Cultural Dimensions of Ethics

Journal of Business Ethics (2007) 75:273–284 DOI 10.1007/s10551-006-9252-9

Ó Springer 2007

Cultural Values and International Differences Bert Scholtens Lammertjan Dam in Business Ethics

ABSTRACT. We analyze ethical policies of firms in industrialized countries and try to find out whether culture is a factor that plays a significant role in explaining country differences. We look into the firm’s human rights policy, its governance of bribery and corruption, and the comprehensiveness, implementation and communication of its codes of ethics. We use a dataset on ethical policies of almost 2,700 firms in 24 countries. We find that there are significant differences among ethical policies of firms headquartered in different countries. When we associate these ethical policies with Hofstede’s cultural indicators, we find that individualism and uncertainty avoidance are positively associated with a firm’s ethical policies, whereas masculinity and power distance are negatively related to these policies. KEYWORDS: business ethics, codes of ethics, cultural values JEL: G300, L210, M140

Introduction Are there differences with respect to the ethical policies of firms that are headquartered in different countries? And are there differences among firms that belong to different industries? Chryssides and

Bert Scholtens received his Ph.D. at the Universtiy of Amsterdam. Since 1999 he has been working at the Department of Finance of the University of Groningen, the Netherlands. His research particularly looks into the interaction between financial institutions and corporate social responsibility. He has published in, among others, Ecological Economics, Journal of Banking and Finance, Finance Letters, Journal of Investing, Sustainable Development, and Journal of Business Ethics. Lammertjan Dam is a Ph.D. student at the Universtiy of Groningen. He expects to defend his thesis about the integration of corporate social responsibility in economic valuation in Summer 2007....