Proximity and Micro-Enterprise Manager���s Ethics: A French Empirical Study of Responsible Business Attitudes Jean-Marie Courrent Katherine Gundolf ABSTRACT. This research article analyses the influence of micro-enterprise (ME) managers��� perception of their relationship to their environment on the nature of their ethics. We carried out a survey with the head managers of 125 French MEs, providing a large set of primary data. Two types of variables were defined: (1) variables related to the nature and intensity of the relationships between ME managers and their social environment, and (2) variables related to the ethical framework that the man- agers used. The results of univariate and bivariate analyses show significant statistical relationships between the variables that indicated perceived embeddedness in the community and ethical variables. This result underlines the idea that ������communities of ethics������ may have an important influence in MEs. KEY WORDS: micro-enterprise, ties, ethics, proximity, management Introduction In 2006, the Journal of Business Ethics published a special issue on ������Responsibility and small business������. In the editorial, Moore and Spence (2006) gave the following limits: ������the current academic literature on SMEs and responsible business practice focuses geographically on the local/regional and national, and on micro and meso-level issues������. Although our research is also national in its rele- vance and addresses micro- and meso-level issues, it is an additional contribution to ������this important but under-researched topic������. First, it focuses on the French context, which is still relatively rarely studied (despite the publication of a special issue of the Revue Internationale PME in 2007) and has not, to our knowledge, given rise to any publication in English language and international academic journals. The cultural aspect of this ethic, however, justifies if not conducting international research, then at least observing the practices and attitudes of the key players in a varied selection of countries. Secondly, this subject is based on a relatively large empirical study (125 businesses), which made it possible to collect a wide range of data. In addition, the question of responsibility is not touched on from the CSR perspective, but from that of the managing director���s individual ethics, defined in terms of the relationship with the company���s stakeholders. In order to avoid any methodological bias caused by misleading answers given by the people interviewed, the survey focused on the atti- tudes of the key players, and not on their behaviour. Our research is thus a contribution to the knowledge more of ������responsible business attitudes������ than ������responsible business practice������. Finally, our field of observation was micro- enterprises (MEs) and not small- and medium-sized enterprises (SMEs) in the broader sense of the term. There are two particular advantages to studying ME: First, microbusinesses represent a major part of the European economy, and are responsible for job creation and securing the well-being of many peo- ple. Nevertheless, the heterogeneity of ME makes it difficult for researchers to find common ground and to build specific theories about ME. Researchers do in fact agree that MEs are generally dependent on the vision and behaviour of their manager, and that consequently they are as diverse as humanity. In this way, and more so than in the larger SME, the decisions made by the manager (often the owner-manager) are those made by the company: there is little or no sharing of power. Studying this individual makes it possible to get a very good idea Journal of Business Ethics (2009) 88:749���762 �� Springer 2008 DOI 10.1007/s10551-008-9979-6

of the decisions made by the organisation as a whole (Dawson et al., 2002 Quinn, 1997). Secondly, and regarding the manager���s concep- tion of managerial responsibility, on the one hand, his personal characteristics in terms of ethics should have an impact on the business, whilst on the other, he is not an isolated actor, unlike what classical economic analysis may suggest. He is in fact embedded in personal and economic networks. The literature suggests that these networks play an important role in the development of the company, especially in the context of ME. This article thus analyses the link between man- agers��� ethics and their relationships to their social environment, in order to determine the repercus- sions this link may have on management decisions. After a review of the literature, we will present our method and the results of our survey. In the final part of this article, we will present our findings and discuss them, in order to suggest some avenues for future research. Literature Micro-enterprises have largely been ignored by researchers (Julien, 1993), and would have remained so if politicians had not realised (cf. recent EU programmes focused on ME) the economical importance of these very small structures. In France, more than 92% of companies have less than 10 employees (European Commission, 2008). These small businesses create more than 21% of added value, and employ 21% of all workers (Vuorinen et al., 2006). From a theoretical point of view, there is a paradoxical lack of research on MEs in com- parison with their economic importance. This may be explained by the fact that (i) MEs are often considered to be ������small SME������ and, as a result, their specificities are neither identified nor explored (ii) the consequent lack of literature prevents ME studies from building on a solid theoretical framework and (iii) the diversity and heterogeneity of MEs, which make this such a fascinating field of study, also prevent the development of coherent theories. A certain amount of effort has, however, been made recently. For example, an SME conference in 2004 held in Montpellier included a strand on the subject of MEs. Certain specific studies of ME that have been published (1) stress on several character- istics attributed to SME (Gundolf, 2006): small structure, management centralisation, low task spe- cialisation, intuitive and informal strategy, and a simple information system (Blackwell et al., 2006 Julien, 1993) and (2) emphasise a number of others: structural lack of resources (Vuorinen et al., 2006), a feeling of urgency (Torres ` and Julien, 2005), prox- imity (Julien, 1993), and the informal and personal nature of the professional relationships (Gundolf, 2006 Marchesnay, 2003 Pfeffer and Salancik, 1978 Vuorinen et al., 2006). The need for resources may lead MEs, which are often highly specialised, to opt for cooperation, for instance through strategic alliances (Vuorinen et al., 2006) or collective strategies (Astley and Fombrun, 1983 Fombrun and Astley, 1983), as a means of developing their financial structure without weak- ening it. The feeling of urgency found in MEs comes from their difficulty in overcoming external changes, notably because of short-term management and a focus on the immediate environment. Proximity plays a determining role in very small structures (Gundolf and Jaouen, 2005) because of the personal and informal nature of the links owner-managers maintain with their social environment (and their employees). The extent to which entrepreneurs are embedded in their environment (Granovetter, 1985) affects their personal and professional life, and may also influence management decisions. The networks they belong to may not only bring legitimacy, help, etc. They also constitute a framework for their social life because of the overlap between economic and social interactions in ME (Gundolf and Jaouen, 2005 Johannisson et al., 1994 Vuorinen et al., 2006). In fact, the views of ME managers are influenced by the personal relationships they have within their net- works and also by the opportunities and resources offered by their surroundings. Entrepreneurial networks do not only provide advantages by structuring relationships and exchanges, thus making coordination through trust possible. They also provide a framework for entrepreneurs��� actions. This framework imposes institutional and symbolic values and conventions (Julien, 2005 Rin- dova and Fombrun, 1999). Moral obligations may therefore arise which limit the freedom of action of the entrepreneurs. From this perspective, entrepre- neurs��� ethics are strongly tied to their network. 750 Jean-Marie Courrent and Katherine Gundolf

The search for a unifying definition of ethics, particularly in the field of management, comes up against the multiplicity of rules of action adopted and the variety of paths taken by moral conscience. It is difficult to summarise these standards as a means of extracting a common concept for good or moral behaviour. The solution does not lie in analysing this diversity, but in returning to the original question of moral sense. Analysis of the major philosophical texts devoted to ethics makes it possible to recall the profoundly individual nature of moral sense on the one hand and, on the other, the role played by morals in the preservation of the social links to which Man aspires, and which go beyond (or are at the very heart of) his egocentric desires. From these considerations it is possible to derive a definition of ethics that comes from an individualistic approach to relationships with others. An individual���s moral acts, which shape his/her relationships with others, are a translation of his/her concept of (distributive) justice. ������We can [thus] see in any moral act an attribution or allocation of something (rights, objects, feelings, intentions, etc.) to someone. Specifying this something comes down to sharing [���]������ (Moessinger, 1996, p. 105). The fundamental moral problem with which key players are faced is thus focused on the way in which, by using these rules, they consciously try to reconcile the search for personal interest with respect for others. The quest for morality in action effec- tively comes up against the limited nature of the means at their disposal, preventing them from dealing with all the parties concerned by their decision in the same manner, either directly or indirectly. Players are thus obliged to choose the partner(s) that they will privilege, morally speaking. This principle of distributive justice, underlying all moral acts, thus leads to a distribution of wealth. In other words, within the company, it leads to a distribution of added value. It is very widely accepted that morality (the object of which is to give human actions a framework that is likely to guarantee social cohesion, but which fights the centrifugal effect of each person���s search for their own personal interests) tends to limit the ambitions of all the individuals, who must take their fellow man or woman into account. Morality as we see it in an act, is also a function of the consequences that are attributed to it, satisfying the interests of others. It is in this sense that every moral act can be defined as an act of sharing. The result of this sharing is nevertheless not al- ways enough to make it possible to judge the morality of an act. In addition, there must be respect for the interests of others. The notion of respect, as explained by Kant (in Practical Reason), is the very ������moral motive������ behind the decision, pushing the player to treat others as an end in themselves, and not as simple means. In order to be moral, an act must be deliberate and disinterested: deliberate, because the respect of others must be one of the real motives behind a decision (if not the only motive), and dis- interested, because it must not be a conscious means of pursuing one���s personal interests. If this were the case, then it would no longer be a question of a moral motive but of a pragmatic motive (according to Kant). As players, by means of both their decisions and their choices, nevertheless necessarily pursue their own interests (material interests or moral satisfaction at having acted well), it is only the intention or motivation regarding others that gives the act its moral nature, independently of the vagaries of its implementation. It would be wrong to claim that an act is morally good because it satisfies the interests of others, just as it would be wrong to claim that an act is morally reprehensible because it goes against the interests of others. The moral qualification of acts thus appears to be very relative, as it is a function, when players have (or believes they have) interests opposed to those of others, of the recognised legitimacy of the satisfac- tion of their own desires. This relativity has two aspects. The judgment will vary according to the identity of the moral judge, his/her personality, experience and position as regards the act (the judge can be the actor himself/herself or an external ob- server who is more or less close to the player). In addition, the judgment, which is based on the evaluation and comparison of competing interests, can only be expressed in terms of degree in most cases. It is thus, generally, an appreciation of the ordinal, rather than cardinal, type. Different scales for measuring ethics have thus been proposed (for example, Reidenbach and Robin, 1991 Skipper and Hyman, 1993) to understand the hierarchy estab- lished by the referee in terms of the morality of behaviour. Proximity and Micro-Enterprise Manager���s Ethics 751