Use and perception of lawfulness of illegal or unethical survival practices adopted by micro and small business

Abstract

According to Sebrae (2013), Brazil’s Micro and Small Enterprises (MSE) survival rate has been improving, with survival of 75.6% in the first two years of life. Many of the survivors, faces difficulties in the market, sometimes, opt for the use of illegal or unethical practices, but still not considered themselves "outlaws". In this context, the general objective was to identify the illegal or unethical practices used by SMEs to survive and the illegality perception of such practices. This is a descriptive and quantitative research type. The research process consisted of four steps: literature review, initial survey with 10 companies, pre-tests with seven companies, and field research with 102 MSEs. The field research was conducted through a questionnaire with 33 variables of illegal or unethical practices, where practices should be assessed by the respondents based on their competitors’ behavior, using a four-points Likert scale. We concluded that all investigated practices are being used to some degree by entrepreneurs, pointing out that for only four of the 33 practices the illegality perception appeared lower than the sense of legality, showing that the majority (29 of 33 practices) are used even though there is illegality awareness. Also, we conclude that five from the nine most used practices are related to tax avoidance.