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Small Business Owners Doing Little to Promote Ethics, Study Says

Many business leaders are failing to provide adequately for ethics compliance in their organizations, and small-business owners, are doing little -- in some cases, nothing at all -- to promote an ethical corporate culture, according to a recent survey of CEOs conducted by the Southern Institute for Business and Professional Ethics.

Many business leaders are failing to provide adequately for ethics compliance in their organizations, and small-business owners, are doing little -- in some cases, nothing at all -- to promote an ethical corporate culture, according to a recent survey of CEOs conducted by the Southern Institute for Business and Professional Ethics.

"There is a clear pattern where smaller firms are less likely to have ethics governance programs. The larger the firms are the more likely they are to have a governance structure for ethics and diversity," said Bill Ross, Jr., associate professor of marketing at Penn State University’s Smeal College of Business, who served as an advisor for the study. "Small firms may feel like they don't need a formal ethics program, or that they don't have the resources to provide it."

The “2002 Survey of Georgia CEOs on Business Ethics” surveyed 173 CEOs of Georgia-based companies, representing a mix of industries, on their views of business ethics and on the actions their companies are taking to promote business ethics. The study finds that, although the majority of those surveyed believe business ethics is important, many have a limited investment -- or no investment at all -- in developing formal programs to promote ethical business performance.

Among the findings: 87 of the 173 respondents agreed or strongly agreed with the statement "the primary social responsibility of business is to make a profit." And 82 agreed or strongly agreed that "businesses are more likely to make ethical compromises during economic downturns." 99% of those surveyed said that high ethical standards strengthen a company's competitive position in the long run; and 150 of the respondents strongly agreed with that a company’s CEO should be the moral leader of the organization.

When asked what were the most important causes of unethical conduct among employees in most organizations, 91 of the respondents cited a failure of the organization's leadership in establishing ethical standards and culture. 10% of the respondents indicated that their firm has a board-level ethics committee, and 28% have an assigned ethics officer.

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