Evaluating the ethical management practices of small, medium and micro-enterprises to ensure effective business decision-making in the eThekwini Municipal area

Abstract

This study is premised on the understanding that the democratic government of South Africa has made use of many initiatives to sustain the development of SMMEs. This is due to the fact that this sector has the potential to develop the country's economy. The study then aimed to explore the effect of a knowledge of ethics and its management on the business decisions of entrepreneurs. This research examined the potential of SMME managers and business owners in terms of how they can use their ethical management knowledge to ensure effective decision-making which can make their enterprises promote viable economic growth. The basis on which this research was initiated was that of the human behaviour of SMME managers, operators and business owners in relation to how they can contribute to economic development and survive the competitive market using ethical management practicesto make good decisions. The data of the study was accumulated from different SMMEs in the eThekwini Municipal Area using simple random sampling. A total of 200 entrepreneurs answered to the questionnaire, which comprised the sample of the study. This data was captured and evaluated on the Statistical Package for the Social Sciences (SPSS) Version 28 and yielded the descriptive statistics. Significant findings of this research were that to add positively to economic development, SMME owners, managers and operatives must be equipped with knowledge to run their operations with elements of trustworthiness and values of honesty, integrity, fairness accountability, loyalty and empathy if they are to succeed in their choice of operation. The constraining factors that stemmed from the answers of the respondents were that they did not give preference to the legal standards and ethical ideas that regulate their operation with results that end up affecting their ability to make good decisions. The main recommendation is that prospective entrepreneurs must be equipped with knowledge to understanding of how to cope with the changing risks encountered in the process of operation, as well as how to come up with emergency plans that can mitigate this problem. This could also be an avenue for further research.