universal values, behavioral ethics and entrepreneurship

ABSTRACT. This is a comparison of graduatestudents attitudes in Spain and the United States onthe issue of universal versus relativist ethics. Thefindings show agreement on fundamental universalvalues across cultures but differences in responses tobehavioral ethics within the context of entrepreneurialdilemmas.

Do people hold universal attitudes towardbusiness ethics or are ethical orientations specificto different cultures? This promises to be anincreasingly relevant question for managers asbusiness activities in most industries and manyenterprises assume and international scope. Cuilla(1991) presents a comprehensive and well-argueddiscussion of the growing impact of ethics onbusinesses in the global economy. She points outthat the interdependences of business crossnational boundaries, which means that themodern firm depends on and has obligations tostrangers all over the world. She suggests thatthinking about morality increasingly requires avery sophisticated approach.

However, as David Vogel (1992) points out,there is evidence that business ethics are notuniversally similar, but vary by country, in par-ticular with historically large differences evenbetween capitalist countries. Vogel argues that

Americans are more sensitive to and concernedwith issues of business ethics that other countriesbecause the values of “business civilization” areso engrained in the national psyche. Drawingfrom a literature review, Vogel presents threecritical differences in business ethics betweenAmericans and Europeans. First, he makes theargument that Americans make ethical decisionsbased on individual values, while Europeans referto the norms of the community, labelled as“communicative” or “consensual” businessethics. Secondly, he argues that Americans uselaws and formal rules as opposed to the informalmechanisms of social control in Europe. A thirdcritical difference is the American preoccupationwith universal application of American rules andprocedures.

While a number of researchers have addressedthis question of universal versus relativist ethics,consistent conclusions have yet to emerge.Through a two country comparison of graduatebusiness students’ attitudes toward ethics, thisstudy attempts to shed light on the question ofwhether there are universal moral values withdiffering behavioral applications or culturallyrelative principles and attitudes toward businessethics. The implications for developing businessnetworks are deep, for even with basic agreementon principles, individuals may apply distinct andseparate behavioral standards. If we can furtherthe understanding of this conundrum then wecan facilitate the resolution of interorganizationalconflict.

Several studies have found similar attitudestoward business ethics across cultures. Izraeli(1988) for example, found ethical beliefs andbehavior of a sample of Israeli managers to besimilar to results found for U.S. managers. In a

Universal Values, Behavioral

Ruth ClarkeEthics and Entrepreneurship John Aram

Journal of Business Ethics

16: 561–572, 1997.© 1997 Kluwer Academic Publishers. Printed in the Netherlands.

Ruth Clarke is Assistant Professor of Management atSuffolk University, Boston. She was recently affiliatedwith Madrid Business School, Spain, where this researchwas initiated.

John Aram is Professor of Management at Case WesternReserve University. His publications include articles inthe Academy of Management Review, Businessand Society Review, Long Range Planning andResearch Policy.

cross-cultural study internal to the United States,Tslikis and Nwachukwu (1980) found little dif-ference in ethical beliefs between black and whitestudents. Another study of university businessstudents in the United States, Denmark, andNew Zealand (Lyonski and Gaidis, 1991) evalu-ated reactions to ethical dilemma problems. Thisstudy concluded that students’ reactions weresimilar regardless of country. Moreover, theseresearchers found that students and practicingmanagers were equally sensitive to the ethicaldimensions of business decision making. Finally,a comparative study of American and Britishstudents’ ethical judgements (Whipple andSwords, 1992) found that differences in demo-graphic profiles did not influence ethicaljudgements. In both countries, however, femalerespondents expressed more ethical attitudes.

In contrast, several studies have found ethicalattitudes toward business issues to differ bycountry. Becker and Fritzche (1987) foundFrench managers to be idealistic, Germanmanagers to have a pessimistic orientation, andAmerican managers to be realists on ethicalquestions. White and Ohodeback (1992) founddifferences between United States and Taiwanesebusiness students’ responses to a set of ethicaldilemmas in organizational consulting situations.

One team of researchers found that managers’reactions to business ethics are similar on someissues and different on other issues. Becker andFritzsche (1987), for example, found American,French, and German managers to have like viewson problems involving paternalism in the firm,on a conflict of interest problem, and on aconsumer safety issue. These managers, however,indicated differences by country on problemsdealing with violation of environmental laws andwith a bribery situation. Becker and Frizschesuggest that differing laws and regulations mayinfluence specific ethical responses and that thereare both universals and cultural differences inattitudes toward business ethics.

Wines and Napier (1992) present a generalmodel of cross-cultural ethics that addresses thequestion of whether attitudes toward businessethics are universal or culturally specific. Winesand Napier distinguish between moral values,which may be more similar than they are dif-

ferent between cultures, and the application ofmoral principles to specific situations (ethics),which are more likely to vary between cultures.Thus, situations calling for the application ofprinciples are hypothesized to depend on anumber of personal and organizational factors.

Dees and Starr (1992) also distinguish betweena set of shared, consensual, and largely universalvalues and responses to more specific ethicaldilemmas to which societies are likely to responddifferently. In the former context, Dees and Starrrefer to very general “core social values,” suchas prosperity, justice, and liberty, and somewhatless abstract “social lubrication values,” such ashonesty, trustworthiness, and concern for others.This is to suggest that moral aspirations are highlyuniversal. These authors also suggest that somelevel of realization of these values is necessary toestablish a basis for a cooperative, productive,fulfilling existence in any society. The way thatdifferent societies view the reasons for unethicalbehavior and the way that they address morespecific ethical problems may be expected todiffer, however, due to contextual factors.

Universal principles, such as these, have pre-viously been confirmed as admirable qualities inthe workplace in the U.S., by researchers Burkeand Black (1990) and Posner and Schmidt (1984).

Both of these studies established honesty as themost highly rated quality, followed by, indescending order, competence, responsibility,creativity, caring, confidence, cheerfulness, logic/reason, independence, ambition, courage andobedience. We believe that cross-cultural testingof these universal values has been inadequatelyperformed and documented. In general,researchers have tested ethical vignettes whichmeasure behavior without directly establishingthe perceived value of core principles. FollowingDees and Starr (1992), we accept the belief thatdifferent societies will share very general ethicalbeliefs. Fundamental values will not be expectedto differ at least among Western cultures.

Burke and Black (1990) further questionedAmerican executives on the strength of situa-tional variables that influence unethical behaviorat work. Society’s moral climate was found tobe the strongest factor, followed by behavior ofsuperiors, which they argue might indicate a high

562 R. Clarke and J. Aram

concern and appreciation with ethical behavior.Conversely, Trevino (1986) argues that muchresearch tends to be pessimistic about businessethics, tending to portray managers who arecynical about their peers and superiors, selves andbusinesses. Factors that people perceive as thesources of unethical behavior at work areexpected to be sensitive to the context of cultureand societal norms. Thus, we expect that respon-dents in different societies will differ in theirviews of the sources of unethical behavior atwork.

Dees and Starr (1992) propose an entrepre-neurship-ethical context for examining manage-rial attitudes toward ethics. Following Van deVen’s (1986) thoughts on the importance of therole of innovation and entrepreneurship for socialand economic development, this focus seemsparticularly appropriate today given the wide-spread endorsement of market-driven economicgrowth in many parts of the world and given aparallel concern in many countries about apotentially diminishing emphasis on positivesocial values, public-spirited behavior, andcommunity orientation. The way that differentsocieties address the dilemmas of economicgrowth (entrepreneurship) and social well-being(ethics) represents a salient contemporary issue.Dilemmas of entrepreneurship-ethics refer tospecific action situations and respondents areasked to declare personal courses of action. Beingspecific, these situations call for responses that arestrongly influenced by particular cultures. Weexpect respondents in different societies to havemore differences than similarities in theirresponses to these dilemma situations.

Entrepreneurs are recognized by some theo-rists as having two central features, independenceand egoism (Longenecker et al., 1988). Certainly,entrepreneurs are involved in creating newbusiness regardless of high levels of uncertaintyand risk, which would be unacceptable toestablished, non-innovative business. We mightexpect, as these authors state, that entrepreneurswill place their business success and continuityabove all else. This does not necessarily implythat entrepreneurs will act unethically, in fact ifthey believe that ethical behavior is at the coreof long term business success, ethics will be

correspondingly more important to a smallbusiness person or entrepreneur. Training ourresearch focus on situations of innovation forcesrespondents to make an ethical statement in theface of danger to the future of a business, so thatthey must trade-off entrepreneurial and ethicalvalues.

Hypotheses

Three hypotheses address the central question ofwhat are universal and what are culturally specificresponses to problems of ethics among managers.Following Wines and Napier (1992) and Deesand Starr (1992), it is first suggested that samplesof managers from differing countries will sharefundamental moral values and will differ in theirresponses to specific ethical dilemmas. Secondly,situations specific to ethical decision making areviewed both in terms of (1) factors most likelyto influence unethical behavior and (2) a seriesof entrepreneurial-ethical situations.

H1: Respondents from different countries willdemonstrate more similarity than differ-ences in attitudes toward fundamentalmoral values.

Hypothesis 1 was tested by presentingrespondents with a list of fundamental values,colloquially called “most admired workplacecharacteristics,” and derived from Burke andBlack, and Dees and Starr. Following on fromthe work of Posner and Schmidt (1984), Burkeand Black, in 1990, found that honesty (85.5%)was ranked most highly by managers. In theirresults they ascribe this finding to the increasedacknowledgement of the importance of integrityin leaders. Characteristics of subsequent impor-tance in decreasing order were competence(78.3%), responsibility (76.8%), creativity (52.2%),caring (40.6%), confidence (39.1%), cheerfulness(34.8%), logic/reason (29%), independence(21.7%), ambition (20.3%), courage (14.5%) andobedience (7.2%).

Since the Posner and Schmidt, 1984 study,ratings of these qualities had changed to somedegree, as reflected in the Burke and Black study,

Ethics and Entrepreneurship 563

the gainers being competence, caring, cheerful-ness, confidence, and obedience, while respon-sibility, creativity, logic/reason, independence,ambition and courage declined. We supple-mented these qualities with two other qualitiesmentioned by Dees and Starr, fairness and trust-worthiness, and finally the value, competitiveness,to test whether this had become important to therespondents in a seemingly more aggressive,worldwide economy.

H2: Respondents from different countries willshow more differences than similarities intheir perceptions of the sources of uneth-ical behavior.

Two factors, society’s moral climate andbehavior of superiors found by Burke and Blockto be most important in influencing unethicalbehavior, and three additional factors, personalfinancial need, peer behavior in organizations andformal organizational policy were used to coverall aspects of influence in the organization.Respondents were asked to rank these factorsaccording to respondents’ perceptions of havingmost to least influence on unethical behavior.Burke and Black found that society’s moralclimate had the highest ranking by their groupof respondents, followed by behavior ofsuperiors, and argued that institutionalization ofethics investigations at the federal, state and locallevels in the United States had made the moralclimate a more pervasive factor. Behavior ofsuperiors had previously been ranked as numberone by respondents in the 1984 Posner andSchmidt study, supporting ample leadershipresearch that identifies leaders’ behavior asparamount in ethical matters (Longenecker,1985).

H3: Respondents from different countries willshow more differences than similarities intheir responses to entrepreneurial-ethicaldilemma problems.

A series of questions was developed largelyfrom Dees and Starr’s identification of entrepre-neurship-ethical dilemmas. In an attempt todevelop a grounded theory approach to the issue,

these authors suggest general categories of salientdilemma facing entrepreneurial managers.Leaving aside the least well defined “other”category, we worked with the three categories ofpromoter dilemma, relationship dilemma andinnovators dilemma. Promoter dilemma can beconsidered to arise when the entrepreneurialmanager must engineer consent, using powers ofpersuasion and influence, to overcome the skep-ticism and resistance of guardians of the statusquo, (Dees and Starr, p. 96). Relationshipdilemmas occur in situations where the entre-preneurial managers’ social networks may be usedto provide benefits, but may also present ethicalchoices between loyalty to relationship expecta-tions and loyalty to the new venture. Innovatordilemmas arise out of the risks and costs inherentin innovation, with entrepreneurs creating newtechnological, administrative, and social innova-tions that challenge the status quo (Etzioni,1986).

It is anticipated that tests of these hypothesesmay shed light on generally inconsistent resultspresent in prior studies concerning whetherattitudes toward business ethics are universal orculturally specific.

Methodology

Sample

Graduate business students from the UnitedStates (159) and Spain (180) participated in aquestionnaire study of attitudes toward businessethics. These were two convenience groups, theSpanish being the entire population of a two yearMBA program with instruction in English, andthe American a subset of a larger MBA program.Adequate fluency in English, both written andspoken, was assured by the researchers whoadministered the questionnaire. Questions aboutthe instrument were addressed on site by theresearchers.

These two countries present an attractive com-parison based on differences in their long-termand recent experiences with market economies.The United States has a long-standing traditionof private economic freedom and entrepreneur-


ship. In contrast, Spain began to participate inthe international economy only since 1986 whenit joined what is now the European Union. Interms of economic policy at the time of the study(summer, 1993), Spain’s economy was less open.Also, at the time of the study, Spain was in themidst of a serious recession, and the UnitedStates was gradually recovering from recession.

These general evaluations of the entrepre-neurial climate and the existence of long-standing experience with entrepreneurship weresupported by data from the sample populations.Using cross-tab statistical tests, we found thatcountry groups significantly differed in bothrespondents’ perceptions of the tradition ofentrepreneurial attitudes and behaviors in theircountry (U.S. = 4.0; Spain = 3.2; p < 0.0001),and in the percentage of respondents who stateda positive intention to open their own businessone day (Spain = 77%; U.S. = 60%; p < 0.0011).The Americans clearly recognize their history ofentrepreneurship but are not intent on followingup on that history. The Spanish realize that inrecent twentieth century history Spain has notfostered entrepreneurship, but they exhibit a highlevel of interest in becoming entrepreneurs.Recent policy changes in Spain toward economicliberalization and the consequent opening up ofnew business opportunities is probably a stronginfluence on this interest level, particularly inlight of the relative lack of work experience ofthe Spanish respondents.

The cross-tab analysis of the sample also showssignificant disparities in demographics in termsof age and overseas experience (Table I). TheSpanish respondents are significantly younger,(p < 0.0001) all less than 35 years, the Americansexhibit a wider age range. In terms of overseas

experience, the Spanish are significantly moreexperienced with 90% having been abroad, andthe Americans, unsurprisingly, a 17.6% levelof travel abroad (p < 0.0001). The respondentshave a similar and non-significant background interms of fathers’ work and mothers’ role inworkforce. An interesting, non-significantdemographic statistic is the gender compositionof both samples, the Spanish sample is composedof 34% females, and the Americans of 37%females.

Research tools

Overall a thirteen item questionnaire was devel-oped with one question set evaluating respon-dents’ attitudes toward general moral values, andone question set requiring a ranking of factorsinfluencing unethical behavior. Eleven questionswere used to elicit responses to entrepreneurial-ethical dilemma questions. These latter questionswere Likert-type items ranging from stronglydisagree, (1) to strongly agree (5). Three broadcategories of dilemma types were used, promoter,relationship and innovator. A more specificdiscussion of the nature of these dilemmas waspresented in the hypothesis section.

Four questions were developed to examineattitudes to promoter dilemmas. Three questionstested respondents’ attitudes to relationshipdilemmas. Three questions tested respondents’attitudes to innovator’s dilemmas. A furtherquestion concerning the value of an ethic ofchange, which is suggested may counteract thestresses of the innovation dilemma, was included.

Results

Most admired workplace characteristics

We use means to rate admired workplace char-acteristics, testing hypothesis 1, that respondentsfrom different countries will demonstrate moresimilarity than differences in attitudes towardfundamental moral values. The results in Table IIare generally collaborative of the ranking ofmoral qualities discussed in Burke and Black’s


TABLE IDemographics

Significant chi-square Chi-sq. df pstatistics

Nation by ent tradition 012.00 2 0.0001Nation by age 066.51 2 0.0001Nation by plan business 010.65 1 0.0011Nation by overseas 180.04 1 0.0001

study and addressed in Dees and Starr’s theoret-ical work. Hypothesis 1 is supported by the data.

The data show a clear agreement betweenSpanish and American respondents on the fivemost admired characteristics in the workplace.Honesty is rated as the most admired character-istic by Spanish respondents and a close secondby American respondents. Responsibility rates asa close second for the Spanish and as number onefor the Americans. The Spanish respondents aremuch more enthusiastic about creativity, courageand logic than the Americans. We might ascribethis finding to the youthfulness of the group, whoare about to enter the workforce and needmuch courage to face the economic situation.Additionally we could say that with less work-force experience, the Spanish group is idealisticabout the importance of creativity. Converselywith increased emphasis on TQM in the U.S.,we might expect the American respondents to bemore enthusiastic about the possibilities for beingcreative. Perhaps they are not yet involved in thelatest management techniques or regard them asless than effective. Obedience rates last, for bothsets, as a desired characteristic, and caring andcheerfulness are given little support. As expected,business students tend to be concerned more

with getting the job done and less concernedwith supposedly “soft” personal qualities. Burkeand Black found that these empathic qualitieswere becoming more important, however thisresearch does not support that conclusion.

Situational factors influencing unethical behavior

Hypothesis 2, which states that respondents fromdifferent countries will show more differencesthan similarities in their perceptions of thesources of unethical behavior, was tested via theMann-Whitney U, which is appropriate forordinal data. This non-parametric procedure teststhe null hypothesis that the variable ranks fromtwo groups are random sets from a commonpopulation. The test showed that there weresignificant differences on two dimensions: thesewere the variables “behavior of superiors,” and“formal organizational policy.” Hypothesis 3 isnot supported by the data, there are less differ-ences than similarities between nations in theirperceptions of sources of unethical behavior.

Table III shows the probabilities resulting fromthe Mann-Whitney U test, and the means ofresponses on each variable. While these are


TABLE II5 characteristics most admired in the workplace

Spain U.S. position rankings

# % # % Spain/U.S.

01. Honesty 137 76 098 61 01/2002. Responsibility 132 73 100 63 02/1003. Fairness 079 44 095 60 04/3004. Trustworthiness 077 43 083 52 05/4005. Creativity 107 59 075 47 03/5006. Confidence 069 38 068 43 06/6007. Ambition 044 24 065 41 09/7008. Competitiveness 044 24 039 25 09/8009. Independence 033 18 037 23 11/9010. Logic 054 30 035 22 08/1011. Cheerfulness 034 19 035 22 10/1012. Caring 023 13 032 20 12/1113. Courage 056 31 022 14 07/1214. Obedience 002 01 001 01 13/13

ranked data, and strictly speaking the mean is aninappropriate measure, the means are shown as amore useful comparison than the median.

We interpret the findings to mean that on thedimension “behavior of superiors,” the Spanishrespondents, as a group, tended to rank this factoras more important and the Americans, as a group,ranked this factor as less important, with asignificance level of p < 0.001. If we look atthe means we see that Americans tend to rankthis factor as less important than the otherfour variables. This relegation to fifth place byAmericans contradicts the Posner and Schmidt,1984, findings, and the Burke and Black findings,that superior’s behavior is an important deter-minant of behavior.

With a significance of p < 0.0145, the datawere shown to be in differently ranked sets forthe factor “formal organizational policy,” whichtended to be seen as less important by Spanishrespondents and more important by Americansrespondents. If we look at the means however,both Americans and Spanish rank formal orga-nizational policy as the most important influenceon unethical behavior. This is more importantfor Americans overall. This is not consistent withWeaver and Ferrell’s 1977 study, reporting thatformal organizational policy is not perceived asinfluencing behavior. Paraphrasing Trevino, weargue that unless a code of ethics is perceived asan integral part of everyday organizationalactivity, it is unlikely to be given serious con-sideration in decision making. We suggest thatthis particular result reflects the increasingnumbers of companies implementing codes ofethics in recent years and the corresponding

attention paid to them by employees. Ourfindings lend some support to Burke and Black’s(1990) report that society’s moral climate rankedmost highly in their American study, however,both Spanish and American respondents rankedthis as the second most important situationalinfluence on behavior.

In ranking factors that influence unethicalbehavior, Spanish respondents show a smallerrange of dispersion of means, implying disagree-ment amongst the group. Personal financial needis ranked of least importance by the Spanishgroup, and peer behavior in organizations isranked of fourth importance, however this is veryclose in rank to behavior of superiors andsociety’s moral climate. American respondentsreported a much bigger range of dispersion ofmeans, implying more agreement within thegroup in attributing importance to factors thatinfluence unethical behavior.

Entrepreneurial-ethical dilemmas

Hypothesis 3 states that respondents from dif-ferent countries will show more differences thansimilarities in their responses to entrepreneurial-ethical dilemma problems. Subjecting the data toa MANOVA test revealed an overall significantdifference (p < 0.001) between the two nationson the dependent variables, confirming thishypothesis. Country effect is further explainedbelow using a series of univariate ANOVAS fortests of significance. Previous researchers havepointed out the greater importance of gendereffect than country effect (Whipple and Swords,


TABLE IIISituational factors influencing unethical behavior

Spain Prob. U.S.(M-W)

Rank Means Rank Means

Formal organizational policy 1 2.728 0.015 1 2.358Society’s moral climate 2 3.022 0.616 2 3.107Behavior of superiors 2 3.022 0.001 5 3.616Peer behavior in organizations 4 3.028 0.117 3 3.226Personal financial need 5 3.217 0.939 4 3.233

1992). Therefore, a second MANOVA test ofsignificance was performed using gender (male,female) as the independent variable against thesame variable set. This test produced a result ofno significant difference along gender lines,therefore we can ascribe differences in this dataset to country effect. We continue our discussionwith an analysis of entrepreneurship-ethicsdilemmas presenting the findings of univariate Ftests between country sets.

A series of questions relating to specificexamples of tradeoffs between ethics and inno-vation established that the two groups, in general,perceive themselves to be at different points ofthe entrepreneurship-ethics continuum. Ameri-cans appear to tradeoff entrepreneurship forhigher ethical behavioral standards, while theSpanish appeared more likely to tradeoff ethicsfor greater business success, as demonstrated byresponses to the following questions. However,if we look at the responses to the different pro-jected types of dilemma, we find that respondentssignificantly differed on responses to relationshipdilemmas, equally significantly differed and con-curred within the bounds of promotor dilemmaquestions, and did not differ on responses toinnovator dilemmas. Hypothesis 3 is thereforeconfirmed in general, but not completely sup-ported on all three conceptual dimensions.

The dilemma questions

Promoter dilemma. The following example of apromoter’s dilemma, “Leading new investors tobelieve others have committed substantial sumsto the venture when they have only expressedinterest is acceptable,” resulted in significantdifference (p < 0.001), with Spanish respondentsagreeing more clearly with this tradeoff (Smean= 2.815; USmean = 1.815), than Americans.The Spanish group shows a greater acceptance ofthe belief that an entrepreneur’s success dependson engineering consent in the face of obstaclesto changing the status quo, which is supportedby the finding that a large number of respondentsstated a desire to own a business one day.

Promoter Dilemma. The example, “The charac-

teristic “can-do” optimism of entrepreneurs ismore important to the success of innovation thanhigh ethical standards,” results in Spanish respon-dents significantly (p < 0.02) differing fromAmericans. Spanish agree more with this state-ment (Smean = 3.144; USmean = 2.898),Americans tending to disagree with this belief.Again this supports the idea that the Spanish aremore entrepreneurial in psychological profile,and ties in with the previous question, as we canassume that selling a venture is easier if one isoptimistic about the likelihood of success.

Promoter dilemma. The statement “When pro-moting innovation, managers must completelydisclose all risks and uncertainties, includingupside return and downside risk,” resulted in afinding of no significant difference (p < 0.597).Both groups tended to agree with the statement(Smean = 3.561; USmean = 3.66). We canspeculate that the positive direction of thequestion resulted in less of a difference inresponse between groups.

Promoter dilemma. The statement, “Investors ina project should be able to rely on the integrityof the innovator,” also resulted in a finding ofno significant difference (p < 0.525). Both groupsagreed quite strongly with this statement, perhapsreflecting respect for the innovator (Smean =3.928; USmean = 3.987).

Relationship dilemma. The statement, “Innovationand entrepreneurship can only take place ifselective honesty is practiced,” produced a sig-nificant difference at the level of (p < 0.001),with Spanish respondents agreeing more strongly.(Smean = 3.056; USmean = 2.478).

Relationship dilemma: The statement, “Entre-preneurial managers have a greater responsibilityto a venture’s success than to previous family orfriendship relationships,” resulted in a significantdifference (p < 0.001), with Spanish respondentsagreeing more strongly (Smean = 2.717; USmean= 2.076).

Relationship dilemma. “When an innovatorpromotes innovation, other individuals involved


are a means to an economic end,” was signifi-cantly different (p < 0.013), Spanish respondentsdisagreeing less strongly than Americans, (Smean= 2.854; USmean = 2.532).

The three relationship dilemmas resulted insignificant difference between the two groups,with the Americans clearly less willing to sacri-fice relationships for innovation, and the Spanishunwilling to sacrifice innovation for relationships.

Innovator dilemma. The example, “Innovationscan have a detrimental effect on society andentrepreneurs must take this into consideration,”resulted in a finding of no significant differencebetween the two groups, (p < 0.761), with bothagreeing somewhat with the statement (Smean =3.151; USmean = 3.09).

Innovator dilemma. The statement “In generalmarket mechanisms are sufficient to limit ethicalproblems,” also resulted in a finding of nosignificant difference between groups (p < 0.134).Respondents tended to disagree with this state-ment (Smean = 1.917; USmean = 2.065).

Innovator dilemma. The statement, “Innovatorsshould decide on each issue independentlywithout reference to an underlying societal code

of ethics,” again produced a finding of nosignificant difference between groups (p < 0.303),who disagreed slightly with this statement(Smean = 2.427; USmean = 2.288).

These responses to the three innovatordilemmas showed no significant differencebetween groups, however the fourth questionrelating to the importance of change produced afinding of significant difference between groups(p < 0.024). “An ethic of change is moredesirable than an ethic of stability, because thismay create new ways of doing things,” was morestrongly agreed with by the Spanish respondentsthan the Americans, (Smean = 3.607; USmean= 3.346), which ties in with the response to ourearlier demographic question on planning toopen a business.

Conclusion

The central focus of this research was to evaluatewhether people hold universal ethical orienta-tions or whether ethics are specific to differentsocieties. We hypothesized that samples of MBArespondents in Spain and in the United Statewould share general moral values and that theywould have more differences than similarities on


TABLE IVAttitudes to entrepreneurship and ethics by country

Spain means U.S. means Prob. (ANOVA)

Promoter dilemmasLeading new investors falsely 2.815 1.815 0.000Optimism more than ethics 3.144 2.898 0.020Risks disclosed completely 3.581 3.660 0.597Importance of innovator integrity 3.928 3.987 0.525

Relationship dilemmasInnovation needs selective honesty 3.056 2.478 0.000Venture rather than relationships 2.717 2.076 0.000Individuals, means to economic end 2.854 2.532 0.013

Innovator dilemmasInnov detrimental to society 3.151 3.090 0.761Market mechanisms sufficient 1.917 2.065 0.134Need not refer to societal code 2.427 2.288 0.303Ethic of change 3.607 3.346 0.024

more specific issues, such as identifying thesources of unethical behavior in organizationsand in responding to ethical dilemma situations.Three hypotheses were proposed as a way tointerpret conflicting prior research concerningcomparative business ethics.

Following Dees and Starr, hypothesis 1 statedthat respondents in different countries wouldshare fundamental moral values. Responding toa question derived from Dees and Starr, andBurke and Black, Spanish and North AmericanMBA students showed significant agreement onhow they ranked a series of moral values. Thisresult is consistent with the universalist theoret-ical position presented by Dees and Starr andWines and Napier, although the Americans’value priorities in this study differed substantiallyfrom the American results of Burke and Black,but not Posner and Schmidt.

Of course, the finding of common moralvalues between samples of American and SpanishMBA students does not mean that these valuesare truly universal, i.e., they are also held bypeople from other societies and cultures. Thisresult does, however, lend weight to the beliefthat fundamental values are widely held and itencourages continued evaluation of this question.The finding that some values may be universalalso may help explain results from studies ofbusiness ethics that have found similar responsesacross cultures and groups (Izraeli, 1988; Lyonskiand Gaidis, 1991; and Whipple and Swords,1992). The instruments that these researchersused to assess attitudes toward business ethics mayhave stimulated awareness of general moralvalues.

We hypothesized that respondents in differentcountries would rank order influences onunethical conduct differently, and show moredifferences than similarities. This hypothesis ispartially supported as Spanish and AmericanMBA students differed in their rank order of alist of five possible sources. While Burke andBlack, and Trevino have evaluated similar ques-tions within the United States, comparativestudies have not used this approach. The work-specific orientation of this question to unethicalinfluences suggested a sensitivity to the normsand values of particular societies. Working on an

organizationally-specific level these differencesare not surprising, and they are consistent withprior research that has concluded that approachesto business ethics differ by country (Becker andFritzche, 1987; White and Ohodeback, 1992).

The increasing concern by corporations withinstituting codes of ethics formalizing requiredethical behaviors appears to be taken seriously byboth sets of our respondents. Concurring withVogel we would expect this in the United States,where the legal system is much more developedin terms of formally recognizing the rights andresponsibilities of American citizens. However itis surprising to note strong respect for formalpolicy in the Spanish sample, who also reportedstrong belief in the importance of behavior ofsuperiors, and by extraction, support for thevalue of informal networks. So while we cannotclaim that universal application of ethical codesis rapidly happening, we can say that recogni-tion of the importance of ethical issues is growingworldwide. It would seem that the Americantendency to believe in universal application ofAmerican values (Vogel, 1992), is not beingcarried out. The 1994 Caux Round Table(CRT) recent publication of a seventeen point“Principles for Business” paper incorporatesAmerican, European and Japanese businessrepresentation, and points to widespread supportfor a universal code of ethics which is not singleculture dependent (Dickson, 1994).

Finally, we hypothesized that respondents indifferent societies would express more differencesthan similarities in response to entrepreneurial-ethics dilemma situations drawn from Dees andStarr’s general statements on these problems.Spanish and North American respondents didshow consistent differences on some questionsevaluating aspects of entrepreneurial-ethicaltrade-offs. This result is again consistent withprior theoretical statements and research thatsupport the notion that specific business actionswill be culturally-dependent and thereforerespondents in different countries will responddifferently. We did not find support for genderbased differences in response to entrepreneurial-ethical trade-offs.

It is also interesting to note the nature of thedifferences between the two samples on these


questions. Spanish respondents consistentlyscored more toward the entrepreneurial end ofthe scale than the ethical end of the scale. Spanishrespondents said they would be more aggressivein requesting investment funds, they would placeinnovation and entrepreneurship ahead of totalhonesty, they would place the new venture aheadof responsibilities to family and friends, and theywould subordinate individual considerations to aventure’s success. Given the strong traditional roleof family in Spanish society, their willingness tobe more concerned with a new venture thanwith family responsibilities is surprising. Vogel’spremise that Europeans tend towards values ofcommunity does not appear to be supported bythis study. In fact, our American sample appearedmore community oriented than the Spanishsample. On each of these questions, theAmerican sample chose a less entrepreneurial, orconversely, more ethical, position.

This result may be explained by the recentchanges in economic policy in Spain comparedto the United States. Spain experienced aneconomic boom in the last half of the 1980s.Foreign capital flowed into the country, themarket for mergers and acquisitions flourished,and Spain grew fifty percent faster than the othercountries of the now-Economic Union. Thisstudy was administered at the end of this periodof rapid economic growth and rough and tumblecapitalism. This spirit of enterprise may have stillbeen alive for the students who participated inthis study, in spite of the fact that the countrywas in the midst of a recession. The suddenincrease in entrepreneurship in Spain from 1986to 1992 may have been an influence on manyrespondents’ interest in business careers.Longenecker et al. (1988), discussed the inde-pendent and egoistic tendencies of entrepreneurswhich may lead them to be less ethical incircumstances of financial gain. This may bean appropriate interpretation to apply in thissituation.

In contrast, no such dramatic change ofeconomic policy had occurred in the UnitedStates prior to the administration of thesequestionnaires. While respondents recognized along tradition of entrepreneurship in this country,nothing dramatic and immediate had occurred to

stimulate their personal awareness and interest innew venture management.

In conclusion, our observations of the uni-versal-relativist ethics question produced mixedresults. We would agree that the economic con-dition of each country influences respondents’interpretations of ethical influences and behaviorin spite of fundamental agreement on underlyinguniversal values. The importance of thisdichotomy should be emphasized as a way tounderstand ethical actions. The increasing use ofcodes of ethics should limit the influence of theeconomic imperative on decision making.Trading-off entrepreneurship for ethical beliefswill limit entrepreneurial actions to the extentthat these are deemed as undesirable by society.We believe that agreement is increasing in thearea of international ethical codes and anticipatethat studies in following years will find increasingconcurrence on appropriate ethical behavioracross cultures.

Acknowledgement

The author wishes to acknowledge commentsreceived from Frances Burke and David Lambert.

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Suffolk University, School of Management,

Boston, MA 02108, U.S.A.


universal values, behavioral ethics and entrepreneurship

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