Frontiers of Entrepreneurship Research
1997 Edition

SUMMARIES

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RUSSIAN VS. AMERICAN ENTREPRENEURS:  WHERE ARE THE ETHICS? 

Robert D. Hisrich
Mikhail Gratchev

Weatherhead School of Management
Case Western Reserve University
Cleveland, Ohio  44106-7235

Telephone: 216-368-5354
Fax: 216-368-4785

Principal Topics

The cultural similarities and differences of American and Russian entrepreneurs were explored.  The focus of the study was on the entrepreneurial practices in each country, the motivation and educational background of the entrepreneurs, and the views of entrepreneurs in both countries on the efficacy of various business practices.

Method

The research involved receiving information from three principal sources.  Questionnaires were obtained from 127 managers/entrepreneurs visiting the United States, focusing on their views of similarities and differences between the two countries.  Then a questionnaire composed of questions and scenarios that were applicable across different industries and cultures was developed.  This measuring instrument, containing four sections (34 questions having a binary response, 12 scenarios having multidimensional scale, 7 scenarios using a seven-point Likert scale, and comprehensive demographic information) was developed, tested, translated into Russian, then back-translated and further tested.  One hundred and sixty-five entrepreneurs in the United States and 159 entrepreneurs in Russia completed the questionnaire.

Major Findings

Entrepreneurs in Russia were substantially younger (average 33 years) compared to those in the sample from America (average 44 years), reflecting the newness of the transitional economy in Russia.  In Russia, the younger people more easily adapt to and learn from ventures in he new market economy.  This young age was reflected in the overall smaller incomes and company sizes in terms of sales and revenues of the Russian entrepreneurial ventures.  Russian ventures were also in different industries.  While Russian entrepreneurs formed ventures in banking investment and insurance (16.5%), retail and wholesale trade (15.8%), management consulting and business services (12.9%) and manufacturing consumer goods (10.1%), American entrepreneurs formed their ventures in manufacturing consumer goods (18.8%), manufacturing industrial goods (13.3%), consumer services (12.7%), and retail and wholesale trade (10.3%).   Significant differences occurred regarding the ethical perceptions of American versus Russian entrepreneurs.  More Russian entrepreneurs than American entrepreneurs thought it was ethical to:  use company services for personal use; remove company supplies for personal use; overstate expenditures by less than 10%  and more than 10%; give or accept gifts/favors for preferential treatment; take extra personal time; purchase shares based on inside information; falsify reports; hire competitors' employees to learn trade secrets; not report a co-worker's violation of law; divulge confidential information to parties external to the firm; and take longer than necessary to do a job.  Similarly, significant differences between the two groups occurred regarding their ethical perceptions of other cultures and people.  This occurred on each of the perceptions tested, except for the one that stated "things illegal are ethically wrong."  Again, Russian entrepreneurs were less positive in their view than American entrepreneurs.  For example, a much higher percentage of U.S. entrepreneurs (88%) felt that man is basically good.

Implications

The research results contribute to the understanding of moral values, behavior, and ethical criteria for decision-making in Russia and the United States.  By focusing on differences and similarities between Russian and American entrepreneurs, it presents some ethical factors contributing to the successes and failures in joint and cooperative projects.  Perhaps the most useful point to emerge from these findings is that culture significantly impacts the ethical attitude and nature of entrepreneurs, at least in terms of the two very different cultures?United States and Russia.  Given the greater reliance on their won value systems and their lesser reliance on social and institutional support, are Russian entrepreneurs coming from their social heritage less ethical than American entrepreneurs?  These findings suggested that they are less ethical, at least in terms of the activities, views and perceptions of others investigated.  The extent to which this reflects the views of society as a whole or the entrepreneurial sector of society needs further exploration.  In addition, this research adds to the understanding of the role and factors of ethics in modern entrepreneurship.  It suggests a methodological framework for building ethical profiles of entrepreneurs in different countries.

 

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