Ethical Behavior of Small Business in Russia: Problems of Regulation and Self-regulation

Over the past twenty years, business ethics issues have increasingly attracted the attention of researchers, managers and public figures. Mandatory ethics courses are taught in all leading business schools. Ethical assessment and reputation today play an important role in the conclusion of transactions, the choice of business partners, the application of regulatory sanctions, etc. And yet ethics should not be seen as a mere hobby or fashion trend. This study examineshow owners and managers of small businesses understand business ethics, as well as how do they deal with it within organizations, what ethical businesses practices they follow and what, in their opinion, are the perspectives of business ethics development in Russia. The three questions that were answered by the achieved results are: 1) What are the most common ethical dilemmas faced by Russian small businesses? 2) What are the most harmful unethical practices in the opinion of Russian small businesses? 3) What are the most effective ways to fight unethical business behavior of Russian small businesses? The empirical base consists of 10semi-structured personal interviews and 68 online survey responses from owners and managers of small Russian businesses in various industries that are located in Saint Petersburg. In the quantitative part of the study it was found that the male respondents frequently face such dilemmas as corruption and bribery, fraud, piracy and counterfeiting practices, seeking unethical schemes to access low-quality goods at lower prices, tax evasion, soliciting or offering kickbacks, lying to stakeholders. Respondents with higher income frequently face such dilemmas as corruption and bribery, piracy and counterfeiting practices, tax evasion, soliciting or offering kickbacks, lying to stakeholders. Respondents with less business experience frequently facesuch dilemmas as piracy and counterfeiting practices and lying to stakeholders. The other finding are discussed further in this study. The findings of this research should help future studies to dig the issue of business ethics further and provide scientific community with a broader picture the current state of business ethics in small businesses in Russia. Besides, these finding should also help people who are planning to start own businesses, since there is a high possibility that they will have to face these dilemmas. Keywords:business ethics, small businesses, ethical dilemmas, unethical business practices