Comparing Ethical Attitudes of Expatriates working in UAE. K.S. Sujit. Institute of Management Technology, Dubai

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1 Comparing Ethical Attitudes of Expatriates working in UAE K.S. Sujit Institute of Management Technology, Dubai Abstract UAE is a multi cultural country with 80% of the population expatriates coming from different locations of the world. Different locations of the world represent different cultures and different ethical attitudes. The objective of this paper is to analyze ethical attitudes of different expatriates working in the UAE using a structured (ATBEQ) questionnaire. The study is based on the survey of 111 respondents from different nationalities employed in various organizations in the UAE. The questionnaire consists of 30 different questions on different aspects of ethics in business. Indians and Filipinos are the majority in the survey and these two communities dominate among the expatriates in UAE. We used a simple t- test to find the differences in their mean. The major finding of this study is that there is not much difference in the attitude towards business ethics among major expatriate communities. However, the level of agreement varies among different expatriate communities. Keywords: cross-cultural studies, business ethics Introduction: In our globalized world, the movement of people to a different country for better opportunities, is a very common phenomenon. For the companies it is strategic to have multicultural employees for their growth. From a country's perspective, expatriates bring skills that the country is lacking. It is always seen as a win-win situation for all as it increases welfare of the country and the world. But at the same time, one must recognize that culture, value systems and ethics may be different the moment people move to a different country. Expatriates, those relocated to a new place other than their own country, often face the challenge of living in and adapting to a culture that is different to their own. Ching et.al. (2008). Similarly, businesses also face challenges to deal with managers and employees of different nations, representing different cultural values. Culture directly and/ or indirectly influences every aspect of the business relationship. Hence, it is important for the businesses and individuals to understand culture. UAE as a country has a rich heritage and distinct culture of its own. Over the years, the inflow of the expatriate population and the number of multinational companies have increased significantly. Understanding local culture and interactions with other expatriate cultures is important for success. The expatriate model has paid rich dividends to the country by providing a skilled labour force, especially from Asian countries. Expatriates have gained in terms of better living standards and better income in the UAE. In a multi cultural business setting, expatriates with different backgrounds, culture and value systems often perceive business ethics differently. When people do not share the

2 same backgrounds then there is a possibility of misunderstandings and conflicts in the organization. The attitude towards business ethics may also vary so greatly in reaching consensus on ethics across cultures. It may be that a consensus on ethics across cultures is not even recommended (Donaldson and Dunfee, 1999). In this situation the differences in culture must be studied and well respected (Randi, 2006). This paper is an attempt in this direction to study the similarities and dissimilarities in regards to ethical beliefs and practices in a country where the expatriate population is huge. Culture and its Implication on Ethical Business: Business in today's world is truly global and embraces many cultures. Most of the people in business will agree to the fact that culture plays a vital role in business decision making. There are many success stories where proper knowledge of culture helped the business to grow. At the same time, there are many stories where companies failed miserably for ignoring culture. Edward Tylor (1871) defined culture as "that complex whole which includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by man as a member of society". [E.B.Tylor, Primitive Culture, London: Murray 1871]. Scholars never agreed fully to a common definition of culture. But most of scholars agreed to the importance of culture in business. Hofsted (1997) defined it to be a collective programming of mind which distinguishes the members of one human group from others. Value system is the backbone of culture and it basically refers to the abstract ideas about what a group believes to be right, good or desirable. These values are the result of many things such as religion, social structure, language, education, political philosophy etc. These aspects can be reflected in the attitude of employees in their work place. Probably, the most famous study of how culture relates to values in the workplace was undertaken in the study of Hofstede (1997). In this study four dimensions had been used to describe culture in the workplace; these are power distance, collectivist vs individualist, feminity vs masculinity, and uncertainty avoidance. Power distance describes ''the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally''. A low score indicates individuals feel that people should be treated equally. Collectivism describes cultures with strong ties between individuals. People are members of cohesive groups that offer protection and demand loyalty. In collectivist cultures, harmony should be maintained and confrontations avoided. Individualism describes cultures with loose ties between individuals. People are expected to look out for him/herself and immediate family only. In individualistic cultures, people feel free to speak their minds and are often considered honest for doing so (Hofstede, 1997). Femininity refers to cultures that have an overlap between the gender roles. In feminine cultures, men and women are equally expected to be tender, modest, and concerned with the quality of life. Yet in masculine cultures, the gender roles are clearly defined. Men are expected to be assertive, tough, and focused on material success whereas women are expected to be tender, modest, and concerned with quality of life issues. Higher scores are an indication of a more masculine culture and lower scores are an indication of a feminine culture (Hofstede, 1997). The cultural dimension of uncertainty avoidance is ''the extent to which the members of a culture feel threatened by uncertain or unknown situations'' (Hofstede, 1997, p. 113). Based on his study, Table 1 shows the index for selected countries that are important to us. It is clear from the Table that India and the Arab world is similar in terms of power distance and feminism whereas the UAE is similar to the Philippines in individualism, whereas India

3 and Philippines are similar in uncertainty avoidance score. Keeping these results in mind, we analyzed the attitude towards business ethics. Source: Table 1: Index score for selected countries Methodology Subjects Using a convenience sampling technique, questionnaires were returned by 111 employees of different organizations. Expatriates respondents from Pakistan, Sri lanka, South Africa etc were not included as the numbers were very small. All the subjects are employed full time with their respective organizations. The subjects are mostly middle level employees of their organizations. Measures A 30-item ATBEQ scale (Neumann and Reichel, 1987 as cited in Preble and Reichel, 1988) was used to gather employee attitudes towards business ethics. This scale was also used in various studies such as Randi (2006), Small (1992) and Carol (1999). The ATBEQ is scored on a five-point scale ranging from 1 strongly disagree to 5 strongly agree. For details of the questions in the survey see Appendix 1 for each of the 30 items. Procedures The survey was done by the MBA students of Institute of Management Technology, Dubai, as a part of their project in their course on legal and ethical aspects of business. The students are working professionals and each student was given the task of distributing the questionnaire to their respective colleagues. They were also given the task to collect it. The respondents were informed that this survey wass being conducted as a project to study the attitude towards business ethics and that their participation was voluntary and without compensation. Completed surveys were collected by the students and analyzed. Analysis After collecting the filled in questionnaire, the information provided was carefully entered and analyzed. The data shows that the majority of the respondents were from India, Philippines and Arab countries. Arab countries included Egypt, Lebanon, Palestine and Jordan. Hence, we thought of making three groups and analyzing the result. Prior to analysis, we conducted reliability test by taking all the data. Cornbach's alpha for 30 items was which is acceptable according to Nunnally (1978).

4 Result As the respondents are grouped under three categories, we compared our results by taking two at a time. While research has indicated that there may be some commonly shared ethical values across cultures, there are also many differences across national cultures in regards to ethical beliefs and practices (Buller et al., 2000). Once the expatriate moves to other countries, he or she brings all those values along with him/her and it gets reflected in their ethics. It is also important to note that the host country's value system often imposes restrictions on the value system of the expatriate individuals. Our hypothesis here is if the host country's value system is imposing restrictions, then the level of agreement will not show a significant difference by t- test. By taking two groups at a time we can verify if there are significant differences in their attitude towards business ethics. For this study, we have chosen three hypotheses. The first hypothesis proposes that there are significant differences in the attitude towards business ethics between Indian and Philippine expatriates. The result of t-test shows that Indian and Philippines expatriates differ in their attitude towards business ethics in eight questions are presented in Table 2. For the question number 2,5,12,13,16,19, 26, 28 and 29 both Indian expatriates and Filipinos indicated different agreement levels. Indian expatriates have shown a higher level of agreement for 16, 19, 26, 28 and 29 whereas for 2, 5, 12, 13 Filipinos have shown a higher level of agreement. However, in the remaining twenty two questions they have a similar attitude towards business ethics. Hence, we are rejecting our hypothesis that Indian and Filipino expatriates have differences in attitude towards business ethics. The second hypothesis proposes that there are significant differences in attitude towards business ethics between Indian and Arab expatriates. The result of t-test is presented in Table 3 which shows that the attitude is similar, as only for two questions (4, and 20) there is significant difference. Hence we, reject the second hypothesis as well. The third hypothesis proposes that there are significant differences in attitude towards business ethics between Indian and Philippine expatriates. The result of t-test presented in Table 4 shows that for five questions (13, 17, 20, 21, 29) the results are significantly different and for the remaining twenty five questions the attitude is similar. Overall we can say that attitude towards business ethics in UAE among different expatriates are basically the same.

5 Table 2: Independent groups t-test (India and Philippines)

6 Table 3: Independent groups t-test (India and Arab)

7 Table 4: Independent groups t-test (Philippines and Arab)

8 Conclusion The UAE with its multi cultural setting dominated by expatriate populations has grown significantly in the recent past. With privatization policy and ongoing reform, UAE continues to depend on expatriate populations for skills and development. In such a situation, the role of understanding expatriate's attitudes towards business ethics is even more important. This study is a simple step toward this direction. The result of this study suggests that the attitude towards business ethics is similar among expatriates in the UAE. In most of the cases there is complete agreement among the various groups. Between Indian and Filipino expatriates there are significant differences in eight questions, otherwise the remaining twenty two questions show a similar level of agreement. On the other hand, the agreement level between Arab expatriates and those from the Philippines is similar, except in five cases. In the case of Arab and Indian expatriates the attitude towards business is almost similar except in two questions. This study can be extended to include other important aspects like duration of stay, gender, qualification etc by grouping variables so that one can understand the difference in attitude towards business ethics.

9 Appendix 1

10 Bibliography Buller, P.F., Kohls, J.J. and Anderson, K.S. (2000), When ethics collide: managing conflict across cultures, Organizational Dynamics, Vol. 28 No. 4, pp Carol Y.Y.L (1999), Comparison of perceptions towards business ethics in four countries. The Journal of psychology, Vol. 133 No. 6, pp Ching-Hsiang Liu, Hung-Wen Lee. (2008) A proposed model of expatriates in multinational corporations Cross Cultural Management Vol. 15 No. 2, 2008 pp Donaldson, T. and Dunfee, T.W. (1999), When ethics travel: the promise and peril of global business ethics, California Management Review, Vol. 41 No. 4, pp Grunbaum, L. (1997), Attitudes of future managers towards business ethics: a comparison of Finnish and American business students, Journal of Business Ethics, Vol. 16 No. 4, pp Hofstede, G. (1997), Cultures and Organizations: Software of the Mind, McGraw-Hill, NewYork,NY. Hofstede, Geert (2001). Culture's Consequences: comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Thousand Oaks, CA: SAGE Publications Nunnally. J.C. (1978). Psychometric theory ( 2nd Edition), New York: McGraw-Hill. Preble, J.F. and Reichel, A. (1988), Attitudes towards business ethics of future managers in the US and Israel, Journal of Business Ethics, Vol. 7, pp Randi L. Sims (2006), Comparing Ethical Attitudes across Cultures, Cross Cultural Management: an international journal, vol-13, no-2, pp Small, M.W. (1992), Attitudes towards business ethics held by Western Australian students: a comparative study, Journal of Business Ethics, Vol. 11, pp Tylor, Edward (1871), "Primitive Culture", Murray, London.