Conceptualizing the determinants of ethical decision making in business organizations

The article substantiates the necessity of development and implementation of ethical rules of doing business into the business practices of small and medium enterprises. Particular attention is paid to business entities in Ukraine as a country with one of the highest levels of shadow economy. The two-level structure of SMEs’ Code of Ethics designed by the author is being presented, which is based on the following key concepts: transparency of business entities activity, partnership integrity, environmental and social responsibility, which are interrelated and reflected in the individual modules of the Code.
The article presents the results of approbation of the author’s Code of Ethics for SMEs. The approbation is based on a personal and interactive questionnaire about the readiness of Ukrainian SMEs representatives to introduce ethical norms into their activities. The authors determined that Ukrainian SMEs are not well-informed about possible positive effects from following norms and rules in business, in particular, in terms of improving the business climate in the country, increasing the investment attractiveness of the economy as a whole and economic entities in particular, simplifying the access to financial and credit instruments.
The survey and questionnaire of Ukrainian SMEs confirmed the need for the development and implementation of the business Code of Ethics norms, as well as potential demand for it. The respondents recognize the importance of certain international ethical rules in conducting business, which may contribute to attracting investment in Ukraine; however, this is not the only factor affecting the investment attractiveness of domestic business. It is substantiated that the business climate improvement is a complex issue, and the Code of Ethics, in this context, creates the opportunities of guiding and encouraging participants to the active influence on the business environment: to declare zero tolerance to corruption and to form and to maintain clear position in interactions with the public authorities.

The formation of the new economy, which is replacing the industrial economy and has a multi-vector dimension1, causes deep transformations in all spheres of social existence, leads to the emergence of new forms and methods for organizing interactions between institutions that function in the area of socio-economic development. The relevance of the study is caused by the necessity of theoretical and applied substantiation of the new subjective composition and network interaction of these institutions. The scientific and practical significance of the research is to substantiate the formation and development of modern institutions and to establish a new format for their interaction within the framework of the new economy. The results of the study are aimed at identifying the latest trends in the modernization of institutes’ functions in the triad “market – state – business”. The subject of the study is the theoretical and applied principles of the social phenomenon “market – state – business”. The methodological basis for achieving this goal is systematic and interdisciplinary approaches to the study of redistribution of roles among these institutions and the improvement of their interaction in the process of ensuring sustainable development. The purpose of the research is a scientific and theoretical substantiation of the new configuration of the social phenomenon “market – state – business”. The principal position of the authors is their belief that a new interpretation should be given if not to all, but to the majority of categories and concepts that reflect the phenomena and processes occurring in the chain “market – state – business”. There is a need for a new, unorthodox, unconventional understanding of most of the phenomena and processes associated with the functioning of the leading institutions of the economy and society. The article presents the authors’ view on the contemporary role of each of the mentioned institutions, their interaction in the process of ensuring sustainable development. Particular attention is paid to the substantiation of the transformation of functions of the state and business under the current conditions. The authors demonstrate that the contemporary role and place of the leading institutions, which have to ensure sustainable development, need a new understanding.

Optimized corporate performance assumes that financial and non-financial performance can be achieved through effective collaboration between leaders and employees. This study analyzes the mediation of employee engagement on the connection between dark side leadership and leader-member exchange on corporate performance in Indonesia. This study used a mixed methods approach by distributing questionnaires to 1,013 respondents consisting of supervisors and managers and conducting intensive interviews with 20 respondents with more than 25 years of work experience to strengthen the perception of answers. The paper uses multiple linear regression analysis. The regression results show that dark side leadership (β = –0.228, ρ = 0.000) and leader-member exchange (β = 0.424, ρ = 0.000) affect employee engagement. Next, leader-member exchange (β = 0.176, ρ = 0.008) and employee engagement (β = 0.391, ρ = 0.000) affect corporate performance, while dark side leadership has no effect (β = 0.020, ρ = 0.400). Finally, employee engagement mediates the effect of dark side leadership and leader-member exchange on corporate performance. This finding indicates that the comfort level of employees at work will decrease if a leader demonstrates a dark side behavior that can affect his/her performance, which later impacts corporate performance. Furthermore, the novelty contribution of dark side leadership measurements on the cultural and emotional dimensions can impact employee turnover intention. This study offers implications for practitioners to conduct selective assessments at the beginning of leader recruitment and control internal leader assessments to create effective organizational behavior.

Acknowledgment
This paper is not supported by grants or scholarship and is free from conflict of interest.