A Causal Model of Ethical Business Practices and Firm Competitiveness of Small and Medium Enterprises in Thailand  

Oleh:

Siriphattrasophon, Sakda ; Piriyatanarak, Sintawee

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: International Journal of Arts and Sciences vol. 06 no. 02 (2013), page 389-402.
Topik: Business ethics; Firm competitiveness; SMEs; Thailand
Fulltext: 06_02_29_Siriphattrasophon_Piriyatanarak.pdf (396.95KB)

Isi artikel

Playing a critical role in economic development, small and medium enterprises (SMEs) in Thailand have contributed remarkably to elevating income distribution and poverty alleviation through job creation as well as significantly to the nation’s exports. However, business competition at present and free trades and investment have resulted in violence and problems in terms of transparency. A lack of accountability and disclosure of material information lead to an increasing use of unethical business practices. This research was therefore aimed at testing the causal relationship between the introduction of ethical business practices and competitive competence of Thai SMEs. A questionnaire was used as the instrument for collecting data from the SMEs’ owners or committee members in 2012. The findings indicated a relatively high level of ethical business adoption and a moderate to high level of competitiveness depending on some organizational competence characteristics. Additionally, the research hypothesis was tested by means of the structural equation modeling (SEM), and the causal relationship between the application of ethical business practices and competitive competence of Thai SMEs was evident (x2 = 62.20, df = 36,x2/df = 1.72, GFI = 0.96, RMSEA = 0.04). The direct positive influence of ethical practices on firm competitiveness implies that SMEs can favorably enhance their competiveness by adopting good governance practices notwithstanding the fact that SMEs usually face a number of transactional limitations. At the end of this paper, it argues the belief that there is a general aversion to adopting ethical practices by SMEs because of the unnecessary high cost of implementation; it also recommends how to simply develop and implement an ethics for the SMEs in Thailand.

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