Business ethics is a matter of increasing importance and public awareness. Recent scandals and the financial crisis have suggested that the standard of business ethics is not high and that corporate behaviour should not solely be oriented to profit goals. Rather, a firm’s ethical conduct should be part of its focus. While discussions of ethical questions in a market economy are mainly related to large firms, this thesis specifically aims at revealing potential problem issues and solutions for small firms. These firms are often ignored when moral concerns in business are addressed. This is in contrast to their importance for the economy and society of almost every country of the OECD, as they constitute the majority of all companies, and provide a major share of jobs.
The majority of the studies examining business ethics are focused on large corporations, using quantitative strategies. Few studies related to small business have been undertaken. The question of how these firms and their owner-managers could systematically engage in business ethics and ethical stakeholder management remain unanswered. The thesis develops a tool which explicitly addresses this topic: the Ethics Integration Guideline. On the basis of a research paradigm of constructivism, a study was designed which was intended to elicit, and then to guide, small business owner-managers’ ethical attitudes, perceptions and experiences. It aimed to develop a structured guideline which can help small firm owners to integrate ethical considerations into their business activities. Taking owner-managers’ perspectives into account provides insight into the small firms’ context. Thus, practical applicability of the guideline is provided.
The results of the research suggested the framework for an Ethics Integration Guideline comprised of sets of questions and imperatives derived from the interview statements during the research. It turns out that the guideline differs considerably from approaches applied in large firms. The Ethics Integration Guideline developed in this research provides a unique tool which connects research results with user’s individual perspectives and experiences in his firm. The guideline is flexible, applicable and adaptable to the needs of the firm in question. It bridges the gap between ethics theory and business conduct. Thus, it contributes to professional practice in small firms – a sector which is commonly underestimated in its importance to the welfare of a society.
Table of Contents
1. Introduction
1.1 The Business Ethics Problem
1.2 Research Questions
1.3 Basic Definitions
1.4 Basic Ethical Presumptions
1.5 Justification of the Focus on Small Firm Owner-Managers
2. Contextual Setting
2.1 History and Perspectives of Philosophy
2.1.1 Teleology
2.1.2 Social Contract Theory
2.1.3 Deontology
2.1.4 Concluding Comments on History and Perspectives of Philosophy
2.1.5 Contribution of this Section to the Research Topic
2.2 Economic Framework of Business Ethics in Western Societies
2.2.1 Capitalism and State Welfare Capitalism
2.2.2 Justice and Equality
2.2.3 The Existence of Companies
2.2.4 Characteristics of Small Firms
2.2.5 Laws and Legal Constraints
2.2.6 Professions and Professional Practice
2.2.7 Concluding Comments on the Economic Framework of Western Societies
2.2.8 Contribution of this Section to the Research Topic
2.3 Moral Problems Inside and Outside of Corporations
2.3.1 General Dimensions of Moral Problems
2.3.2 Particular Ethical Issues in Business
2.3.3 Conclusions on Moral Problems Inside and Outside of Corporations
2.3.4 Contribution of this Section to the Research Topic
2.4 Concepts of Ethics in Business
2.4.1 Corporate Social Responsibility
2.4.2 Stakeholder Theory
2.4.2.1 Introduction
2.4.2.2 Justifications of Stakeholder Theory
2.4.2.3 Criticism of Stakeholder Theory
2.4.2.4 Different Understandings of Stakeholder Theory
2.4.3 Concluding Comments on Concepts of Ethics in Business
2.4.4 Contribution of this Section to the Research Topic
2.5 Summary of the Contextual Setting
3. Literature Review
3.1 Studies Related to Ethical Motivations and Underlying Philosophical Understandings
3.2 Studies Focused on Instruments to Enforce Moral Concern
3.3 Studies Related to Perceptions of Ethical Issues and Moral Behaviours in Businesses
3.4 Studies Related to Environmental Concern
3.5 Contribution of this Section to the Research Topic
3.6 Summary of the Literature Review
4. Methodology
4.1 General Methodological Aspects
4.1.1 General Characteristics of Different Research Approaches
4.1.2 General Characteristics of Different Research Methods
4.2 Description of the Research Design
4.2.1 Research Paradigms
4.2.2 Methodology
4.2.3 Sample Design
4.2.4 Data Collection
4.2.5 Justification of the Aspects Addressed in the Interview Guideline
4.2.6 Data Analysis
4.2.7 Research Quality
4.2.8 Considerations on Research Ethics
4.2.9 Limitations of this Research Approach
4.3 Summary of Methodology
5. Results
5.1 Interview Guideline Question 1: ‘Which three stakeholders are the most important to your company?’
5.1.1 Findings on Question 1
5.1.2 Deviant Participants’ Statements on Question 1
5.2 Interview Guideline Question 2: ‘What are the main conflicts of interest which occur in relationships between your company and the stakeholders mentioned?’
5.2.1 Findings on Interview Question 2
5.2.2 Deviant Participants’ Statements on Question 2
5.3 Interview Guideline Questions 3 and 4: (3): ‘Can you recall a recent conflict that has been arisen between your company and one of these stakeholders and describe the process that you followed to address the conflict?’ (4): ‘Can you now identify a different conflict and describe how you addressed that situation?’
5.3.1 Findings on Interview Questions 3 and 4
5.3.2 Deviant Participants’ Statements on Questions 3 and 4
5.4 Interview Guideline Question 5: ‘What would you do respectively what did you do in ethical dilemma situations (not described above), such as: corruption / bribery, deception / withholding information towards customers, environmental problems, fulfilment of contracts (delayed payments of suppliers), tax evasion?’
5.4.1 Findings on Interview Question 5
5.4.2 Deviant Participants’ Statements on Question 5
5.5 Interview Guideline Question 6: ‘Which means do you think would be appropriate in order to deal with these conflicts?’
5.5.1 Findings on Interview Question 6
5.5.2 Deviant Participants’ Statements on Question 6
5.6 Interview Guideline Question 7: ‘What role do you believe ethics should play in business generally?’
5.6.1 Findings on Interview Question 7
5.6.2 Deviant Participants’ Statements on Question 7
5.7 Interview Guideline Question 8: ‘Do you consciously apply ethical means in your day-to-day business? Can you please give an example?’
5.7.1 Findings on Interview Question 8
5.7.2 Deviant Participants’ Statements on Question 8
5.8 Interview Guideline Question 9: ‘Do you or your company apply a code of ethics or similar self constraint? Would it be possible for me to have copy of this document?’
5.8.1 Findings on Interview Question 9
5.8.2 Deviant Participants’ Statements on Question 9
5.9 Summary of the Results
6. Answering the Research Questions
6.1 Answering Research Sub-Question 1
6.1.1 Findings on Research Sub-Question 1
6.1.2 Implications of the Findings on SQ-1 on the Ethics Integration Guideline
6.2 Answering Research Sub-Question 2
6.2.1 Findings on Research Sub-Question 2
6.2.2 Implications of the Findings on SQ-2 on the Ethics Integration Guideline
6.3 Answering Research Sub-Question 3
6.3.1 Findings on Research Sub-Question 3
6.3.2 Implications of the Findings on SQ-3 on the Ethics Integration Guideline
6.4 Answering Research Sub-Question 4
6.4.1 Findings on Research Sub-Question 4
6.4.2 Implications of the Findings on SQ-4 on the Ethics Integration Guideline
6.5 Answering Research Sub-Question 5
6.5.1 Findings on Research Sub-Question 5
6.5.2 Implications of the Findings on SQ-5 on the Ethics Integration Guideline
6.6 A Normative Response to Research Findings: Answering the Main Research Question
6.6.1 Ethics Integration Guideline Part 1: Diagnostic Questions
6.6.2 Ethics Integration Guideline Part 2: Behavioural Instructions
6.7 Comparison of the Guideline to Large Companies’ Ethics
6.8 Summary of Answers to the Research Questions
7. Conclusions and Hints for Future Research
8. References
9. Appendix
9.1 Consent Form
9.2 Information Sheet
9.3 Data Analysis Sheet (on CD attached)
9.4 Ethics Integration Guideline (full Table with references, on CD attached)
Research Objectives and Core Themes
The primary research objective is to explore the ethical attitudes, perceptions, and experiences of small business owner-managers and to develop a structured, practical approach for integrating ethical considerations into their daily business activities. The core research question addresses how these owner-managers can consciously organize their ethical behavior towards their stakeholders, bridging the gap between existing business ethics theory and practical small business conduct.
- Ethical decision-making processes in small, owner-managed firms
- Systematic stakeholder management and prioritization
- Challenges in balancing business profit goals with moral obligations
- Development of the Ethics Integration Guideline for practical application
- Comparison of ethical conduct between small firms and large corporations
Excerpt from the Book
1. Introduction
“Ethics should play a major role and in my opinion in our small firms ethics is an important topic. Big companies are mainly driven by numbers and hard facts. In small business many things are dependent on personal contacts. I know my business partners and most of them even on a private basis. Without moral behaviour you would threaten your business relationships. Therefore, you can’t go without ethics in small firms.” (Cited from interview statement of participant S.N. on interview question no. 7)
This thesis focuses on small firms and their ethical behaviour. Small firms differ considerably from large corporations. The influence of various stakeholders on corporate decision making is a key factor in differentiating small and large firms’ behaviour. Stakeholders such as employees, shareholders and institutional investors, lenders, non-executive directors, and managers play a part in the determination of ethical standards of big companies. This is in sharp contrast to small firms which are mainly led and controlled by owner-managers (Ryan & Schneider 2002).
Large corporations are marked by agency problems which result from separation of ownership and management. The profit expectations of shareholders have led to a short term focus of managers. Large scandals such as the Enron case have been, to some extent, caused by this phenomenon (Arnold & de Lange 2004). In small firms ownership and management are in the hand of the owner-manager (Ryan & Schneider 2002). This makes the situation completely different from that of managers in large firms. Revealing the implications of this distinguishing mark on small business ethics is the core aim of the investigation in this thesis.
Summary of Chapters
1. Introduction: Outlines the business ethics problem, defines research questions, and justifies the focus on small firm owner-managers.
2. Contextual Setting: Establishes the philosophical and economic framework of business ethics, including concepts like teleology, stakeholder theory, and corporate social responsibility.
3. Literature Review: Provides an overview of current research on business ethics and identifies existing gaps in the scholarly landscape regarding small firms.
4. Methodology: Describes the research design based on constructivism, justifying the use of qualitative, semi-structured interviews with owner-managers.
5. Results: Summarizes findings from the interview sessions, categorizing data on stakeholder importance, moral conflicts, and ethical dilemma situations.
6. Answering the Research Questions: Integrates results to provide a normative response and presents the "Ethics Integration Guideline" in two parts (diagnostic questions and behavioural instructions).
7. Conclusions and Hints for Future Research: Summarizes the thesis’ contributions and suggests areas for future research regarding the adoption and impact of the proposed guideline.
Keywords
Business ethics, Stakeholder management, Small business, Owner-managers, Ethics Integration Guideline, Corporate social responsibility, Moral decision making, Qualitative research, Ethical dilemmas, Constructivism, Professional practice, Small and medium-sized enterprises (SMEs), Economic framework, Value integration, Leadership.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on business ethics within the context of small firms, specifically how owner-managers perceive and manage ethical behaviour towards their stakeholders.
What are the central themes of the research?
Central themes include the role of personal values in small business leadership, stakeholder identification and prioritization, the integration of ethics into corporate strategy, and the specific challenges faced by small businesses versus large corporations.
What is the primary research question?
The primary question is: "How can small business’ owner-managers consciously organize their ethical behaviour towards their companies’ stakeholders?"
Which scientific methodology is employed?
The research adopts a constructivist paradigm, utilizing a qualitative research strategy consisting of semi-structured in-depth interviews with 25 small firm owner-managers in Germany.
What does the main body of the work cover?
The main body covers the theoretical contextual setting, a comprehensive review of existing literature, a detailed methodology chapter, the presentation of interview results, and the development of a practical "Ethics Integration Guideline."
Which keywords characterize this work?
Key terms include Business Ethics, Stakeholder Management, Small Business, Owner-managers, Ethics Integration Guideline, and Corporate Social Responsibility.
How does the "Ethics Integration Guideline" function in practice?
It is divided into two parts: diagnostic questions to prompt reflection and understanding of the firm's specific context, and actionable behavioural instructions to guide the integration of ethical standards.
In what way does this thesis bridge the gap between theory and practice?
It translates findings from scholarly literature and personal experiences into a structured, flexible, and applicable instrument that owner-managers can use to integrate moral concern into their daily activities.
- Citation du texte
- Juergen-Matthias Seeler (Auteur), 2011, Business Ethics and Stakeholder Management: Developing a Structured Approach for Small Business' Owner-Managers, Munich, GRIN Verlag, https://www.grin.com/document/187428
