An overview of empirical research on ethics in entrepreneurial firms within the United States
Abstract
Scholars recognise that entrepreneurs may encounter different ethical issues and pressures than managers in larger corporations. This has fostered empirical research aimed at assessing ethics in entrepreneurial settings in the United States. Our emphasis on empirical research with little attention paid to purely conceptual papers allows us to highlight the narrow definition of entrepreneurship used in the US and how US researchers distinguish between entrepreneurship and other types of small businesses. This differs greatly from many other countries, especially those in which researchers equate entrepreneurship with the study of small and medium sized enterprises (SMEs). Researchers in the US often distinguish ethics from corporate social responsibility (CSR), corporate social performance (CSP), stakeholder theory and stakeholder management with different theoretical models proposed in each of these areas. After discussing these various definitional issues, we review the empirical research on ethics in entrepreneurial firms, discussing what the results tell us, identifying gaps in prior research and concluding with recommendations for future research that draws more heavily on theoretical frameworks in the field of ethics.ÂDownloads
References
Aldrich, H. & Fiol, M. 1994. Fools rush in? The institutional context of industry creation. Academy of Management Review, 19(4): 645–670.
Ashkanasy, N.M., Windsor, C.A. & Trevino, L.K. 2006. Bad apples in bad barrels revisited: Cognitive moral development, just world beliefs, rewards, and ethical decision-making. Business Ethics Quarterly, 16(4): 449.
Ball, G.A., Treviño, L.K. & Sims, H.P. Jr. 1994. Just and unjust punishment incidents: Influences on subordinate performance and citizenship. Academy of Management Journal, 37(2): 299–322.
Baucus, Melissa S. & Near, Janet P. 1991. Can illegal corporate behavior be predicted? An event history analysis. Academy of Management Journal, 34, 1–28.
Baumol, W. 1990. Entrepreneurship: Productive, unproductive, and destructive. Journal of Political Economy, 98(5): 893–921.
Brenkert, G.G. 2009. Innovation, rule breaking and the ethics of entrepreneurship. Journal of Business Venturing, 24: 448—464.
Brown, D.J. & King, J.B. 1982. Small business ethics: Influences and perceptions. Journal of Small Business Management, January: 11–18.
Brown, M.E., Trevino, L.K. & Harrison, D.A. 2005. Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2): 117.
Bryant, P. 2009. Self-regulation and moral awareness among entrepreneurs. Journal of Business Venturing, 24: 505–518.
Brush, C.G., Manolova, T.S. & Edelman, L.F. 2008. Separated by a common language? Entrepreneurship research across the Atlantic. Entrepreneurship Theory & Practice, March: 249–266.
Bucar, B. & Hisrich, R.D. 2001. Ethics of business managers vs. entrepreneurs. Journal of Developmental Entrepreneurship, 6(1): 59–82.
Bucar, B., Glas, M. & Hisrich, R.D. 2003. Ethics and entrepreneurs: An international comparative study. Journal of Business Venturing, 18: 261–281.
Buchholz, R.A. & Rosenthal, S.B. 2005. The spirit of entrepreneurship and the qualities of moral decision making: Towards a unifying framework. Journal of Business Ethics, 60: 307–315.
Busenitz, L.W. & Barney, J.B. 1997. Differences between
entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision making. Journal of Business Venturing, 12: 9–30.
Chau, L.L. & Siu, W. 2000. Ethical decision-making in corporate entrepreneurial organizations. Journal of Business Ethics, 23(4): 365–375.
Chrisman, J.J. & Fry, F.L. 1982. Public versus business expectations: Two views on social responsibility for small business. Journal of Small Business Management, January: 19–26.
Covin, J.G. & Miles, M.P. 1999. Corporate entrepreneurship and the pursuit of competitive advantage. Entrepreneurship Theory and Practice, 23: 47–63.
Dess, G.G. & Lumpkin, G.T. 2005. The role of entrepreneurial orientation in stimulating effective corporate entrepre- neurship, Academy of Management Executive, 19(1): 147.
Dew, N. & Sarasvathy, S.D. 2007. Innovations, stakeholders and entrepreneurship. Journal of Business Ethics, 74: 267–283.
Donaldson, T., & Preston, L. E. 1995. The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20: 65–91.
Dyer, W.G., Jr. & Whetten, D.A. 2006. Family firms and social responsibility: Preliminary evidence from the S&P 500. Entrepreneurship Theory and Practice, November: 785–802.
Ebert, R.J. & Griffin, R.W. 2005. Business essentials. Englewood Cliffs, NJ: Prentice-Hall.
Elm, D.R & Weber, J. 1994. Measuring moral judgment: The moral judgment interview or the defining issues test? Journal of Business Ethics, 13(5): 341–355.
Fisscher, O., Frenkel, D., Lurie, Y. & Nijhof, A. 2005. Stretching the frontiers: Exploring the relationships between entrepreneurship and ethics. Journal of Business Ethics, 60: 207–209.
Freeman, R. E. 1984. Strategic management: A stakeholder approach. Boston: Pitman.
Freeman, R.E. & Venkataraman, S. 2002. Ethics and entrepreneurship: The Ruffin Series, Volume 3. Charlottesville, VA: Philosophy Documentation Center.
Hall, J. & Rosson, P. 2006. The impact of technological turbulence on entrepreneurial behavior, social norms and ethics: Three Internet-based cases. Journal of Business Ethics, 64: 231–248.
Hannafey, F.T. 2003. Entrepreneurship and ethics: A literature review. Journal of Business Ethics, 46(2): 99–110.
Hornsby, J.S., Kuratko, D.F., Naffziger, D.W., LaFollette, W.R. & Hodgetts, R.M. 1994. The ethical perceptions of small business owners: A factor analytic study. Journal of Small Business Management, October: 9–16.
Humphreys, N., Robin, D.P., Reidenbach, R.E. & Moak, D.L. 1993. The ethical decision making process of small business owner/managers and their customers. Journal of Small Business Management, July: 9–22.
Jones, T.M. 1991. Ethical decision making by individuals in organizations: An issue-contingent model. Academy of Management Review, 16(2): 366–395.
Jones, T.M. & Ryan, L.V. 1998. The effect of organizational forces on individual morality: Judgment, moral approbation, and behavior. Business Ethics Quarterly, 8(3): 431–445.
Joyner, B.E., Payne, D. & Raiborn, C.A. 2002. Building values, business ethics and Corporate Social Responsibility into the developing organization. Journal of Developmental Entrepreneurship, 7(1): 113–131.
Katz, J.A. & Green, R.P. 2007. Entrepreneurial small business. NY: McGraw Hill Irwin.
Kentucky Cabinet for Economic Development. 2008. Technology and innovation overview. [Online.] Available: http://www.thinkkentucky.com/DCI/DCIHome.aspx/. Accessed on 27 June 2008.
Kuratko, D.F. & Goldsby, M.G. 2004. Corporate entrepreneurs or rogue middle managers? A framework for ethical corporate entrepreneurship. Journal of Business Ethics, 55:13–30.
Kuratko, D.F., Goldsby, M.G. & Hornsby, J.S. 2004. The ethical perspective of entrepreneurs: An examination of stakeholder salience. Journal of Applied Management and Entrepreneurship, 9(4): 19–42.
Longenecker, J.G. 1988. Egoism and independence: Entrepreneurial ethics. Organizational Dynamics, Winter: 64–72.
Longenecker, J.G., McKinney, J.A. & Moore, C.W. 1989. Ethics in small business. Journal of Small Business Management, January: 27–31.
Longenecker, J.G. & Schoen, J.E. 1975. The essence of entre- preneurship. Journal of Small Business Management, 13.
McGrath, R.G. & MacMillan, I. 2000. The entrepreneurial mindset: Strategies for continuously creating opportunity in an age of uncertainty. Boston: Harvard Business School Press.
McVea, J.F. 2009. A field study of entrepreneurial decision- making and moral imagination. Journal of Business Venturing, 24: 491–504.
Mitchell, R. K., Agle, B. R. & Wood, D.J. 1997. Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4): 853–886.
Morris, M.H., Schindehutte, M., Walton, J. & Allen, J. 2002. The ethical context of Entrepreneurship: Proposing and testing a developmental framework. Journal of Business Ethics, 40(4): 331–361.
Neubaum, D., Mitchell, M., & Schminke, M. 2004. Firm newness, entrepreneurial orientation, and ethical climate. Journal of Business Ethics, 52: 335–347.
Paine, L.S. 1994. Managing for organizational integrity. Harvard Business Review, March/April: 106–117.
Palmer, E. 2003. US entrepreneurial activity continues to lag, study finds. Knight Ridder Tribune Business News, August 14. [Online]. Available: http://findarticles.com/p/ articles/mi_hb5553/is_200308/ai_n21510535. Accessed on 26 June 2008.
Payne, D. & Joyner, B.E. 2006. Successful US entrepreneurs: Identifying ethical decision-making and social respons- ibility behaviors. Journal of Business Ethics, 65: 203–217.
Phillips, R. & Freeman, R.E. 2003. Stakeholder theory and organi-zational ethics. San Francisco: Berrett-Koehler Publishers.
Reidenbach, R.E. & Robin, D.P. 1991. A conceptual model of corporate moral development. Journal of Business Ethics, 10(4): 273–284.
Rutherford, M.W., Buller, P.F. & Stebbins, J.M. 2009. Ethical considerations of the legitimacy lie. Entrepreneurship Theory and Practice, July: 949–964.
Sarasvathy, S.D. 2001. Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2): 243–288.
Sarasvathy, S.D., Simon, H.A. & Lave, L.B. 1998. Perceiving and managing business risks: Differences between entrepreneurs and bankers. Journal of Economic Behavior and Organization, 33(2): 207–226.
Schramm, C.J. 2006. The entrepreneurial imperative: How America’s economic miracle will reshape the world (and change your life). New York: HarperCollins.
Shane, S. & Venkataraman, S. 2000. The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1): 217–226
Small Business Administration. 2008. The small business economy 2007: A report to the president. [Online]. Available: http://www.sba.gov/advo/research/sb_econ2007.pdf. Accessed on 27 June 2008.
Smith, P.L. & Oakley, E.F., III. 1994. A study of the ethical values of metropolitan and non-metropolitan small business owners. Journal of Small Business Management, October: 17–27.
Teal, E.J. & Carroll, A.B. 1999. Moral reasoning skills: Are entrepreneurs different? Journal of Business Ethics, 19(3): 229–240.
Trevino, L.K. 1986. Ethical decision making in organizations: A person-situation interactionist model. Academy of Management Review, 11: 601–617.
Treviño, L.K., Brown, M., & Pincus-Hartman, L. 2003. A qualitative investigation of perceived executive ethical leadership: Perceptions from inside and outside the executive suite. Human Relations, 56(1): 5–37.
Treviño, L.K. & Weaver, G.R. 2001. Organizational justice and ethics program follow through: Influences on employees’ helpful and harmful behavior. Business Ethics Quarterly, 11(4): 651–671.
Trevino, L.K., Weaver, G.R. & Reynolds, S.J. 2006. Behavioral ethics in organizations: A review. Journal of Management, 32: 951–990.
Treviño, L.K. & Youngblood, S.A. 1990. Bad apples in bad barrels: A causal analysis of ethical decision-making behavior. Journal of Applied Psychology, 75: 378–385.
US Newswire. 2003. Secretary of Labor Elaine L. Chao addresses businesswomen at Women’s Entrepreneurship in the 21st Century Summit. [Online]. Available: http:// findarticles.com/p/articles/mi_hb5554/is_200309/ai_ n21824377. Accessed on 26 June 2008.
Vanderkerckhove, W. & Dentchev, N.A. 2005. A network perspective on stakeholder management: Facilitating entrepreneurs in the discovery of opportunities. Journal of Business Ethics, 60: 221–232.
Victor, B. & Cullen, J.B. 1988. The organizational bases of ethical work climate. Administrative Science Quarterly, 33: 101–125.
Vyakarnam, S., Bailey, A., Myers, A. & Burnett, D. 1997. Towards an understanding of ethical behaviour in small firms. Journal of Business Ethics, 16: 1625–1636.
Weaver, G., Treviño, L.K., & Cochran, P. 1999a. Corporate ethics practices in the mid-1990s: An empirical study of the Fortune 1000. Journal of Business Ethics, 18(3): 283–294.
Weaver, G.R., Treviño, L.K., & Cochran, P. 1999b. Corporate ethics programs as control systems: Influences of executive commitment and environmental factors. Academy of Management Journal, 42(1): 41–57.
Weber, J. 1996. Influences upon managerial moral decision making: Nature of the harm and magnitude of consequences. Human Relations, 49(1): 1–21
Weber, J. & Green, S. 1991. Principled moral reasoning: Is it a viable approach to promote integrity? Journal of Business Ethics, 10(5): 325.
Welsh, D.H.B. & Birch, N.J. 1997. The ethical orientation of US small business decision makers: A preliminary study. Journal of Small Business Strategy, 2: 41–51.
Wempe, J. 2005. Ethical entrepreneurship and fair trade. Journal of Business Ethics, 60: 211–220.
Wilson, E. 1980. Social responsibility of business: What are the small business perspectives? Journal of Small Business Management, July: 17–24.
Zahra, S.A. 1991. Predictors and financial outcomes of corporate entrepreneurship: An exploratory study. Journal of Business Venturing: 6(4): 259.
Zhang, Z. & Arvey, R.D. 2009. Rule breaking in adolescence and entrepreneurial status: An empirical investigation. Journal of Business Venturing, 24: 436–447.
This journal is an open access journal, and the authors and journal should be properly acknowledged, when works are cited.
Authors may use the publisher's version for teaching purposes, in books, theses, dissertations, conferences and conference papers.
A copy of the authors’ publisher's version may also be hosted on the following websites:
- Non-commercial personal homepage or blog.
- Institutional webpage.
- Authors Institutional Repository.
The following notice should accompany such a posting on the website: “This is an electronic version of an article published in the African Journal of Business Ethics, Volume XXX, number XXX, pages XXX–XXX”, DOI. Authors should also supply a hyperlink to the original paper or indicate where the original paper (http://ajobe.journals.ac.za/pub) may be found.
The following Creative Commons license applies:
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.