Theorising Ethical Decision Making Process for Research in Small and Medium Enterprises (SMEs) in Australia

Abstract

Purpose – To critically examine various ethical decision making models and use them to arrive at five hypotheses to understand the methods used by small and medium enterprise (SME) owner-managers in Australia when faced with ethical issues or dilemmas.Design/methodology/approach – This analysis involves literature reviews of rational decision making process, alternative methods of decision making and various ethical decision making models including Rest’s four-component model to arrive at the five hypotheses.Findings – The five hypotheses contend that SME owner-managers tend to resolve ethical issues using methods similar to Rest’s four-component model. Some may utilise all four components while others may skip one or more components of the model. Others may engage in intuition and heuristic methods of decision making. Ethical decisions by SME managers may be influenced by factors such as organisational factors, moral exemplars and reflection. The final hypothesis contends that SME managers could consider using the Balanced Scorecard as an instrument to monitor and manage business ethical issues.Research limitations – The literature reviews are not exhaustive but provide sufficient information for the purposes of this chapter.Practical implications – The significance of this study is that the hypotheses can be used to conduct interviews with SME managers and findings from the interviews could be developed into a practical tool for practising managers and a standard or guidelines for managing ethical issues in an SME.Originality/value – This chapter fulfils the need to understand the ethical decision making process and methods used by practicing SME managers in Australia.