Bribery and Gift Giving in Cross Cultural Management

Introduction

A critical component of cross-cultural management is to be familiar with the perceptions on bribery and gift-giving by different cultures. Kabasakal and Bodur (1997), some cultures are characterized by a strong slant towards collectivism and both societal and organizational levels. It may perhaps be useful for those tasked to carry out cross-cultural management to analyze the culture of the nation to which they have been assigned in terms of power distance, masculinity, human orientation, achievement, and future orientation (Hofstede, 1984). Moreover, they may also look at the business culture of the country and their sense of duty to the organization, managerial hierarchy, type of leadership, and other ethical norms. All of these considerations will help cross-cultural managers in assessing the perceptions of locals to bribery and gift-giving.

The research of Mendenhall and Oddou (1985) indicate that adjustment to the cross-cultural facets of a global assignment requires three distinct personal abilities, as follows:

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1. the capacity to sustain a valued sense of self;
2. the ability to associate to host nationals;
3. the ability to intellectually appreciate the belief systems that underpin behaviors in the host country.

If cross-cultural managers were oriented with these traits, it would have been easier for them to adjust because their expectations were more effectively managed (Black, 1990b; Mendenhall & Oddou, 1985). Overall, Western managers are thought to be influenced by their strongly individualist cultures compared to the collectivist cultures of their Asian colleagues (Hofstede, 1984). Western expatriates have stronger inclination to put more premium into their own preferences and their own paradigms and values rather than wanting to maintain smooth relations within the group. While Eastern managers do exercise bribery and gift giving, they do so with prudence since theirs is a culture that puts very high premium on dignity and respect for the person (Hofstede, 1984).

East vs. West: Explaining the Disparity in Perceptions of Bribery

Corruption is a prevalent practice and there are numerous countries which are confronted with this issue. This issue is specifically alarming in countries who are striving to develop economically since it threatens the foundation of peace which promotes such growth within a country (Mauro, 1995).

There are distinctions in perceptions of cultures on the gesture of gift giving and these should be adequately understood by cross cultural managers if they are to be successful in their roles. Most cultures in the West do not particularly like the gesture and perceive it as bribery. On the other hand, Southeast Asian managers perceive it as an exercise of goodwill. In these countries, gift giving is taken as an effective means of establishing rapport and expressing one’s intent to establish a mutually beneficial affiliation. However, one setback that is seen from such practice is the perception of a responsibility or accountability that one is eventually expected to ‘return’ over time. This is something that Western cross cultural managers are not amenable to as a practice.  Along a similar vein, Asian country managers are accepting of the practice of corruption, i.e. bribery, as opposed to their Western counterparts (Bardhan, 1997).

Several authors present that the Nanyang Chinese family business is a representation of a specific and distinguished organizational form (Redding, 1986). These entities are distinguished by high levels of centralization of decision making, with strong dependence on the owner-manager, and a lack of bureaucratic regulation. The outcome is a relatively loose and flexible organizational structure; a leadership style which is both autocratic and paternalistic; the preponderance of nepotism among its entrepreneurial and managerial bench, and extensive family-like bonds of obligation and duty; and lastly, by the occurrence of personalized networks of external linkages (Redding, 1984; Silin, 1976).

The main essence of Asian culture can be said to lie in the philosophies of Confucianism and Taoism which continue to motivate Chinese values and behavior, despite the outcomes of geographical movement and changing political systems (Bond & Hwang,1986). There has also been an increasing body of empirical research on Asian values and the psychology of Asians (Bond, 1986). These are summarized in the key themes of harmony, conformity, power distance, collectivism, “face”, and shame.

Confucianism emphasizes the values of harmony, urging individuals to adapt to collectivity, to control their emotions, to avoid conflict, and to maintain inner harmony (Hsu, 1949). Another main theme of Confucianism is conformity, concentrating on the “rules of propriety” which structure interpersonal relationships into hierarchical obligations. By understanding that the individual does not exist as a distinct entity but is linked with his or her context, family, and clan. Thus, the individual is expected to conform to prescribed social structures and relationships and to apt forms of social behavior. The empirical work of Hofstede (1984) and the Chinese Culture Connection (1987) uphold that Southeast Asian Chinese-dominated societies scored highly on power distance and collectivism. High power distance societies are those which accept large power disparities between individuals, groups, and social strata, and perceive such state of affairs as ordinary or normal.

Collectivist societies are those which do not concentrate much on the individual or his or her interests, but on the continuation of  the collectivity and harmonious relationships. “Face” as “an image of self, delineated in terms of approved social attributes (Goffman, 1955) , is a global phenomenon (Bond & Hwang, 1986), which seems to hold special importance for the Chinese (Hwang, 1985). The straightforward outcome is to exert great care in maintaining face and to desist from damaging the face of others. Several researchers (Hsu, 1949) concur that Chinese and other Asian societies are “shame-oriented” cultures, where shame pertains to an interpersonal frame in which behavior is compared with social norms rather than intrinsic personal standards (as in Western “guilt” cultures). Thus, the Chinese regard it as shameful to disturb group or interpersonal harmony; a sensitivity which is developed and emphasized through childhood rearing shaming techniques and group loyalty. The value which they attach to saving face adequately explains their prudence in giving gifts; and yet they still engage in the practice as a means of establishing rapport with their business counterparts (Chinese Culture Connection, 1987).

The study conducted by Cameron, Chaudhuri, Erkal, & Gangadharana (2006) has investigated the propensities to engage in and punish corrupt behavior in three different countries, namely, Australia, India, Indonesia and Singapore. The authors have focused on determining if there were distinct ways of deciding whether or not to punish behavior across these countries. They have asserted that being desensitized to corruption may cause it to be implicitly accepted. They then designed an experiment to test this. They hypothesized that in those contexts where there are weak levels of corrupt behavior, there is a higher likelihood to punish those who engage in corrupt activities and there are less who would attempt to actually exercise this. There were three settings in which the study has been carried out, namely Melbourne, Delhi, Jakarta and Singapore. There were more emphasized discrepancies in the probability for punishing corruption than in the exercise of corruption among the three countries. The respondents in New Delhi were more desensitized to corrupt activities than Australian subjects. Moreover, Singaporean respondents were more accepting of this practice than their Indonesian counterparts. The authors have attributed this to contemporary legislation (Cameron et al, 2006).

There are particular protocol that must be observed in certain Asian nations for the same gesture to be tagged either as simple giving of a gift or if it is a corrupt exercise.  These nations usually end a business meeting or negotiation with gift giving and they implicitly assess this as acceptable practice. Among the Chinese for example, expensive gifts may be difficult to give meaning to – that is, whether it has been given as a gesture of gratefulness or for the receiving party to feel indebted to the giver and thus return the gift in the form of a favor (Adler, 1983).

Delving further on Western managers’ perceptions of gift giving, Americans are particularly averse of the practice since they perceive that this is against being Christian and is an expression not only of immorality but of greed. Moreover, it is drastically opposed to the strong sense of equity, fairness, and independence that are espoused by Americans. This strong opposition is attested to by their legislation that explicitly punishes offshore American activities that are against their ethical standards in this realm, embodied through the Foreign Corrupt Practices Act or the FCPA (Gibeaut, 2007). Such legislation has effectively affected the way American managers deal with their offshore counterparts; such global laws have helped shaped the moral fiber of American managers in their business dealings (Singer, 1991). However, there are still a handful who are not agreeable to the FCPA and claim that it undermines the ability of American organizations to compete head-on with their foreign competitors (Mauro, 1995).

While they are classified as first world Western countries, Latin American nations are more accepting of bribery and gift giving compared to their American and Canadian counterparts. These practices are seen from the most menial issues to giving gifts to police authorities to as high-end as openly giving gifts to officials in key positions. The practice is predominant in Latin American countries, mostly seen in government contract bids, bribery for issuance of permits, and sponsoring political candidates in their campaigns with the intent of harnessing some favor when these politicians have already assumed their powerful posts (Birdseye & Hill, 1995).

Culture profiles derived from Hofstede’s  (1984) theoretical dimensions of cultures, yield many hypotheses regarding cross-cultural differences in leadership and management.  Hofstede's dimensions of culture are: uncertainty avoidance, power distance, masculinity-femininity, individualism-collectivism, and future orientation. In his original work, he determined four key dimensions which influence national cultural differences. These are:

• Individualism/collectivism: This aspect reflects the degree to which individuals value self-determination instead of their behavior being determined by the collective will of a group or organization.
• Power-distance: At the core of this dimension lies the question of participation in decision making. In low power-distance cultures, employees seek involvement and have a desire for a participative management style. At the other end of this continuum, employees tend to work and behave in a specific way because they recognize that they will be directed to do so by management.
• Uncertainty avoidance: This facet is involved with employees’ tolerance of ambiguity or uncertainty in their working environment. In cultures which have a high uncertainty avoidance, employees will look for clearly defined, formal rules and conventions governing their behavior.
• Masculinity/femininity: This is perhaps the most difficult dimension to use in an organizational context. In reality, the hardship is more to do with terminology and linguistics, in Hofstede’s work the dimension related to values. In highly “masculine cultures” dominant values relate to assertiveness and material acquisition. In highly “feminine cultures” values emphasize on relationships among people, concern for others and quality of life.

High uncertainty avoidance cultures, with the resulting emphasis on rules, procedures and traditions may place demands on leaders not expected in low uncertainty avoidance cultures (Hartog et al., 1999). Under this typology, Latin American countries are distinguished by high power distance, uncertainty avoidance and masculinity which predispose them to be more accepting of such practices. Among these societies, there is also much emphasis on positions, stature in society, and connections which all the more make them prone to such unethical behavior. Thus, Latin American managers overall are more accepting of bribery and gift giving than other managers from Western countries (Singer, 1991).

Conclusion

This paper has shown that there are distinct differences in the perceptions of bribery and gift giving depending on the culture of the perceiver. Thus, cross cultural managers must be sent to cultural awareness training programs to facilitate their understanding of bribery and gift giving and similar social norms. For example, cultural diversity training programs and learning sessions concentrating on values, habits, beliefs, religion and language which could form part of expatriation preparatory training. These will help them undergo the indoctrination period more easily and quickly.  In this context, expatriates assigned to offshore operations, should also be keenly aware of the particular facets of life in the country they are to be assigned in. If cross cultural managers and their families are made aware of these information and their expectations well managed, then unwelcome surprises may be avoided, and they would be able to work within peculiar ethical and moral parameters set by the culture (Cavusgil et al., 1992).

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