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Comsumerism across cultures
1. Journal of Business Ethics (2010) 93:567–581 Ó Springer 2009
DOI 10.1007/s10551-009-0240-8
Does the Individualist Consume More?
Monle Lee
The Interplay of Ethics and Beliefs that Anurag Pant
Governs Consumerism Across Cultures Abbas Ali
ABSTRACT. Individualism leading to more consumer- humans towards materialistic behavior and empha-
ism seems to be a bit of truism nowadays in the media. The sizes that the rise of consumerism coincided with the
USA is particularly indicted for being too individualistic rise of modern marketing.
and consumerist. Past research has mostly indicated a Modern marketing is commonly assumed to be
positive relationship between the two. However, past responsible for this consumerist society with its
research has not suggested a negative association between
hedonistic lifestyle (every night on television you see
individualism and consumerism. This paper offers support
for such a negative relationship by showing that an indi-
many commercials promoting phones, cameras, cars,
vidual’s ethical values can temper the consumerist nature cruises, casinos, etc.) and for undermining other
of individualists. Data were collected in the USA and cultural values. In particular, advertising is often
Taiwan. Structural equation models demonstrate that our singled out as acclaiming acquisition and celebrating
hypothesized model fits our data well. A key result over consumption at the expense of other values (e.g.,
the global sample is the stability of the linear path from family orientation and so on), and has been labeled
individualism to work ethic to consumer ethic to con- the most value-destroying activity of Western civi-
sumerism. The two-nation comparison also supports dif- lization (Schudson, 1984).
ferences in how Taiwanese and Americans differ in their For many critics, the undermining of ethical values
belief that consumption benefits society. of people is the dark side of consumer marketing
(O’Shaughnessy and O’Shaughnessy, 2002). One
KEY WORDS consumer ethic, consumerism, ethical
major value that some believe has been compromised,
behavior, individual values, individualism, protestant
work ethic, work ethic
due to people identifying themselves with consump-
tion, is the work ethic. In this paper, we will use the
term ‘‘work ethic’’ to refer to the belief that work is
Introduction desirable and rewarding in its own right. Some
researchers claim that consumption is superseding the
The adoption of modern marketing practices has led work ethic for many people as a motivator for work
to the emergence of consumerist societies in the and as a primary source of identity (Beder, 2000).
swelling middle classes (Chan and Cui, 2004). Social People now tend to identify with the lifestyle they can
progress and economic development, however, have achieve through work rather than the work itself. In
led to the accusation that contemporary market- fact, one could argue that consumerism has replaced
ing practice contributes to a consumerist or materi- the work ethic altogether (Ho, 2001). Therefore,
alistic society. A consumerist society is defined as marketing scholars need to investigate if consumerism
one directed largely by the accumulation and con- is indeed fueled by the lowering work ethic of society.
sumption of material goods (O’Shaughnessy and Deterioration of the work ethic can be disastrous
O’Shaughnessy, 2002). The underlying connotation for societies. Societal commitment to hard work
is that such consumerist societies are too much about itself is often associated with economic development
themselves and not enough about others. Abela and competitiveness (Kraar, 1991). The work ethic
(2006) also acknowledges this innate tendency in seems to have originated with the Protestant era,
2. 568 Monle Lee et al.
although the absolute need to do one’s duty was has received considerable research attention.
well-founded in ancient religious systems like Hin- McHoskey (1994) proposed that the PWE was not
duism. Modern Protestant work ethic (PWE) studies unidimensional but in fact had four work ethic
have focused on the Protestants’ emphasis on hard dimensions: success, asceticism, hard work and anti-
work and obedience. Most people had to work leisure. However, the dimension of success is more of
hard because the alternative was to starve (Barbash, a perceived consequence of work ethic, most items of
1983). Advancement in psychological techniques PWE load onto only two dimensions (13 out of 19
and studies, and the ascent of an affluent society gave items of PWE), the dimensions are fairly correlated
rise to a contemporary work ethic (CWE). People with many low loadings, and these dimensions
began demanding greater responsiveness from their have not been tested by confirmatory factor analysis.
organizations and seeking personal growth and ful- Advancements in psychological techniques and stud-
fillment beyond economic needs (Ali et al., 1995). ies and the ascent of affluence in society gave rise to a
Barbash (1983) and Zuboff (1983) asserted that contemporary type of work ethic (CWE; Ali, 1988).
modern society shifted from a simple work-or-starve More recently, the debate on the dimensionality of the
choice to one encompassing work or education, work ethic scale continues. Ghorpade et al. (2006)
temporary and part-time jobs, flexible work sched- focused on only two of the four dimensions of the
ules and early retirement. Given this complexity of original PWE: success and hard work, and introduced
work-related values in the modern world, could the the Protestant ethic of hard work (PEHW). They
potential relationship of work ethic to consumption retained the word Protestant in this definition of work
have grown more intense? On the other hand, as ethic because of its historical connection, but con-
time has passed, perhaps such work ethic values no tended that work ethic cut across religious boundaries
longer have any impact on consumption-related and has links with personality and demographics.
beliefs, because people have started taking such Their study also confirmed the observation of several
values in their stride, and the negative connotations other studies (e.g., Cherrington, 1980; Weber, 1958)
of consumerism may have subsided. that there was a positive correlation between the
This study is concerned with a cross-cultural PEHW and individualism. Related work ethic
comparison of the relationship between individual constructs in the Islamic world have been created
values and consumerism-related beliefs. Given the that are also significantly correlated with individual-
varying values (e.g., the USA, a low-context culture, ism (Ali, 1988). However, these different work ethic
versus Taiwan, a high-context culture) and the dif- scales are relevant to the cultures that these papers
ferent economic conditions prevailing in different explored, which prevents their applicability to
countries, it seems likely that differences exist in other cultures. In this study, we try to subsume
relationships between individual values and consum- all these scales into one measure of global
erism-related beliefs. Therefore, the main objectives work ethic that we hope will apply across multiple
of this study are to: (1) design suitable measures of cultures.
global work ethic and consumerism beliefs, (2) The relationship between work ethic and con-
develop a structural equation model that links indi- sumerism has been well known. Weber (1958) first
viduals’ values to their consumption-related beliefs, proposed a causal relationship between the Protes-
(3) determine whether American and Taiwanese tant ethic and the development of capitalism in
consumers exhibit different levels of work ethic and Western society. Consumerism was fired up in the
consumerism, and (4) explore whether relationships west when people demanded greater responsiveness
of individual values to consumerism are different from their organizations and when they sought
between Taiwanese and Americans. personal growth and fulfillment beyond simple
economic needs in return for their hard work (Ali
et al., 1995). We can conclude that since work ethic
Literature review and individualism both seem to be related to con-
sumerism, it is important to investigate how they
Work ethic is the belief that work is desirable and influence consumerism in the presence of the other.
rewarding in its own right (Weber, 1958). The PWE This is one main objective of this paper.
3. Does the Individualist Consume More? 569
A strong work ethic is a characteristic of indi- professional life than their personal life (Eastman
vidualistic people (Ali, 1988). As the individualistic et al., 1996). However, when only the ‘actively
person bases decisions more on individual initiative, benefitting from illegal behaviors’ dimension of the
achievement and self-orientation (Hofstede, 1983), consumer ethics scale (Muncy and Vitell, 1992) was
higher individualism should lead to a stronger work considered, these insurance professionals were shown
ethic. While individualism in the USA has been to have poorer professional ethics than consumer
linked to materialism (Micken, 1995), work ethic ethics. Note that this is a one-industry study focusing
has not been related to consumerism. Individualists only on the levels of personal and professional ethics
show less concern for their in-group members and in the insurance industry. It did not measure the
stay more distant from their in-groups than collec- work ethic of the insurance professional nor did it
tivists who receive quantitatively and qualitatively provide the correlation between professional and
better support than the individualists (Triandis et al., personal ethics.
1988). Thus, individualists will have to fend more A recent survey of ethics in the workplace con-
for themselves without much dependence on other cluded that work-life balance is strongly related to
group members compared to the collectivists. This ethical behavior in the workplace (Deloitte and
should imply a positive relationship between indi- Touche, 2007). Those employees who were most
vidualists and consumerism. dissatisfied due to an imbalanced work load and
However, we propose in this paper that there is personal life were most apt to feel workplace pressure
another relationship between individualism and and would hence demonstrate more unethical
consumerism that shows how the need for being behavior in the workplace (Angelidis and Ibrahim,
materialistic can be tempered by the individualist’s 2004; Ferrell and Gresham, 1985). Given the same
ethical values. Specifically, we suggest that the higher work, persons who have a stronger work ethic can be
work ethic of individualists should lead to higher expected to be less pressured and dissatisfied, and
consumer ethics, which in turn should negatively should demonstrate fewer unethical behaviors than
influence their consumerism. Thus, individualism those with a weaker work ethic. Little empirical re-
will both negatively influence consumerism by search that directly relates work ethic and consumer
enhancing a person’s ethics and positively influence ethics was found, but some articles have indirectly
consumerism by satisfying a person’s self-reliance. hinted at this relationship. For example, research has
It is well-known that ethical climate in the work- suggested that people do have worse overall consumer
place is predictive of workplace behaviors (Babin ethics than professional ethics (Eastman et al., 1996).
et al., 2000; Izraeli, 1988; Myers and Myers, 1974; Moral qualities of a person include being dependable
Wimbush and Shepard, 1994). However, such (hardworking, reliable and responsible), which is re-
research assumes that workplace ethical climate is lated to the integrity of the individual, one of the key
created by workplace factors like organizational pillars of good character (Schlenker, 2008). Two
structures and policies, and especially by peer items of the integrity scale used in this paper seem to
behaviors. Few seem to have focused on how much measure the work ethic of an individual. (‘It is
individual values play a role in cultivating such an important to fulfill one’s obligations at all times even
ethical work climate. Moreover, there is little when nobody will know if one doesn’t’ and ‘No
empirical evidence that individual values like work matter how much money one makes, life is unsatis-
ethic affect anything beyond the workplace, espe- factory without a strong sense of duty and character.’)
cially in the marketplace. Considering that market- Hence, integrity seems to be related to work ethic.
place ethical behavior is a key component of overall Moreover, integrity may lead to more ethical
ethical behavior, such a gap is surprising. behaviors (like helping others and volunteering) and
Some past researchers have presented a conceptual fewer unethical ones (like lying, stealing, cheating,
model and have called for empirical investigation and broken promises, fraud and infidelity) because persons
future research into how ethical behaviors may be who lack integrity may rationalize away their
explained (Wimbush and Shepard, 1994). Others unethical behaviors to enhance their self-gratification
have found that insurance sector employees were (Schlenker, 2008). Based on the relatedness of
‘overall’ more likely to behave ethically in their integrity and work ethic, we propose that lack of
4. 570 Monle Lee et al.
work ethic and unethical behaviors may also be re- part of the puritanical beliefs of western society. The
lated. Other recent research has found that the more a asceticism based in puritanical religion may make a
person is motivated to enhance their own self-interest person resist material pleasures as well (Dyck and
over that of others, the more unethical they will be Schroeder, 2005; Muncy and Eastman, 1998).
(Steenhaut and van Kenhove, 2006). As defined by Consequently, consumer ethicality may make con-
these researchers, net self-enhancement (based on an sumers less supportive of consumerism.
individual’s residual value after removing values like But is consumerism always bad? And do con-
benevolence and universalism from the values of sumers always consider this to be so? On the one
seeking power and achievement) has shades of indi- hand, consumerism lets us express our personality,
vidualism, work ethic and materialism in it. Since net interests, and activities and is a natural characteristic
self-enhancement has a negative relationship with of a free democratic wealthy society (O’Shaughnessy
consumer ethicality, we need to deconstruct how and O’Shaughnessy, 2002). Branded products are
each of these components of net self-enhancement essential to forging one’s self-identity and to differ-
affects consumer ethicality. Given this literature entiate oneself in the world, and offer the deepest
backdrop, we argue that people who have a poor insight into meanings of life (Fournier, 1998). On
work ethic will resort more to unethical work prac- the other hand, consumerism has contributed to the
tices and will carry home or to the market much of indebtedness of American society, and ‘keeping up
this unethicality. In this paper, we propose that a with the Joneses’ has heavily indebted many
person’s work ethic positively influences her/his American families (Himes, 2007). Consumerism has
consumer ethicality. been indicted in causing harm to the physical (e.g.,
Cultures differ vastly in their consumer ethicality, smoking and obesity) and mental (e.g., addiction and
which is defined in many ways (Al-Khatib et al., violence) well-being of children and youth (Abela,
1997). For our purposes, we use the definition of 2006; Kramer, 2006). Thus, different viewpoints
consumer ethicality as the degree of fairness in the about whether consumerism benefits society exist
shopping behaviors of an individual in the market- (Himes, 2007; O’Shaughnessy and O’Shaughnessy,
place. Heretofore, very little research has linked 2002). However, those who partake of consumerism
consumer ethicality to consumerism, but we expect to a greater degree will more likely support the view
a significant but negative relationship between the that consumerism benefits society since they are
two, i.e., the more ethical the person is in the enjoying the aforesaid benefits of consumerism
marketplace, the less consumerist one will be. While (O’Shaughnessy and O’Shaughnessy, 2002). Those
an indication of this negative relationship between who are more critical of consumerism are unlikely to
consumer ethicality and materialism was detected by think that it benefits society (Abela, 2006; Kramer,
Muncy and Eastman (1998), they were not able to 2006). Higher consumerism is thus hypothesized to
predict the directionality of this relationship. We, on lead to a stronger belief that consumerism benefits
the other hand, hypothesize that consumer ethicality society.
will mediate the relationship between work ethic The following theoretical model is hypothesized
and consumerism. This is because, as mentioned based on our literature review. As in most descrip-
before, an individual’s work ethic may lead to more tive research, there is no attempt to prove causality
ethical behaviors. The Protestant work ethic was just here (Figure 1).
(+) (+) (-) (+)
Individualism Work Consumer Consumerism Benefits
Ethic Ethicality Society
(+)
Figure 1. Hypothesized model.
5. Does the Individualist Consume More? 571
Taiwan versus the USA: past research has shown sample was in age category 30–39 years, 12% was in
that Taiwan is a collectivist culture, whereas the USA age category 40–49 years, with the rest of the sample
is an individualist culture (Hofstede, 1983). On the being in the age category 50 years and over. Sixty-
other hand, the USA is also described as a workaholic nine percent of the sample was single, and 29% was
society with considerably less time for leisure (versus married. Seventeen percent of the sample was
the French, for example; Schor, 1991). The USA is employed or had been employed in public or state-
also a more ethical society than Taiwan, as rankings owned businesses, 48% in private businesses and 12%
from Transparency International (2008) show. in mixed sectors. Twenty-eight percent of the
Americans are often indicted for having a consum- sample classified themselves as managers in their
erist culture and for being interested in material current or last jobs, while 45% worked or had
trappings of daily life (Lerman and Maxwell, 2006). worked in a non-supervisory capacity. The Ameri-
The USA (USD 46,946) is a high per capita gross can sample was 87% Caucasian, 4% Hispanic and 4%
domestic product country compared to Taiwan African–American.
(USD 17,277; Economist Intelligence Unit Country Graduate business students were targeted because
Profiles, 2009a, b). Additionally, the USA is a net they are a commonly used proxy for business people
importing country, while Taiwan is a net exporting and have been found in prior research to share a high
country (Central Intelligence Agency Factbook, degree of congruence with business professionals
2009a, b). The USA also has a poorer savings rate (Peppas, 2002). Business students are likely to be in
than Taiwan (World Bank, 2005). All this makes us positions of power to lead businesses and influence
conclude that per capita consumption in the USA far the ethics of their juniors (Ferrell and Gresham,
exceeds that of Taiwan. 1985). As such, their behaviors are mirrored by a
In summary, it appears that the USA is a more wide section of the societal workforce. Their work
individualist, higher work ethic, higher consumer ethic is of economic consequence to society as the
ethic and higher consumerism country than Taiwan. productivity of the western world has shown. Busi-
While individualism may enhance consumerism, our ness students have a large and growing presence on
model predicts that consumer ethics will play college campuses (Clarke, 2008). Given the many
the countervailing role of reducing consumerism. corporate scandals in recent years and the widespread
We expect stronger links among individualism, international publicity they have received, many
work ethic, consumer ethicality, consumerism and universities have refocused their attention on
consumption benefits society in the USA than in including ethics as separate required courses for their
Taiwan. business majors (Glanzer and Ream, 2007). Many
business professors have individually also integrated
several aspects of ethics into their course curricula.
Methodology Graduate business classes are among the most diverse
as far as the backgrounds of the students taking them
Sampling procedure (De Onzono and Carmona, 2007). In general,
graduate business programs do not give too much
The questionnaire was administered to business weight to possessing a business undergraduate major,
students attending the business schools at two Tai- probably because having an undergraduate business
wanese universities and two Midwestern universi- degree is not a good predictor of MBA success
ties. Questionnaires were administered by graduate (Braunstein, 2006; Fish and Wilson, 2009). Schools
assistants and participating instructors during gradu- of business assiduously try to diversify their student
ate business classes and took about 15 min to com- populations [for example, in terms of undergraduate
plete. Four hundred ninety-four questionnaires were majors (Nelson and Monson, 2008) and international
collected, including 248 Taiwanese, 196 American representation (AACSB Report, 1997)].
and 50 other nationalities. Research conclusions have been mixed on
This convenience sample was diverse in many whether business students differ substantially from
respects: 53% of the sample was female. 64% of the non-business ones, when used in a research sample.
sample was in age category 18–29 years, 19% of the In a Finnish sample, for example, out of 12 value
6. 572 Monle Lee et al.
types, researchers found that business students gave Global work ethic
more importance to the values of power and Multiple items of work ethics were gathered from
achievement, social science students gave more the Protestant work ethic scale (Mirels and Garrett,
importance to universalism, whereas technology 1971), Islamic work ethic scale (Ali, 1988) and the
students found security values more important contemporary work ethic scale (Pesek et al., 2006) to
(Myyry and Helkama, 2001). Even these observed develop a generalized work ethic scale that would be
differences in values were rendered difficult to relevant across cultures.
interpret because of a gender interaction with stu-
dent type. In another study of theories about how
Consumer ethicality
stereotypes influence perceptions of race, business
Only one of the four dimensions of consumer ethics
and psychology majors were found to show no
used by past researchers was included in our
difference in their judgments of job candidates
instrument (Al-Khatib et al., 1997; Mitchell and
(Jussim et al., 1987). One recent paper that investi-
Chan, 2002; Muncy and Vitell, 1992; Steenhaut and
gated cross-cultural differences regarding work and
van Kenhove, 2006). The dimensions of consumer
life-related values between France and French-
ethics were based on questions like: Who were the
Canada found the use of business students to be an
perpetrator and victims of the behavior? What
advantage (Zhang et al., 2007). Others who have
extent of damage did unethical behavior cause?
used correlational data have pointed out that there
Was the unethical behavior actively (directly) caused
was no reason to doubt that such relationships
or passively (indirectly) caused by the consumer?
observed in business students would not be appli-
People are more likely to be accepting of illegality if
cable to the general population, even if there were
they are not directly responsible for it but are indi-
differences in the levels of these constructs between
rectly benefitted by it. People are more tolerant of
the two populations (Muncy and Eastman, 1998).
illegalities against a faceless organization rather than
Our sample is a limited representation of the
an individual. People are more tolerant of unethical
broader society, given that most students were
behavior where they deem the loss to the victim to
studying business and had come from the business
be trivial or where their behavior is considered
world or were planning to join it. However, in light
‘normal.’ We chose only the part of consumer ethics
of the foregoing discussion on the ambivalent re-
that focused on active ethical behaviors in the mar-
search about the differences between business and
ketplace that were also illegal. This dimension
non-business students, we feel that our sample is
measures the part of consumer ethics that is actively
adequate in its use as a proxy for the population in
caused by the consumer itself and would likely be
these countries to study work ethic and consumer-
related to behaviors which involve the active pur-
ism relationships.
chase, collection and consumption of goods. We
reasoned that persons who were more accepting of
such overt unethicality were also the ones who were
Survey instrument
more likely to be accepting of consumerism. To
reduce complexity of the model, we chose only this
A back translation method to translate the ques-
dimension to be the most likely predictor of the
tionnaire to Mandarin Chinese was employed for the
overt behavior of consumerism. In addition, this
data collected in Taiwan. In the USA, all national-
dimension also discriminated the most between
ities were given the English questionnaire. All items
American and Egyptian consumers (Al-Khatib et al.,
in the survey instruments used 5-point Likert scales
1997).
ranging from 1 (‘‘strongly disagree’’) to 5 (‘‘strongly
Higher agreement scores on the consumer ethics
agree’’).
scale items would have indicated more acceptances
of unethical practices. Hence, all items of this
Individualism construct were reversed to ensure that higher
A 7-item scale from Ali (1988) was used to measure scores indicated a higher degree of consumer eth-
individualism. icality.
7. Does the Individualist Consume More? 573
Consumerism and Consumption Benefits Society light of the fact that we also have non-normal data
Ali’s (2006) research on consumerism has assembled (for which a larger sample size is recommended), our
multiple items of interest with respect to many larger sample size seems realistic and sufficient for
consumption-related behaviors. We used a set of reliably estimating the parameters of our hypothe-
these items to develop two constructs. The first sized model using the robust maximum likelihood
construct of consumerism has been defined as the method. However, for the two-country compari-
excessive accumulation and consumption of goods sons, our sample is at best a moderate-sized sample,
and services. The second construct is defined as the since the number of parameters to be estimated is
belief by individuals that the more goods and ser- almost double that of the hypothesized model.
vices purchased and consumed, the better off society In the interests of brevity, we present in Table II
will be. the results of testing the fit of the five models
identified below. EQS 6.1 was used to analyze the
data.
Analysis and results
Model 1: This was the basic measurement model
An initial exploratory factor analysis on all data re- with all indicators linked to their latent con-
vealed suitable items for the various scales. Confir- structs but with no paths connecting the con-
matory factor analysis identified a final set of items structs themselves.
that were then used in the structural equation model Model 2: This was the hypothesized model as
that included paths between the relevant constructs per Figure 1.
as hypothesized earlier. Final CFA results are shown Model 3: The final best fit model for the global
in Table I. population.
For the CFA of the five factors, model fit was Model 4: Two-group SEM for the Taiwan and
good (NFI > 0.95; CFI > 0.95; RMSEA was from the USA subjects only. Note that about 50 sub-
0 to 0.09). With the exception of correlating the jects belonged to countries other than Taiwan
errors of two highly correlated items of work ethic and the USA.
(‘Any person who is able…’ and ‘If one works hard Model 5: Verifying that the factor loadings and
enough…’), all other CFA were one-level standard path weights for Taiwan and the USA are the
latent factor models. The high residual correlation of same.
these two items is self-evident from their close
descriptions. To prevent them from affecting the fit
of the structural model, it was decided to leave their Discussion
errors correlated for further analysis. Since the
multivariate kurtosis in many of the CFA indicated While individualism does affect consumerism, it
non-normal data (Mardia’s normalized multivariate does not do so simply. On the one hand, the
kurtosis >3), all indicators and indices reported in necessities of being individualistic increase the like-
this paper were estimated using the robust maximum lihood of such a person needing more and con-
likelihood method. Our sample of 494 exceeds the suming more. On the other hand, the individualist
recommended large sample size of 200 by a good also has higher work ethics, and ethics seem to
margin and manages to be within a realistic range of reduce the tendency to consume. This second route
5–10 subjects per estimated parameter of the SEM of individualism affecting consumerism negatively
(Kline, 2004, p. 110). Others have recommended a was hitherto unexplored and unverified. Our paper
larger sample size of 200–400 subjects when using provides a model for understanding how ethics
maximum likelihood estimation (Malhotra, 2010, mediates the affect of individualism on consumption.
p. 699). There is a problem in using too large a From the global model, it is clear that ethics
sample size in maximum likelihood estimation be- mediate the individualism to consumerism relation-
cause this may make the test unnecessarily sensitive ship. It is also clear that individualism directly affects
and might falsely indicate poor fit in the goodness of consumerism. Our results for the first time specify
fit indicators (Hair et al., 2010, p. 643). However, in the crucial mechanism by which individualism re-
8. TABLE I
Results of CFA on the latent variables 574
Factors and their robust goodness-of-fit Variables Standardized loading t-Value
indicators
Individualism One should be proud of one’s own achievements and accomplishments 0.516 8.800
Satorra–Bentler scaled v2 = 3.0628, df = 5; Individual incentives and rewards should be given priority over group 0.398 6.381
p-value = 0.69030 incentives and rewards
NFI = 0.976; CFI = 1.000; One’s loyalty should be first and foremost to one’s self and one’s family 0.379 5.794
RMSEA = 0.000
A person is the best judge of one’s own best interests 0.535 8.837
To be successful, one has to rely on one’s self 0.339 5.108
Work ethic Dedication to work is a virtue 0.566 7.887
Good work benefits both one’s self and others 0.721 9.247
Satorra–Bentler scaled v2 = 11.221, df = 8; One should carry work out to the best of one’s ability 0.704 9.864
p-value = 0.18943
NFI = 0.960; CFI = 0.998; One should constantly work hard to meet responsibilities 0.542 12.746
RMSEA = 0.029
Any person who is able and willing to work hard has a good chance of 0.458 7.718
succeeding
If one works hard enough one is likely to make a good life for himself/ 0.459 8.436
Monle Lee et al.
herself
Consumer ethicality Changing price tags on merchandise in a retail store is ok 0.664 15.616
Satorra–Bentler scaled v2 = 10.9409, df = 5; Drinking a can of soda in a supermarket without paying for it is ok 0.708 11.488
p-value = 0.05256
NFI = 0.979; CFI = 0.988; Reporting a lost item as ‘‘stolen’’ to an insurance company in order to 0.654 15.985
RMSEA = 0.049 collect the money is ok
Giving misleading price information to a clerk for an unpriced item is ok 0.820 19.084
Returning damaged merchandise when the damage is your own fault is 0.707 15.346
ok
Consumerism I fully express my identity through consumption 0.805 18.781
Acquisition of goods that are admired by others is a testimony of my 0.732 16.680
unique personality
Satorra–Bentler scaled v2 = 5.1519, df = 2; An exposure to brand advertisement almost always leaves an immediate 0.619 12.132
p-value = 0.07608 impression upon me
NFI = 0.987; CFI = 0.992; I find shopping as a useful means to minimize exposure to social and 0.513 9.868
RMSEA = 0.057 political problems
9. Does the Individualist Consume More? 575
t-Value duces consumerism. Individualism increases a per-
9.962
11.185
14.945
12.023
son’s work ethic, which in turn increases the ethical
behavior of the person in the marketplace. This
ethical behavior in turn is strongly and negatively
Standardized loading
related to consumerism. This critical check provided
by ethics on an individualist’s tendency to consume
0.491
0.594
0.800
0.627
is being demonstrated for the first time. This also
explains why consumption has gone awry in indi-
vidualist countries like the USA. Ethical standards
have become lax, leading to the weakening of
checks on consumption. This is evident in the sub-
prime loans and excessive consumption of credit in
Consumption of leisure items contributes positively to the prosperity of
In today’s world, personal growth is inherently linked to market growth
Increasing the consumption of goods is closely and positively linked to
the USA. Now that ethics is making a comeback, we
may find that consumption is reducing significantly.
Consuming materials is an exercise of my rights to be somebody
For example, in his inaugural speech, President
Obama (2009) made a call to curb wasteful and
excessive consumption in America by returning to
the values of honesty, fairness and hard work. Pre-
sumably, such a call to ethics will enhance the
negative influence of individualism on consumerism
and bring balance to Americans’ tendency to con-
sume.
continued
TABLE I
Differences between the Taiwan and the USA models
Our results also show that our hypothesized model
fits the two-nation data very well. Based on chi-
societal prosperity
square differences between the best two-country
model (Figures 2 and 3; last row of Model 4 in
Table II) and the constrained measurement model
Variables
(first row of Model 5 in Table II), we see no sig-
society
nificant differences. Results of factor loadings in the
first row of Model 5 of Table II indicate that there
are no significant differences in construct definitions
Satorra–Bentler scaled v2 = 10.2307, df = 2;
or interpretations across the two countries (all uni-
variate tests on the equality of factor loadings across
Factors and their robust goodness-of-fit
the two countries were NS, p > 0.05). This implies
that our measurement model is invariant across the
two countries.
NFI = 0.966; CFI = 0.972;
Based on the chi-square differences between the
Consumption benefits society
measurement model (row one of Model 5 in Table II)
and the path constrained model (row two of Model 5
p-value = 0.00600
in Table II), there are significant differences between
RMSEA = 0.092
the two countries. The main difference exists in the
path from work ethic to consumerism benefits society
indicators
(univariate constraint test p < 0.001). This difference
was significant even though it was not significant in
the global model or indeed a hypothesized path.
10. TABLE II
Models tested for fit 576
Models and their robust df Satorra–Bentler scaled v2 p-value CFI RMSEA AIC Modifications suggested
goodness-of-fit indicators
Independence model 276 2,530.629 1,978.659 Run Measurement Model with latent
factors connected to their indicators, but
not to each other
Measurement model 251 787.1481 0.000 0.762 0.067 285.148 LM Test recommended many of the paths
of our hypothesized model
Hypothesized model 246 556.3823 0.000 0.862 0.052 64.382 LM Test and Residuals indicated three
variables may be causing misfit. Drop
variable ‘Dedication to work is a virtue’
from work ethic; ‘Consuming materials is
an exercise of my rights to be somebody’
from Consumption Benefits Society; and
‘Individual incentives and rewards should
be given priority over group incentives
and rewards’ from Individualism
Best fit global model 183 366.8672 0.000 0.909 0.046 0.867 See Figure 2. Perform a two-country
Monle Lee et al.
analysis of only the Taiwan and the USA
data
420 1,923.338 1,083.338 These are the two-nation independence
model indices
Two-country model: 366 530.2259 0.000 0.891 0.046 -201.774 LM test indicates the presence of a work
Taiwan and the USA ethic to consumption benefits society link
for the Taiwanese sample. We add this
link for both groups in the next model
364 489.3743 0.000 0.917 0.040 -238.626 Test factor loadings and path weights
equality
380 503.9579 0.000 0.918 0.039 -256.042 All factor loadings difference tests NS
(p > 0.05)
Testing paths in the Tai- 386 528.3380 0.000 0.905 0.042 -243.662 All paths NS (p > 0.05) except Work
wan versus the USA Ethic to Consumption Benefits Society
models (p = 0.000) and consumerism to con-
sumption benefits society (p = 0.005)
11. Does the Individualist Consume More? 577
(.698) (.570) (-.532) (.158)
Individualism Work Consumer Consumerism Benefits
Ethic Ethicality Society
(.269)
Figure 2. Best-fit model with significant standardized (p < 0.05) path values.
Taiwan (Dashed lines indicate not significant, p > .05)
(. 596)**
(.663) (.495) (-.520) (.195)*
Individualism Work Consumer Consumerism Benefits
Ethic Ethicality Society
(. 099)
The USA (Dashed lines indicate not significant, p > .05)
(. 189)**
(.686) (.652) (-.427) (.423)*
Individualism Work Consumer Consumerism Benefits
Ethic Ethicality Society
(.079)
* p < 0.01
** p < 0.001
Figure 3. Two-country best fit model with standardized (p < 0.05) path values.
Statistically, this may happen when two paths are society on their work ethic than the Americans.
significantly different in a way that the combined Thus, the more work ethic the Taiwanese have, the
slope of the two sets of data leads to more variance or more likely they are to support the belief that con-
lesser effect size. The significant difference between sumption benefits society. On the other hand, the
the standardized path weights (0.596 for Taiwan and Americans seem to be more forthright in expressing
0.189 for the USA) points to just such an effect. their consumerism to consumption benefits society
Theoretically, this implies that besides the effect that link. The more consumerist they are, the more
work ethic has on the belief that consumption ben- strongly they express their support for consumption
efits society indirectly mediated by consumer ethics benefits society. The Taiwanese seem more coy
and consumerism, there is also a significant direct about such open support of consumption-related
positive effect. This direct effect is significantly larger beliefs. They in turn seem to base this support for
in Taiwan than in the USA, while the effect of con- consumption-related beliefs on their work ethic.
sumerism on consumption benefits society is signifi- Also, the path between individualism and con-
cantly lower. sumerism becomes non-significant in each country
It appears that the Taiwanese seem to be basing even though it was significant in the global model
more of their beliefs that consumerism benefits (univariate constraint test p < 0.01, but multivariate
12. 578 Monle Lee et al.
test p < 0.10). Although it may seem like individ- Our sample size consisted of a diverse group of
ualism’s connection to consumerism is tenuous students in graduate business classes. However, they
within each country, we would like to point out that are not representative of the total national popula-
this path is significant in the global model. A more tion. Also, some researchers have recommended that
probable explanation is that the elimination of 50 the sample for two-group research should be twice
other-nation subjects and the splitting of the balance that for one-group models (Hair et al., 2010). Given
of data into the two-country models caused a sample the sample limitations in our research, our research
size effect on the significance of this path. The small results should be replicated using a bigger national
but significant effect size of this path in the global sample.
model (as evidenced by the partial R2 of (0.269)2 = Our model showed good fit in the USA and
0.0723) supports our contention that the reduced Taiwan, but there is no reason to expect the same
sample size may have rendered these paths insignif- will apply globally. Our non-USA and non-Taiwan
icant in the two-countries model. sample was limited to 50 subjects. More research is
With the exception of the above two paths, needed to extend the validity of this model to dif-
Model 5 results support the contention that the ferent countries.
global model is replicated within each country and
that all other paths seem to be equally weighted in
the two countries (all univariate tests of constraints Managerial implications and future research
NS, p > 0.05). Thus, the individualism to work
ethic to consumer ethic to consumerism paths are Recent corporate scandals exposing executive greed,
equivalently supported in each country. This level of boardroom spying tactics, financial manipulations,
congruence is not surprising given that some recent and investment bank and mutual fund favoritism
research has suggested that younger subjects of less have provoked serious research into ethical values of
individualistic countries like China are significantly individuals (Townsend and Gebhardt, 1997; Svens-
more consumerist than older subjects, ostensibly due son and Wood, 2004). This growing concern for
to their embrace of free market values and rapid ethics research has prompted nations, not-for-profit
western style economic development (Gu et al., organizations, businesses and institutions of higher
2005). Besides this, even if the mean levels of our education to investigate how ethics affects overt
constructs in Taiwan and the USA are different, our consumer behavior. Governments of progressive
models indicate that the constructs are equivalently countries like the USA are seeking to curb exuberant
related in their influence on each other. consumption and living outside their means by cit-
izens. Our paper will inform such nations about the
interplay of their national traits like individualism
Limitations and ethics in curbing such consumption.
Increasing ethics education may be a crucial way
In a cross-cultural context, there is bound to be large to curb consumerism, since clearly, traits like indi-
variability in the understanding of the measurement vidualism are held so dear by many in the USA. Such
instrument items by the members of the different education can also reduce the corruption of the sys-
cultures being studied. While every effort was made tem that is dragging the economy down because
to ensure uniformity of interpretation of items, it is these same individuals take their education into the
possible that some of our items did not load onto their workplace. Cavanagh (1998) contends that manage-
constructs because of difficulty in interpretation. rial instances of unethical behavior illustrate the need
While we used only one dimension of consumer for employees with good character, along with a
ethics for the reasons stated above, it is possible that sensitive and informed conscience, to remedy such
the other three dimensions of this scale may add situations. Their attitudes toward business codes of
more to our model (Muncy and Vitell, 1992). ethics become crucial to business operations and
However, their inclusion would increase the sample marketing practices.
size needed for estimating the parameters of this Since our research shows a strong relationship
more complex model. between consumer ethics and work ethic, it stands to
13. Does the Individualist Consume More? 579
reason that hiring employees with higher consumer Cavanagh, G. R.: 1998, American Business Values with
ethics may also be bringing higher work ethic International Perspectives (Prentice-Hall, Upper Saddle
individuals to the firm. Future research is needed to River, NJ).
confirm this and also to confirm if this is a beneficial Central Intelligence Agency: 2009a, ‘The World Fact-
thing for organizations. book: Taiwan’, https://www.cia.gov/library/publica
tions/the-world-factbook/geos/tw.html. Accessed 30
Future research should try to replicate our findings in
July 2009. Retrieved 31 July 2009.
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one. Our sample was limited in its non-US and non- book: USA’, https://www.cia.gov/library/publica
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Toward Marketing in a Transitional Economy: A
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