Characteristics of ethical business culture in small and medium enterprise: A case

The scandals and collapses, for example, involving Independent Insurance and Marconi in the United Kingdom, Elan in Ireland, Kirch in Germany, Royal Ahold in the Netherlands, HIH Insurance and One.Tel in Australia (Hill, 2001, p.369) and Satyam in India, posed analogous questions about the efficacy of corporate ethical practices. These global corporate collapses represent a defining moment in the contemporary corporate practices. After the failure of Enron and other high profile companies, many boards of directors, in response to new guidelines and a perceived crisis of confidence, decided to reexamine their business practices during the intervening period (Flanagan, Little, and Watts, 2005, p.278).In order to ensure that there were no systemic abuses by managers, legislations on fiduciary restraints, disclosure regimes and directors‘ duties were developed. Subsequently, corporate governance gained greater circulation, salience, credibility and eventually, entrenched as part of corporate practices of public-listed companies (Wong, 2002, p.120-121).In fact, corporate scandals have produced increased levels of regulation in the US, UK and Australia, not to mention Malaysia by refocused attention to the board of directors, suggesting that board failure was a significant contributing factor to the corporate collapses (Hill, 2001, p.375). Thus, commentators claimed of a need to change the culture in the boardroom (Knight, 2004).However, Flanagan et al. (2005, p.278) argued that any cultural change needs to be consistent with the ethos of those who control the organization.The ethos in turn will initiate the organization‘s culture and stated mission.They maintained that unless these factors are addressed early, it is likely that a strategy adopted that is not consistent with the organization‘s ethos culture and mission will fail.This means, officers of a company are expected to act ethically, that is, to take full cognizance of the interests that the firm‘s stakeholders directly or implicitly entrust to them when making their decisions.Over the years, we have observed a destruction caused by social institutions and we have foreseen more would come in future.Hence, we questioned the ethical capabilities of the corporations.We contended that a business should thrive on ethical culture which subsequently would be expected to flourish ethical businesses. We propose that studying characteristic of an ethical business culture among Small and Medium Enterprise (SME) has its mores of what constitute ethical business and consequently ethical business culture would bring Malaysia to a level that is equal to the one in developed countries.Based on the stories of the corporate scandals in the past two decades (i.e. Enron and WorldCom for instances), we concluded that recognizing ethics culture in maintaining ethical business is importance. On this premise, we believed that it is time to recognize that ethics in business should embrace ways and means to discover the expression of ethical business. We based our discussion by employing a single case study within the SME company to identify the ethical culture characteristics associated with Ardichvili, Mitchell and Jondle‘s work (2009) ethical business cultures model. For this purpose, we chose Thumbprints Utd. Sdn. Bhd. (Thumbprints) one of the leading printing and packaging SME company in Malaysia as our sample case study. The practical justification for choosing Thumbprints is that the company has successfully managed to survive in the industry during the financial crisis by practicing and emphasizing on honesty and maintaining integrity as its guiding principles in conducting the business operation. We therefore contended that a sustainable business should thrive on ethical culture business.With this aim, we attempt to focus on actions, and ground on the rationalization of imposing ethics culture in the Malaysian corporations