The ethical context of entrepreneurship: Proposing and testing a developmental framework

Michael H. Morris, Minet Schindehutte, John Walton, Jeffrey Allen

Research output: Contribution to journalArticlepeer-review

132 Scopus citations


The aim of this study is to increase our understanding of the ethical climate of entrepreneurial firms as they grow and develop. A developmental framework is introduced to describe the formal and informal ethical structures that emerge in entrepreneurial firms over time. Factors influencing where firms are within the developmental framework are posited, including the entrepreneur's psychological profile, lifecycle stage of the business, and descriptive characteristics of the venture. It is also proposed that the implementation of ethical structures will impact perceptions of the clarity and adequacy of the ethical standards of the firm and the firm's preparedness to deal with ethical challenges as they arise. Results are reported of a cross-sectional survey of small firms at different stages of development. The findings indicate the existence of four distinct clusters of firms based on their formal and informal ethical structures: Superlatives, Core Proponents, Pain and Gain, and Deficients. Evidence is also provided of statistically significant relationships between the proposed antecedent and outcome variables. Implications are drawn from the results, and priorities are established for future research.

Original languageEnglish (US)
Pages (from-to)331-361
Number of pages31
JournalJournal of Business Ethics
Issue number4
StatePublished - 2002
Externally publishedYes


  • Entrepreneurship
  • Ethical context
  • Formal and informal structures
  • Small business
  • Stages of development

ASJC Scopus subject areas

  • Business and International Management
  • General Business, Management and Accounting
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law


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