Abstract

MAYANJA, J  and  PERKS, S. Business environment factors influencing ethical business conduct of small and medium-size businesses in Uganda. JCMAN [online]. 2017, vol.14, n.1, pp.1064-1096. ISSN 1815-7440.

The inability of some small and medium-size enterprises to operate in an ethical manner may influence their potential to grow. The business environment plays a role in the ethical behaviour of businesses. This study explores how the business environment affects the ethical business conduct of SMEs in Uganda. Primary data was collected through a newly developed self-administered questionnaire. The sample comprised of 384 SMEs utilising convenience sampling. Exploratory factor analysis was conducted to extract the valid factors. Multiple regression analysis was conducted to determine the influence of the business environment factors on the ethical business conduct of SMEs. The empirical findings show that the business environment significantly influences SMEs' ethical business conduct in Uganda. Three statistically significant relationships exist between legal business operation requirements, industry norms, media power and ethical business conduct. It is suggested that SME management should strictly comply with business operation requirements and adhere to industry norms to show they are serious about their ethical business conduct. They should also utilise the media to inform employees of the implications of unethical business behaviour to further encourage the adoption of ethical business values.

Keywords : business environment; business ethics; industry norms; legal business operation requirements; media power; small- and medium size enterprises.

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