Employees’ Beliefs and Behaviors of Ethical Issues in SMEs: A Comparative Study between Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Limited
Statement of the Problems
The terms “moral” and “ethical” are often used interchangeably in society, although it is important to understand the difference between these concepts. While morality involves an individual’s personal belief system, ethics are more so comprised of society’s expectations of acceptable behavior. Norms of acceptable ethical behavior are naturally formed in social environments including work situations. In these certain environments, individuals tend to
adhere to these set standards of conduct and act in a similar way to their surrounding population. At work, employees also act in a similar way to their coworkers. New employees tend to act in the way that the other veteran employees deem as normal (Kott, 2012).
Beliefs in an ethical code are standards of thought. Beliefs are criteria of abstract thought that does not necessarily evoke action. It may instigate or forces certain quest in the environment that coheres one to behave in a certain manner (Meghe, 2014). Ethical behavior tends to be good for business and involves demonstrating respect for key moral principles that include honesty, fairness, equality, diversity and individual rights. (Cremer, 2009).
The beliefs and behavior on business ethics has barely changed in the past 3 decades, meaning that ethical issues in businesses are still rampant even in the 21st century (Carroll, 2009). To address the situation, ethics programs were implemented in organizations to regulate and resolve the trust issues that are present (Tota and Shehu, 2012). However, past studies have not differentiated the various ethics programs made in terms of their scope in the business (Kaptein, 2009).
The indiscretions of one’s ethical beliefs vary from providing false information and manipulation (Johnson 2004; Carlson et al 2011). Firms who are in competition with one another has a tendency to play foul, ignoring the virtues of morality and ethics to outpace their rivals. Business firms are being met with a considerable load of pressure, rooting from the operations (Ethics Resource Centre 2009; Ferrell & Ferrell, 2011).
The pressure of competition makes business firms focus on their objectives, causing them to compromise their principles that bind them in the virtues of morality and ethics (Kalshoven et al 2011; Elango et al 2010). Businesses perceive the concept of marketing based on aggressively selling products and services. There are common instances most of the employee beliefs in practicing organization’s culture but a few of them behave (Johnson, 2004).
Employee beliefs on ethical issues on work place. (a) Honesty: Do not lie or deceive stakeholders in conducting business operations, fully disclose all the information that stakeholders have a right to know. (b) Trustworthiness: Act in a reliable manner by exercising diligence in business decision making, be consistent and dependable in word and deed. (c) Fairness: Judge Performance in the workplace in an unbiased manner, Act in accordance with established standards of behavior (i.e. code of conduct). (d) Integrity: Keep promises and carry through decisions with ethical action, Act to prevent improper behavior or to stop it once it has been detected. (e) Responsibility: Meet obligations to stakeholders, accept the consequences of decisions and act to improve corporate behavior (Mintz, 2011).
Sources of ethics have a far-reaching effect on codifying business ethics. Besides there are other some factors which also influence ethical behavior. Following chart shows the picture.
|Areas of ethical behavior||Factors that have bearing|
|1. Business Environment||a) Conflict of interest of business & society
b) Socio-political norms of home & abroad
c) Meeting budget & quota challenge
d) Culture & Technology
|2. Organization behavior||a) Reward & punishment system
b) Behavior of boss and subordinates
c) Informal organization
d) Trade association behavior
|3. Individual Philosophy||a) Moral philosophy of relevant personnel
b) Influence of family members
c) Humanistic philosophy of superiors
d) Societal situation
|4. Governing legislature||a) Acts governing personnel management
b) Acts governing consumer interest
c) Acts governing social welfare, safety & wages etc.
d) Nature & attitude of Govt.
|5. Societal attitude||a) Norms standards & sanction of society
b) Global environment
c) Expectations of society
d) Expectation of women
Source: Introduction to business and doing business in Bangladesh (Mahmud & Uddin) (2nd Edition).
Major ethical issues mainly concern a business in certain areas & following may be such areas: Misleading advertisement, misuse of enterprise asset, donation of political party, kickbacks, target payment of executives, political lobbing, corporate hospitality, leaking out secrecy of competitors, producing and selling armament to be used for regimentation, testing on animals, etc. These areas need to be given attention by concerned partition to avoid unethical activities and ensure fair business deal (Mahmud & Uddin, 2010).
SME stands for Small and Medium Enterprises, companies whose number of employees or income falls below certain limits. There is no universal definition of SME. The definition of SME varied over time and country to country and between times in the same country. Different countries have used various criterions to define SME. To determine the size of an enterprise some countries use turnover of the company, whereas some use fixed investment or the number of employees (Lokhande, 2011), sales volume, and worth of assets (Rahman, 2001). In Bangladesh, existing definition of SME is recommended by Better Business Forum; formed by the 2007-2008 interim government amid a drastic erosion of business confidence and accepted as a uniform one by Ministry of Industry and Bangladesh Bank. On 26 May 2008, the Agricultural Credit and Special Programs Department (ACSPD) of Bangladesh Bank in a circular (No.8) defined small enterprise.
Smart Health Bangladesh Limited (SHBL) was established at 2009 and it develops and manufactures health equipment for home and medical use and rural healthcare services. The sole aim of the organization is commercialization of advanced innovative point of care diagnostics technology to address the urgent need for better diagnostic tests. The have four (4) departments with thirty-five (35) employees (Source: www.smarthealthbd.com).
Twister Media Technology Bangladesh Limited (TMTBL) was established at 2008 and provides Specialized Secured Technology and Designing Consulting for all businesses and budgets. Their philosophy is that a sound technology strategy will simplify the way you do your own business. It has three (3) departments with twenty-seven (27) employees (Source: www.twistermedia.com).
Rationale of the Study
A large number of the research have been carried out in home and abroad on perception of employees on ethical issues in SMEs. The indiscretions of one’s ethical principle vary from providing false information and manipulation (Johnson, 2004; Carlson et al, 2011). Firms who are in competition with one another have a tendency to play foul, ignoring the virtues of morality and ethics to outpace their rivals. Business firms are being met with a considerable load of pressure, rooting from the operations, up until its marketing leg (Ethics Resource Centre 2009; Ferrell & Ferrell, 2011). The pressure of competition makes business firms focus on their objectives, causing them to compromise their principles that bind them in the virtues of morality and ethics (Kalshoven et al, 2011; Elango et al, 2010). Businesses perceive the concept of marketing based on aggressively selling products and services. There are common instances wherein companies provide misleading information to their customers, just to entice them to make a purchase (Johnson, 2004). An example of such is a clear indication that business ethics is not being adhered to. The aforementioned common practice of some businesses leads to the unprecedented result of compromising the quality of services and products that are being offered as the aggressive competition rivalry pushes the concept of quality to the side-lines (Kalshoven et al, 2011; Ferrell & Ferrell, 2011).
Since a variety of companies have been involved in compromising their ethical responsibilities to their clients (Kalshoven, Hartog & Hoogh, 2011), this concept may be used to address the ethical issues prevalent in varying industries. This study seeks to investigate strategies employed by businesses to find the right balance between business ethics and the firm’s operations. In that light, the findings of the study would be able to address common business ethical issues (Ethics Resource Centre, 2009; Ferrell & Ferrell, 2011). The balance between business ethics and operations would assist in identifying how companies align their moral obligations to their stakeholders with their overall business strategy (Lewis, 2002).
As a developing country, the health sector organization should work with business ethics and their employees should belief the ethical issues and behave as well. Both company’s business is based on health sector. Based on literature review and subject to the objectives of the study will be to find out the beliefs and behavior on ethical issues of those company. How the employees of SHBL and TMTBL behave on ethical issues practice at their working place will be the main focus.
Many researchers have attempted to clarify the research on why individual differences in moral judgment occur. Some researchers have suggested that either individual characteristics (Trevino, 1986) or social networks (Brass, Butterfield, & Skaggs, 1998) may be able to explain why there are differences in how a person reacts to a moral dilemma. Other researchers have examined the circumstances surrounding each dilemma as an explanation for ethical behavior.
Five ethical issue should belief and behave as like- misusing company time, abusive behavior, employee theft, lying to employees, violating company internet policies (Schwartz, 2015).
Honesty, trustworthiness, fairness, integrity, responsibility and civic virtue should be the organizational ethical issues and employees should belief and behave as well (Mintz, 2011).
Dedication, integrity, accountability, collaboration and conduct are the work place values and ethical issues. Values and ethics are important in the workplace to help keep order, ensuring that a company runs smoothly and remains profitable (Amico, 2017).
Moral Decision-Making, goals and policies, employee and company integrity and ethics and morals in competition are considerable on work place for ethical behavior. Morals and ethics go hand-in-hand in the workplace and should be of concern to small business owners. Operating an ethical and moral business depends not only on how the owners and managers of a company behave, but also its employees and how they interact with each other (McFarlin, 2017).
In order to develop an effective code of ethics in the workplace we must first identify potential ethical issues to be covered by such a code. The list to the top ten ethical issues from the perspective of top management and employees in the workplace. Misreporting the amount or number of hours worked, taking credit for the work of another person, stealing resources (i.e. cash, inventory) or falsifying financial statements, treating others unfairly including employees, customers, and suppliers, accepting gifts or other forms of payment that might cloud one’s objectivity in decision-making, getting too personal with any colleague or superior in a professional setup. Sexual harassment occurs when such actions create a “hostile work environment”, violating one’s confidentiality obligation to the organization by divulging sensitive information, using sensitive company information for personal gain including insider trading, misrepresentation of data, knowingly or unknowingly (It also involves failing to report such misrepresentation by other employees of the organization), failing to disclose all the information the public has a right to know. This would include product safety and financial information (Mintz, 2011).
Define organizational culture as “a collective phenomenon emerging from members’ beliefs and social interactions, containing shared values, mutual understandings, patterns of beliefs, and behaviors that tie individuals in an organization together over time”. The beliefs and assumptions that are considered valid or effective are passed down through the organization and taught to new members as the way they should perceive, feel and act in the organization. In other words, it guides how things are done in an organization and indicates what should be important to the employees. It helps explain what happens in organizations since the behaviors within the company should be consistent. As a result, the culture and corporate values help to create a sense of identity and enhance social stability (Giberson et al, 2009).
It can be stated that organizational culture holds the organization together and drives members of the organization to commit to it and produce good results. This is one reason it is so important, especially in the context of ethics. There is a definite direct relationship between ethical behavior and corporate culture. Although the culture may not be the sole determinant of the behaviors in organizations, it certainly influences them (Nel, Nel & du Plessis, 2011).
Organizational culture is often considered to be a “multilayered phenomenon”. The inner layer of the organizational culture contains deep and more permanent core values. These follow the company’s mission or vision statements from its inception. The more superficial layers are described above. These are more pliable and more easily influenced by management. Indeed, as can be seen, a company can reinforce and amend its ethical culture through its stories, symbols, rituals and routines. Using these aspects of the culture in tandem with the firm’s organizational structure, power structure and control and reward system, management can influence the culture, and therefore ethics, within the company. Managers view the organizational culture as both a source of problems as well as the basis for solutions, and therefore use the culture to devise organizational changes (Sinclair, 1993).
Unethical behavior of employees in the workplace not only threatens the reputation of the affected organizations, but also has a devastating effect on these organization’s ability to render quality services to its customers and other stakeholders. It undermines and harms human relations (Kaptein, 2011; Treviño, Weaver, & Reynolds, 2006). One of the greatest challenges facing any organization is therefore the mismanagement of the unethical behavior of its employees. This can even impact negatively on the continuity of organizations (Grant & Visconti, 2006). Before discussing how organizational culture can be changed to improve ethics in an organization, it is useful to describe different types of organizational culture. Distinguish among four types with respect to their ethical behavior in business: Defiance, Neglect, Compliance, and Character (Sauser & Sims, 2007).
Most of the studies have significant findings in ethical behavior, a few studies found that there is no significant influence on ethical behavior of code of ethics (Sims & Keon,1999) although there are mixed results on existence of code of ethics, but most of the review concluded that code of ethics influenced ethical behavior. In organization, there is large no. of studies available on code of ethics.
Rewards are the one of the most important in ethical behavior. A relationship between rewarding unethical behavior and the continuation of such behavior was revealed in most studies. Rewards system for ethical behavior increases ethical behavior (Baumhart, 1961).
A training programme should positive influence on ethical behavior (Delaney & Sockell 1992; Kawathatzopoulos, 1994). Proposed that ethics training enhance ethical behavior in organization. (Jose & Thiodeaus, 1999; Sims,1991; Trevino & Nelson,2007; Valentine & Fleishman, 2004; White & Lam, 2000)
Do not offer real answers to the ethical dilemmas employees face. In some cases, a negative relationship between codes of conduct and violations has been found (Sinclair, 2003). People feel more motivated and empowered to “do the right thing” in companies that have comprehensive ethics and compliance programs (Singh, 2011).
Spiritual individuals in the workplace are more likely to demonstrate enhanced teamwork (Mitroff & Denton, 1999; Neck & Milliman, 1994), greater kindness and fairness (Biberman & Whitty, 1997), increased awareness of other employee’s needs (Cash & Gray, 2000), increased honesty and trust within their organizations (Brown, 2003; Krishnakumar & Neck, 2002), higher incidences of organizational citizenship behavior (Nur & Organ, 2006). They are also prone to perceive the ethical nature of business issues more clearly (Giacalone & Jurkiewicz, 2003b) and are more sensitive to corporate social performance (Giacalone, Paul & Jurkiewicz, 2005). What is unclear, however, in the workplace spirituality literature is why and how an individual’s spirituality influences their ethical performance within an organizational context.
Objectives of the Study
The present study aims to explore the perception of employees on ethics within the organization in order to develop an ethics program. The research will focus on the relationship between business ethics and the employee’s beliefs and behavior to properly construct an ethics program that would suit the employees’ perceptions on business ethics.
The main objective of the study will be to find out the beliefs and behavior of employees on ethical issues in small and medium enterprises, especially of Smart Health Bangladesh Limited (SHBL) and Twister Media Technology Bangladesh Limited (TMTBL).
However, to achieve the main objective, the study will cover the following specific objectives.
- To explore the profile of the selected employees;
- To find out the employee’s beliefs on ethical issue regarding organizational culture of SHBL and TMTBL;
- To justify the employee’s behavior based on their beliefs on ethical issue for practicing organizational culture of SHBL and TMTBL; and
- To measure at which degree the ethics exist at SHBL and TMTBL.
Scope of the Study
The indiscretions of one’s ethical principle vary from providing false information and manipulation (Johnson 2004; Carlson et al 2011). Firms who are in competition with one another have a tendency to play foul, ignoring the virtues of morality and ethics to outpace their rivals. Business firms are being met with a considerable load of pressure, rooting from the operations, up until its marketing leg (Ethics Resource Centre, 2009).
The study will focus on identifying the relevance of the employee’s beliefs and behavior on business ethics within the Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Ltd. In essence, the study will delve into whether the perspective of business ethics is dependent on the employee’s beliefs and behavior. Furthermore, the research aims will be to use the information gathered from the participants and use it to construct an ethics program model that would help the organization have a more ethical environment. The purpose of the study is to provide organizations with information on business ethics, based on the understanding of their employees. This will help the Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Ltd to understand their employee’s view on the significance of ethics in the workplace. The study will also be able to recommend a possible ethics program model that can be added to the company’s structure.
Methodology of the Study
As this is an analytical research mainly survey based primary data would be used on this research. Primary and secondary, both types of data might be required in the study. Employee information like- Age, gender, Designation, year of experience in this company, total years of experience etc. will be the part of primary data. The survey data will be collected from the various departments like accounting & finance, technical, HR etc, Areas to be covered by the system analyzes; the behavioral attitude and the beliefs on ethical issues about their organization.
Types and Sources of Data
Primary and secondary, both types of data will be used in the study. The primary data will be collected from the employee of the Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Ltd. The secondary data will be collected from the books, articles, journals, magazines, newspapers, annual reports, website, unpublished PhD theses, research reports, and other publications.
Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Ltd are the two major companies who are serving in health sector in Bangladesh. Smart Health Bangladesh Limited has total 35 employees including managing directors and Twister Media Technology Bangladesh Ltd has 27 employees. The survey will conduct among those total 62 employees of the two companies.
Data Collection Procedure
The observation, questionnaire, and physical interview methods will be used to collect primary data from the Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Limited. After extensive related literature review the interview schedule and questionnaire will be shaped finally according to research expert opinion and prospective respondent’s views to the extent possible. Secondary data will be amassed by desk research by using different books, journals, articles, magazines, newspapers, annual reports, website, and other publications.
Data Processing and Analysis
The data, after collecting from the selected respondents will be processed. The task of data processing consists of editing, coding, classification, and tabulation of collected data so that they will be amenable to analysis. To analyze the processed data various Statistical and mathematical tools are to be used.
Limitations of the Study
This study is mostly based on survey based primary data. Being a developing country, it is believed that if Bangladeshi SME sector should practice ethical business. But the research is only for two companies. Therefore, a large number of companies of SME sectors are not included in this study and it is considered to be a limitation of this research. Like any other study, the study also suffers from several limitations. Due to time and resource constraints all the departments will not be included. The Key Performance Indicator details would not compare with similar organization or benchmarking with international standards. To overcome the limitations, appropriate methodology, more no of similar organization, proper research design, and appropriate statistical tools shall be used in the study.
Plan of the Study
The employees’ beliefs and behavior of ethical issues of Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Limited will be analyzed in the present study. To highlight the main issues, the whole research work will be divided into the following chapters.
Chapter One: Introduction
This chapter will cover the statement of the problem, rationality, objectives, scope, limitations, and structure of the study.
Chapter Two: Review of Related Literature
The other researcher’s contributions in towards employees’ beliefs and behavior on ethical issues will be reviewed in this chapter. The research hypotheses based on the objectives will also be framed into this chapter.
Chapter Three: An Overview of the Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Limited.
This chapter will provide a short brief about Smart Health Bangladesh Limited and Twister Media Technology Bangladesh Ltd.
Chapter Four: Methodology of the Study
This chapter will discuss the design of the study, types and sources of data, sampling, data collection procedure, data processing and statistical analysis.
Chapter Five: Data Analysis and Interpretation
This chapter will be analyzed the collected primary data and discussion will be made.
Chapter Six: Summary, Conclusions and Recommendations
The last chapter will summarize the major findings, draw conclusions based on the findings and make some recommendations for better ethical practice in SMEs.
Activity schedule to prepare this study is as follow:
||Preparation of report outline and proposal||15|
||Collection of data||20|
||Data processing and analysis||20|
||Draft report writing and submission for suggestions||20|
||Final report writing, printing, binding and submission||15|
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