The impact of ethical values of SME owners-managers on performance of enterprises : Durban South, eThekwini Municipality, KwaZulu-Natal province, South Africa

Abstract

The primary purpose of this study was to investigate impact of ethical values of SME owner-managers on performance of enterprises: Durban South, eThekwini Municipality, KwaZulu-Natal Province thereof. Previous studies pointed out the significant role played by ethical values towards the performance of SMEs. However, very little research has been conducted in South Africa on the impact of ethical values of SME owner-managers on the performance of their enterprises, especially in the Durban South area. In order to achieve the purpose, a conceptual framework was developed to explain the relationships between ethical values, ethical practices, leadership style, organisational policies and performance of SMEs.

Substantive hypotheses were formulated in order to determine the validity of the propositions made in the literature review, with the objective of testing the proposed the conceptual model. The researcher employed questionnaires to gather field data from a selected sample of 217 which was drawn from a target population of 500 SMEs in the Durban South area. The field data was analysed using the Statistical Package for Social Sciences (SPSS), Version 26. Statistical tools that include frequency tables, pie-charts and graphs were utilised in analysing data in chapter five. The Correlation matrix, chi-square test and linear regression analysis were also utilised to further analyse the strength of association between the variables.

The findings from the study indicated that there was statistically significant association between business ethics and performance; that there was a significant positive relationship between corporate governance success of the businesses, and that there was no significant relationship between the personal values and ethical practices, and there was no significant association between business ethics and ethical practices. One of the recommendations of the study was that the Pe model should be operationalised to reduce unethical conduct of employees and owner- managers of SMEs. The study further recommended that there should be creation of SBCF at municipal level. Additionally, it was recommended that BE education should be introduced.