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Master’s Thesis

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University of Economics, Prague

Faculty of Business Administration

Masters field: Management

Title of the master’s thesis:

Exploring the perceived impact of cultural differences on ethical behavior of expatriate managers and their Czech

team members

Author: Bc. Elina Grishaeva

Supervisor: PhDr. David Anthony Procházka, Ph.D., MBA, MSc.

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Declaration of Authenticity

I hereby declare that the master’s thesis presented herein is my own work, or fully and specifically acknowledged wherever adapted from other sources. This

work has not been published or submitted elsewhere for the requirement of a degree program.

In Prague on 25.08.2020 Signature...

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Acknowledgement

I would like to express my sincere gratitude to the supervisor of my thesis PhDr.

David Anthony Procházka, Ph.D., MBA, MSc., for his commitment, dedicated support, excellent guidance, and relevant and thought-provoking feedback throughout the whole process of writing this research. I would like to also thank my family, friends, and my partner for their constant support and understanding

throughout the whole tremendous cycle of the program.

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Title of the Master’s Thesis:

Exploring the perceived impact of cultural differences on ethical behavior of expatriate managers and their Czech team members

Abstract:

The diploma thesis focused on individual experiences of expatriate Russian managers and their Czech subordinates with regards to their perception of ethical and unethical behavior and the influence of the cultures on the perception. In order to fulfill the goal of the research, the qualitative research methodology was selected to discover what is perceived effect of cultural differences between Russian managers and Czech subordinates with regards to ethical behavior and obtain in-depth understanding on the topic. It was revealed that national culture is perceived as auxiliary factor influencing behavior in the context of work as well as perception of ethics. Nevertheless, as the main factor highlighted by the participants of the research – personality – is highly interconnected with the background, which is contingent upon national culture, it shall remain as focus area for the consequent researches. In addition to that, it was found out that perception and judgement of ethical component of behavior is highly contingent upon perspective and attitude towards consequences, and the parties affected by the consequences.

Key words:

National culture, Organizational culture, Czech, Russian, unethical behavior, perception

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1. Introduction

1.1 Goal and research question

The purpose of this qualitative study is to investigate into individual experiences of expatriate Russian managers and their Czech subordinates with regards to their perception of ethical and unethical behavior and the influence of the cultures on the perception. In addition to that, the study attempts to reveal the potential areas of cultural conflicts in ethical dilemma within corporate environment.

It is aimed at identifying the potential areas of misunderstandings and conflicts in perception of ethical behavior that can lead to substantial threats to sustainable and ethical conduct of the organizations. The main question addressed in the paper is formulated in the following way:

R1: What is perceived effect of cultural differences between Russian managers and Czech subordinates with regards to ethical behavior?

Throughout the paper, the author introduces the theoretical frameworks that can help in identifying the characteristics of nations/cultures that could explain and justify the differences of behavior between Czech and Russian cultures representatives, shed the light on the potential misalignment areas from the perspective of ethical aspect. The practical part of the paper is aimed at the investigating the real-life experiences and crystallizing it into the valid system of structured categories that can serve as the further areas of exploration for scientific as well as business environment.

1.2. Importance of the research

Ethical behavior and decision-making are becoming vital parts of organizations’ assets due to increased complexity of contemporary environment and necessity to act in a transparent manner. The wave of ethical ethics violations in the beginning of the century gave the rise to the heated discussions over moral and ethical issues related to business as well as introduction of ethical business practices as the cornerstone of the management programs (McWilliams and Siegel, 2001). There is significant evidence of the influence of the religion on the business ethics (Brammer et al., 2006); however, the approach is widely criticized to be accepted as ethical standard (Forsyth, 1992), especially taking into account increasing level of atheism.

As the Czech Republic is currently one of the main European hubs for locating the offices and shared service centers for multinational corporations, it is crucial to explore into the context of ethics in local environment. Especially important it is due to quiet high degree of

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ethnocentricity of the nation and level of atheism (Banting, Courchene, & Seidle, 2007). Taking into consideration the necessity to perform the work under new substantially different from traditional conditions, it would be essential to explore the specifics of interactions of Czech culture with others in a new environment from the perspective of ethics.

Historically, there has always been vast amount of Russian culture representatives in the Czech Republic, and the trend is still upward-slopped. Among them, the majority is educated and they play significant roles in the lives of organizations they are employed by. Owing to the historical backgrounds between Czech Republic and USSR, there might be element of predisposition towards Russians in general. Therefore, it is vital to explore how the members of cultures interact, especially in the setup when host culture representatives are in the subordinate positions to members of foreign culture.

This paper can serve as the role of flagging the potential clashes of interests and issues that may arise in the interaction of the members of the above-mentioned cultures and help managers of organizations avoid misunderstanding and decrease the tension within the organization, thus, improving level of ethical conduct within the organizations and microclimate by addressing key differences in a sustainable manner.

1.3. Structure of the research

To achieve the goal of the study, the paper has been divided into three major parts. The first part of the paper explores the theoretical models and concepts, which can shed the light on the issues concerning cultural differences, ethical decision-making of the individual, and the inter- relation of the two before mentioned elements. Finally, it specifies the key areas of concern with regards to ethical behavior in dual-cultural setup of interaction and proposes the methodology for the exploration.

The second part of the paper is dedicated to the presentation of the ethnographical research and provides the evidence with regards to the main areas of interest. The emphasis of the part is put on the real experiences of the participants and their perception of them. The quintessential element is understanding the perception of the participants and their real and potential concerns.

The third part of the paper makes the efforts to link the findings of ethnography with the existing theoretical frameworks and discuss the application of the findings, highlighting the areas for the subsequent empirical research and suggestion of the hypotheses that could be tested with the purpose of overcoming limitations and generalization of the results.

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2. Literature review

Culture and ethics are themselves multidimensional and sophisticated phenomena, which are subject to huge number of comprehensive researches. Interconnection of the two “variables” is even more difficult to explore, however, essential from the perspective of communication and maintaining the relationships within the organization (Ardichvili, Mitchell, & Jondle, 2009;

Fisher, 2005; Foote & Ruona, 2008). The concept of culture at any particular level is well developed and broadly accepted among management practitioners and researchers. The same cannot be claimed regarding ethics in general. Some researchers suggest that ethics in the organizations exists only in the form of individual values and beliefs of the members of the organization rather than as the product of their interaction (Ewin, 1991; Smircich, 1983).

Contemporary approach to ethics in the organizations emphasizes the necessity to take into consideration the cultural differences between members of the organizations. Massives of the comprehensive researches on the differences in attitude to ethics can be found nowadays (Helin and Sandström, 2008). Some researchers suggest integrative approach to perceiving cultural differences in order to ensure better ethical decisions (Robertson and Fadil, 1998). However, there is also the opposition, which claims that it might be impossible to integrate the wide variety of systems, number of which is growing rapidly nowadays in the globalized world (Thorne and Saunders, 2002; Palazzo, 2002). According to Helin and Sandström (2008), contemporary research pays insufficient attention to individuals within the organization; views are often built based on the existing documents or public statements (Arnold et al., 2007; Singh et al., 2005). The field lacks the stories behind the numbers, which are difficult to obtain, as ethnography is extremely time-consuming and expensive (Hood and Logsdon, 2002).

Moreover, almost any study involving cultural component is over dependent on the assumption that Hofstede’s framework possess a priori knowledge (Arnold et al., 2007).

2.1. Culture

Even though there is no common agreement on the definition of the culture (Eliot, 2010), it is possible to say that the majority of the researchers agree on the fact that culture is set of interconnected beliefs and values that defines the behavior of social groups. This set is strengthened by shared unconscious values (humanic) and shape the political, social, or technical systems, which are behind any form of organizations (Khakhar & Rammal, 2013).

Hofstede (1994), the most cited ever researcher on the cultures, defines culture as “the collective programming of the mind which distinguishes the members of one category of

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people from another” (p. 1). However, the culture is quiet a broad concept and can be perceived as a complex and comprehensive system that includes various subsystems, which are being complex themselves, including the following widely agreed elements: artifacts, beliefs and values, and the trickiest – underlying assumptions being themselves combinations of other elements (Schein and Schein, 2010). Schein and Schein (2010) – one of the most prudent research on culture – gave the following definition introducing the elements of the concept: “a pattern of shared basic assumptions that were learned by a group as it solves its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” (p. 18).

Moreover, culture is not only phenomena in itself, it can be used as a tool or even we may call it a language to perceive and interpret the social events and interactions at various levels, which usually include the following: individual, group, or society (Alverson, 2012; Eliot, 2010). The majority of the comprehensive research existing nowadays are nevertheless concentrating on the society level as individual and group levels highly contingent upon society level even though it can be criticized as supremacy of society level can be challenged by proclaiming individuality and combination of individualities to be core component of society level of culture (Eliot, 2010). In addition to the traditional view of three main layers of culture, there is one more which presents huge interest to scientific community – organizational. Especially, nowadays in the contemporary global world, where biggest organizations frequently outnumber many of the national culture. Nevertheless, the majority of the research derive from the assumption expressed by Spiro (1986, p. 260): “judgments regarding the relative merit of different cultures are ethnocentric”.

2.1.1. National culture

As some of the research claim that exactly national culture is the main driver of the differences of conduct among organizations (McGrath et al., 1992; Thomas and Mueller, 2000), this chapter of the literature review is dedicated particularly to the matter.

The definition of concept of national culture is even less agreed in the academia due to the fact that each nationality because of the different content assigned even to the world culture (driven by language differences, for instance) can vary significantly. However, generally it is accepted that national culture is comprised by shared value systems, which are inherited continuously from generation to generation (Fischer, 2009). The significant difference from the very general definition of culture provided in the previous passage is the reference to transmission of the

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elements through the generations giving it a historical context through socialization mechanisms. Basically, it is possible to say that the key to understand the national culture is to properly identify how the shared values are communicated and perceived through various elements such as: shared ideas, beliefs, value, and symbols that present the same meaning to the majority of the population (Fischer, 2009). Another way of understanding the national culture is seeing it as the framework that provides some kind of limits or barriers with regards to distinguishing between appropriate and inappropriate in terms of behavior, cognitive process, feelings, and interexchange in the particularly explored culture (Curhan et al., 2014).

Those limitations or underlying assumptions are communicated through the elements mentioned above via social institutions such as religion, family, etc. (Easthorpe, 2004).

The further exploration of the national cultures requires in-depth empirical studies conducted in the national environment. Despite huge evidence of the research on the matter, there are three which are widely acknowledged and considered to be “pearl” research in the scientific community: Hofstede cultural dimensions of national cultures (Hofstede & Bond, 1984;

Hofstede and Minkov, 2010), Schwartz’s Theory of Cultural Values (Schwartz, 1992;

Schwartz, 1999), and last but not least – the Global Leadership and Organizational Behavior Effectiveness (GLOBE) research conducted quiet recently (House et al., 2004). These three main scientific pillars of the research on national cultures are going to be explored in the following sections of the literature review. The selection of the models is determined based on the citation indexes and influence on the further empirical studies that followed the methodology of the beforementioned scientific papers.

2.1.2. Hofstede’s cultural dimensions

Hofstede (1980) in his extensive research aiming at finding the linkage between cultural and organizational behavior collected over 150.000 surveys responses from employees of IBM in more than 60 countries to obtain the significantly sufficient amount of evidence to justify the national culture as the separate or even determination criteria for attitudes, values, and behavior of members of organizations. In his research he highlighted the importance of characteristics that are underlying the behavior over those which had always been traditionally perceived as determination factors – demographic characteristics of individuals.

Based on the results of the survey and further exploration of the consolidated data Hofstede (1980) initially came to the conclusion that he could classify around 40 countries (out of the whole sample of 60+) based on the four major types or in his own words “dimensions”:

individualism-collectivism, power distance, uncertainty avoidance, and masculinity-

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femininity. The fifth dimension – orientation on time perspective – was introduced by Michael Bond (1987) and incorporated into original model by Hofstede & Bond (1988).

The first dimension – individualism-collectivism – is defined by the author as “the degree to which people in a country prefer to act as individuals rather than as members of groups”

(Hofstede, 1994, p. 6). The extreme values of the scale are: self-interest and subordination of personal needs and interests to the society needs. Even though, for instance, research of Markus and Kitayama (1991) suggest that individualism and collectivism shall be two separate dimensions, the majority of the further research stick to the original classification, adding the drill-down sub-dimensions in case of specific research needs (Singelis et al., 1995).

The second dimension – power distance – is referred to by the author as “the extent to which a society accepts the fact that power in institutions and organizations is distributed unequally”

(Hofstede, 1980, p. 45). For the countries with high power distance indicator it is typical to absolutely respect the hierarchical boundaries, while for countries with the low score it is typical to arrange relationships based on respect and egalitarianism. Alternatively, power distance can be expressed as the degree to which members of the society are not expected to raise their concerns with the decisions made at the higher level of the hierarchy (Hofstede, 2001).

Third original dimension – uncertainty avoidance – is defined as “the extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid these situations by providing greater career stability, establishing more formal rules, not tolerating deviant ideas and behaviors, and believing in absolute truths and the attainment of expertise” (Hofstede, 1980, p. 45). However, it should not be confused with risk avoidance as uncertainty avoidance is rather associated with the needs and wants to have clear rules or guidelines (Hofstede, 2001).

The fourth dimension opposes “the extent to which the dominant values in society are

“masculine” – that is, assertiveness, the acquisition of money and things” (Hofstede, 1980, p.

46) with femininity or ““preference friendly atmosphere, position security, physical conditions, [and] cooperation” (Hofstede, 2001, p. 281).

The last dimension as it has already been mentioned was developed by Bond (1987) and later on elaborated by (Hofstede & Bond, 1988) being long-term versus short-term orientation or in some other research referred to as “Confucian dynamism”. Cultures with high level of this indicator tend to have high perseverance to achieve goals, being opposed by commitment to traditions, historical values, and social obligations (Franke, Hofstede, & Bond, 1991).

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2.1.3. Schwartz’s Theory of Cultural Values

In his own words (Schwartz, 2006) claims: “Using the cultural orientations, I generate a worldwide empirical mapping of 76 national cultures that identifies 7 transnational cultural groupings: West European, English-speaking, Latin American, East European, South Asian, Confucian influenced, and African and Middle Eastern” (p. 137). The model, which we currently know as Schwartz theory, is based on the previous research of the author (Schwartz, 1994, 1999, 2004) and is aimed at studying individual differences in value priorities and the effect of them on the behaviors and attitudes. As per the author himself (2006), the model has very similar goal as, for instance, Hofstede’s cultural dimensions, however, aims to characterize the cultures in a more precise way, despite being more complex and difficult to comprehend. The outcome of the theory is the framework of 7 cultural orientations that are used for culture classification and the global map of cultural regions (Schwartz, 2006).

The first basic values introduced by Schwartz are concerned the relation between the self and the group. The matter is subject to extensive literature including several classic authors such as Hofstede (1980) and his followers (Kim, 1994; Shweder & Bourne, 1982; Sinha & Sinha, 1990). Schwartz (2006) labels the polar values of the “scale” as autonomy (where two types of autonomy exist: intellectual and affective) and embeddedness: autonomous people tend to express their own ideas and feelings, while members of cultures with emphasis on embeddedness who’s meaning in life comes through social interaction and identifying themselves as part of the bigger community.

The second pair of basic values – responding to the societal problem of assuring responsible behavior of people – refers to opposing egalitarianism (admitting one another as equals) to cultural hierarchy relying on clear system of roles within the society and legitimate power (Schwartz, 2006).

The third pair of basic values – responsible for social problem of regulating the relations to nature and society – are labeled as harmony putting the emphasis on fitting into the environment, understanding and adapting; and mastery focusing on shaping the world and changing the natural and social environment around (Schwartz, 2006).

Figure 1 shows the prototypical structure of the values responding to societal problems by combining them into a polar and inter-related set of sectors. The practical implementation of the model on the particular countries could be found in the Appendix 1 for the sake of representativeness.

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The main and distinctive difference of Schwartz values from the other classic approaches (Hofsetede, 1980; Inglehart, 1997) is in its integrated approach where the several values are compatible and not-independent.

Figure 1: Prototypical structure of Schwarz values. Source: Schwartz, 2006.

2.1.4. Global Leadership and Organizational Behavior Effectiveness

Research GLOBE was particularly designed to explore the influence of the cultural differences on leadership, organizational performance, economic competitiveness of countries on the global arena (House et al., 2004). The research itself as well as preceding empirical research (House, Wright, and Aditya, 1997) managed to illustrate particularly what are the expectation from the leaders and the behaviors leaders shall and shall not have in various cultures across the globe.

The main distinctive feature of the GLOBE is in its original aim and selected methods – it aimed particularly at empirical research and afterwards exploration without a priori selection of the theoretical framework as in Hofstede (1980) or Schwartz (2006). The major output of the program were dimensions – attributes of cultures – as follows: 1) Uncertainty avoidance;

2) Power distance; 3) Collectivism I: societal emphasis on Collectivism; 4) Collectivism II:

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Family practices; 5) Gender Egalitarianism; 6) Assertiveness; 7) Future orientation; 8) Performance orientation; 9) Human orientation (House et al., 2004).

Obviously, research was influenced by Hofstede (1980), which can be noted immediately looking at the dimensions outlined. Table 1 presents the consolidated knowledge about the three beforementioned theories and their main ideas.

Theories Dimension Description

Hofstede's Cultural Dimensions

Power Distance The extent to which members of society accept that power is distributed unequally.

Uncertainty Avoidance Shows how much members of society are afraid of the unknown and try to protect themselves from ambiguous events.

Individualism vs Collectivism Evaluates the preference of people to act in a team or individually.

Individual cultures are characterized by weak interpersonal relationships.

For collectivists, there are strong connections between people, where everyone adheres to group goals.

Masculinity vs Femininity Shows which qualities of character are more valued in society.

Masculine societies are characterized by: assertiveness, desire for success, responsibility, competition, and ambition. In societies with a low level of masculinity people tend to be more caring for the quality of life, maintaining relationships.

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Long–term vs Short–term Orientation

Measures how far members of society look into the future. Setting goals for the years ahead and perseverance depend on long-term orientation.

Schwartz Theory of Cultural Values (Schwartz, 1999).

Conservatism Adherence to certain traditions and principles, respect for traditions Intellectual Autonomy Orientation on personal ideas in

intellectual development

Affective Autonomy The desire of individuals to strive independently for an emotional experience

Hierarchy Unequal distribution of power is widely accepted as normal

Egalitarianism Emphasis on equal interests, equality of all people and their beliefs

Mastery Self-affirmation as a way to reach heights (ambitions, achievements)

Harmony Harmonious merging with the

surrounding world (with nature, people)

Project GLOBE House et al. (2004)

Power Distance Shows the level of expectation of equal distribution of power

Uncertainty Avoidance To reduce the uncertainty of a given situation, a person or group of people rely on rules and social norms Humane Orientation Encouraging individuals for their

altruism, honesty, care and guardianship

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Collectivism I (Institutional) Encouraging collective action:

decision-making, equal sharing of resources

Collectivism II (In Group) The level in which people express pride, loyalty, and unity in their own organizations/families.

Assertiveness An indicator that determines how aggressive and assertive people are towards others to gain their own goal Gender Egalitarianism Represents the level of reduction of gender inequality that society is trying to achieve

Future Orientation An indicator that represents people's desire to pay more attention to the future than to the present by investing and planning

Performance Orientation Encouraging individuals by the group for their contribution to the common affair, for improvements and their work done

Table 1: Main cultural theories. Source: author.

2.2. Ethics

Ethics is a concept in which individuals act in accordance with norms, which can vary depending on culture and other sociological factors. Norms are a kind of framework and boundaries that a person creates himself or get exposed on by the communities based on the environment, values, and culture (Možina et al., 2002). There are different subtypes of ethics, one of them is business ethics, in fact, business ethics is the same ethics, only considered in the context of the organization, where people need to make business decisions based on the business norms established by the organization and general ethical standards, i.e. business ethics is the ethics of management. Ethical behavior in the corporate sphere is constantly evolving and is one of the most important indicators of the success of an organization. Today, there are lots of studies that describe what determines the ethical behavior of individuals and their ethical decision-making in the organization.

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Loe, Ferrell, & Mansfield (2000) and Crane and Matten (2004) discuss that ethical theories can help clarify and address various moral aspects that which should be taken into consideration when making various decisions, hence ethical theories are an integral part of business ethics.

Business ethics cannot be reviewed without the fact that it is a part of the culture and cannot be considered outside of its context (see Hofstede, 1991; Scott, 2001; Trompenaars, 1993).

The very traditional view on the ethics implies existence of the three main streams of theories:

1) Utilitarian theories assessing the behavior of individuals from the perspective of consequences of the actions; 2) Theories of rights putting the emphasis on the rights of individuals (mainly including rights to privacy, rights to freedom, rights to free speech, etc.);

3) Theories of justice being based on the social contract theory (Cavanagh, Moberg, &

Velasquez, 1981).

However, the contemporary view on the ethics is a bit more complicated than previously.

Nowadays theories are mainly divided as follows: 1) Consequential theories – which claim that consequences of any action shall be ultimate tool for judgement; 2) Single-rule nonconsequential theories which imply that except for the morality the are other factors to be considered when judging; 3) Multiple-rule non-consequential theories relying on the same assumptions as previous group but applying more than one rules. These three groups of theories are going to be explored in the following section.

2.2.1. Consequential theories

As per Tsalikis and Fritzsche (2012), those are the theories that assess the moral rightness of any actions from the perspective of consequences. Basically, if the consequences are good, the act can be considered as good, and vice versa. However, there are several streams of the generic theory. Egoism stream claims that from the perspective of an individual the actions that pursue the long-term “best” option for that particular individual are ethical. However, the pure egoism is widely criticized as the logic of it does not stand against the evidence of real life such as, for instance, business practice or any other situation involving conflicts of two individuals (Tsalikis and Fritzche, 2012).

Utilitarianism suggests that the actions shall be considered ethical when it is aimed at producing as much as it could for everyone. The crucial element here is to be able to determine all the parties involved as the whole point of the action should be evaluating the alternatives of “all”

to choose the option being the best for the whole society (Fletcher, 1966). Sherwin (1983) claims that business in the paradigm of utilitarianism shall be conducted in a way that all the

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involved parties (e.g.: owners, workers, customers) shall share fairly the business gains, however, lashing out the interests of the other stakeholders, which might be considered as the key drawback of the theory as assessing the consequences for all the parties involved can be considered impossible in the contemporary world.

2.2.2. Single-rule nonconsequential theories

The stream of philosophy implies that decision on action shall not take into consideration the consequences as the actions is being evaluated by itself. The most traditional example would be Golden Rule commonly being interpreted as: “Do to others as you would like them to do to you” (Tsalikis and Fritzsche, 2012).

However, not only this Rule but others such as, for instance, categorical imperative falls into the category of such theories. Kant (1959) claimed that consideration of consequences should not have any influence on the decision-making of individuals, and the action shall be based purely on the concept of duty for each individual. As the philosophy itself is complicated for understanding without deep-diving, for the purpose of this paper we would limit its presentation by the above-mentioned ideas.

2.2.3. Multiple-rule nonconsequential theories

Ross (1939) in his theory made efforts to connect the ideas of utilitarian theory with the ideas of Kant. According to his theory, consequences should be taken into account in decision- making, however, they cannot be solely determination factor for alternative selection. Ross claims that the majority of the decisions include the components of multiple duties, for instance: the businessman is obliged to earn profit but at the same moment has the obligation not to injure people around him (Tsalikis and Fritzsche, 2012). To solve this issue Ross proposes the principle called “prima facie duties” claiming that the people should stick to the most “dictating” duty when not in conflict with the others.

Rawls (1971) proposes different approach aiming at the same goal as Ross’s theory: he introduced two guiding principles of actions – equal liberty and difference principles. The first one implies that each person involved in any action shall possess the equal right to the maximum amount of liberty (taking into account liberty of others), while difference principle frames the justifiable inequalities.

Garrett & Pangle (1966) suggests that any actions involves in itself three elements to be considered: intention, means, and ends. In the own words of the author: “I am responsible for whatever I will as a means or an end. If both the means and the end I am willing are good in

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and of themselves, I may ethically permit or risk the foreseen but unwilled side effects if, and only if, I have a proportionate reason for doing so” (Garrett and Pangle, 1966, p. 8). By synthesizing the consequential view (emphasis on ends) and Kant’s view (means) Garrett and Pangle suggested to balance the decision-making process and not to fall within the trap of Absolut.

Despite being guiding generally, the theories themselves rarely clarify the particularities of personal decision-making process, which is going to be explored in the following section of the paper.

2. 3. Ethical decision-making process

One of the most frequently referred to frameworks for ethical decision-making was developed by Rest and Narvaez (1994). The model explains the cognitive process of an individual consolidating theories on moral development and ethical behavior from the variety of the perspectives. Rest and Narvaez (1994) in their model derived from the assumption that moral judgement or in other words evaluation of the decision as good or bad is neither the only nor the most important element on individual’s decision-making towards ethical matters. His model represented visually by figure 2 involves four separate psychological processes explained below.

Figure 2: Categories of influences on behavioral ethics outcomes. Source: Rest & Narvaez, 1994.

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2.3.1. Moral awareness

Rest (1986) claimed that the first stage of decision-making process is identification of the moral issue. Basically, the stage includes realization of an individual that the moral problem exists in a particular setup. The first stage is considered to be critical as being the prerequisite of the further cognitive activities. There are two main approaches towards moral awareness:

awareness being solely individuals’ moral sensitivity or ability to detect ethical context (Sparks

& Hunt, 1998) and more holistic approach viewing individuals’ perspective as only one of the factors contributing to development of moral awareness (Jones, 1991).

Several researches were conducted in various industries and spheres in support of the first approach such as: accounting (Shaub, Finn, and Munter, 1993) or marketing (Sparks & Hunt, 1998). In general, the findings suggested that the skills to identify the ethical issues can be honed and trained and are not defined by the genes or any other inherited factors.

Reynolds (2006) in his research supporting more holistic approach claimed that issue characteristics (situational factors) are often in interaction with the personal differences of people to shape the moral awareness. He argued that people tend to pay more attention to issues that correspond with their predispositions. The findings also suggested that there is substantial difference between people focusing on ends (utilitarians) and means (formalists or supporters of nonconsequential theories), and that the former are less likely to detect the issues related to behavior itself, which only contributes to the idea of at least equal importance of situational factors in formation of moral awareness (Reynolds, 2006).

2.3.2. Moral judgement

The second stage of the ethical decision-making process is moral judgement. The most comprehensive scientific theory on the ethical judgements, which is incorporated in the majority of the subsequent research, belongs to Kohlberg and Kramer (1969). The empirical evidence of his research showed very similar results to the work conducted by his apprentice and follower – Rest (1986) – that ethical reasoning similarly to moral awareness becomes better over the time and experience. Consolidating the evidence into the model Kohlberg and Kramer (1969) suggested 6 sequential steps (as each next one requires higher cognitive capacities) model of moral judgement including the following categorized into three levels:

1) Preconventional level characterizing the lowest level of moral development of an individual includes two stages – individual reasoning regarding right or wrong based on fear of punishment (stage 1) or exchange in return (stage 2);

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2) Conventional level – reasoning based on expectations of others who are significant to individual (stage 3) or laws (stage 4) is claimed to be the most common for the adult population all over the world;

3) Principled level – reasoning based more on the general principals of rights and justice (stage 5 and 6), attribute of the highest level of moral development of an individual.

Empirical research of Rest et al. (1999) showed that only 20% of the US society of those days could be categorized as belonging to principled level. That could be used as a significant argument in favor of holistic approach as only the very minority of the population could be oriented more on the internal factors. Despite being criticized for rigid stage-based model (Siegler, 1997) or self-reports as a data source (Shweder, Mahapatra, & Miller, 1987), the theory of Kohlberg still remains to be the most referred to as well as adopted for the further explorations of the related topics and could be considered to be the most substantial work in the field (Greenberg, 2002; Weber, 1990).

2.3.3. Moral motivation

Despite logical linkage between judgement, intention, and behavior several research (Treviño

& Youngbood, 1990; Weber & Gillespie, 1998) found out that there are significant differences between expected behavior based on the results of issue identification and actual behavior of individuals. Thus, motivation component of the framework presents key importance in understanding the linkage between reasoning and actions.

The author of the framework (Rest et al., 1999) defined moral motivation as “degree of commitment to taking the moral course of action, valuing moral values over other values, and taking personal responsibility for moral outcomes” (p. 101). As per Bergman (2004), the main problem of inconsistency between judgement and intentions is basically weakness of will as many individuals struggle with committing to actions while not having motive to act according to the own judgement, in other words not being able to select moral values over the other value types.

Bergman (2004) and Blasi (2004, 2005) discovered that there is a significant disruption of the process at the stage of intent formation as moral motivation frequently turns out to be disconnected totally from the process of moral reasoning. Substantial amount of evidence collected by the further research (Blasi, 2005; Lapsley & Narvaez, 2004) enable us to state that moral behavior quiet frequently involves high level of automatic responses and absence of any attentive reasoning process or internal struggle before performing the action. Similarly, Haidt’s

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(2001) model of approach to moral judgement is built on the evidence against direct linkage between ethical judgement and behavior and instead attributes ethical behavior to intuitive judgement. He claims that situations including ethical issues mainly get resolved by intuitive responses without preliminary reasoning process (Haidt, 2001) opposing the model to theory of Kohlberg and Kramer (1969) and claiming the embedded physiological and cultural factors playing the quintessential role in the process.

2.3.4. Moral behavior

The fourth stage or element of the model is basically the behavior itself – action or inaction.

Not coming as a surprise, moral development of an individual is linked to the ethical behavior (Ashkanasy, Windsor, & Treviño, 2006; Treviño & Youngblood, 1990), which was originally suggested by Kohlberg and Kramer (1969). However, not only extent of personal development but also other not always developed traits play significant role in behavior formation: for example, people with internal locus of control (which is not always result of moral development but in a lot of cases can be attributed to culture or even inherited) tend to behave as seeing more linkage between their actions and situation resolution (Forte, 2005). Or people having high score of ego strength were observed to follow the similar logic (Treviño, 1986).

However, it is obvious that as people live in the society, they are influenced widely by the individuals and groups around them. Several researches have been conducted on the ethical climate and ethical cultures of the organizations (Victor and Cullen, 1988; Schminke, Ambrose

& Neubaum, 2005; Treviño, Butterfield, & McCabe, 1998) proving the substantial influence of the organizational practices on the ethical behavior. The attitudes and behavior of the peers in the organizations have also been found to affect an individual’s ethical behavior (Brass, Butterfield, & Skaggs, 1998).

Another stream of research concentrated on exploring the role of leadership on ethical conduct within organizations. Bandura (1986) suggested that leaders influence ethical behavior through the social learning, thus, influencing significantly the expected behavior of organization members. Blau (1964) and Treviño & Brown (2004) emphasized the elements of reciprocity, claiming that proper ethical leaders being fair and caring support willingness of their subordinates and peers to act accordingly and exemplify ethical conduct.

Not only social networks themselves but also the nature of the underlying communication and hierarchical mechanisms play a huge role in affecting ethical behavior of organizations’

members. Treviño (1986) and his consequitive research (Treviño, Butterfield, & Mccabe, 1998;

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Treviño et al., 1999) found out that organizations with high level of rigidity in the line of command and expected authority orientation tend to observe significantly higher levels of unethical behavior. These findings are very in line with the social science research conducted by Kelman (1989) claiming high level of authority dependence to be prerequisite of unethical behavior.

In the following section, I will explore into the scientific evidence of the linkage between ethical decision-making and cultural component in order to highlight the uncontested waters and provide the solid justification of the importance of inter-related research on the topic.

2.4. Linkage between culture and ethics

Comprehensive research on the issues of transferability of ethical models into different countries suggest national culture as essential factor to be taken into consideration in ethical decision-making in organizations (Cagliano et al., 2011).

There is growing evidence of theoretical as well as empirical studies in cross-cultural ethics (Buller, Strzyzewski, & Hunsaker, 1991; Goodwin and Goodwin, 1999; Wood, 2000).

However, the majority of the research, which were able to propose theoretical models and test empirically the relationships, are very limited by two factors: usually the research were conducted taking into consideration small number of cultures involved, thus not substantial enough to extrapolate over the wider samples of nations; and, once again, the majority of them took Hofstede as the a priori knowledge, which is obviously valid but for the purpose of more in-depth exploration may need additional specification (Bronson, Cullen, and Parboteeah, 2005). Therefore, to identify less general issues related to perception of ethics, ethnographic research is needed.

The theory of cultural relativism suggests that in order to explore relations between cultural and ethical values it is necessary to drill through national cultures, which is supported by various empirical studies’ results (Bondy, Matten, Moon, 2004; Sanyal, 2005). Moreover, even high-level research on the inter-relation of national cultures and ethics in one particular organization might be not sufficient as individuals are heavily influenced, first of all, by those surrounding them on a frequent basis, and once exploring the topic in the environment of vast organizations without single dominating culture, would require drill-down exploration of behavior and perception in particular smaller groups. Schminke et al. (2002) in their extensive study of 36 groups of students revealed that exactly group leader’s style is causing the major impact on the behavior within the group rather than high-level climate or culture of the overall

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organization. Nevertheless, the research on the topic are quite rare as considered not to be valuable enough for scientific thought unless being aimed at particular research problems for practical application. The following section of the review includes the analysis of the literature on two relevant for the paper cultures.

2.5. Czech and Russian cultures

In the whole huge evidence of scientific literature on the culture and ethics there is no single paper aimed at comparative analysis of the two cultures even in the context of more countries in the meta-study. The only available in English research (McRae et al., 2004) is concerned with consensus validation of personality traits across two countries, and still does not provide any significant information on the inter-relation of the cultures except for categorization of both of them to less individualistic and non-Western oriented in terms of personal values societies. Attempts to explore the research on similar topics tackling cultures separately also did not lead to any significant generation of the literature. Thus, it could be certainly claimed that there is a huge research gap in the contemporary environment on the inter-relation of two major Slavic cultures from the perspectives of cultural differences and ethical decision-making and business conduct.

Majority of the scientific papers on Czech culture and ethics in business (Franková, & Surynek, 2006; Horváthová, Černek, & Kashi, 2014) were concentrated mainly on the organizational element of topics; showing the evidence of comparatively with Western societies lower scores on ethical conduct and importance of ethics in business conduct. The similar outcomes could be found in research on the moral judgements in Russia (Arutyunova et al., 2013) giving us an interesting suggestion of existence of probability of similarities in perceptions between two mentioned cultures. However, it is necessary to admit that the samples of any of the mentioned research were extremely low and not representative for the whole or at least significant part of the populations of both countries.

Moreover, according to Brunet-Thornton and Bures (2012), even the Hofstede’s dimensions for the Czech Republic are based mainly on the suggestions or estimates. Therefore, it is impossible to explore the general relations between cultures and the views on ethics without conducting comprehensive research on each. The evidence from Hofstede (2001) could be used as the proof of the previous statement: sample of only 107 respondents from Czech Republic was used to derive the data for the dimension construction. Naumov and Puffer (2000) use almost the same expressions with regards to construction of Hofstede dimensions of Russian

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culture: Hofstede (1993) used the data from 55 participants. Without any complicated mathematics, it is obvious that the samples for both countries were not only insignificant but could be interpreted even as irrelevant.

Therefore, it would be fair and logical to claim that a comprehensive comparison of the cultures and the attitudes of representatives require further in-depth exploration based on either preliminary empirical research in both countries using the established methodology (Hofstede, for instance) or ideally would include comprehensive ethnographic research to reveal the similarities and differences as well as the specificity of interaction of cultures.

3. Research problem and methodology

3.1. Research Problem

The essential part of the paper is dedicated to exploration of the current state of scientific knowledge on the culture, ethics, and ethical decision-making process. In the contemporary environment when modern technologies and globalization tremendously increased the speed of data collection, interpretation, and knowledge generation, proper and well-conducted review of the literature becomes critical part of research and plays the role of fundamental foundation for any research (Webster and Watson, 2002). Furthermore, interdisciplinary subjects require additional level of efforts due to the need to consolidate and synthetize the previously conducted research (Baumeister & Leary, 1997; Tranfield, Denyer, & Smart, 2003). Therefore, the literature review has been conducted in a thorough and extensive manner incorporating researches not only on the main topics of explored issue but also on complementary disciplines and indirectly related findings from the researches on other topics, thus, guaranteeing the quality of the paper and scientific novelty of the findings with no regards to the practical implementation of the ethnographic research.

Based on the generated knowledge, this paper is aimed at filling the research gap in finding the impact of cultural differences between two major Slavic cultures – Czech and Russian – in the context of manager-subordinate relationships towards ethical behavior based on Bandura’s (1986), Blau’s (1964) and Treviño & Brown’s (2004) suggestion of criticality of managers and leaders being conductors of ethical behavior in the organizations. As the research is conducted solely on the territory of Czech Republic, members of Russian culture were selected as managers in attempt to generate additional knowledge on potential conflicts of reporting to expatriate manager.

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Deriving from that, the main research question of the paper can be formulated as following:

R1: What is perceived effect of cultural differences between Russian managers and Czech subordinates with regards to ethical behavior?

3.2. Research methodology 3.2.1. Participant selection

As the research is conducted based on ethnographical principles, the selection of the participants is critical: those who can provide the best suitable for the research purposes information shall be selected (Sargeant, 2012). As the aim of the research is not to generate the knowledge with the further goal to extrapolate it to wider populations but to reveal the underlying issues and provide fundament for the further research, the following prerequisites were strictly defined for potential participants:

- All of them are members of one organization

- Sample of subordinates was filled with ethnically Czech people - Sample of managers was filled with ethnically Russian people - No gender limitations were imposed

- No age limitations

- There are direct reporting relationships among participants

The following logic was used for determining the prerequisites. As organizational variables play huge role in ethical behavior (see section 2.3.4.), there is a huge probability of significant bias in case of selecting participants from various companies. Moreover, the research would have moved to purely hypothetical setup, as it would be based on suggestions and not real-life experience, which is not the goal of this paper. No limitations on other demographic characteristics were imposed as the goal is to reveal as many potential issues and involved factors as possible for the following testing and exploration. In addition, there was no limitations with regards to international exposure of the participants as in the contemporary environment it is becoming a new normal rather than exceptional. However, both Czech as well as Russian participants were confirmed to be exposed to their home cultures significantly long time. Determination factor was not the ethnicity of them but the real belonging (admitted by the person) to the cultures researched.

Table 2 presents the summary of the information about the participants of the research including their first name, nationality, and position in the corporate hierarchy.

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Name Nationality Position

Žaneta Czech Subordinate

Oleg Russian Manager

Michal Czech Supervisor, reporting to Russian manager Michaela Czech Supervisor, reporting to Russian manager Lukas Czech Supervisor, reporting to Russian manager

Yanina Russian Manager

Martin Czech Subordinate

Radek Czech Subordinate

Filip Czech Subordinate

Petr Czech Subordinate

Maxim Russian Manager

Alex Czech Subordinate

Table 2: Participants. Source: author.

3.2.2. Sampling

As it has been mentioned before, the informants are selected based on the best possible information provided principle. At the preliminary phase of the research, there was no predefined or restricting number of informants as the goal was to sufficient amount of knowledge. Glaser and Strauss (1967) and Strauss and Corbin (1998) suggested that the key to grounded theory is generation of sufficient in-depth data to reveal underlying elements of observed phenomena. Therefore, the research was continued until the moment when no new or principally new data seeming relevant to research essence was revealed, in other words principle of theoretical saturation was adopted (Douglas, 2003; Goulding, 2002; Locke, 2001).

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3.2.3. Reaching out participants

The selection of the candidates was based on finding the suitable candidates in the personal work-related network of the author. First of all, the Russian managers with sufficient number of Czech subordinates were identified and invited to participate in the research. Nevertheless, the aim and essence of the research had not been disclosed before data collection so as not to limit the potential of exploring the topic by providing the additional time to prepare for the interview questions as it might have caused negative impact on the value and size of the data collected. The managers have been tested for their English language skills before enrolling them as participants of the research as the topic of the paper requires sufficient understanding of the vocabulary and ability to express the thoughts in a comprehensive manner.

As the second step, three Czech subordinates of each manager were selected based on the voluntarily principle. Despite ability to force the subordinates through their managers, this approach was not even considered as qualitative research implies collection of as much information as possible, which is impossible to achieve by forcing participants to simply respond to the questions. The same language test as for managers was applied to subordinates for the sake of the quality of the findings. Anonymity of the data provided has been guaranteed to all the participants to facilitate the discussions.

It is necessary to make a note that all of the discussions except for two with the participants were conducted in online environment due to the epidemiological situation and willingness of the author to create as much relaxing as possible environment. The following tools are used to interview: Skype, Webex, MS Teams.

Each of the participants confirmed their belonging to the before mentioned cultures as well as direct relationships with other participants of the research. For the purpose of transparency, author declared to the participants that interviews with them would be recorded, transcribed, and used afterwards for the academic purposes, however, no personal information would be provided and disclosed. Each of the participants agreed to the conditions and signed the consent form agreeing to usage of the data for the further analysis with the goal of knowledge generation.

3.2.4 Research methods justification

Based on the analysis of the literature, it was revealed that there is a research gap in interdisciplinary subject presenting sufficient value for local application and general concept testing. As the area is underexplored, the selection of the qualitative research method would be

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logical in order to be able to absorb as much data on the topic as possible and obtain the holistic view on the observed phenomena. Moreover, it is widely admitted that usage of structured interviews is causing harm to the rapport creation, which is key in getting insights on the under researched area; moreover, essential information can be missed out due to focus on particular answer choices (Segal and Coolidge, 2003). The questions for the interviews could be found in the Table 3.

Question 1 Do you think that culture affect the behavior of the workers? Why do you think so?

Question 2 Have you ever come across situations where you had different understanding because of the culture?

Question 3 Could you please provide an example? With Russian (for team members) or with Czech culture?

Question 4 [For manager] Where do you see influence of culture on your working style? [For subordinate] Do you think Russian culture influences working style of your manager?

Question 5 Have you ever had to adjust your approach to work or to people at work because of the cultural differences? How you adjusted yourself? Did you do that with Russian (Czech) people?

Question 6 Do you think that ethics of people is influenced by their national culture? Why do you think so? Do you have any example?

Question 7 Have you ever noticed behavior or situation that is ethical for one culture and unethical for another? Did you have this feeling with Czech (Russian) culture?

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Question 8 Have you ever thought that some of your colleagues or subordinates behave not in a way you would consider ethical? Do you have some stories (anonymously)?

Question 9 What do you think are the most typical unethical acts?

Question 10 How would you describe unethical behavior? What characteristics are common for unethical behavior?

Question 11 Do you think that Czech and Russian cultures are very different between each other? Differences at work?

Question 12 Do you think that members of those cultures perceive what is ethical differently?

Question 13 Have you ever had any issues with your manager/subordinate with regards to ethics? Was there any element of cultural differences?

Question 14 Could you imagine any situation including ethical dilemma where Czech and Russian person would behave differently? What do you think are the reasons of that?

Question 15 What other factors do you think can influence the ethical behavior of people except for the culture and why?

Question 16 Which factors do you think are most important?

Question 17 Do you think lying is ethical? Have you ever experienced this type of behavior?

Question 18 Do you think talking behind the back is ethical? Have you ever experienced this type of behavior?

Question 19 Do you think that using working time for personal matters is ethical? Have you ever experienced this type of behavior?

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Question 19 Do you think that using working time for personal matters is ethical? Have you ever experienced this type of behavior?

Question 20 Do you think ethical or unethical behavior depends on the consequences of action?

Question 21 Do you think result is the most important? What else?

Question 22 What do you think defines if person act ethically or not?

Do you think it is conscious choice or automatic?

Question 23 What characteristics of Russian culture do you think influence their ethical behavior?

Question 24 What characteristics of Czech culture do you think influence their ethical behavior?

Table 3: Interview questions. Source: author.

Initially, author was considering the option of inclusion of another qualitative method – participant observation in group environment. However, later on it was decided to disregard the option due to the complexity and timeliness of investigation as well as potential risk to the work-related relationships between participants. Moreover, as the research is concerned particularly with personal attitudes and believes, exploration behavior in groups would increase complexity and require further follow-up clarifications, which was considered to be extra efforts that may lead to misleading treatment of the observed phenomena.

3.2.5. Data analysis procedure

The procedure for data processing and analysis was selected using the best practices in qualitative studies. Braun and Clarke (2006) suggested thematic analysis to be used for interview with the purpose of exploring the underlying concepts of social phenomenas; the methodology include the main 6 stages:

1) Exploring the collected data 2) Coding the themes

3) Finding the themes in the transcripts 4) Reviewing the interactions of the themes

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5) Giving exact definitions to themes and naming them properly 6) Production of the report including visualizations

Each interview afterwards was fully transcribed, the texts were validated by the recipients, some of the wordings were adjusted taking into consideration contextual meaning, language was adapted for the sake of better understanding of reader of the reports.

The whole procedure was conducted in the software called MAXQDA including the transcribing and coding. Selection of the software for processing the data was done based on the familiarity with the software as well as analysis of existing literature on the topic, which came to the conclusion that MAXQDA is the most suitable program for the qualitative research including interviews without recording actual behavior of the participants (Schönfelder, 2011).

The following procedure was followed in data processing and coding: first of all, the author set preliminary coding system that was based on the suggestions of the researches highlighted in the literature review for the purpose of more convenient orientation in the documents. After that the visual maps of themes were explored and taking into consideration findings, the codes were elaborated: obsolete codes deleted, some general topics drilled down and categorized in a more holistic and understandable way.

3.2.6. Validity of the data collected

Despite explorative nature of the study and procedures selected, validity of the of the data collected is a crucial indicator of the conducted research. Multiple researches were conducted on the topic (Maxwell, 1996; Schwandt, 1997) introducing many terms that shall be used as the indicators of well qualitative data such as: authenticity, adequacy, validity, and many others. However, the complexity of understanding them and even more importantly proving them has been for a long-time major constraint. Merriam (1998) elaborating the previously developed frameworks suggested the following procedures for validity validation: peer reviews, external audits, and triangulation. Taking into consideration the specifics of the research as well as limitations, triangulation of data sources was selected.

In addition to that, as it has been mentioned before, the author tried to create as convenient environment for the participants as possible in order to ensure that all of the answers are provided without any pressure. Selection of timing and facilities was justified by the preferences of the participants.

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3.2.7. Bias

Certainly, there is a huge possibility of biases taking into consideration the research nature and research methodology. Nevertheless, as the goal of the research is not generalization but identifying the underlying concepts and particular behaviors for the further exploration, testing, and validation. The research is solely concentrated on issues identification and is not supposed to be used for proving the concepts and generalization.

4. Research findings

4.1. System of codes and significance

The table with all of the revealed codes, sub-categories, and categories as well as frequencies of their occurrence in the data could be found in the Appendix 2 of the paper. However, as the goal of the research is purely to explore the experiences, attitudes, and perceptions of the participants without any aim to generalize the obtained results, quantities of occurrence presents very limited interest to the author and subsequent researchers.

The author revealed how Czech subordinates and Russian managers perceive the issues of culture and ethics and their linkages to the behavior, which people exhibit in work and non- work-related environment. In addition to that, author made efforts to understand the factors that are considered by participant as crucial with regards to behavior, ethics, and approaches.

The Table 4 presented below summarizes the most important categories and sub-categories that were revealed during the contextual analysis of the interviews.

Category Subcategory Code

Environment Culture National culture

Organizational culture International environment International environment Behavior Corruption/Fraud Corruption/Fraud

Backstabbing Backstabbing

Lying Lying

Misusing working time Misusing working time Unethical behavior Unethical behavior Ethical behavior Ethical behavior

Differences Background Family

Community/Surroundings Experience

Religion Education

Approach Directness

Empathy