Ethical fibre and psychological contract of social entrepreneurs

Abstract

Of the many facets of entrepreneurship under investigation, ethical fibre of entrepreneurs is hugely under-investigated (Florin et al., 2003; Zhang et al., 2003). It is evident that even today, well known organisations rely on gut feeling for assessing the ethical orientation of entrepreneurs. The difficulty in assessing ethical orientation is due to a lack of consensus amongst practitioners and researchers in objectifying ethical fibre in the context of entrepreneurship (Chell et al., 2016). It goes beyond the written, legal contracts. This paper argues that the subtle, relational and behavioural aspects of an employee’s and employer’s expectations from each other serve as an effective metric for a reliable assessment of the ethical orientation of entrepreneurs. Such implicit levels of unwritten expectations are referred to as psychological contract, which is of a much greater relevance in small and medium enterprises in today’s millennial times. A breach of psychological contract would encourage an employee to break rules of the written employment contract and reduce their work efficiency (Guchait et al., 2015; Morrison and Robinson, 1997; Thomas et al., 2016).