Resolving Ethical Dilemmas in Small Business

Resolving Ethical Dilemmas in Small Business
David Robinson, Shanghai Jiao Tong University

DATE: October 2006

ABOUT THIS DOCUMENT:
Pre-publication print of a presentation delivered at the 8th West Lake International Conference on Small and Medium Business held in Hangzhou, China, 15-17 October 2006.

ABSTRACT:

Managers and small business owners are often at a disadvantage when faced with an ethical business dilemma. Whereas their corporate counterparts may be guided by a company code or an established corporate culture that safeguards them from having to make morally significant decisions alone, the small business owner-manager has no such backstop. At the very least, corporate managers have a person higher up the hierarchy that they can refer to, but the small business owner-manager must often face the stark reality of a dilemma all alone.

Under circumstances of intense competition and the need for expediency, conflicting priorities arise and the entrepreneur may be faced with certain dilemmas. It may even be that entrepreneurial managers may sometimes inadvertently overlook the ethical elements of business decisions, or worse still, choose to ignore them. Recognising a business ethical dilemma requires a certain basic awareness of ethics. Dealing confidently with a dilemma requires far more, namely the assurance that one is able to concisely define the dilemma and then resolve it appropriately and amicably. In seeking to do so, entrepreneurs must usually rely on their own judgment to determine an appropriate outcome for all concerned.

Since moral choices have a significant impact on business decisions, and given the fact that entrepreneurs usually have to make those choices without advice from people well-versed in ethics, it is important to provide them with a technique that can be used effectively in a wide range of circumstances. Hence, this paper illustrates the use of the ‘Business Ethics Synergy Star (BESS)’ (Robinson, 2006) as a tool to help define and resolve ethical dilemmas in small business. This research paper examines how entrepreneurs experience and deal with these dilemmas. The research is based on interviews with seven entrepreneurs in established service-oriented ventures, which gave rise to twenty-six dilemmas.