Deciding on equity or parity: a test of situational,cultural, and individual factors

Previous cross-cultural research in distributive justice has neglected the situational and individual determinants of allocation preferences. This study incorporated the cultural value of Individualism–Collectivism (I–C), situational demands of task interdependence and system goals, and individual achievement motivation to examine their effects on the allocation decisions made by U.S. Americans and Hong Kong Chinese. It was found that the Americans and the Chinese in the study responded to situational demands in a similar fashion, i.e. equity was preferred under circumstances of low interdependence and the productivity goal whereas parity was preferred under circumstances of high interdependence and the solidarity goal. It was also found that in the U.S., I–C had no significant relation with the allocation differential (between the bonus amounts for the highest and the lowest performer), and the achievement motivation interacts with levels of interdependence and with goal priorities; in Hong Kong, both I–C and the achievement motivation related negatively to the allocation differential. Research and managerial implications for international management were discussed. © 1998 John Wiley & Sons, Ltd.