Business Ethics and Performance of small and medium Enterprises in Lagos State.
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Date
2023
Authors
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Publisher
The Department of Business Administration, Faculty of Administration, Obafemi Awolowo University.
Abstract
The study examined the various ethical practices among the small and medium enterprises in Lagos State. It also determined the extent of implementation of business ethics among SMEs and, assessed the effects of business ethics on their performance. It further analysed the challenges confronting its implementation. These were with a view to providing information on the effects of business ethics on the performance of SMEs in Lagos State.
The study utilised a descriptive survey research design. Primary data were employed in collecting the needed information for the study and was achieved through self-administered questionnaire to the respondents. Lagos State was purposively selected being the state with the highest number of SMEs. Multistage sampling technique was used for the study. At the first stage, random sampling technique was employed in selecting the 20 local government areas (inclusive of its LCDAs) in the state. At the second stage, purposive sampling technique was used in selecting 10 sectors based on the proliferations of SMEs as stated in the SMEDAN/NBS (2017) national survey of micro, small and medium enterprises (MSMEs). At the third stage, 382 respondents from specific sectors within the local governments were selected using purposive sampling technique so as to arrive at the sample size for the study. Data collected were analysed using percentages, mean, standard deviation, and partial least square/structural equation model approach.
The results showed that various ethical practices such as fairness (𝑋̅ = 4.18), discipline ( 𝑋̅ = 3.80), accountability (𝑋̅ = 4.30), trust (𝑋̅ = 3.80), honesty (𝑋̅ = 4.57) confidentiality (𝑋̅ = 3.98), and integrity (𝑋̅ = 4.40) were adopted by SMEs in Lagos State. Also, the result showed that fairness and respect (42.4%, 𝑋̅ = 4.22), integrity (55.3%, 𝑋̅ = 4.41), discipline (46.2%, 𝑋̅
= 4.35), accountability (49.7%, 𝑋̅ = 4.39), trust (42.4%, 𝑋̅ = 4.17), honesty (54.2%, 𝑋̅= 4.40), leadership (45.3%, 𝑋̅=4.25), transparency (45.1%, (𝑋̅= 4.27),and confidentiality (46.9%, 𝑋̅=4.37) were implemented to a
very large extent; while objectivity (
43.1%, 𝑋̅ = 3.98), and
environmental concern (40.6%, 𝑋̅ = 3.80), and were implemented to a large extent. Furthermore, findings reveal that at a p-value of 0.05, all the values of business ethics (fairness, confidentiality, integrity, responsibility, transparency, environmental consciousness) and the SMEs performance (employee satisfaction, market share, perceived customers’ satisfaction and product quality) of the measurement’s variables are significant. Findings also revealed that the outer factors loading is significant and reliable at a threshold value of 0.70 and that all the measured constructs have values above 0.70. In addition, the results revealed that business ethics had significant and indirect effect on employee satisfaction (t=23.287, p <0.05), market share (t= 11.484, p <0.05), perceived customers’ satisfaction (t= 18.905, p <0.05) and product quality (t= 6.730, p <0.05). Additionally, the study identified inadequate education and orientation of employees on business ethics principles (30.7%) as a major challenge confronting the implementation of business ethics. While, undue societal pressure (9.7%), too many inconsistencies/impartialities in administering ethical codes (7.4%), poor supervision and monitoring (6.8%), lack of disciplinary action(s) on part of management and lack of ethics training (6.2%) were less critical. The least were: poor leadership (1.2%) and organisational culture (0.9%).
The study concluded that there is a strong positive effects of business ethics on the performance of SMEs in Lagos State.
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xv, 152
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Citation
Andre, A.A. (2023). Business Ethics and Performance of small and Medium enterprises in Lagos State. Department of Business Administration, Falculty of Administration Obafemi Awolowo University.