Global Business and Management Research: An International Journal - 2024 : Understanding Factors of Ethical Culture towards SME Performance: Transparency Matters

Dr. Siti Masitah, Ashar and Prof. Madya Dr. Dewi Izzwi, Abdul Manan and Fauziah, Yusof (2024) Global Business and Management Research: An International Journal - 2024 : Understanding Factors of Ethical Culture towards SME Performance: Transparency Matters. Global Business and Management Research: An International Journal, 16 (4). pp. 1666-1684. ISSN 1947-5667

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Abstract

Purpose: Small and medium enterprises (SMEs) are important as they drive most of nations market economy around the world helping small and medium sized businesses. The aim of this study is to evaluate the impact ethical culture using factors of clarity, supportability and transparency on the performance of small and medium enterprises (SMEs) in Malaysia. Data was analysed using PLS Path-modelling (SEM) with the latest SmartPLS software as the method of analysis. Design/Methodology/Approach: Data for this research was collected from SMEs business owners, directors and managers in Malaysia. A total of 162 questionnaires were obtained in this study. The study examines factors of ethical culture which consists of clarity, supportability and transparency. SmartPLS was employed for structural equation modelling to analyse the relationships between ethical culture and performance. Findings: The results show that transparency strongly influence business performance showing that it is important to promote transparent ethical values in any business operated organisation. Our findings reveal the importance of having a transparent business operations in tandem of improved performance. Research Limitations/Implications: While the study provides valuable insights into the impact of ethical culture on the performance of SMEs in Malaysia, there are certain limitations to be acknowledged. The sample size of 162 questionnaires may be considered relatively small, and the generalisability of the findings to all SMEs in Malaysia might be limited. Additionally, the study focuses on specific factors of ethical culture; clarity, supportability, and transparency, leaving room for further exploration of other dimensions. Practical Implications: The findings of this study hold significant practical implications for SMEs in Malaysia. Business owners and managers can leverage the insights to cultivate and enhance ethical culture within their organisations. Emphasising clarity, supportability, and transparency has a possibility to contribute to improved performance outcomes. Implementing ethical practices not only aligns with societal expectations but also enhances the overall reputation and sustainability of SMEs. Originality/Value: This study adds original value to the existing literature by specifically exploring the relationship between ethical culture and performance in the context of SMEs in Malaysia. The focus on clarity, supportability, and transparency as key dimensions of ethical culture contributes to further understanding of how these factors influence overall business performance. The use of Structural Equation Modeling (SEM) and SmartPLS software enhances the empirical findings and provides an enhanced analysis framework.

Item Type:	Article
Uncontrolled Keywords:	Small and Medium Enterprises (SMEs), Ethical Culture, Performance, Malaysia, Structural Equation Modeling (SEM), Clarity, Supportability, Transparency.
Divisions:	Institute of Graduate Studies (IGS)
Depositing User:	LIBRARY1 UPTM
Date Deposited:	26 Jun 2025 08:29
Last Modified:	26 Jun 2025 08:29
URI:	http://eprints.kuptm.edu.my/id/eprint/4708

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