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Moral and Social Responsibility Practices in Small Business

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Published: Mon, 20 Aug 2018

There are so many kind of people within different country in the world. Some people will only care about themself and unscrupulously to complete their target and some people will care about the country future. This kind of selfish people will destroy our country’s economy. So, ethical and social responsibility is so important to our country. From a conceptual framework, the impact seems to ethical and social responsibility approach to financial and non-financial performance of SMEs (small and medium-size entreprises) in Malaysia. Ethical business practices and social responsibility is seen as a strong reason to build a multi-ethnic community in harmony between Malaysia’s business dealings turn may affect the overall performance of SMEs in the key. In Malaysia, there was so many different kind of business. In different business interests, ethics and social responsibility practices of different cultural perspectives and unique historical skills and understanding of the industry’s business environment can provide a wealth of perceptual framework. Although it was reported that there is a minimum distance of cultural between Malays, Chinese and Indians, but it may face a variety of challengers in the business environment, awareness of ethics and socially responsibility. So we can envisaged that this study can provide a deeper knowledge and understanding of the cultural different between the entrepreneur in Malaysia for the greeting values, ethics and socially responsibility practices and promote a better understanding of personal values that held in Malaysia.

According (Noor Hazlina Admad, Azlan Amran and Hasliza Abdul Halim 2012) the study, for the introduction, that was influence the behavior of existing entrepreneurs on business ethics and national culture of a prolific discussion. There was some scholars seeking to move beyond national cultures suggest focusing on more fine-grained variations within a nation. In Malaysia, the intercultural differences provide an important reflection on the existence and range of values and beliefs within a nation. Certainly, it was cautioned that may be linguistic, regional, tribal, ethic or caste cleavages within nations that may sometimes make national data non-representative for the nation. It is believed that there still exist some values among the three major racial groups which was Malay, Chinese and Indian. These three major racial groups can be markedly from different dominant culture, especially in business practices. This is because the ethnic divisions tend to be reinforced by religious, cultural, linguistic and economic divisions in Malaysia. The reason is the ways of thinking of people are behavior, personal, cultural values entrepreneurs may also affect the business environment in the moral and social responsibility practices prevalent cognitive.

After that, there are three important reasons as to why these practices in smaller firms should be examined more closely. Firstly, there is a large disparity in the number of studies of ethical and social responsibility issues between large firms and small firms. There was work on ethics and social responsibility has been largely concentrated on large firms particularly in the context of Malaysia until now. Secondly, small businesses have a strong interrelated community in which it operates. Typically, they deal with who live in the local are mark that ethical and socially responsible business behavior is an important factor for creating a customer’s harmony “business-customer” relationship in the local community. Thirdly, there is increasing number of people awareness on ethics and social responsibility, thus leading to social disapproval is considered bad ethics or corporate irresponsibility. For the “good ethic is good for business” notion, this means that if we want our business stay longer and stronger, the ethical behavior is the reason. If we ignore the ethic, it would have an adverse impact on our own business.

According (Noor Hazlina Admad, Azlan Amran and Hasliza Abdul Halim 2012) study by Corruption Perception Index (2009) reported that it was reported that Malaysia was ranked 56th of the 180 countries studied that the way behind other Asian countries. This means that Malaysia is just a medium country in Asian. Although the CPI report is not limited to small business, but this is a general ethical standards reflected between the people in this country. Regard to the social responsibility, there was reported that the Council of Small Business Organization of Australia had received a sample of 9000 revealed show that a strong socially responsible behaviors especially in terms of providing support for the local community. “There was a genuine enthusiasm for the notion of corporate social responsibility which was viewed as duty”, this is the result found out of the Australian. This was happening among the SMEs in Australia. On the contrary, it was noted that in regard to the moral sense of corporate social responsibility and smaller still relatively lacking in Malaysia. This is because the focus on such issues in Malaysia is often directed to large firms compared to smaller firms. Nevertheless, for the question of ethics and social responsibility, small businesses may be due to larger peers and different characteristics of these companies from nature to a certain extent. Small firms are, by nature, independent and self-managed. Presumably, the main aspects of morality will revolve around personal values, the owners themselves, and not bound by the ethical code of conduct as a large company’s belief. ‘Multitasking’ is another key criterion of small businesses.

Besides that, the variety of tasks facing small business owners can make them less time to consider ethics in the daily management. In addition, according to the notice what constitute personal and business ethics are probably closer in situations where the owner is also the manager in a business. Relatively speaking, recession has greater impact on small firms compared to larger ones, making business survival one of the top agenda among smaller firms. It means that ethic and social responsibility will make the small business survive in the challengers. Because of these limitations faced with small business owners, it is vital, so be careful to check the moral and social responsibility to consider to what extent is suitable for small businesses. In surmise, the purpose of this paper is to address these issues for examples, ethics and social responsibility in SMEs by advancing a conceptual framework that links the personal value of SME owner-managers, the ethical and socially responsible practices, and business performance. Followed by a conceptual framework beginning of this article, some propositions are formulated in the discussion of the relevant literature, and during use. Then, subsequent data collection methods will be used to sample and measure presents brief details. Finally, this paper summarizes the discussion of research and its impact.

On the other hand, Malaysia is a multi-ethnic country that contains 27 million people. That have the three largest ethnic in our country, it is Malays, Chinese and Indian. Malaysia also has many smaller ethnic in the country. Because of this multi-ethnic composition of communities, many people believe that Malaysians have different cultural values, even though there is evidence that similar cultural value orientation. Malaysians generally share examples of collectivism and relationships. The only difference found among the three races was in terms of religiosity, with Malays holding religious beliefs to be far more important than their Chinese and Indian counterparts. However, people think different communities and ethical groups within a country, with their diverse business interests, different cultural perspectives and unique history of the skills and industry to understand the ethical and social responsibility practices in the business environment of the rich perceptual framework. It was a contention that personal or cultural values held by individuals may lead to different views on what is considered to be right or wrong, moral or immoral, and social responsibility, or otherwise. Interestingly, an investigation of cultural values in Malaysia using the right cultural values suggests that Malays, Chinese and Indians share similar cultural values. However, the increased pressure from economic development could result in changes in term of cultural values. Therefore, even if there are reported that the minimum distance between the cultures of Malays, Chinese and India, is likely to be a different business environment facing challenger cognitive moral and social responsibility on a certain bearing.

Since the SMEs in Malaysia are labor-intensive, they will create employment opportunities. Secondly, SMEs enhance regional development and create more equitable income distribution due to their location and ongoing expansion throughout the broader community. Thirdly, SMEs play a vital complementary role in relation to larger firms. In many cases, large firms depend on SMEs as suppliers and distributors. For example, many SMEs in Malaysia supply component parts, tools, and equipment to larger manufacturing firms. Large firms also rely on SMEs for the distribution of their products to the consumer. Fourthly, SMEs serve as a training ground for developing the skills of workers and entrepreneurs. Finally, the presence of SMEs curbs the monopoly power of larger firms and provides the structure of the economy with greater flexibility. Thus, a country can strengthen SMEs and to ensure its success in reducing its vulnerability to financial crises.

To promote the harmonious business and societal relationship, we should suggests to the word “ethics is not a luxury of advanced economies; it is an indispensable means to foster economic development”. Therefore, in developing economies to understand their daily business activities, such as the importance of the structure, especially in the context of Malaysia, small business is crucial. There may here also gives information about the entrepreneur’s personal values may affect the moral and social responsibility practices cross-cultural variation. As a large company code of ethical conduct of business ethics research has been the center of attention. With a view that ethical practices should be the guiding principle for all businesses, large or small, researchers have begun to investigate the small business ethics gaining momentum. A study found that the interests of small businesses in the UK has experienced around the stakeholders, the protection of knowledge and information, legal and moral obligations, as well as issues of personal and business decisions conflict is a moral issue. It is also uses a dilemma to determined that small business owners have faced, including the maximization of profits, life priority, enlightened self-interest and social priorities of the four problems.

When the concept was first developed more than twenty years ago, companies are finding it difficult to operate their business practices, because it requires sacrifice to be carried out in the financial level. However, recently, the organization’s leaders have begun to recognize the importance of social responsibility in business. Specifically, they found that small businesses have expressed their willingness to make arrangements to meet the requirements of social responsibility, especially their customers, their employees and the public. Through the lens of business, ethics and social responsibility practices are considered in the long run, help the economy entrepreneurs. In a rapidly changing and unpredictable environment, socially responsible behavior, to help businesses get the support from various external stakeholders groups. Such behavior, to provide them with some protection from unforeseen problems they face. It is also important to note that an organization’s image and reputation may be in good moral behavior shaping public effects. Taken together, the benefits of ethical and socially responsible practices enable competitive advantage to be attained as a firm distinguishes itself from its competitors.

Apart from a business perspective, entrepreneurs show such subtle gesture is considered to be the mechanism to promote the harmonious business and social relationships. In particular, it can enhance trust, cooperation, and taking into account that people can understand why other people behave the way they tolerates each other in three different ethnic groups. The three elements are intrinsically important because they are core characteristics that positively affect the emotional and interpersonal aspects of the work and life relationships. Because of this moral and social responsibility survey should get more attention and make the people think that important of it.

The foregoing discussion is a strong link between the imaginary moral and social practice, results of operations, relations harmonious society, indicating the stakeholder theory, both from tool and normative perspective. The instrumental stakeholder theory methods treat the interests of maximizing the wealth of the company by means of stakeholder interests meet to achieve, whereas the fundamental assumption of normative approach to stakeholder theory suggests that “a company should behave in a socially responsible manner because it is morally correct to do so”. Based on this underpinning theory, conceptual framework is advanced for further investigation. Personal values of the SME entrepreneurs from the three main races in Malaysia are treated as the independent variable. Perceived role of ethics and social responsibility as well as ethical and socially responsible practices in business are mediating variables. The dependent variable is business performance in the context of SME.

From this paper (Noor Hazlina Admad, Azlan Amran and Hasliza Abdul Halim 2012) ,we can make a stage to solve this problem. Firstly, in practice, we should provide between Malaysian entrepreneurs on values, ethics and social responsibility in a better understanding of cross-cultural differences. Secondly, we should promote a better understanding of the interaction of the three individual values in business practices and ethnic groups held in Malaysia. Then, we need to find the SME entrepreneurs consider important ethical and social responsibility practices. For the fourth point, we need to make sure that if this practice ethical and social responsibility does affect results of operations for example financial and non-financial. After that, fifth point is benefit of society, it will promote a harmonious business and taking into account the related parties of this study will inspire the similarities and differences between them, the strong ground of public relations in a multiracial society.

In conclusion, the value of this study lies in its efforts to provide moral and social responsibility practices and informed understanding of small businesses, especially in the environment of Malaysia. Determine the signal such “noble” approach because of its strong interaction with employees, customers and the local community about this approach, especially an important message is ubiquitous in small businesses. Ethical and social responsibility considerations are considered critical in view of harmony “business enterprise”, “customer business” relationships and “community business” could enhance the company’s performance and to a greater extent, promoted the establishment of trust, respect for community solidarity and integrity. Importantly, this study will alert was similar and look at ethics and social responsibility in a manner different from each ethnic community and entrepreneurs, especially in Malaysia. The awareness of ethical business practices among smaller firms could also furnish a healthier economy as they make up more than 80% of all establishments in most countries. Above all, business practitioners should realize that ethics, social responsibility and profit making can go hand in hand; they are not conflicting agendas. Therefore, the challenge of entrepreneurship education and policy-makers face is to recognize the unique aspects of these practices of SMEs, rather than through the lens of large companies the problem of moral and social responsibility corporate policy but as for creating competitive advantage for small businesses. Training programs that could portray the relationships among strategic planning, ethics, and social responsibility of the entrepreneurs is of great value. Finally, ethical is important to our country, it is because ethical and social responsibility can make our economy become better or badly. So all people in Malaysia need to unite and always help each other even not same ethnic to make our country become a stronger country and increase our economy in future.


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