Ethical Attitudes in Small Businesses and Large Corporations : Theory and Empirical Findings from a Tracking Study Spanning Three Decades

This study proposes a theoretical framework forassessing ethical behavior after analyzing comparatively the ethicalperformances of both managers of small and large companies. A baseline forethical perceptions of American business professionals over a 17-year period isestablished, and data from three different nationwide surveys (1985, 1993, and2001) is used. The sample of respondents included 5,000 people who responded tothe same 16 scenarios profiling business situations with questionable ethicalundertones. The framework for ethical responses in large and small firms takes intoaccount both personal and situational factors influencing ethical standards.The personal factors considered in this study include: entrepreneurial acts,cognitive moral development, locus of control, need for achievement,Machiavellism, and social costs. The situational factors include environmental,institutional, and agency factors. The findings of the study suggest that business owners and managers aremaking more ethical decisions in recent years. Moreover, small businessowner-managers were found to offer less ethical responses to ethical behaviorscenarios in 1993, but no significant difference in response was noted withlarge firm managers in 1985 and 2001. The findings also suggest that theoverlap of business and personal networks of small company owner-managers doesnot necessarily suggest material differences in the ethical behavior of largefirms' managers. (CBS)