Presentation on theme: "Is “the Love of Money” the Root of All Evil"— Presentation transcript:
1 Is “the Love of Money” the Root of All Evil Is “the Love of Money” the Root of All Evil? Or Different Strokes for Different Folks: Lessons in 12 CountriesThomas Li-Ping TangThe International Conference onBusiness Ethics in the Knowledge Economy, Hong KongApril 3, 2002 (Revised 9/16/2002)
2 Co-AuthorsAdebowale Akande, Abdulgawi Salim Alzubaidi, Mark G. Borg, Bor-Shiuan Cheng, Randy K. Chiu, Chin-Kang Jen, Ali Mahdi Kazem, Vivien Kim Geok Lim, Eva Malovics, Johnsto E. Osagie, Raja Pholsward, Elisaveta Sardzoska, Allen F. Stembridge, Toto Sutarso, Theresa Li-Na Tang, Thompson Sian Hin Teo, and Peter Vlerick
3 Now, Please Pay Attention to my Outline: *The Meaning of Money *The Love of Money*A Model of Unethical Behavior*Methods*Results: the Whole Sample, Compare 12 Countries Simultaneously*Recommendations
4 The Color of Money Color Size Shape Cross-Cultural Differences: History, Culture, People (Citizen, President, King, Queen), Architecture, National Pride, World View, Euro-305M 12
5 The Meaning of MoneyFather Joseph P. Breen of St. Edward in Nashville, TN Celebrated 40 Years Priesthood on 2/28/2002. (Story by Fr. Wiatt A. Funk.) Turbulence,In God we..Priests: Pray, Ask
6 The Meaning of Money $20 vs. $1 in a Money Bag Shall we create a pay-for-performance program for priests?The Government has no money until you pay...The Terrorists
17 The Meaning of Money: Theory Money is a motivator (Gupta & Shaw, 1998; Lawler, 1981; Locke, Feren, McCaleb, Shaw, & Danny, 1980: 381).Money is a hygiene factor (Herzberg, Mausner & Snyderman, 1959; Kohn, 1998; Pfeffer, 1998).People’s attitudes toward money can be perceived as their “frame of reference” in which they examine their everyday lives (Tang, 1992).
18 Managers *Attract, Retain, and Motivate employees *Achieve Company Goals (Chiu, Luk, & Tang, 1998; Milkovich & Newman, 2002; Tang, Kim, & Tang, 2000; Tang, Luk, & Chiu, 2000).
20 The Meaning of Money-Motivator Performance ImprovementParticipation: %Job Design: %Goal Setting: %Contingent Payment: 30%.Movements vs. Intrinsic Motivation.What gets measured gets done (Inc., 1998, June)
21 The Meaning of Money-Hygiene Money is a Hygiene factor (Herzberg, Mausner & Snyderman, 1959). 0, 0 point escalatesSalary has more potency as a job dissatisfier than as a job satisfier (82).In the lows salary is found almost three times as often in the long-range as in the short-range sequences (82).
22 The Meaning of Money-Hygiene Cameron & Pierce (1994). Review of Educational Research.Kohn (1993, September/October). Harvard Business Review.Kohn (1998, March/April). Compensation and Benefits Review.Pearce (1987). New perspectives on compensation.Pfeffer (1998, May/June). Six dangerous myths about pay. Harvard Business Review.
23 The Meaning of MoneyMoney always represents or signifies something other than itself (Crump, 1981).One is not interested in money, but in what money will buy (Crump, 1981).
25 Time is MoneyMy account is worth every penny he charges because of the time he saves me.This year, for example, he probably saved me five to ten years in prison.
26 The ABCs of Money Attitudes Affective: Do you “love or hate” money?Behavioral: What do you “do” with your money?Cognitive: What does money “mean” to you?
27 Measures of Money Attitudes-1 Burgoyne (1990). Money in marriage.Janda (1998). Love & Sex Tests.Holbrook, MA: Adams Media Corp MES
28 Measures of Money Attitudes-2 Bailey & Gustafson (1986, 1991). Money beliefs and behaviour scale. Handbook of Behavioral Economics.Bailey & Lown (1993). Journal of Consumer Studies and Home Economics.Bailey, Johnson, Adams, Lawson, Williams, & Lown (1994). Consumer Interests Annual.Doyle (1992). American Behavioral Scientist.Fank (1994). Money handling inventory, PAID.
29 Measures of Money Attitudes-3 Furnham (1984). Many sides of the coin: PAID.Furnham & Argyle (1998). The psychology of money.Goldberg & Lewis (1979). Money madness: The psychology of saving, spending, loving, and hating money.Gresham & Footenot (1989). The Money Attitude Scale. Advances in marketing.Hanley & Wihelm (1992). Money Beliefs and Behaviour Scale. JEP.
30 Measures of Money Attitudes-4 Haraoka (1990). Money & value orientation, PJSSP.Lim & Teo (1997). Sex, money and financial hardship, JEPLuna-Arocas, Quintanilla, & Diaz (1995). EAD-6, IAREP.Luna-Arocas (1998). Dinero, Trabajo y Consumo. PROMOLIBROLynn (1991). The secret of the miracle economy.
31 Measures of Money Attitudes-5 McClure (1984). Money attitudes and overall pathology, PAQJHB.Mitchell & Mickel (1999)**. The meaning of money: Money Importance Scale, AMR.Opsahl & Dunnette (1966). The role of financial compensation in industrial motivation, PB
33 Measures of Money Attitudes-7 Thierry (2000). The meaning of pay, in Erez & Thierry (Eds.) Work motivation.Wernimont & Fitzpatrick (1972). The meaning of money, JAP.Yamauchi & Templer (1982). Money attitude scale, JPA.Zelizer (1989). The social meaning of money: Special monies, AJS.Zuckerman (1983). Sensation seeking.
34 Mitchell & Mickel (1999)The well-developed measures are those that have been developed more carefully and used more systematically. There are three of these: (1) the money ethics scale (Tang, 1992, 1993, 1995), (2) the money belief and behavior scale (Furnham, 1984; Furnham, Kirkcaldy, & Lynn, 1994), and (3) the money importance scale (Mitchell, Dakin, Mickel, & Gray, 1998) (AMR: 571).
35 Why Do We Study Money Attitude? The Importance of Money (Mitchell & Mickel, 1999)The Meaning of Money (Individual Difference)Money MaterialismOther Attitudes--Pay Satisfaction
36 Why Do We Study Money Attitude? Pay Dissatisfaction has numerous undesirable consequences (Heneman & Judge, 2000)Commitment, Turnover, Counter-Productive Behavior, and Unethical Behavior (Cohen-Charash & Spector, 2001; Hom & Griffeth, 1995; Tang, Kim, & Tang, 2000)
37 The Money Ethic Scale Measures the Meaning of Money Follows the ABC ModelHas Multi-Dimensional Constructs (5 versions)Is Well Developed and Systematically Used (17 papers)Reflects Individual Differences
38 The Money Ethic Scale Has been used in many samples, in many countries, andin many languages (published articles): Chinese, English, French, Italian, Spanish, Russian, etc.
39 Research Question:Does money (income) have a direct and/or indirect impact on unethical behavior?Does money attitude (the love of money, the MES) have a direct and/or indirect impact on unethical behavior?
40 MES in This Study Money is a Motivator Money is a sign of my Success Money is ImportantI want to be Rich58 items, EFA—US Sample, 14 factors,Select 4 factors (17 items), EFA, CFA--Whole Sample, 12 Countries
42 MotivatorNo other incentive or motivational technique comes even close to money (Locke, Feren, McCaleb, Shaw, & Danny, 1980: 381).Money is a motivator (Gupta & Shaw, 1998; Lawler, 1981).Ex. I am motivated to work hard for money. Money is a motivator.
43 Success In America, money is how we keep score (Rubenstein, 1981). Some people are obsessed with “money as a sign of success” (Furnham & Argyle, 1998: 148)Ex. Money represents my achievement. Money is a symbol of my success.
44 ImportanceThe one consistent thread in this body of work is “the emphasis on its importance” (Mitchell & Mickel, 1999: 569)Ex. Money is important. Money is an important factor in the lives of all of us.
45 Rich Would you like to be Rich or Poor? Most people: Rich Being Rich will make you feel Good, Happy, Powerful, Beautiful, Healthy, etc.Many CEOs are tested G-r-e-e-d positive (Crystal, 1990, Fortune).Ex. Having a lot of money (being rich) is good. I want to be rich.
46 Other Variables Income Pay Satisfaction Organizational Commitment Unethical BehaviorEthical Corporate CultureSex, Job Changes
50 Unethical Behavior Abuse Position (theft, 5 items) + 15-Scenario Unethical Behavior TendencyAbuse Position (theft, 5 items) +Ex. Take merchandise and/or cash.Abuse Power (corruption, 5 items)Ex. Accept money, gifts, and kickback from others.Abuse Resources (office supply, 3 items)Ex. Waste company time. Use office supplies.Take No Action for Unethical Behavior (look the other way, 2 items)Ex. Take no action for shoplifting/stealing cash/merchandise.
51 In This Study Motivator, Success, Importance, & Rich “The Love of Money”Abuse Position, Power, Resources, & Take No Action “Evil”
52 Is “money” the root of evil? Is “the love of money” the root of evil? In This StudyIs “money” the root of evil?Is “the love of money” the root of evil?The love of money is the root of all evils (Bible: Timothy, 6:10).
53 Cross-Cultural StudyAustralia*, Austria, Belgium, Brazil*, Bulgaria*, Canada, Chile, China, Congo (Zaire), Cuba, Czechoslovakia, Egypt, France, Germany, Hong Kong, Hungary, India, Ireland, Italy*, Macau, Macedonia, Malaysia, Malta, Mexico*, Nigeria*, Oman, Panama (?), Peru, Philippines, Poland, Portugal*, Puerto Rico, Romania*, Russia, Saudi Arabia, Singapore, Slovenia*, South Korea, South Africa, Spain*, Taiwan, Thailand, Turkey, Ukraine, the UK, the USA, and Venezuela.
54 Need Your Help To expand this project: Need People in different parts of the worldIf you or your colleagues in your country or other countries are interested, please let me know. Thank YOU.
55 A Model of Unethical Behavior PaySatisfactionMoneyEthicSexCultureZ IncomeCommitmentUnethicalBehaviorJobs
56 Income Money Ethic Inverted U: + , 0, -- Unsatisfied needs are important, satisfied needs are not (Alderfer, 1971; Maslow, 1970)Financial Hardship Obsessed with Money (Dittmar, Tang, & Tillery, 2001; Lim & Teo, 1997; Lynn, 1991; Tang et al., 2001) (+ path)
57 Income Money EthicHigher Incomes Lower Marginal Utility of Money (Brandstatter & Brandstatter, 1996) (-- path)Fairly Paid Income MES: Non-significant (Tang, Luna-Arocas et al, 2001)Compare Income with (1) GDP per Capita or (2) Bill Gates (52.8B)
58 Income Money EthicAmong nations: As nations get richer, increases in wealth are associated with diminishing increases in well-being (Ahuvia & Friedman, 1998; Schyns, 1998)Objective Wealth vs. Subjective Appraisals (Ahuvia & Friedman, 1998)
59 Objective Money (Income) Within nations: Increased income is associated with well-being for the poor; once the poverty threshold is crossed, increased income matters little for happiness (Czikszentmihali, 1999;Diener, 2000; Myers 2000; Oishi, Diener, Lucas, & Such, 1999; Oropesa, 1995, Richins & Rudmin, 1994; Schyns, 2000; Tatzel, 2002)
60 Objective Money (Income) If we are so rich, why aren’t we happy?Csikszentmihalyi, M. (1999). American Psychologist, 54,
61 Subjective Money (Compare) Subjective well-being increases as income increases from below average to above average within one’s home community (Hagerty, 2000)
62 East AsiaThe major global market for luxury goods (Wong & Ahuvia, 1998)Thailand: very Materialistic, regarding possessions as a measure of Success, valuing possessions for their public visibility (face) over private, personal meaning (Webster & Batty, 1997; Wong & Ahuvia, 1998).
64 Hong KongCash Mentality (Chiu, Luk, & Tang, 2001)The Most Popular Car in Hong Kong…Public Visibility--Face
65 MES Pay Satisfaction Equity Theory (Adams, 1965) Discrepancy Model (Lawler, 1971)Expectation vs. Reality“The Love of Money” as the Frame of Reference, i.e., expectation, standardsHigh MES High Pay Dissatisfaction
66 Pay Satisfaction Commitment Job Satisfaction Commitment (Williams & Hazer, 1986, SEM)There is reciprocal and synchronous causality between commitment and satisfaction, with satisfaction influencing commitment more than vice versa (Home & Griffeth, 1995: 98).
67 Pay Satisfaction Commitment Perceived unfair procedural and distributive justice negative attitudes toward the organization (e.g., lower trust and commitment) (Cohen-Charash & Spector, 2001: 288)
68 Commitment Unethical Behavior From a procedural justice perspective, perceived injustice will lead to negative perceptions of the organization and, hence to counterproductive behaviors that will hurt the organization (Cohen-Charash & Spector, 2001: 287).
72 Sex MESMen prefer equity, women prefer equality (Tang, 1996; Tang, Furnham, & Davis, 2000)Men consider money more important than women (Lawler, 1971)Women are more subjectively satisfied with their pay than men, the contented female worker (Crosby, 1982; Major & Konar, 1984; Sauser & York, 1978; Smith, Kendall, & Hulin, 1969)
73 Job Changes Unethical Behavior Reason for Voluntary Turnover: higher wages/career opportunities (Campion, 1991)Leavers have lower pay satisfaction and receive 20% pay increase on their new jobsThe number of job changes is a predictor of management professors’ pay (Gomez-Mejia & Balkin, 1992) Self-Interest vs. Organization
74 Sample 2,338 Full-Time White-Collar Employees from 12 Countries: The US, Belgium, Hong Kong, Hungary, Macedonia, Malta, Oman, Philippines, Singapore, South Africa, Taiwan, and Thailand.HK is a part of China. We use the term “country” or “culture” for each sample.
75 Additional Data US: income = $34,661, *GDP per Capita = $31,500, *ratio = 1.10*CPI (1) Rank = 16, (2) Score = 7.6Hi income: HK (1.89); Thailand (3.41), Macedonia (2.07)Lo income: HungaryHi Corruption CPI: Score < 5: South Africa, Thailand, Philippines Low Corruption > 9
76 Data Analysis Convert income to Z Income 1. Perform CFA for all measuresThe Whole SampleCross-Cultural Equivalence:(1) Factor Structure, (2) Factor Loadings2. Test the SEM Model: The Whole Sample3. Compare the Model Across 12 Countries
78 A Model of Unethical Behavior Whole-.13*PaySatisfaction.17*MoneyEthicSex-.06Culture.55*.68*Z IncomeCommitment.14*.01-.28*UnethicalBehaviorJobs.12*
79 Main ResultsThe Money Ethic is directly and indirectly related to Unethical Behavior, whereas Income is not.The “Love of Money” is the root of all Evil.Money is not the root of all evil.
80 A Model of Unethical Behavior The US.03PaySatisfaction.88*MoneyEthicSex.04Culture.60*.62*Z IncomeCommitment.00.01-.26*UnethicalBehaviorJobs-.04
81 A Model of Unethical Behavior Belgium.09PaySatisfaction.87*MoneyEthicSex-.09Culture.22*.81*Z IncomeCommitment.15-.07-.22*UnethicalBehaviorJobs.01
82 A Model of Unethical Behavior Hong Kong-.30*PaySatisfaction.50*MoneyEthicSex-.28*Culture.68*.38Z IncomeCommitment.28*-.14-.04UnethicalBehaviorJobs.02
83 A Model of Unethical Behavior Hungary.09PaySatisfaction.45*MoneyEthicSex-.33*Culture.56*.64*Z IncomeCommitment.02.66*-.23*UnethicalBehaviorJobs-.12
84 A Model of Unethical Behavior Macedonia.00PaySatisfaction-.26*MoneyEthicSex-.13Culture.35*-Z IncomeCommitment.04.17-.12UnethicalBehaviorJobs.08
85 A Model of Unethical Behavior Malta-.25*PaySatisfaction.11MoneyEthicSex-.03Culture.70*-Z IncomeCommitment.38*-.13-.34*UnethicalBehaviorJobs.04
86 A Model of Unethical Behavior Oman-.35*PaySatisfaction.96*MoneyEthicSex-.22*Culture.50*.52Z IncomeCommitment.33*-.14-.18UnethicalBehaviorJobs.25*
87 A Model of Unethical Behavior Philippines.13PaySatisfaction.04MoneyEthicSex.17Culture.74*.92Z IncomeCommitment.01.07-.33*UnethicalBehaviorJobs-.13
88 A Model of Unethical Behavior Singapore-.21*PaySatisfaction.22*MoneyEthicSex-.04Culture.56*.58Z IncomeCommitment.29*-.20-.19*UnethicalBehaviorJobs.04
89 A Model of Unethical Behavior South Africa.55*PaySatisfaction.25*MoneyEthicSex-.02Culture--Z IncomeCommitment.15*-.31*-UnethicalBehaviorJobs-.05
90 A Model of Unethical Behavior Taiwan-.13PaySatisfaction.14*MoneyEthicSex-.09Culture.69*.51*Z IncomeCommitment.14-.12-.22*UnethicalBehaviorJobs.01
91 A Model of Unethical Behavior Thailand-.20*PaySatisfaction-.20*MoneyEthicSex.22*Culture.60*-Z IncomeCommitment.06.15-.12UnethicalBehaviorJobs.13
92 Summary: 12 Countries 12 Countries -: 5; (+: 1) +:5; (-:2) Pay Money SatisfactionMoneyEthicSex+: 1, 0: 8-: 3Culture104Z IncomeCommitment+:1;-:157UnethicalBehaviorJobs1
93 A Simplified Model 12 Countries -.13* Pay Money Satisfaction Ethic .61*Commitment-.24*UnethicalBehavior
94 DiscussionEmployee theft is a $200 million-dollar a year problem in the USSome managers condone theft by looking the other wayTreat that as “an invisible wage structure” to compensate for their lower than average wages
95 Discussion Financial loss is attributed to Employee Theft--38.4% Shoplifting—35.6%Administrative Error –19.4%Vender Theft—6.4%
96 Discussion Average Loss Shoplifting—$142.49 per incident Employee Theft–$737.31Armed Robbery–$2,410Culture of corruption Business failuresDiscourage and Prevent
97 How Do Managers Discourage and Prevent Unethical Behavior? Create Pay FairnessInternal Equity (Vertical Pay Differential)External Competitiveness (Market) andIndividual Equity (Merit, Seniority)
98 Discourage and Prevent Procedural Justice (rules of the game, How the decision was made, the means)Distributive Justice (results of the game, What was decided, the ends)
99 Discourage and Prevent Set Role ModelsCreate Ethical Corporate CultureUse Reward and PunishmentEstablish Ethics Hot LineDevelop Profiles of Dishonest EmployeesSelect Good Employees HRMInstall Surveillance SystemsProvide Training to Employees
100 Organizational Culture Top management: Decoration or Dedication?One company has built their organization around these four values*:Communication, Respect, Integrity, ExcellenceCan you name this company?Culture can only be strong when the commitment to norms and values is strong.*Taken from Year 2000 Annual Report
101 CEOs’ Pay Corporate Corruptions Enron Chairman Kenneth Lay and his wife own over 30 million dollars worth of real estates and stocksEmployees lost their jobs and 1 billion deferred compensation and pension plan
102 CEOs’ PayMichael Eisner, CEO of Walt Disney made US$575,592,000 in 1998The average worker made $30,000 in 1998Pay Differential = 19,320 to 1
104 Good Money ProfilesConscientious Steward (H-C; L-IMS) H satisfaction, L jobs, all Unethical BehaviorFrugal Budgeter (H-B; L-E) H SatisfactionEvil, Budget, Charity, Importance, Motivator, Success
105 Bad Money ProfilesMoney Worshiper (H-EIMS)- Abuse Power, Take No ActionCareless Handler (L-BC) Abuse Position, ResourcesEvil, Budget, Charity, Importance, Motivator, Success
106 The love of money is the root of evil. (Tim, 6:10) ConclusionThe love of money is the root of evil. (Tim, 6:10)
107 Additional ThoughtsIt is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.Judas, who betrayed Jesus for a sum of money (30 pieces of silver), was the treasurer of the disciples. John, 12: 6; 13: 29For when he dieth he shall carry nothing away: his glory shall not descent after him. Psa, 49: 17Beloved, follow not that which is evil, but that which is good. He that doeth good is of God: but he that doeth evil hath not seen God. John, 11
108 Professional Wrestlers as Ushers: Increased Collection Plate Donations by 72%