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Coping with different ethical perceptions in America's increasingly diverse workforce.

U.S. firms face a growing challenge in instilling good ethical behavior in the work place. The challenge comes from a workforce of widening cultures with differing ethical perceptions.

The often repeated phrase, "Managing diversity is an idea whose time has come," is not merely a cliche.[1] American business is facing an increasingly diverse workforce - a workforce comprising individuals from various, often conflicting, cultural and subcultural environments. As a result, employers are faced with a workforce in which there is no consensus on basic issues relating to performance on the job. Indeed, there is often no consensus about such issues as the nature and meaning of work.[2]

The growing diversity in the workforce has its origins in two fundamental changes occurring in the environment faced by American business. One of these changes concerns the competitive environment. Over the past several decades, the American economy has become increasingly global. This globalization of the American economy is reflected in the growth in the number of business firms based in other countries now doing business in the United States, as well as the growth in American business firms doing business overseas. In many industries, American businesses must compete on a global scale to survive. In the process of building such a global presence, many American businesses are finding that hiring foreign nationals is an integral step of the process - individuals who are often from a different culture than that of the employer or the business' existing workforce.

Changing Demographics

The other change facing American business is the changing nature of the American workforce itself. The American workforce has changed considerably over the past several decades - a change that is expected to continue, and even accelerate, as the demographics of the population continue to change. Traditionally, the American workforce has comprised primarily white males. Workforce 2000, however, has projected that 85 percent of the growth in the American workforce from 1985 and 2000 will comprise minorities, women, and immigrants.[3] Indeed, by the year 2000, white males are expected to comprise only 45 percent of the workforce. Not only is the American workforce becoming increasingly heterogeneous, no single group of individuals will even hold a majority.

The United States, however, has a history of workforce diversity, with individuals - often immigrants - coming from a number of various cultures and subcultures. By tradition, these individuals were expected to assimilate into the "American way," with the burden of change and adjustment placed on the individual workers.[4] Today, there is a different attitude - an attitude of "I do not want to assimilate."[5] The workforce, therefore, is becoming "dynamically diverse" seeking to maintain its individual minority identities. The burden of change and adjustment, therefore, is being placed more and more on the employer.

Ethical Perceptions

One important cultural or subcultural difference that is likely to be encountered by firms with diverse workforces is differing ethical perceptions. Researcher Hans B. Thorelli suggests the existence of such differences in the ethical perceptions of individuals from differing cultures or subcultures.[6] Specifically, he proposes that ethical perceptions are directly related to the level of economic development of one's culture or subculture. An individual from an economically deprived culture or subculture can be expected to have lower ethical perceptions than one from an economically prosperous culture or subculture. Because a person's ethical perceptions are regarded by many as being formed in the childhood environment,[7] it could be assumed that workers' ethical perceptions will reflect their culture - or subculture - rather than the firm in which they are employed.

Within the business firm, differences in employee ethical perceptions are likely to manifest themselves in the sales area. Indeed, in the overall business environment, the sales area appears to be particularly susceptible to the development of "ethically active" situations which promote the display of unethical behavior. According to one study, salespersons are three to four times more likely to engage in unethical behavior than are personnel in other business departments.[8] This increased susceptibility arises from a number of sources. For instance, salespersons play a "boundary-spanning" role, through which the satisfaction of both customers and management are sought.[9] Within this context, management pressure to produce consistent results tends to create an atmosphere that often fosters questionable activity.[10]

Although few studies exist that examine the ethical perceptions of employees or business personnel across cultures and subcultures, a number of recent studies have investigated the ethical perceptions of business students from different cultures and subcultures on a number of potentially "ethically active" sales situations. Because ethical perceptions are hypothesized to be established primarily in one's childhood environment as discussed above, any such differences observed among business students can be expected to continue they enter the job market.

Research Results

Three sets of researchers observed that ethical perceptions of business students attending different types of universities, such as a "large" state university vs. a private "religious" university, are significantly dissimilar.[11] These authors did not attempt to determine the possible causes of these differences, but such dissimilarity can be expected. Student self-selection would likely increase the homogeneity of students attending the same institution and likewise the heterogeneity of students among universities. Students would be expected to make decisions to associate themselves with institutions that most closely correspond with their self-images.[12] Simply put, students can be expected to associate with individuals and institutions that they perceive to most closely reflect their own subculture. Such self-selection, however, is generally not possible in the business world.

Ethical differences are also noted in other populations that are considered by some as subcultures. Two research teams (one investigated mangers rather than students) observed that ethical perceptions varied significantly by gender.[13] It appears that females may tend to have higher ethical perceptions than males. Further, another research team observed that ethical perceptions may vary by race as well.[14] The manner by which ethical perceptions may vary by race, however, was left unclear by this study. It appears, therefore, that ethical perceptions do vary between individuals from differing subcultures - those subcultures that are increasingly being represented in the American workforce.

Two research teams investigated ethical perceptions of individuals from different cultures.[15] Specifically, they compared the ethical perceptions of business students from developing countries attending school in their home countries with those of business students from developed countries. In both instances, the ethical perceptions of the individuals from differing cultures were found to be significantly different in the direction proposed by Thorelli.[16] Business students from developing countries attending school in their home country were found to hold less ethical perceptions than those of business students from developed countries.

It appears, therefore, that the ethical perceptions of collegiate business students vary among individuals from different cultures and from different subcultures. Because individuals today are less likely to assimilate into society, but are more likely to maintain their cultural or subcultural diversity, it can be expected that such differences in ethical perceptions will be sustained throughout one's work career. Moreover, it is logical to expect that the perceptions of individuals from differing cultures or subcultures presently in the workforce will vary similarly.

Steps To Success

Now, how can a business successfully deal with this environment? First, the firm must acknowledge the existence of such differences. No longer can management simply assume that its employees will possess the same ethical perceptions. Given such an environment, an employer has two non-mutually exclusive courses of action available. The first option involves differential assignments of duties and positions. The second option the use of company policies that specifically address potentially "ethically active" situations.

As mentioned earlier, certain positions or duties within a business are more likely to involve exposure to "ethically active" situations than are others, such as sales. An employer who has insight into employees' ethical perceptions, or value systems, based on their cultures or subcultures, can assign employees perceived to possess high ethical standards to those positions or duties most likely to involve "ethically active" situations.

Although this approach may have an initial appeal, it often cannot practically be implemented. This approach expressly involves the assignment of positions and duties based on employees' cultural or subcultural origins. Such assignment, then, clearly involves discrimination on the basis of cultural or subcultural origins. Given the ethical and legal ramifications of such a course of action, particularly if the differing positions or duties involve differential pay and/or promotional opportunities, this does not appear to be an acceptable alternative.

Use of Company Policies

Policies, or "directives designed to guide the thinking, decisions, and actions of managers and their subordinates in implementing an organization's strategy,"[17] comprise the key administrative tool available to business firms in the process of strategy implementation. The role of policies in this process involves the development of a social environment that is conducive for progress toward a firm's objectives through the successful implementation of strategy.

Policies fulfill this role by serving to standardize the decision-making process and control the range of discretion available to managers and their subordinates.[18] Policies, in effect, limit the domain in which a decision can be made and the alternatives that can be considered.[19] Policies that address potentially "ethically active" situations, therefore, define the parameters of acceptable behavior for employees in such situations. One such "ethically active" situation may involve the giving or receiving of gifts within a sales encounter. Within this context, business firms can establish policies that dictate the types of gifts that may or may not be offered by a firm's salespersons or accepted by the firm's buyers. In fact, most business firms have set such policies.[20]

The behavior of target individuals may be changed through the use of policies by their potential to alter the relative attractiveness of the choices faced by employees. For instance, policies increase the potential negativity associated with behavior deemed as unacceptable, through such means as reprimand or dismissal. A purchasing agent who accepts a gift that is clearly deemed inappropriate according to company policy may face a loss of privileges, a demotion, or even dismissal as a result of violating the policy. Further, policies can increase the potential benefits associated with behavior consistent with the firm's policies. An employee may face the prospect of receiving a bonus, promotion, etc., as a result of consistently performing within the environment set by a firm's policies.

Definer of Reality

There are no easy answers when the issue of managing diversity is addressed, particularly when ethical perceptions are involved. It needs to be stressed that the first step to be taken by a business firm is to recognize that the diversity exists. The firm's employees likely will not hold the same ethical perceptions as the firm's management or each other.

Within this scenario, the employer is placed into the role of establishing the appropriate courses of action available to employees within the situations in which they will likely find themselves. This is the function of policies. Policies can provide express employee guidelines stating what are appropriate, and inappropriate, courses of action. For instance, through policies firms can fashion the nature of all aspects of an employee's work environment, including relationships with the business itself (e.g., use of a company car, or the reporting of expenses), with the firm's customers (e.g., product return policy, or the use of price discount), and with the firm's competitors (e.g., denigration or sabotage of a competitor's products).

The use of policies, however, does not involve the establishment of an ethical policy per se (though that will often be a part of the process). Instead, the business is fulfilling its requirement of providing leadership. Indeed, a part of the role of providing leadership within a business is being a "definer of reality" in which the relationships with subordinates are set.

Developing and implementing company policies is a part of this process. Policies establish the parameters of acceptable behavior by members of the business firm. This is accomplished by manipulating the costs and benefits associated with particular activities through various rewards and punishments. This is consistent with social exchange theory which suggests that individuals will seek rewards and avoid costs in social encounters.[21]

Policy implementation

The mere establishment of policies is not, in and of itself, capable of ensuring that the actions of individuals will be kept within the ethical perspective desired by a business firm. Indeed, the establishment of policies represents only the first step in the formation of a successful policy implementation program. These policies, along with corresponding rewards or punishments must be coherently and completely communicated to those individuals whose actions they are intended to affect. If employees are unaware of a firm's policies and the rewards and punishments, associated with them, it is unlikely that these policies will have their desired effect.

Once the policies have been established and communicated to the affected employees, they must be implemented. The employees must know when they take effect and that they will be enforced. For instance, it is not sufficient merely to establish a policy expressly banning the firm's salespeople from providing kickbacks to purchasing customers, and to communicate this fact to the salespeople. The business firm has the need and responsibility to provide follow-up - to ensure that the policies communicated will be implemented by the firm and are not just empty statements.

Finally, a key component of that follow-up is strict enforcement of the policies. Enforcement motivates employees to adhere to the policies. Management must consistently and overtly reward those who follow company policy and punish those who don't. A business must continually focus to enforce policies if those policies are to produce the results desired.

The establishment of policies that define acceptable and unacceptable courses, and the enforcement of those policies, appear to hold the greatest promise for successfully addressing the diversity faced by most American businesses. In this way, the business can define its ethical perspective and can ensure, at least to some extent, that the ethical perspective is indeed implemented. Individual employees can then be permitted, or even encouraged, to exhibit their cultural or subcultural identities as long as their actions comply with the policies of the business.

[1] Thomas, R. Roosevelt, 1991, Beyond Race and Gender: Unleashing the Power of Your Total Work Force by Managing Diversity, New York: American Management Association. [2] Ronen, Simcha, 1986, Comparative and Multinational Management. New York: John Wiley & Sons. [3] Johnston, William B., and Arnold H. Packer, 1987, Workforce 2000: Work and Workers for the 21st Century, Indianapolis: Hudson Institute. [4] Thomas, R. Roosevelt, Ibid. [5] Ibid. [6] Thorelli, Hans B. 1983. Consumer Policy in Developing Countries. In Proceedings of the 29th Annual Conference of the American Council on Consumer Interests, ed. K. P. Goebel. Columbia, MO, American Council on Consumer Interests. [7] Berkman, Harold W., and Christopher Gilson, 1986, Consumer Behavior: Concepts and Strategy, Boston: Kent. [8] Murphy, Liz. 1987. Did Your Salesman Lie To Get His Job?, Sales and Marketing Management 139 (November), 54-58. [9] Donnelly, James H., and John M. Ivancevich, 1975, "Role Clarity and the Salesman," Journal of Marketing, 39 (January), 71-74. [10] DeConinck, James B., and David J. Good, 1989, "Perceptual Differences of Sales Practitioners and Students Concerning Ethical Behavior," Journal of Business Ethics, 8 (September), 667-676. [11] Burns, David J., John M. Lanasa, and Jeffrey K. Fawcett, 1990, "Ethical Perceptions of Undergraduate Business Students: Does the Nature of the Institution Matter?," Journal of Midwest Marketing, 5 (Spring), 84-89. Grant, Eugene W., Jr., and Lowell S. Broom, 1988, "Attitudes Towards Ethics: A View of the College Student," Journal of Business Ethics, 7 (August), 617-619. Martin, T. R., 1981-82, "Do Courses in Ethics Improve the Ethical judgment of Students?," Business and Society, 20 (Winter/ Spring), 17-31. [12] Samli, A. Coskun, 1989, Retail Marketing Strategy: Planning, Implementation, and Control, New York, Quorum Books. [13] Robideaux, Douglas R., Donald P. Robin, and R. Eric Reidenbach, 1989, "An Examination of Demographic Variables Associated with Ethical Behaviors and Perceptions of Retailers," In Developments In Marketing Science, eds. Jon M. Hawes and John Thanopoulos, Akron, Academy of Marketing Science. Jones, Thomas M., and Frederick H. Gautschi, 1988, "Will the Ethics of Business Change? A Survey of Future Executives," Journal of Business Ethics, 7 (April), 231-248. [14] Tsalikis, John, and Osita Nwachakwen, 1988, "Cross-cultural Business Ethics: Ethical Beliefs Difference Between Blacks and Whites,"Journal of Business Ethics, 7 (October), 745-754. [15] Burns, David J., and John Brady, 1991, "Ethical Perceptions of Future Business Personnel: An Intercultural Perspective," In Marketing Theory and Applications, eds. Terry L. Childers, et al, Chicago, American Marketing Association. Tsalikis, John, and Osita Nwachakwen, 1991, "A Comparison of Nigerian to American Views of Bribery and Extortion in International Commerce," Journal of Business Ethics, 10 (February), 85-98. [16] Thorelli, Hans B, Ibid. [17] Pearce, John A., and Richard B. Robinson, Jr., 1988, Strategic Management: Strategic Formulation and Implementation, 3rd ed., Homewood IL, Irwin. [18] Koontz, Harold, Cyril O'Donnell, and Heinz Weihrich, 1984, Management, 8th ed,, New York, McGraw-Hill. [19] Bedeian, Authur G., 1986, Management, Chicago, Dryden Press. [20] Bird, Monroe, 1989, Gift Giving and Gift Taking in Industrial Companies, Industrial Marketing Management, 18 (May), 80-85. [21] Light, Donald T., and Suzanne Keller, 1985, Sociology, 4th ed., New York, Alfred A. Knopf.
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Author:Burns, David J.
Publication:Business Forum
Date:Jan 1, 1993
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