Business's Environmental Responsibility in Taiwan — Moral, Legal or Negotiated

ABSTRACT. This study explores both the negotiating styles and moral reasoning processes of husiness people and governmental officials in Taiwan, so as to provide a footing for
"outsiders" when negotiating with Taiwanese over environmental concerns. Findings imply that Taiwanese husiness people and governmental officials can and will reason hoth at the conventional level and at the postconventional level of moral judgment. But, results of this study also indicate that
Taiwanese negotiating styles do not necessarily match their levels of moral reasoning. With respect to pollution concerns, Taiwanese seem unwillingly to accept responsibility as autonomous individuals. Instead, responsihility is accepted when mandated hy the law.

Introduction
Over the past four decades, Taiwan has undergone an economic transformation which has led to its current position as the world's 12th-largest trader.
Annual per capita income in Taiwan is now the second highest in Asia (Allen, 1990). Foreign exchange reserves stand at $88 billion (Engardio and
Gross, 1992), second highest in the world. Its trade surplus has reached $12 bilhon (Cunningham, 1991)

Peihua Sheng teaches marketing and marketing research at the
American Collegefor the Applied Art, Atlanta Campus. She has taught marketing at the university level in Chinese for several years. Her research interests include business ethics, equity, and international marketing strategy.
Linda Chang is a financial analyst on OTSUKA America. A native of Taiwan, she has an MBA. Her research interests are in the areas of planning and negotiation.
Warren French is a professor of Marketing and the I. W. Cousins
Professor ofBusiness Ethia at the University of Ceorgia. His research interests include business ethics, aging, and international business. His articles have appeared in a variety,of scholarly and practitioner-oriented Journals.

Joumal ofBusiness Ethics 13: 887-897, 1994.
© 1994 Kluwer Academic Publishers. Printed in the Netherlands.

Peihua Sheng
Linda Chang
Warren A. French

with an expected annual growth of over estimated
7%. However, economic success has not come to
Taiwan without cost; serious pollution goes hand in hand with Taiwan's wealth.
While four decades of industrial growth have put a vast array of consumer goods within reach of the island's 20 million people, clean air, clear water and unspoiled countryside have almost vanished. Taipei has one of the highest polludon indexes in the world- 200, while in comparison, a smoggy day in
Los Angeles rates less than 100. Engholm (1991), measuring the "livability" of major Asian cities, rated
Taipei worst in congestion/pollution. More than 60 miles of the island's rivers are officially reckoned to be heavily polluted. Less than 5% of the population is served by a sewage system (Anonymous, 1989).
Facing choking pollution, dwindling space and a populace up in arms over fouled air and water,
Taiwan's business community is being pressured to clean up the by-products of its huge industrialization program (Rubin et al. 1990). An active grassroots environmental movement has emerged, and in several incidents local residents have barricaded factories, forcing their owners to pay compensation for damage that the residents say has been caused by pollution. In addition, a number of industrial development projects have been canceled in the planning stage or moved offshore due to local resistance
(Allen, 1990).
The government's answer to the growing environmental tide has been to promise money and regulation. The Taiwanese government has enacted
13 new environmental laws, beefed up five existing ones, and proposed or amended more than 40 sets of pollution control regulations. What does this mean to multinational firms setting up operations in Taiwan? What responsibilities will be projected onto them regarding pollution control? If foreign firms

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