Why should the ethics of entrepreneurship be of particular interest and importance now? Separately, the topics of entrepreneurship and ethics have become more visible with numerous articles breaking out of the confines of academic journals and onto the editorial pages of leading newspapers and magazines. Most recently, both topics have even found a place near the top of the table in political and electoral debates.
However, there are more fundamental reasons to take the ethics of entrepreneurship more seriously than these, perhaps fleeting, references. First, entrepreneurship has emerged as a distinctive area of academic inquiry, with unique problems and questions that can be productively studied in their own right. Second, and put simply, entrepreneurship is an inescapably ethical activity – whether one views it from the societal, the organizational or the individual level, entrepreneurial action has powerful ethical dimensions and implications.
The Ethical Dimensions of Entrepreneurial Action At the societal level, entrepreneurship significantly influences the sort of lives we will live in the future. To the extent that our lives are shaped by market activity, changes in the way we will live are driven by entrepreneurs. These visionaries create and commercialize new products and services for which there has not been a market previously. We only have to look back at our lives before thepossibilities unlocked by cars, PCs and cell phones to recognize the ethical impact of entrepreneurial activity.
Entrepreneurship also exerts a powerful ethical impact through the organizations that it brings into existence. Entrepreneurship leads to the creation of enduring enterprises that ultimately reflect the values that entrepreneurs bring to their formation. We need only think of Wal-Mart, Microsoft and Starbucks to recognize the profound influence of the entrepreneur’s values, not only upon their own organizations but also upon the many organizations and people their firms touch. Such firms not only exercise tremendous economic power but also symbolic power as they become the role models for the next generation of organizations.
Finally, the ethical influences of entrepreneurship also have more immediate and individual impacts. The very process of creating new products, services and markets is a journey with its own enormous ethical impact on the stakeholders immediately affected by the entrepreneur’s actions. Such groups of individuals support the emerging venture, place much at stake and put themselves in a position of great vulnerability to the entrepreneur. Relationships formed and developed under such circumstances are necessarily imbued with strong ethical dimensions in terms of the roles and responsibilities.
Given the tremendous complexities involved in operating in new, untested areas and at the edge of knowledge, entrepreneurship requires entrepreneurs to make important, and as we have seen, often ethical, decisions under conditions of extreme uncertainty, ambiguity and ignorance. As a result, the entrepreneurial process places extraordinary ethical demands on entrepreneurs, whetherthey realize it – and act on it – or not.
In sum, entrepreneurship has ethical concerns richly woven throughout. This is not to say that entrepreneurship is an inherently “good” process or that all entrepreneurs are inherently good moral agents; rather, it is to face quite squarely the reality that entrepreneurial action leads unavoidably to ethical consequences that can be either good or bad, and whose significance we cannot afford to ignore.
An Emerging FieldAs an area of research, the field of entrepreneurial ethics is young. Much work remains to be done, particularly in better understanding the nature of the ethical dilemmas faced by entrepreneurs and the decision-making processes through which they navigate the complex issues facing them.
In my own research, I have found an important and positive role for ethics. In particular, I have found that the perceived character of the entrepreneur and her venture plan an important part in determining the entrepreneur’s success at the earliest stage of the process, when the would-be entrepreneur seeks to secure the financial and physical resources she needs to get her product to market. Given the tremendous uncertainties and risks surrounding new ventures, securing these resources from others is a crucial but extremely challenging task.
I have found that when entrepreneurs are viewed as having high integrity, when their personal values are perceived as congruent with those of the prospective resource providers, and when their ventures are perceived as making a positive social contribution, entrepreneurs are more likely to win the support of these key stakeholders.
Given this and other evidence of the role of ethics in the entrepreneurial process, as well as the undeniable and significant ethical impact of entrepreneurial action, it seems clear that the time has come to pay closer attention to the ethics of entrepreneurship.