There are two ways to set the Character set used when reading the attributes from a shapefile. First you can set the "Default" character set in the preferences dialog. (Do a search for character set). This declares the character set that will be used the first time a shapefile is added to the catalog or to a map.
Once a Shapefile is in the catalog its Character set can be modified by selecting the Shapefile Service (the top level object in the catalog) and using the "Change Character Set" Operation. This can be found in the context menu or in the Data>Resource menu.
For convenience you can select many services and change them all with a single operation.