Academic journal article Management International Review

National Culture and Ethical Climates: A Comparison of U.S. and Japanese Accounting Firms

Academic journal article Management International Review

National Culture and Ethical Climates: A Comparison of U.S. and Japanese Accounting Firms

Article excerpt


* We investigated the effects of Japanese and U.S national cultures on ethical climates within accounting organizations. We hypothesized that national cultural differences would lead to the observation of different ethical climates.

* Results support the national culture hypothesis for the principled climates.

* However, contrary to expectations based on national culture arguments for egoism and benevolence, our findings suggest that key institutional factors, specifically the accounting institutional rules and regulations, lead to differences in ethical climates.

Key Results

* This paper suggests that we need to understand both national culture forces and institutional forces from governing bodies to develop a more comprehensive understanding of cross-cultural ethics.


With globalization of trade and investments, organizations face more and more ethical issues and dilemmas as they make business decisions outside of their own country (Beyer/Nino 1999). Consequently, there is an increasing need to understand cross-national ethics (Cullen/Parboteeah/Hoeg12004). One approach to increase our understanding is to examine the cross-national differences in the moral ethos of companies, i.e., the "set of force-fields within organizations, comprising everyday norms, rules-in-use, social pressures, and quality of relationships, all of which impinge on members' understandings, judgments, and decisions concerning good and bad, right and wrong" (Snell 2000, p. 267). In this paper, we studied one manifestation of the moral ethos of companies through ethical climates (Victor/Cullen 1987, 1988) and whether they are affected by national cultures. Specifically, we examined the relationship between national culture and ethical climates for accountants located in two nations (US and Japan). Furthermore, given the highly regulated nature of the accounting profession, we also investigate the possibility that, consistent with some aspects of institutional theory (e.g., DiMaggio/Powell 1983, Kostova 1997, 1999), professional pressures of the accounting field result in an isomorphism of ethical climates in accounting organizations regardless of national context.

We believe that understanding the link between national cultures and ethical climates is critical. First, at a more general level, as more companies operate in foreign locales, it is important to understand how national cultures influence local unit ethical climates. Such an understanding can provide important information to assist global companies in their efforts to adjust their operations to build more ethical organizations. Second, by examining cross-national differences in ethical views of US and Japanese accountants, we provide some additional understanding of how the values and beliefs inherent in national cultures may permeate the ethical values of a profession. Importantly, we investigate a profession that has faced increased scrutiny with numerous scandals both in the US (Jennings 2004) and in Japan (Sagakami/Yoshimi/Okano 1999). Given recent cries to incorporate reform within the Japanese accounting profession (Lafferty 2003, Sakagami/Yoshimi/Okano 1999), we contribute much needed understanding of the ethical orientations of Japanese accountants. Such understanding can also be useful to multinational accounting firms to create conditions conducive to more ethical climates among their employees. Third, given the widespread incidences of corporate wrongdoing at a global level (Carroll 2004), it is crucial to evaluate the ethical orientations of multinationals to better plan ethical management systems that might avoid such corporate wrongdoings. Finally, with globalization of trade and growth of transnational corporations, there are more pressures to internationalize the accounting profession (Tsui/Windsor 2001) by holding accountants to similar standards worldwide. As such, our study provides some understanding of cultural barriers to the internationalizing of the accounting profession. …

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