This paper describes the results of a field experiment involving 400 employees from ten financial institutions operating within the Shenzhen Special Economic Zone of the People's Republic of China. It was found that, when faced with an agency-based problem, employees indicated they would be less inclined to advise management of the existence of unethical work practices. Younger employees without supervisory experience displayed significant risk aversion. Traditional Chinese values associated with Confucian work dynamism, were shown to be poor predictors of moral choice response. A parsimonious regression model was developed that provides evidence that the universal trait Masculinity/Femininity (Human-heartedness) acted to offset the negative influence of the agency problem. On the other hand, an operative's level of education attainment exerted a negative influence on moral response scores.
A major objective of this study is to develop a guanxi scale with two dimensions, favour-seeking guanxi and, for the first time, a rent-seeking guanxi, based on Ang and Leong's (2000) guanxi scale and Su and Littlefield's (2001) classifications of guanxi orientations. The relationship between Chinese auditors' guanxi orientations and their ethical judgments is also reported. A survey methodology was used in this study and 519 useable respondents were included. Results of this study show these two guanxi dimensions are relatively independent. It was also found that Chinese auditors' favourseeking guanxi orientations were positively associated with their ethical judgments but their rent-seeking guanxi orientations negatively impacted on their ethical judgments.
Moral choice, as a precursor to behaviour, has an important influence on the success or failure of business entities. According to Rest, 1983, Morality, Moral Behavior and Moral Development (John Wiley & Sons, New York), moral choice is prompted, amongst other things, by a motivational component. With this in mind, data obtained from a sample of four hundred financial sector operatives, employed in a rapidly developing region of China, was used to construct a relatively stable set of motivational typologies which could be used to predict choice within an agency-based context. A non-egoist version of the agency theory was developed, which permitted the modelling of alternative heuristic patterns. Altruists and persons identified as bordering on the verge of being classified as psychological egoists, refused to reorganize their motives when responding to a problem that included both moral hazard and adverse selection criteria. It was also possible to identify certain personal and contextual issues which discriminated between the typologies.
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