As multinational companies expand globally and enter foreign markets, ethical conduct
of the officers and employees assume added importance since the very cultural diversity
associated with such expansion may undermine the much shared cultural and ethical values
observable in the mores homogeneous organizations (Mahdavi, 2001). Although understanding
of other cultures and recognition of differences among them will enhance the cross-cultural
communication, it may not be sufficient to provide viable guidelines of proper ethical behavior in
organizations. Thus, concerns about unethical behavior of corporations in other countries, are
manifested in legislations such as The Foreign Corrupt Practices Act of 1977, and the Sarbane-
Oxley Act of 2002. In the academic arena, on the other hand, the culture-based consequentiality
model is developed to explain, among other things, how cultural differences alter the ethical
perception and actions of individuals engaged in making decisions with ethical overtones
(Robertson and Fadil, 1999: 385-392).
Turnen-Red and Woodland (2001:61) stated: