EntrepreneurialEthics

Ethicsor rather morals entail mechanisms that defend, systematize, as wellas recommend conceptions of right or wrong. Many organizationsdevelop ethical codes to ensure employees and employers understandthe difference in doing good or bad. Additionally, companies, as wellas any persons in management, are guided by them to ensure theyprovide transparent leadership. Ethics also define how customersshould be handled. In the business perspective, it amounts to theachievement of ethical objectives through entrepreneurship. Much ofthe current literature relating to ethics and entrepreneurship isdedicated to the subject at the micro level. Additionally, weight ison the entrepreneur, with concern in moral dilemmas that may beespecially relevant to the fresh scheme setting. However, someliterature also looks at the structural dynamics of fresh ventures,and the influenceon ethical performance at thebusinesslevel.This stream of study probes at least six crucial queries.

  1. How are entrepreneurs different from non-entrepreneurs regarding ethics?

Thisinquires whether or not methodical attribute variances betweenentrepreneurs and non-entrepreneurs are remnant in the correspondinglogical differences in moral perception and deed. Whereas somestudies query the actuality of constant, systematic variationsbetween entrepreneurs and non-entrepreneurs on aspects like risktolerance, others contend that the merits necessary for productiveentrepreneurship sensibility, novelty, imagination, and creativityare ideally and systematically vital to ethical decision-making. TheIslamic people believe ethics is a two-way traffic, i.e. it should bein both entrepreneurs and non-entrepreneurs. This typically affirmsthat entrepreneurship and ethics are closely affiliated. According toJared and Bownie (2009), entrepreneurs ought to emphasize on ethicalconduct and display higher degrees of moral thinking. In addition tothat, equality or procedural justice are vital components in handlingthe relation between entrepreneurs and major investors, resulting inanticipated consequences for the entrepreneur. The focus onprinciples and fairness regarding the entrepreneur might come withits risks, nevertheless some entrepreneurs have a propensity toover-trust, hence are more susceptible to others` opportunism.Researchers also believe that entrepreneurs have a strong ‘actionbias’ which prevents them from effectively bearing in mind ethicalissues. They are mostly focused on individual financial gain morethan the firm managers [ CITATION Jar09 l 1033 ].

  1. How does an entrepreneur make ethical verdicts?

Avariety of issues influence the choices and actions of entrepreneursregarding ethics. They may be impacted by demographic factors,social-cultural influences among others. Finding an exact study toexemplify the entrepreneurial decision is extremely difficult. Thisis because entrepreneurs defer regarding how they make the decisions.For instance, individuals vary in their sensitivity to ethicalissues. The Islamic people make decisions based on the Qur’an. Anydeed that contravenes the Qur’an tends to affect an entrepreneur’sdecision [ CITATION Jar09 l 1033 ].

  1. What are the ethical dilemmas that emanate from entrepreneurship?

Entrepreneurialchallenges depend on the new venture, nature of business, andindustry setting. It can also emanate from religion. For instance, areligious entrepreneur finds it hard to sell a product at a pricethat does not portray actual value. However, selling at this pricecould result in more profits. Based on the type of industry, newschemes face unique challenges such as constant change and inadequatefinancial resources. These burdens can have an intense impact onethical decision-making procedures, ensuing in moral situations forentrepreneurs that are tense with uncertainty. Particular ethicaldilemmas can also emanate from profit division, high risk related tothe newness, legitimation, honesty, and tradeoffs in management. Inaddition to that, entrepreneurs face dilemmas regarding their values,employee well-being, external accountability, organizational culture,and customer satisfaction. The Islamic people believe acts that donot uphold Allah’s wish are unjust to the consumer. Instances thatwiden the gap between Allah’s wish and current entrepreneurialneeds result in a dilemma [ CITATION Jar09 l 1033 ].

  1. How does technological innovation affect entrepreneurial ethics

Therising advancements in technology tend to play a significant role inentrepreneurial ethics. In most cases, new ventures often emerge atthe onset of fresh innovations. Aligning the challenges brought byfresh innovation regarding entrepreneurship values is also hard.Entrepreneurs are sometimes forced to reconsider their ethicaljudgments based on technological advancements [ CITATION Jar09 l 1033 ].

  1. How institutional ethics arise in a novel venture

EntrepreneurialEthics also plays a significant role at the macro level. For example,aspects of social capital, culture, and context influence moraldecisions. Elements of corruption, illegal behaviors in the newventures are quite common [ CITATION Jar09 l 1033 ].

  1. How the stakeholder concept relates to fresh ventures

Therelation of the stakeholder concept to the entrepreneurial ethics,particularly involving fresh ventures is a fundamental aspect. Smallto medium business operators tend to prioritize customer satisfactionover stockholders or employees. In general, how are entrepreneurialstakeholders as well as their dynamics qualitatively vary fromtraditionally regarded large-organization stakeholders?

Importanceof the Study

Studyingthe entrepreneurial ethics of GCC countries will assist investors andupcoming business personalities to understand the markets beforeventuring. The Islamic States have their mechanism of operation. Itis vital to understand their cultures before engaging in any businessactivity. Ethics in business is a global thing, but tends to changeslightly from state to state. For instance, a deed may be regardedunethical in Asia, but suitable in some African states. Therefore,outlining the ethical aspects within the GCC countries could helpentrepreneurs understand their moral responsibilities. The study willalso gauge the technology standards within the GCC countries. Oman,UAE, and Qatar have exemplified steady growth over the years.However, their technology aspects cannot be compared with developedstates. This study will help to outline some of the limitations todevelopment regarding innovations. It will be beneficial to anyindividual assessing the GCC markets.

Literaturereview

Aselaborated above, morals in entrepreneurship can be displayed inseveral ways. Though most businesses envision upright undertakings,they face numerous challenges in trying to balance their profits.However, Islam emphasizes immensely on ethical values in typicallyall specs of human life. Ethics is regarded as the foremost importantthing, especially for small enterprises. Guarded by the Qur’an,entrepreneurs are forced to comprehend with the teachings to upholdhuman life. A major challenge entails making the inevitabledecisions. Apart from it being anti-business, morals provide crucialsupport for future long-term corporate values. In an Islamic setting,entrepreneurship and ethics are more than compatible. The two specsare inseparable. However, companies still contravene the ethicalneeds by indulging in corruption, employee harassments among others(Muhammad, 2013).

Onerecent example of contravention of human rights entails the FIFAWorld Cup preparations in Qatar. Though the Islamic cultureemphasizes on fair treatment of human life, the activities withinthis region did not correlate to the same. Labor exploitation inQatar is rife. As per recent findings, deaths involving workers havebeen reported even after human rights interventions. The constructionsector tasked with ensuring workers’ safety has failed to guaranteethe same. Apart from Islamic teachings, entrepreneurial ethics callfor the safeguarding of human life. However, entrepreneurs aiming tomake substantial amounts of profits tend to disregard human life.Reports by Amnesty International reveal that workers lack proper carewith most of them lacking IDs. In that regard, most can be arrestedand jailed. As a matter of fact, around construction workers died in2014. The international trade union estimates that approximately 4000workers will die before the completion of the project in 2022. Abusiness that overlooks its workers’ safety, appreciating progressand substantial profits, fails in all aspects of life (Malliris,2015).

Upcomingcompanies also have a propensity for lying to the funders/sponsors toacquire capital. In most cases, new ventures have funding issues, andentrepreneurs sometimes lie to attract investors. For instance, inQatar, only a small percentage of entrepreneurs have registeredcompanies. The Enterprise Qatar group is involved with getting theyoung people to register and startup businesses. However, in an AlFikra Competition, only one out of 18 winners had registered acompany. As one competitor mentioned, there is no connection betweenthe competition and the business creation in reality. Lackingsupport, the entrepreneurs resort to lies to attract investors. Apartfrom that, they do not get enough support regarding audience. Forinstance, Al-Doran, who managed to finish second in the Al Fikracompetition complained of limited prizes. The young entrepreneur hada healthy, fresh food concept that was supposed to be presented tothe Qatari Business and Trade Minister.However, she only got a photo session with the minister.In addition to that, she was only given QR30, 000. This amount isquite minute considering that an entrepreneur should have roughlyQR200, 000 in his/her bank account to register a business. Upcomingentrepreneurs are left with a daunting task of garnering such amountsto have an impact in the business world. In that regard,entrepreneurs are forced to go against the ethical requirements (DohaNews Team, 2013).

Thegovernment has a vital role to play in the establishment of moralcodes. As entrepreneurs indulge in maximizing their profits, consumerquality may be compromised. In a move to protect the consumers, theUAE Banks Federation relayed a code of ethics that governed lenders.The ethical code has relations between banks, management, andcustomer service. In addition to that, a website to reveal lenderswho provided poor services was created by the UAE Banks Federation.Entrepreneurs face financial challenges while coming up with a newidea. Most have to seek assistance from the banks for loans. However,some banks take advantage of the entrepreneurs by offering poorservices or charging them highly. Such practices can be preventedthrough government intervention. For example, the government couldregulate the interest rates by setting limits. responsibility should not only be a duty of the business person. Itinvolves all stakeholders associated with the product or service. TheUAE Bank Federation eliminates dishonest adverts on credit cards andinterest rates. The code of ethics inhibits bankers aiming to makesubstantial profits using illegal means (Kassem, 2013).

Cultureis another hindrance to entrepreneurial activities. The privatesector in Oman is quite small with very few people indulging inentrepreneurship. Entrepreneurs are forced to make decisions based onthe cultural background which sometimes hinders advancements. Infact, a 2003 study showed that less than two people out of 100started new ventures. Comparing this to one out of ten in the UnitedStates, the levels are quite small. The few entrepreneurs are notnatives of the country. Entrepreneurs are sometimes forced to makedecisions based on cultural aspects. For instance, womenentrepreneurs face a daunting task of coming up with fresh ideas in aworld dominated by men. Also, a government post or even a highmilitary position is perceived favorably by the society than asuccessful entrepreneur. The Omani citizen site that regulatory andmanagement issues as the core hindrance. According to the 2016 WorldBank report, Oman ranks 70 out of 189 regarding ease of conductingbusinesses. This suggests that country’s ease of doing business isworsening with time since it was ranked 65 out of 183 in the previousyear. Bureaucracy and an ineffective government affectentrepreneurial progress in the region. Lacking an appropriate policythat governs their undertakings, entrepreneurs are put in aprecarious position to make ethical decisions. The very fewsuccessful entrepreneurs are celebrated even in the media. They areleft with the utmost responsibility of choosing a good or badpractice in their venture. A good example is the quality of productand service. Entrepreneurs are known to value profits more thancustomer satisfaction. In situations where they are forced to choosebetween the two, they mostly prefer profits. Another aspect is thevalue of products and services. Some entrepreneurs are known toovercharge much to the anguish of consumers (Al-Shanfari, 2012).

Asearlier illustrated, technological advancements also play asignificant role in making ethical decisions. Oman is not atechnologically gifted region. As per the 2010 study by the GlobalCompetitiveness Report, Oman was positioned at 61 out of 128regarding technical readiness. The businesses are reluctant to adoptnew technologies whenever they are available. Advancements intechnology tend to ease the mode of operation. Therefore,entrepreneurial ethics suggest if a new technology improves customersatisfaction, but lessens the profits, then it is appropriate toconsider advancing. However, lack of advancements in technology andadoption of new mechanisms pose a challenge to the ethicalentrepreneurship (Al-Shanfari, 2012). According to research, internetusage across the Arab States is considerably lower as compared to thedeveloped countries. Though the GCC states have experienced a growthin internet usage, it still lags the developed states. The same canbe shown through the mobile broadband subscriptions. Therefore, thereadiness for technology is a challenge to some of the GCC statesparticularly Oman.

Assessmentof corruption in the stock market across the GCC countries can alsoillustrate its impact on entrepreneurial decisions. Using theCorruption Perception Index (CPI), its correlation with developmentin Stock market can be shown. Earlier studies suggested thatcorruption held positive impacts on the development of stock markets.This is because they allowed expediting of transactions and privatefirms would overcome unproductive policies as well as governmentalbodies. Some businesses opt to indulge in corruption to get easieraccess to the markets. It, therefore, results to a logical query, iscorruption profitable? Should entrepreneurs use corrupt means to getbetter access to the markets? It is an ethical question mostentrepreneurs face, especially in the GCC countries. Research hastried to vindicate the fact that bribery decreases uncertaintieshence leading to positive performance. Furthermore, it is a means ofovercoming institutional weaknesses, especially in highly regulatednations that do not have effective governance (Moaz Alsherfawi,2015).

Incontrast, several research works also suggest corruption has anegative effect on stock market development. Marshal (2011) affirmsthat corruption decreases competition, thereby minimizing economicgrowth. In his assertion, corruption in the GCC countries effectivelyrobs them the chance to progress economically since it impairs theeffectiveness of domestic and foreign companies. Moreover, corruptionraises the costs, making it even harder to conduct internationalactivities primarily obtaining permits and licenses. The impact ofcorruption in the GCC states cannot be clearly elaborated. As much asit heightens the cost of acquiring permits, it also helps to reduceuncertainties. Econometric assessments perpetuate that corruption inthe GCC nations is positively related to financial marketdevelopment. For example, instead of an entrepreneur making profits,he/she has to deal with corrupt officials who embezzle money thatcould be used for other developments. Instead, the money is used forpersonal gain. It, therefore, greases economic development. Anentrepreneur, mostly indulges in acts that benefit them economically.Therefore, if a corrupt deed benefits a business venture, the choiceof participating in it conjures an entrepreneurial dilemma.

Trainingand education are essential for any business to succeed. Oman’seducation system is another challenge. requires an educated population. Both the entrepreneur and consumermust have some level of knowledge to relate to various businessundertakings. According to the majority of the Arab CEOs, theeducation system in Oman promotes memorizing and imitation instead ofcreativity and innovation. The present system lacks business-relatedknowledge within the curriculum. Initiatives championingentrepreneurship programs are also countable in number. In fact, onlySANAD, a government initiative has tried to train unemployedindividuals. The Education system has been accused of producing anincomplete national cadre. The entrepreneurs, therefore, lack theappropriate skills to venture adequately. They are bound to indulgein unethical business behaviors. In other words, they are not wellacclimatized to the entrepreneurial ethics and tend to get involvedin unethical practices unknowingly (Al-Shanfari, 2012).

Theentrepreneurial practice requires some level of trust among all thestakeholders involved. Customers must trust the companiesentrepreneurs must trust the government among others. However, theUAE business culture suffers from shareholder rights, irregularitiesin domestic markets, and conflict of interest among the executives.This has led to the enactment of stringent ethical standards toregulate businesses and provide a conducive environment forentrepreneurs. Since the 2008 meltdown that impacted negatively onmany businesses, the government has moved to alleviate such fears byadopting laws like the Emirates Securities and Commodities Authority(SCA). Entrepreneurs must trust their markets to indulge in honestactivities (Halime, 2011).

Anothercommon entrepreneurial dilemma involves the ultimate result. In otherwords, what is the next step for successful entrepreneurs? It is inhuman character to want more. Quenching the thirst for cash has neverbeen easy. In that regard, one an entrepreneur is successful in oneventure, he/she tends to venture in another. Frequently, wealthyentrepreneurs seek power, especially in politics. In the GCCcountries, successful entrepreneurs indulge in challenging ventures.For instance, they move to acquire big sporting clubs such asfootball clubs. The sense of ownership is quite evident among the GCCnations. A good example can be seen by the business ventures of AbuDhabi. The group has ventured in many sporting clubs includingfootball clubs such the U.K. based Manchester City Football Club. Anentrepreneurial thirst is rarely quenched.

TheUAE economy is typified by high levels of government and familyownerships. The country’s financial system relies sparingly on thecapital markets to get the necessary funds. Neither banks norcompanies feel the necessity to create corporate governancetechniques. The firms can trust the banks for continuous finances,whereas the banks feel contented with the government guarantees. Inthis case, institutional investors have limited roles. In addition tothat, accountability is also quite minute. Although the country hasremarkable economic growth, it does not display corporate governanceor entrepreneurial ethics. As noted by Badr Jafar, the CEO ofCrescent Enterprise based in the UAE, the country lacks appropriatecorporate governance hence impacting negatively on foreign directinvestment. In most of the UAE companies, the relation betweenshareholders, board of directors, and management is not wellbalanced. The knowledge of business ethics within the organizationshas not been clearly revealed. Even with the growing trend ofcorporate governance, organizations in the UAE have not displayed it(Abdelaziz, 2013).

ResearchMethodology

Thisstudy utilized publications done by different scholars. In additionto that, a few interviews were conducted to ascertain theentrepreneurial ethics in the GCC countries. is a global thing, and many scholars have attempted to relate theissue across the various countries. By going through variouspublications on business ethics in the GCC countries precisely Oman,UAE, and Qatar, this study is based on the findings. As a means ofsubstantiating the findings, the study utilized information from thedifferent governments as well as international bodies. For instance,Qatar’s ethical conduct of workers was obtained from research worksdone on FIFA and its treatment of employees. In general, this studyis mainly based on publications targeting the GCC countries inconsideration.

Interpretationof results and conclusions

Inan attempt to ascertain the situation on the ground, one upcomingentrepreneur by the name Al-Doran was interviewed. Being a competitorin the Al Fikra competition in Qatar, the interviewee expected morethe event. She had improvised a healthy, fresh food concept thatpropelled her to finish second in the competition. However, shesuggested that there was no connection between the competition andbusiness creation. It is also the reason why very few companies areregistered in Qatar (Doha News Team, 2013).

Likemany other professions, entrepreneurs are faced with a daunting taskof maintaining honesty in a dynamic business world. Some businesspeople manage to stay true to ethical codes, while others indulge inthe dishonest acts just to remain competitive. An entrepreneurialmind is characterized by making profits as the primary requirement.In most cases, they jeopardize the ethical values just to ensure theystay profitable. Apart from that, the entrepreneurs face ethicaldilemmas, especially in customer satisfaction. Is it appropriate tolie to the consumers just to sell products or services? Is it fittingto lie to the investors just to attract funds? As much as it may seemeasy, making a suitable decision is quite hard.

Asexemplified above, the GCC countries have been quite successfulregarding economic growth. The business environment is quite dynamicand the entrepreneurs ought to adjust accordingly. According to somestudies, corruption held positive impacts on the development of stockmarkets. Through corruption, entrepreneurs can avoid excessivepermits and regulations. Corruption can also be detrimental toeconomic growth. Viewing it from both sides, corruption has bothnegative and positive impacts, especially in the volatile GCCgovernance.

Oneobservation in across the GCC countries in consideration is theconsistent growth in internet usage. Embracing the internet is amajor indicator of appreciating technological growth. The threestates have been experiencing a rise in internet usage as indicatedby the graph above. The graph indicates the percentage of Internetusers by the year 2016. Out of a population of 9,266,971 in the UAE,8,515,420 have internet access. In Oman, 3,310,260 residents out of4,654,471 have access to the internet. Qatar has a 92% internetusage, i.e. out of 2,291,368 people 2,108,970 access the internet.

Theentrepreneurial ethics responsibility cannot be solely left on thebusiness personalities. Instilling a favorable business environmentfor both consumer and entrepreneurs is a collective responsibilityinvolving the government and other stakeholders. Therefore,establishing entrepreneurial institutions to educate populations is agovernment’s duty. As exemplified by the GCC countries, someefforts have been directed towards promoting education and trainingin schools. In that regard, future entrepreneurs will be wellacclimatized to the different business requirements. It would alsoassist them in making ethical decisions. Decisions could range frompractical means of venturing into a business to the ways of spendingthe money.

Limitationsof the study

Thefact that this study mainly relied on publications is a majorlimitation. Some publications tend to contradict each other and henceit is upon the researcher to make accurate judgments. Apart fromthat, the ethical conducts of GCC countries is not a popular topic.In other words, adequate research has not been done to ascertain theactual state of business ethics in the region.

Furtherdirections

Thoughthe research is not substantive enough, it presents a clear pictureof the current state in the GCC countries. The challenges intechnology are slowly diminishing suggesting the future will bebetter. As exemplified above, the major challenge in UAE pertainscorporate governance. Outside investors are afraid to venture in thestate fearing the laws are not stringent enough to protect all thestakeholders. As for Oman, the major challenge involves the educationsystem. The country is slowly appreciating technology, which is amajor development driver. The ethical standards in Qatar are quitequestionable, especially when you look at the FIFA constructionproject where workers are mistreated. Islam recommends thatentrepreneurs must be ethical in their undertakings. However, theextent of ethical issues within the GCC countries has not been welladdressed. A detailed research, including interviews, questionnaires,and observation must be done to substantiate the entrepreneurialethics within these states.

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