior research indicated a possible relationship between the religious affiliation of an institution and its members' ethical orientation, we studied students at universities with three different types of religious affiliation: evangelical, Catholic, and none.Results of the study lend (...) support to a negative relationship between the above-mentioned dimensions of religiousness and willingness to behave unethically. In addition, students at the Evangelical university were far less willing to engage in unethical behavior than were students at either the Catholic or the unaffiliated institutions. (shrink)

While Buddhism focuses on the same ethical concerns as Western ethical traditions, it provides a distinct perspective and method for dealing with them. This paper outlines the basic Buddhist perspective and then provides some experiential exercises which offer insight for self-understanding and ethical practices in business. Implications for business and ethics research are provided.

Is guanxi ethical? This question is largely ignored in the existing literature. This paper examines the ethical dimension of guanxi by focusing on the consequences of guanxi in business, from ethically misgiving behaviour to outright corruption. Guanxi may bring benefits to individuals as well as the organisations they represent but these benefits are obtained at the expenses of other individuals or firms and thus detrimental to the society. As guanxi has an impact on the wider public other than the guanxi (...) parties, it must be studied in the context of all stakeholders. It can be argued that guanxi is an inevitable evil under the current political and socio-economic systems in China. Its role and importance in business life will be diminished as the country moves towards an open market system. (shrink)

This paper extends the discussion of guanxi beyond instrumental evaluations and advances a normative assessment of guanxi. Our discussion departs from previous analyses by not merely asking, Does guanxi work? but rather Should corporations use guanxi? The analysis begins with a review of traditional guanxi definitions and the changing economic and legal environment in China, both necessary precursors to understanding the role of guanxi in Chinese business transactions. This review leads us to suggest that there are distinct types of, and (...) uses for guanxi. We identify the potentially problematic aspects of certain forms of guanxi from a normative perspective, noting among other things, the close association of particular types of guanxi with corruption and bribery. We conclude that there are many different forms of guanxi that may have distinct impacts on economic efficiency and the well-being of ordinary Chinese citizens. Consistent with Donaldson and Dunfee (1999), we advocate a particularistic analysis of the different forms of guanxi. (shrink)

In China, Buddhism and Taoism are two major religions. Using a sample of 10,363 firm-year observations from the Chinese stock market for the period of 2001–2010, I provide strong and robust evidence that religion (i.e., Buddhism and Taoism on the whole) is significantly negatively associated with owner-manager agency costs. In particular, using firm-level religion data measured by the number of religious sites within a radius of certain distance around a listed firm’s registered address, I find that religion is significantly negatively (...) (positively) associated with expense ratio (asset utilization ratio), the positive (reverse) proxy for owner-manager agency costs. This finding is consistent with the following view: religiosity has remarkable effects on the way how an individual thinks and behaves, and thereof can curb managers from unethical business practices. Moreover, my findings suggest that the negative association between religion and owner-manager agency costs is attenuated for firms with strong external monitoring mechanisms such as higher Marketization and high-quality auditors. Furthermore, after separating Buddhism from Taoism, my finding indicates that above conclusions are only available for Buddhism, suggesting that different religions may have asymmetric influence on owner-manager agency costs. Above results are robust to various measures of religiosity and a variety of robustness checks. (shrink)

Using a sample of Chinese listed firms in polluting industries for the period of 2008–2010, we empirically investigate whether and how Buddhism, China’s most influential religion, affects corporate environmental responsibility (CER). In this study, we measure Buddhist variables as the number of Buddhist monasteries within a certain radius around Chinese listed firms’ registered addresses. In addition, we hand-collect corporate environmental disclosure scores based on the Global Reporting Initiative (GRI) sustainability reporting guidelines. Using hand-collected Buddhism data and corporate environmental disclosure scores, (...) we provide strong and robust evidence that Buddhism is significantly positively associated with CER. This finding is consistent with the following view: Buddhism can serve as social norms to evoke the consciousness of social responsibility, and thereof strengthen CER. Our findings also reveal that the positive association between Buddhism and CER is attenuated for firms with higher law enforcement index. The results are robust to various measures of Buddhism and a variety of sensitivity tests. (shrink)