Business Ethical Orientations Among Management Students:
A Comparative Study of Two Countries
Dr. Razali Mat Zin, King Fahd University of Petroleum and Minerals, Saudi Arabia
ABSTRACT
This research is intended to investigate the impact of culture on the ethical attitudes of business managers
in Saudi Arabia and Malaysia. Adopting Hofstede’s cultural typology, this study examines the relationship between
his five cultural dimensions—individualism, power distance, uncertainty avoidance, masculinity and long term
orientation – and management students ethical attitudes and various demographic and organizational variables. This
study will use primary data collected from a selected sample of undergraduate students in business management who
are studying in two universities in the Kingdom of Saudi Arabia and two other universities in Malaysia. The findings
showed that there are significant differences between the Saudi and Malaysian business students views in all the
attitudinal statements about business ethics except on the item, “export unsafe products.
Keywords: Business ethics; individualism, power distance, uncertainty avoidance, masculinity and long term
orientation
INTRODUCTION
There has been considerable debate regarding the effectiveness of business ethics instruction (Arlow &
Ulrich, 1980; Beekum, 1996; Braxton, 2004; Razali, 2006). In addition, the AACSB (Barnett & Karson, 2004) states
that, "students should have a background of economic and legal environment as it pertains to profit and/or non-profit
organizations along with ethical considerations and social and political influences as they affect such organizations."
This new trend is also relevant and applicable in the context of higher learning institutions in developing countries
such as Malaysia and Saudi Arabia. Universities in Malaysia and Saudi Arabia should give serious attention about
inculcating the right ethical value orientations among their students as part of the preparation before they join the
workforce in the real world.The purpose of this research is to investigate and compare the impact of national
cultures on the ethical attitudes of undergraduate business management students in Saudi Arabia and Malaysian
universities. Employing the cultural typology proposed by Hofstede (1980, 1997), this study examines the
relationship between the cultural dimensions of individualism, power distance, uncertainty avoidance, masculinity,
long-term orientation and the ethical attitudes of business managers in these countries.
SIGNIFICANT OF THE RESEARCH
This research is the first cross-cultural business-ethical study to focus on these two countries together –
Malaysia and Saudi Arabia. It should give us a better understanding of the relationship between the culture and the
ethical attitudes of future business managers (who are currently enrolling in undergraduate business degree
programs) in Malaysia and Saudi Arabia. It should also help facilitate international business transactions in the
future among these two countries. It is also the first attempt to study empirically the relationship between Hofstede’s
five cultural dimensions — individualism, power distance, masculinity, uncertainty avoidance, and long- term
orientation — and the ethical attitudes of future business managers toward common questionable practices in
business. This study should give us a better understanding of the relationship not only between culture and ethical
attitudes of business managers but also between Hofstede’s cultural dimensions and ethical attitudes of business
managers.
REVIEW OF THE LITERATURE
Empirical research on business ethics began thirty five years ago, triggered by rising scandals in business
corporations, with Baumhart (1961) publishing a descriptive research on the ethical behavior of managers. The late
1980s witnessed an acceleration in empirical researches – descriptive as well as explanatory – after a slow growth in
the 1960s and 1970s (Fritzsche, 1997). In most of these studies culture is considered as one of the independent
variable influencing one’s ethical attitudes and behavior. However, culture is a loaded variable, overarching many
areas in life. It is an abstraction and not an independently existing entity (Biernatzki, 1991). To facilitate crosscultural comparisons, one needs to operationalize culture and identify aspects or dimensions common to all cultures
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(Bruhn, 1996), particularly in the area of business. The outcome of the analysis could be influence by a host of
factors, including what “ethical” means to each person involved in this process. All theorists on managerial ethics
acknowledge that ethical decision making in organizations is a complex process involving a series of variables at the
individual, organizational and cultural levels (Bannett & Karson, 2004; Razali, 2006).
The outcome of the analysis could be influenced by a host of factors, including what ‘ethical’ means to
each person involved in this process. All theorists on managerial ethics acknowledge that the ethical decision
making in organizations is a complex process involving a gamut of variables at the individual, organizational and
cultural levels ( Barnett & Karson, 2004; Jones, 2001). Baumhart (1968) documents the disagreement among the
business executives as to what they mean by ‘ethical’-- 50% of his respondents equated ‘ethical’ with “what my
feeling tells me right”; 25% of the respondents believed that to be ethical is to decide in accord with one’s religious
beliefs; 18% of the respondents thought that to be ethical is to conform to the golden rule. Though he did not
correlate the respondents’ idea of ‘ethical’ with their ethical decision making, we can hypothesize the relationship
between these two factors (Knouse & Giacalone, 1992). Culture has been identified as one of the important
determinants of business-ethical decision making. Culture influences the ethical decision making both directly and
indirectly by interacting with other variables (e.g., what a person means by ‘ethical).
RESEARCH METHODOLOGY
Sampling Procedures
For this study, using the matched sample procedures, data were collected from eight-hundred (800)
undergraduate students who are enrolling in the business or management programs at two Universities in Saudi
Arabia: (i) King Fahd University of Petroleum and Minerals (KFUPM); (ii) King Abdul Aziz University (KAAU),
Jeddah; and in Malaysia: (i) University Kebangsaan Malaysia (UKM); and (ii) University of Malay (UM).
Data Collection
In order to achieve the highest possible rate of return on the questionnaires the researchers administered the
questionnaires by personally visited all the universities selected in both countries
Instrument for the Study
A questionnaire was developed to collect the data. The first section is made of twenty content questions
from the Value Survey Module 1994 (VSM 94)’ developed by Dr. Geert Hofstede, from the Institute for Research
on Intercultural Cooperation (IRIC), University of Maastricht, the Netherlands, to compare culturally determined
values between people of two or more countries. The second section measures the ethical attitudes of respondents.
Researchers believe that it is difficult to get accurate empirical data on ethical attitudes and behavior of respondents,
since business ethical decisions involve complex, multidimensional issues — personal as well as business — and it
is impossible to address and control all the variables in a questionnaire. The third section of the questionnaire
contains several demographic questions
Statistical Data Analysis
Simple descriptive statistics of variables were obtained to achieve a general understanding of the
characteristics of respondents. Analysis of Variance (ANOVA) were conducted to study the differences in
respondents’ ethical attitudes across cultures.
FINDINGS
Hofstede’s Value Survey Module (94)
The first section of the questionnaire, the Value Survey Module (94), contains twenty content point scale:
1 (of utmost importance) to 5 (of little or no importance). Table 4.2 lists mean scores by country for each of these
twenty content questions. Mean scores of content questions for each country were calculated treating non-responses
and multiple answers as missing values and thereby excluding them in the calculation of mean scores. The lower the
mean score for a work value is, the higher is the importance given to it by a particular culture.
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Table 4.2 Mean Scores for Content Questions in VSM (94) by Country (Scale: 1= of utmost importance; 5 = of very little or no importance)
NO.
VALUES
SAUDI ARABIA
MALAYSIA
Mean
Std.
Mean
Std. Dev.
Dev.
1.
Have sufficient time for personal or family life
4.28
0.756
4.27
.742
2.
Have good physical working conditions
4.31
0.747
4.48
.656
3.
Have a good working relationship with your direct superiors
4.26
0.817
4.44
.649
4.
Have security of employment
4.39
0.773
4.61
.651
5.
Work with people who cooperate well with one another
4.24
0.801
4.48
.649
6.
Be consulted by your direct superior in his/her decisions
3.54
1.075
3.98
.770
7.
Have an opportunity for advancement to higher-level jobs
4.36
0.769
4.38
.698
8.
Have an element of variety and adventure in the job
3.74
1.034
3.86
.748
9.
Personal steadiness and stability
4.68
0.603
4.43
.580
10.
Thrift (frugality)
3.83
0.914
4.18
.749
11.
Persistence (perseverance)
4.09
0.78
4.30
.656
12.
Respect for tradition
3.78
0.993
3.94
.807
13.
How often do you feel nervous or tense at work
2.17
0.953
2.48
.944
How frequently, in your experience, are subordinates afraid to
2.42
1.121
2.88
.867
14.
express disagreement with their superiors
15.
Most people can be trusted
2.61
0.988
2.62
.923
One can be a good manager without having precise answers to
2.79
1.13
2.89
.948
16.
most questions that subordinates may raise about their work
An organization structure in which subordinates have two bosses
3.75
1.061
3.79
.951
17.
should be avoided at all cost.
Competition between employees usually does more harm than
2.58
1.04
2.79
.981
18. .
good
19.
A company’s organizations rules should not be broken
3.26
1.195
3.24
.902
20.
When people have tailed in life it is often their own fault
2.7
1.228
3.22
1.077
Hypotheses Testing
Hypothesis One: There is a significant difference in the ethical attitudes among management students in Saudi
Arabia and Malaysia;
Table 4.4 Attitudes Toward Business Ethics in General -- ANOVA Results Factor: Culture
Attitude
Country
Mean
F
Gift-giving
Malaysia
4.27
25.293
S.Arabia
2.04
Marketing unhealthy products
Malaysia
3.56
30.347
S.Arabia
2.16
Padding expense accounts
Malaysia
3.84
703.776
S.Arabia
1.99
Export Unsafe products
Malaysia
3.89
.160
S.Arabia
3.37
Software piracy
Malaysia
3.69
32.746
S.Arabia
2.27
Injury to the environment
Malaysia
3.92
50.592
S.Arabia
2.45
Bribery
Malaysia
3.98
133.838
S.Arabia
2.15
Nepotism
Malaysia
3.01
14.160
S.Arabia
2.76
Compliance with superior’s order
Malaysia
4.87
22.351
S.Arabia
2.01
Dishonesty in advertising
Malaysia
4.66
38.772
S.Arabia
2.82
Sharing of insider information
Malaysia
4.47
52.253
S.Arabia
2.41
Firing older supervisors
Malaysia
4.97
42.234
S.Arabia
2.76
*Significant at .000
Sig.
.000*
.000*
.000*
.689
.000*
.000*
.000*
.000*
.000*
.000*
.000*
.000*
It is clearly shown in Table 4.4, there are significant differences between the Saudi and Malaysian business
students views in all the attitudinal statements about business ethics except on the item, “export unsafe products.”
Thus, the Hypothesis 1 is statistically supported. Overall, the Malaysian sample were more ethical compared to
Saudi sample on all common questionable practices items.
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Hypothesis Two: There is a significant relationship between Hofstede's cultural dimensions – collectivism, power
distance, uncertainty avoidance, masculinity and long-term orientation – and one's ethical orientations.
H2a: The business students with high individualism score tend to look at business practices such as giftgiving, nepotism, software piracy, sharing of insider information as more unethical than the business
students with high collectivism score.
For all the Hypothesis 2 (H2a; H2b; H2c; H2d; and H2e), the “Computed Index Values of Hofstede
Cultural Dimensions” scores (see Table 4.3) were used to determine which sample (Malaysian versus Saudi) is
considered “High” or “Low” on each cultural dimension to be tested in the analysis. The Malaysian sample ranked
higher on “Individualism” score compared to Saudi Arabia.
Table 4.5: The Relationship Between Hofstede’s Cultural Dimension (Individualism) and Ethical Orientations – ANOVA Results
Individualism
N
Mean
F
Sig.
Gift Giving
High (Malaysia)
400
3.60
2.079
.150
High (Saudi)
400
2.77
Software Piracy
High (Malaysia)
400
4.59
6.674
.010**
Low (Saudi)
400
2.35
Nepotism
High (Malaysia)
400
4.09
.076
.000*
Low (Saudi)
400
2.02
Sharing of insider
High (Malaysia)
400
4.22
12.952
.000*
information
Low (Saudi)
400
2.88
*Significant at .000; ** significant at .01 level
The Malaysian business students in the sample of this study emerged to be more individualistic compared
to the Saudi students. ANOVA was the relationship between the common questionable practices (gift-giving;
software piracy; nepotism and sharing insider information) and “Individualism” cultural dimension. Except for
“gift-giving” the results showed significant differences between the Malaysian students (High Individualism) and
the Saudi students (Low Individualism). That means the business students view the common questionable practices
(software piracy; nepotism and sharing insider information) as more unethical than the business students in Saudi
Arabia. In a more collectivist society such as Saudi Arabia, the interest of one’s group, family, clan or tribe prevails
over the interest and expectations of the individual. It is clear in more individualistic society like Malaysia, business
students perceive more importance on issues such as copyright and patent laws which give exclusive rights to certain
individuals to print, manufacture or sell. Also, in Malaysia, business students tend to view the practice of sharing
insider information with family members and close friends as more unethical. Nepotism is also viewed with similar
attitude. Thus, Hypothesis 2a is fully statistically supported.
H2b: The business students with high power distance score take superiors' orders, whether ethical or
unethical, more seriously, than the business students with low power distance score.
Saudi business students from this study sample turned out to be higher in “Power Distance” cultural dimension as
compared to their Malaysian counterparts (Table 4.3). The ANOVA analysis in Table 4.8 clearly indicated that there
is significant differences between Saudi business students and Malaysian students. The Saudi students who scored
higher on “Power Distance” tend to respond to the directions of a superior more positively regardless of whether
they are ethical or non-ethical. Disagreeing, opposing or confronting superiors or elders is regarded as rude and
impolite in high power distance societies such as Saudi Arabia. Therefore, Hypothesis 2b is fully statistically
supported by the data of this study.
Table 4.8: The Relationship Between Hofstede’s Cultural Dimension (Power Distance) and Ethical Orientations—ANOVA Results
Power Distance
N
Mean
F
Sig.
Compliance
Low (Malaysia)
400
4.08
4.641
.032***
with the
High (Saudi)
400
2.27
superior’s order
***Significant at .05
H2c: The business students that scored high in uncertainty avoidance score perceive business practices
which are done legally as less unethical than the business students that are low in uncertainty
avoidance score.
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300
From the computed index of Hofstede Cultural Dimension on “Uncertainty Avoidance”, the Malaysian
sample had a higher score compared to the Saudi sample. In Table 4.9, the data showed that, there is significant
statistical differences between the Saudi sample (High uncertainty avoidance) and Malaysian sample (Low
Uncertainty avoidance) in relation to how they view the common questionable practices such as, “Padding expenses
accounts” and “Bribery.” For Malaysian business students who belong to a lower uncertainty avoidance cultural
orientation tend to be more tolerant toward uncertainty or ambiguous situations. On the other hand, the Saudi
business students are more likely to focus on the legality of the action and they may not perceive the ethical
problems when the practices are strictly legal but not ethical. From the data, the Saudi students perceive business
practices which are done legally although can be construed as “padding expense accounts” and/or “bribery” as less
unethical as compared to those Malaysian students who belong to low uncertainty avoidance group. Thus, the data
clearly fully supported the Hypothesis 2c.
Table 4.9: The Relationship Between Hofstede’s Cultural Dimension (Uncertainty Avoidance) and Ethical Orientations –ANOVA
Results
Uncertainty Avoidance
N
Mean
F
Sig.
Padding
High (Saudi)
400
1.56
.024
.000*
expense
Low (Malaysia)
400
4.78
accounts
Bribery
High (Saudi)
400
2.37
8.956
.003**
Low (Malaysia)
400
4.35
** Significant at .01 level
H2d: The business students with high masculinity scores are less likely to perceive ethical problems in
practices such firing older employees, dishonesty in advertising, damage to the environment and
marketing products that are injurious to health than the business students with high femininity
scores.
The Saudi business students in this sample scored higher on “Masculinity” cultural dimension computed
score compared to the Malaysian business students. This can be understood, in a society such as Saudi Arabia,
gender roles are clearly distinct; and males are encouraged to be dominant, assertive, competitive and to strive for
material success and progress. However, the data displayed in Table 4:10 showed mixed findings. There are
statistical differences between the Malaysian samples (low masculinity) and Saudi sample (high masculinity) on
three common questionable business practices i.e “Marketing unhealthy products;” “Export of unsafe products;” and
“Firing older supervisors.” There is no significant difference between “Masculinity” and the other practice,
“Dishonesty in advertising.” Thus, the business students in Saudi Arabia (more masculine) are less likely to perceive
problems as ethical issues when it comes to the marketing harmful products, export of unsafe products, and firing of
older supervisors. From this ANOVA results, the Hypothesis 2d is partially supported.
Table 4.10: The Relationship Between Hofstede’s Cultural Dimension (Masculinity) and Ethical Orientations –ANOVA Results
Masculinity
N
Mean
F
Sig.
Marketing
Low (Malaysia)
400
4.66
.014
.017***
unhealthy
High (Saudi)
400
2.67
products
Export of unsafe Low (Malaysia)
400
4.71
5.788
.016***
products
400
2.94
High (Saudi)
Dishonesty in
Low (Malaysia)
400
2.45
1.026
.311
advertising
400
1.53
High (Saudi)
Firing of older
Low (Malaysia)
400
4.25
2.956
.024***
supervisors
400
2.41
High (Saudi)
***Significant at .05;
H2e: The business students with low long-term orientation scores will perceive practices such profiting at
the expense of damaging the environment as less unethical than the business students with the high
score on the long-term orientation.
Malaysian business students from this sample came out showing higher “Long-term Orientation” computed
scores compared to the Saudi students. They are more focused toward the future, while the Saudis are towards the
past and the present. From the Table 4:11, the ANOVA Results showed that there is a significant difference between
this particular cultural dimension and the practice which leads to creating “injury to the environment.” It is highly
likely that, Saudi students who belong to the short-term oriented society will be more concerned about making short-
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term and quick success at any cost, even at the expense of destroying relationships and/or causing long-term damage
to the environment. Therefore, Hypothesis 2e are statistically supported.
Table 4.11: The Relationship Between Hofstede’s Cultural Dimension (Long-term Orientation) and Ethical Orientation –ANOVA
Results
Long-term Orientation
N
Mean
F
Sig.
Injury to the environment
Low (Saudi)
400
2.89
8.158
.004**
High (Malaysia)
400
4.66
**Significant at .01 level
CONCLUSION
The main purpose of this research was to investigate and compare the impact of national cultures on the
ethical attitudes of undergraduate management students in two Malaysian and two Saudi Arabia universities using
ANOVA statistical analysis. Further, employing Hofstede’s cultural typology, this study examined the relationship
between cultural dimensions of individualism, power distance, masculinity, uncertainty avoidance and long-term
orientation, and the ethical attitudes of business managers in these countries. The findings clearly suggested that
culture has a strong influence on the managements students’ attitudes toward both business ethics in general and
various questionable business practices in particular and there are significant differences between the two countries.
Acknowledgement
We would like to express our heartfelt gratitude to KFUPM for funding this research through Internal Research Funds. We also would
like to thank all the respondents for their generosity in participating in this research.
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