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An investigation of moral values and the ethical content of the corporate culture: taiwanese versus u.s. sales people

An Investigation of Moral Values and the Ethical Content ABSTRACT. An empirical study using two ethics- Ethical behavior in business is a complex inter- related and three sales force outcome variables was action of organizational factors, personality conducted in Taiwan and compared to an existing characteristics, and societal information cues U.S. sample. Across the two national cultures, indi- which have a positive effect on long-term vidual perceptions of corporate ethics appears to be profitability. The ethical decision-making in a more direct determinant of organizational commit- organizations is a function of individual factors ment than individual moral values. Differences (Akaah and Riordan, 1989), such as one’s moral between the two national cultures were found inethics perception as it relates to moral values, job values (Boyce and Jensen, 1978; Reidenbach and satisfaction, and turnover intention. Explanations for Robin, 1988) and components of organizational culture (Hunt and Vitell, 1986; Ferrell et al.,1989; Jones, 1991; Hunt and Vasquez-Parraga, KEY WORDS: commitment, corporate culture, 1993; Weber, 1996). Few empirical studies have ethics, sales management, satisfaction, Taiwan, related ethics to sales force outcomes (Futrell and Sager, 1982; Apasu, 1986; 1987) with only oneusing a foreign culture ( Japan) (Apasu et al.,1987). In the case of Apasu et al., personal valueswere defined in terms of a desire for a comfort-able or exciting life, peace, beauty, freedom, love,wisdom, etc. With the exception of “honesty,”none of the values studied were involved withethics. The first work that successfully associated Dr. Neil Herndon has lived and taught in Hong Kong for over five years. His work in ethics has appeared in the ethical values with commitment was Hunt et al.
Journal of Business Ethics, the Journal of (1989). In terms of corporate ethical values, International Consumer Marketing, the Asia Pacific organizational commitment, and job character- Journal of Management, and Research in istics, Hunt et al. found that organizational commitment was strongly related to corporate Dr. John Paul Fraedrich has published in journals such as ethical values. Several models have incorporated the Journal of Business Ethics, the Journal of the personal beliefs into organizational performance Academy of Marketing Science, and the Journal of with satisfaction as a key dependent variable Business Research. He has co-authored several books (Ferrell and Gresham, 1985; Hunt et al., 1989).
on the topic of ethics: Business Ethics: Ethical Much of the research within this area has been Decision Making and Cases, Houghton-Mifflin; and done on U.S. corporations and samples (Angle Integrity Management, University of Tampa Press. and Perry, 1981; Morris and Sherman, 1981; Dr. Quey-Jen Yeh, much of her work concerns values and ethics and has been published in leading Taiwanese Abelson, 1983; Bonoma, 1984; Barney, 1986; Hunt et al., 1989). Hence a gap has appeared Journal of Business Ethics 30: 73–85, 2001.
2001 Kluwer Academic Publishers. Printed in the Netherlands.
concerning the generalizability of findings into When such ethical values are shared within an the international marketplace. It is the purpose organization, success can be enhanced (Keeley, of this study to begin to fill this gap.
1983; Badovick and Beatty, 1987; Hunt et al., The focus of this research is on how organi- 1989). Positive outcomes of an ethical value zational and individual factors affect sales force structure may be increased organizational com- commitment, satisfaction, and turnover in sales mitment and job satisfaction, and decreased organizations in a cross-cultural setting. It deter- mines if there are cross-cultural differences in the Organizational commitment is a “psycholog- ethics-related variables individual moral values ical bond” to an organization which influences and perceived ethical content of the corporate individuals to act in ways consistent with the culture and then considers if these differences organization’s interests (Porter et al., 1974) and influence the sales force outcome variables of has been characterized by such concepts as loyalty organizational commitment, job satisfaction, and (Price and Mueller, 1986), and behavioral and attitudinal commitment (DeCotiis and Summers, A brief literature review explains individual 1987). When employees are committed to an moral values, corporate ethical values, organiza- organization they tend to reenforce the existing tional commitment, job satisfaction, and turnover value structure around them. Haughey (1992) intention. Propositions are developed relative to concludes that there is a relationship between the literature and the methodology and analysis loyalty, commitment, and the ethical character of used for the Taiwanese sample is discussed.
Finally, results are discussed and suggestions are Another outcome of an ethical organization made for researchers and practitioners.
is job satisfaction which is defined as the degreeto which employees have a positive affectiveorientation toward employment by the organi- Literature review and propositions
zation (Price and Mueller, 1986; Brown andPeterson, 1993). This construct appears to Individual moral values are evolved perspectives involve all job characteristics that sales people which can include such concepts as relativism, “. . . find rewarding, fulfilling, and satisfying, or egoism, justice, deontology, and utilitarianism.
frustrating and unsatisfying” (Churchill et al., There are many ways in which to measure such 1990, p. 343). The organization’s psychological a construct (Kohlberg, 1976; Boyce and Jensen, climate appears to be related to job satisfaction for sales managers (Vitell and Davis, 1990; Swift 1988); however, all are grounded in the premise and Campbell, 1998) with trust leading to of “right making”. It can be self-interest for the increased job satisfaction for sales people as well egoist, interest satisfaction for the utilitarian, or the value of natural laws for the natural law Also, when organizations are ethical it is theorist (Harris, 1986). The age and gender of assumed that turnover – operationalized as the sales managers has been associated with differ- intention to cease paid employment in an orga- ences in personal moral philosophies, yet these nization for the purposes of this study (Bluedorn, philosophies do not differ significantly from those 1982; Johnston et al., 1990) – will decrease.
of other marketers (Bass et al., 1998). For Historically, business has been concerned with example, women appear to be more likely than this construct along with its causes and effects men to perceive business practices as unethical; (Bluedorn, 1982; Futrell and Parasuraman, 1984; however, this gender difference declines with work experience (Franke et al., 1997).
example, Apasu (1986) found that individual Corporate ethical values is a central dimension value congruence with organizational values is of corporate culture which underlies specific negatively associated with turnover. Hence, it values that guide product and service quality, would appear that sales people who do not agree advertising content, and treatment of customers.
with the ethical content of a corporate culture An Investigation of Moral Values and the Ethical Content of the Corporate Culture do not fit in and so are more likely to leave (DeGeorge, 1990). Increased intentions to leave an organization have been associated with an increased potential for illegal acts, which in turn encourages others to learn inappropriate behavior (Ferrell and Gresham, 1985; Ferrell et al., 1989).
between commitment, satisfaction, and turnover.
Turnover intentions is negatively related Job satisfaction and organizational commitment are highly correlated (Brown and Peterson, Turnover intentions is negatively related 1993). Organizational commitment is positively correlated to job satisfaction (Dubinsky andSkinner, 1984) and negatively related to turnover their level of individual moral values will Summers, 1987; Sager and Johnston, 1989).
DeCotiis and Summers (1987) also concluded that both job satisfaction and commitment areequally capable of predicting turnover. Mobley The relationships presented as research propo- (1982) however, indicated that, in general, sitions in P4, P5, and P6 concerning organiza-
organizational commitment is a better predictor tional commitment, job satisfaction, and turnover of turnover than satisfaction. The work of intentions are frequently found in sales manage- Johnston et al. (1990) reveals that organizational ment studies (Sager et al., 1989). They are commitment does play a key role in turnover included here primarily to confirm if they will decisions. While the link between job satisfac- hold for the Taiwanese sample as they do for the tion and turnover is indirect, it appears as if it is being mediated by organizational commitment.
conclude that organizational commitment and Methodology and analysis
job satisfaction are positively correlated with eachother and that they both are negatively related Data was collected from full-time sales personnel across a national Taiwanese chain of retail stores becomes: Does the perceived ethics of the cor- and compared to Herndon’s 1991 study of a porate culture affect these constructs differently comparable national U.S. chain of retail stores.
Only full-time sales people and sales managers From the discussion, the propositions to be were surveyed to avoid a possible confound on full-time versus part-time employment. Alsousing a sample from one functional area (i.e., sales) within a single organization reduces the influence of other corporate subcultures on the hypothesized relationships in this study. A stratified sampling method was used to determine measure of organizational commitment.
the number and location of stores in eachdivision from which the sample was to be drawn.
For each of the selected stores an envelope con- taining an instruction letter and questionnaire booklets was mailed. Within each questionnaire there was a statement that explained the general purpose of the research, voluntary nature of participation, and assured confidentiality.
The measurement instrument used was a self- 18 items, nine of which were reverse scored.
administered questionnaire in the Chinese Each item was followed by a 5-point, Likert-type language consisting of five measures, plus a demographic questionnaire. To ensure accuracy and generalizability, translation-back translation modified Staying or Leaving Index (Bluedorn, 1982; Johnston et al., 1990) and consists of 4 Individual moral values were measured using items, each followed by a 7-point, Likert-type the Reidenbach and Robin scale (1988) and scale. Even though its coefficient alpha was 0.67, consisted of three scenarios, each of which was this is within the minimum reliable bounds for followed by eight, 7-point semantic differential exploratory research (Cosenza, 1993).
items anchored by bi-polar adjectives or phrases.
Of the 630 questionnaires distributed, 143 Of the eight items, two measured justice, three (22.7%) usable questionnaires were returned with relativism, and the rest deontology. This research a distribution of 92 (64.3%) from sales people and made no assumptions about the desirability or 51 (35.7%) from sales managers. The typical appropriateness of a given moral framework. A respondent was a single (88%) female (62%).
high mean score for all 24 items in the three Average years of employment with the firm scenarios presented a high level of individual was 2.4 (males) and 2.2 (females) respectively.
moral values. Cronbach’s alpha was used to assess The education level was primarily high school the reliability of all measures used in this study.
graduates with some college training. In general, Coefficient alpha for Reidenbach and Robin’s scale ranged from 0.85 to 0.87 for the three company means. Sampling error techniques as well as nonresponse manipulations suggested no Corporate ethics was assessed by the Ethical Climate Questionnaire (ECQ) originally devel- oped by Victor and Cullen (1988). The ECQ grouping variables for ethics were derived that was used to measure corporate ethics as perceived classified subjects into the following groups: by individual members of the sales force. The high/low individual moral values, high/low focus of the ECQ was on description rather than individual feelings. The ECQ consists of 26 items matched/mismatched between individual moral for five constructs: law and code, caring, instru- values and perceived corporate ethics. The mentalism, independence, and rules. Each item high/low conditions were determined by calcu- was followed by a 6-point, Likert-type scale.
lating the means of the two ethics-related Subjects with a high mean were classified as variables. Individuals scoring above the mean of having a high perception of corporate ethics. The a variable were classified as high and those coefficient alphas assessing internal reliabilities for scoring below the mean were classified as low.
the five constructs were 0.745, 0.736, 0.701, Interaction of the two variables resulted in four 0.715, and 0.560. Their combined value (0.821) groups of ethics-related constructs: H-H (high corresponds favorably with other research that on both), H-L (high individual moral values/low perceived corporate ethics), L-H (low individual Organizational commitment was assessed by moral values/high perceived corporate ethics), the Organizational Commitment Questionnaire and L-L (low on both). Combining H-H with (OCQ) (Mowday et al., 1979) which consists of the L-L group, and H-L with the L-H group, we 15 items, six of which were reverse scored. Each obtained groups that were matched/mismatched item was followed by a 7-point Likert-type scale.
between individual moral values and perceived The coefficient alpha for the OCQ was 0.85 which is consistent with Mowday et al. (0.82).
The Job Satisfaction Index (Brayfield and reduces error variance and increases the precision Rothe, 1951) describes job satisfaction as a global of the model parameter estimates, was used to measure similar to morale. The index consists of test model concomitant variables (Freund et al., An Investigation of Moral Values and the Ethical Content of the Corporate Culture outcome variables which revealed that organiza- groupings of ethics with individual demographics tional commitment is positively related to job as the covariates since organizational commit- satisfaction (P4 supported) (r = 0.52, p = 0.0001)
ment, job satisfaction, and turnover intentions and negatively related to turnover intention (P5
may be affected by the respondents’ demo- supported) (r = –0.28, p = 0.0006). In addition, graphics. By incorporating these demographic job satisfaction was negatively related to turnover variables into the analysis as covariates, variation intention (P6 supported) (r = –0.35, p = 0.0001).
that otherwise would be incorrectly attributed to These relationships also held for both sales the measures of interest due to spurious correla- managers (r = 0.69, p = 0.001; r = –0.37, p = tions would be more properly accounted for.
0.0079; r = –0.32, p = 0.0228) and sales people The profiles between sales managers and sales (r = 0.43, p = 0.0001; r = –0.22, p = 0.0391; people (Table I) show that sales managers have r = –0.35, p = 0.0007). These results also imply higher mean scores than sales people in each predictive validity of the instrument relative to measure except for turnover intention. This the three sales force outcome variables.
implies that, in general, sales managers have Table II indicates that there are no significant higher individual moral values and corporate differences in the ethics-related variables and in ethics perception, are more committed, more the sales force outcome variables across the satisfied, and less likely to leave the organization geographic divisions of the organization, indi- than sales people. While there were significant cating that divisions can be combined in the differences in age, tenure, and turnover intention subsequent analysis. There is no significant between sales managers and sales people, it seems difference in either individual moral values or the these differences occurred due to position.
perceived ethicalness of the corporate culturebetween sales managers and sales people, indi-cating that position can be combined for each Tests of the research propositions concerning sales of these variables. There is no significant differ- force outcomes for the Taiwanese sample ence in organizational commitment between salesmanagers and sales people, indicating that they Correlation analyses were used to examine the also may be combined for subsequent analysis.
relationships between the three sales force However, job satisfaction and turnover intentionare significantly different between sales managersand sales people, indicating that the analysis for these two groups should proceed separately on Profiles of the Taiwanese sales managers and sales these two sales force outcome variables.
Tests of the research propositions concerning theethics-related variables for the Taiwanese sample Analysis of the three ethics grouping variables on perceived corporate ethics and individual moral values indicate no significant differences between subjects in matched/mismatched groups. Also, there was no significant difference in individual moral values between subjects in groups of high/low perceived corporate ethics (Table III).
However, there was a significant difference in perceived corporate ethics between subjects in 6 for the high school graduate; 7 for 1 year of groups of high/low individual moral values. One may conclude that subjects who differ in indi- Effects of division, position, and demographics on the five research variablesa * p < 0.0001; ** p < 0.01.
icant, thus partially supporting P3. None of the
Effects of the three ethics grouping variables on demographics showed any significant influences corporate ethics and individual moral valuesa on the three sales force outcome variables. Thelevel of individual moral values do not seem to significantly influence the three sales force Further analyses by least square means differ- ence (LSD) indicates that those subjects in the high perceived corporate ethics group were more committed to the organization than those in (4.73–4.41). Also those sales people in the matched group had less tendency to leave the organization than those in the mismatched group (3.35–3.86), further supporting P3. However, P1
and P2 are not supported in that congruence
between individual moral values and the per- Results of F-values in ANCOVAs.
ceived ethical content of the corporate culture do not significantly influence organizationalcommitment or job satisfaction.
vidual moral values will also differ in how theyperceive corporate ethics, but not vice-versa.
Discussion of the Taiwanese findings
Hence P7, predicting the relationship between
the two ethics-related variables, is supported.
No significant differences were found across the geographic divisions of the organization under force outcome variables also show partial signif- study or between sales managers and sales people icance (Table IV). Significance occurred in on the individual moral values scale or on the organizational commitment between all subjects measure of perceived corporate ethicalness. This in groups of high/low perceived corporate ethics.
suggests that the individual moral values of both Similarly, turnover intentions between sales sales managers and sales people are very similar people in match/mismatched groups was signif- throughout the organization and that both sales An Investigation of Moral Values and the Ethical Content of the Corporate Culture Effects of the three ethics grouping variables on the three sales force outcome variablesa managers and sales people perceive the ethical- related to turnover intention. Job satisfaction was ness of the corporate culture in a similar fashion.
also negatively related to turnover intention. In One source of this consistency is likely to be the addition, the association of perceived corporate existence of a strong and consistent corporate ethics with job satisfaction and turnover inten- culture and the implied existence of shared tion was not statistically significant.
norms and other social control systems to help These findings indicate that the effect of produce this organizational uniformity. Because perceived corporate ethics on job satisfaction and of the stand-alone design of the stores in this turnover intention is indirect and is being chain, the sales manager likely plays an impor- mediated by organizational commitment. It also tant role in communicating (or not communi- appears that individual moral values are not very cating) the ethical content of the corporate useful in directly predicting employee potentials in organizational commitment, job satisfaction, The individual moral values of the Taiwanese and turnover intention. Their impact on the sales managers and sales people directly impact three sales force outcome variables seems to be their perception of corporate ethics, but not vice mediated by one’s perception of corporate ethics.
versa. Specifically, it seems that those who score There was also a significant difference in high on individual moral values are more likely turnover intention between sales people in to perceive a higher level of corporate ethics than matched/mismatched groups. This may imply those who score lower on individual moral that whether or not a sales person perceives a values. Those who had a higher perception of congruence between individual moral values and corporate ethics were more committed to the corporate ethics, it still is a useful indicator of organization than those who had a lower per- potential turnover intention. Finally, none of ception. Among the three sales force outcome the demographic covariates were found to be variables, organizational commitment was posi- tively related to job satisfaction but negatively Comparisons between U.S. and Taiwanese
influence of ethical considerations on an organi- sales managers and sales people
zation in terms of organizational commitmentappears to lie, in part, in one’s perception of the Similarities between the two samples organization’s own commitment to ethics.
Organizational commitment was also positively The final step in the research process was to related to job satisfaction and negatively related compare the findings from the Taiwanese sample to turnover intention in both studies. This (Figure 1) with Herndon’s 1991 research on U.S.
finding empirically validates what many already retail sales managers and sales people to consider believe: irrespective of national culture those who the generalizability of the Taiwanese results.
are more committed to an organization or have more job satisfaction are less likely to leave the differences in individual moral values and per- organization than those who are less committed ceived corporate ethics between sales managers and sales people across national cultures. Also,our study supports the findings that individualmoral values may influence one’s perception of Differences between the two samples corporate ethics directly, but may indirectlyinfluence the three sales force outcome variables.
U.S. sales managers and sales people who differed Hence, one may conclude that individual moral in their individual moral values also differed in values are not very useful as an indicator of the level at which they perceived corporate potential organizational commitment, job satis- ethics, and vice versa (Figure 2). The Taiwanese faction, or turnover intention across these two sample revealed the former relationship, but not the latter which indicates that the perception of It was also discovered that sales personnel who corporate ethical content may have an influence have a higher perception of corporate ethical on individual moral values in the U.S. but not climate are more committed to the organization which indicates that the key to understanding the Also, U.S. managers and sales people had sig- Figure 1. The relationships among the five research variables for the Taiwanese sample.
Figure 2. The relationships among the five research variables for the U.S. sample.
An Investigation of Moral Values and the Ethical Content of the Corporate Culture nificant differences in organizational commit- Discussion of findings from the two
ment, job satisfaction, and turnover intention with the Taiwanese sample only having signifi-cance differences in job satisfaction and turnover Perceptions of corporate ethics appear to be a intention. One may conclude that organizational more direct determinant of organizational com- commitment and job satisfaction are both pre- mitment than individual moral values for both of dictors of turnover intention in U.S. sales forces, the samples. Organizational commitment and job but that job satisfaction is more directly related satisfaction were positively correlated with each to turnover intention than organizational com- other, while both were negatively related to turnover intention. A practical implication of this In the U.S., job satisfaction and turnover finding is that one may enhance commitment intention were directly associated with different potentials for sales personnel while maintaining levels of corporate ethics perception, but neither job satisfaction and low turnover tendencies by of these relationships were found in Taiwanese strengthening their positive perceptions of cor- sales managers or sales people. In other words, porate ethical policies, perhaps through their sales for U.S. sales forces, those having a higher per- ception of corporate ethics are more satisfied and Also, some researchers suggest that positive less likely to leave than those having a lower perceptions of corporate ethical policies may be perception, but this does not seem to be true for enhanced if the organization is able to establish the Taiwanese sample. It would appear from these a corporate code of ethics containing reward and results that for sales people in the U.S. sample punishment policies that is applicable to all levels perceived corporate ethics have a direct impact of the organization (Victor and Cullen, 1988; on their job satisfaction and turnover intention Hunt et al., 1989). Specifically, the code has to whereas for Taiwanese sales forces there is an be supported by top management, and be con- indirect impact on these two sales force outcome sistent, relevant, and widely publicized within the variables, mediated by organizational commit- organization (Snell and Herndon, 2000). Due to the consistent influence of perceived corporate ethics between these two national cultures, code indicated that education level was negatively development efforts should be effective in related to organizational commitment and posi- enhancing desirable organizational outcomes.
tively related to turnover, and that income was The differences between national cultures is positively related to job satisfaction. None of equally dramatic. In the U.S., a high level of these relationships were found in the Taiwanese corporate ethics perception will have a positive sample. However, the Taiwanese sample was effect on an individual’s moral values and may typically comprised of single Chinese females make one more committed to and satisfied with with less than a year of college education whereas an organization and less likely to leave. For the in the U.S. sample the typical respondent was a Taiwanese a high level of perceived corporate married Caucasian male with two years of college ethics will not directly influence their individual moral values, job satisfaction, or turnover inten- For Taiwanese sales people the perception of tion. This may be explained by the fact that most a match between individual moral values and Taiwanese sales people in this study reported that corporate ethics may reduce the turnover inten- they were not aware of any formal or informal tion, but this is not the case with Taiwanese sales policies on ethics within their organization such managers. This finding is contrary to the U.S.
that the ethical climate of the organization could study and may indicate that, for Taiwanese sales not be perceived as interacting with their own people, a mismatch between individual moral individual moral values. This is also underscored values and perceived corporate ethics is a useful by the result that the turnover intention of Taiwanese sales people was negatively related torecognizing congruence between individual moral values and perceived corporate ethics. One example, the synthesis integrated model of ethical interpretation may be that turnover intention for decision making in business (Ferrell at al., 1989), Taiwanese sales people is less when corporate like the contingency model of ethical decision ethics is perceived as matching one’s own moral making in a marketing organization that preceded values, but not when corporate ethics is per- it (Ferrell and Gresham, 1985), postulate that ceived at a high level as seen in the U.S. sample.
factors within the corporate culture are more It may also be that sales people have two sets influential than individual factors. While addi- of ethical standards – one a personal set and the tional work needs to be done, this study gener- other a business set – with the personal set having ally supports these models and suggests that the higher standards than the business set (Carr, models may be applied in the Taiwanese culture.
1968; Dubinsky and Gwin, 1981). By assumingthat the individual moral values scale has capturedsome portion of the respondents’ set of personal Limitations and conclusion
ethical standards, the implication emerges that anindividual’s set of personal ethical standards is As in most studies, it is useful to note limitations.
used by the individual as a standard to evaluate Using only one sales force in each national the level of perceived corporate ethicalness.
culture limits the generalizability of the findings There is also the implication here that the since other corporate cultures may interact with business set of ethical standards may be used to a given national culture to influence the rela- either directly or indirectly influence the sales tionships under study. Consequently, the results force outcome variables by operating on the level should be generalized to other organizations and of perceived corporate ethicalness or operating as other national cultures with caution.
a part of perceived corporate ethicalness. This Also, the data was collected once from each suggests that the application of both sets of organization. That means changes in ethics- ethical standards does occur within the sales force related variables resulting from organizational environment but that the specific set evoked is learning, for example, would not be captured in situation specific and applicable to different con- this study. Therefore, future studies might include structs. Additional research in this area is needed a longitudinal design to consider if these results to confirm the intensity and direction of these are stable over time and, perhaps, to capture the extent to which ethics training or ethics programs Accordingly, further investigation is suggested change perceptions of the ethics-related variables on the constructs of perceived corporate ethics by sales people who have high individual moral Despite these limitations, this research makes values but score low in their perception of cor- a contribution towards understanding the impact porate ethics, since this group also showed a high of individual moral values and the perceived level of turnover intention. Recognizing the key ethicalness of the corporate culture on each other constructs perceived by this group may provide and on the three sales force outcome variables.
concrete guidance in reducing undesirable sales This study found that individual moral values are force losses, since they are likely to provide not very useful as an indicator of potential orga- positive inputs into the ethical content of the nizational commitment, job satisfaction, or corporate culture. That means that the potential turnover intention across the Taiwanese and U.S.
for learning unethical behavior from the behavior cultures. However, individual perceptions of of significant others would be reduced and the corporate ethics do appear to be a more direct potential for more ethical boundary-spanning determinant of organizational commitment than behavior influencing customers in a positive individual moral values in both national cultures.
This research also suggests that some models related to job satisfaction and negatively related of ethical decision making developed in the U.S.
to turnover intention for both national cultures.
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