Mamabolo, Anas acia; My es, Ke in; Pog und, Gideon
A icle
Smes' pe spec i e on how e hical leade ship suppo s
communi y engagemen in buye -supplie powe
asymme ic ela ionships
Adminis a i e Sciences
P o ided in Coope a ion wi h:
MDPI – Mul idisciplina y Digi al Publishing Ins i u e, Basel
Sugges ed Ci a ion: Mamabolo, Anas acia; My es, Ke in; Pog und, Gideon (2025) : Smes' pe spec i e
on how e hical leade ship suppo s communi y engagemen in buye -supplie powe asymme ic
ela ionships, Adminis a i e Sciences, ISSN 2076-3387, MDPI, Basel, Vol. 15, Iss. 3, pp. 1-18,
h ps://doi.o g/10.3390/admsci15030072
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Ci a ion: Mamabolo, A., My es, K., &
Pog und, G. (2025). SMEs’ Pe spec i e
on How E hical Leade ship Suppo s
Communi y Engagemen in
Buye –Supplie Powe Asymme ic
Rela ionships. Adminis a i e Sciences,
15(3), 72. h ps://doi.o g/10.3390/
admsci15030072
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A icle
SMEs’ Pe spec i e on How E hical Leade ship Suppo s
Communi y Engagemen in Buye –Supplie Powe
Asymme ic Rela ionships
Anas acia Mamabolo * , Ke in My es and Gideon Pog und
Go don Ins i u e o Business Science, Uni e si y o P e o ia, Illo o 2196, Sou h A ica; my [email p o ec ed] (K.M.);
[email p o ec ed] (G.P.)
*Co espondence: [email p o ec ed]
Abs ac : The inc easing mo al challenges acing o ganiza ions lag he signi icance o
e hical leade ship. Despi e he signi icance o p omo ing mo al beha io , he exis ing
li e a u e has sca cely looked a e hical leade ship in small and medium en e p ises (SMEs)
and s udied i s ou comes beyond he o ganiza ion. The e o e, his s udy in es iga ed he
ela ionship be ween e hical leade ship and communi y engagemen mode a ed by he
ea men o SMEs as supplie s and cus ome s. The s udy a gues ha e hical leade ship
is impo an in helping SMEs execu e communi y engagemen ac i i ies, bu ha his
depends on ex e nal ac o s. When en ep eneu s a e ea ed un ai ly by he powe ul la ge
co po a es, hey will no be able o execu e hei ac i i ies. We conduc ed a quan i a i e
s udy o answe he esea ch objec i e and es he hypo heses. The inal sample consis ed
o 276 pa icipan s, and he da a we e analyzed by using mul iple hie a chical eg ession.
The s udy ound ha e hical leade ship p edic ed communi y engagemen . Howe e ,
he mode a ing ole o he ea men o SMEs as supplie s and buye s on he ole o
e hical leade ship and communi y engagemen was no signi ican . The s udy p o ides
insigh s on e hical leade ship in he con ex o communi y engagemen and buye –supplie
ela ionships. Also, he s udy shows ha SMEs con inue p ac icing e hical leade ship
and communi y engagemen , ega dless o how hey a e ea ed as supplie s and buye s
by la ge companies, alluding o he impo ance o e hical leade ship. Las ly, he s udy
p o ides insigh s in o he in e ac ions be ween leade ship and communi y engagemen in
he con ex o buye –supplie powe asymme y.
Keywo ds: e hical leade ship; communi y engagemen ; small and medium en e p ises;
buye –supplie ela ionships
1. In oduc ion
Resea ch in o he ela ionship be ween e hics and leade ship in en ep eneu ial busi-
nesses has been explo ed in many s udies, wi h some schola s inding ha en ep eneu s’
e hical leade ship can enhance he g ow h and pe o mance o small i ms (Sla ec Gomezel
& S i a ,2023). Howe e , ou unde s anding o leade ship in en ep eneu ial businesses
ha a e augh wi h e hical complexi ies in di e en cul u al con ex s emains agmen ed
(A ab e al.,2022). The e is s ill much o be disco e ed abou how con ex in luences he
e hical beha io o en ep eneu ial leade s (Vallas e e al.,2019).
Such knowledge would be impo an because i is gene ally accep ed ha en-
ep eneu ial businesses a e engaged wi h he communi ies in which hey ope a e (Madden
e al.,2006;Wig en-K is o e son e al.,2022). Communi y engagemen plays a signi ican
Adm. Sci. 2025,15, 72 h ps://doi.o g/10.3390/admsci15030072
Adm. Sci. 2025,15, 72 2 o 18
ole in he abili y o en ep eneu ial leade s o mobilize and acqui e esou ces, as well as
hei capabili y o gene a e new esou ces. Howe e , a ecen e iew c i icizes he li e a u e
o ailing o ea he en ep eneu as ac i ely engaging wi h hei communi y con ex
(Wig en-K is o e son e al.,2022) and o he s akeholde s wi hin hei business en i on-
men . We a gue ha e hical leade ship can be e explain how en ep eneu s engage wi h
hei communi ies.
The exis ing li e a u e has s udied communi y engagemen as pa o co po a e social
esponsibili y (CSR) (Rudi o e al.,2022). Since he e is no uni ied de ini ion o CSR, he
concep is g ounded on he idea ha “socially esponsible companies ake in o accoun
all hei ac i i ies, econcile hei in e es s wi h he in e es s o sha eholde s, employees,
consume s, he en i onmen , hei communi y and o he s akeholde s, as well as ake
esponsibili y o hei impac on he en i onmen ” (Ba auskai e & S eimikiene,2021,
p. 284). An o ganiza ion will equi e i s leade s o champion he i m’s CSR engagemen .
In his a ea o esea ch, schola s epo ha e hical leade ship is a p edic o o engagemen
in CSR ac i i ies (Ullah e al.,2022).
While he ela ionship be ween e hical leade ship and CSR ac i i ies is al eady known
(A ab e al.,2022;Kim & Thapa,2018;Ullah e al.,2022), i is a gued ha o he con ex ual
con ingencies in CSR- ela ed decisions should be explo ed (Nicoa a & Kadile,2024). The
de ini ion o CSR by Ba auskai e and S eimikiene (2021) shows ha CSR has many aspec s,
bu ou in e es in his case is in communi y engagemen . Ou esea ch esponds o he
call o g ea e esea ch in o hese aspec s o con ex ual con ingencies by examining he
ela ionship be ween e hical leade ship and communi y engagemen in Sou h A ican small
and medium en e p ises (SMEs) in luenced by ex e nal con ingencies in buye –supplie
ela ionships. Focusing on Sou h A ica, one o he leading economies in A ica, could
help o explain how he con ex ual nuances in luence CSR in how SMEs engage wi h la ge
companies and communi y engagemen ac i i ies (Odu o e al.,2024).
To help elucida e he ela ionship be ween e hical leade ship and communi y engage-
men (Nicoa a & Kadile,2024), ou s udy p o ides insigh s in o he mode a ing ole o he
ea men o SMEs as supplie s and cus ome s by la ge companies in he buye –supplie
ela ionship, an a ea o esea ch no adequa ely explo ed be o e. Ou submission is ha he
ela ionship be ween e hical leade ship and communi y engagemen is con ingen on wo
ac o s. Fi s , he ea men o SMEs as supplie s has nega i e implica ions on p o i abili y,
especially i he e is a powe imbalance (Nabee & Swanepoel,2021). I SMEs as supplie s do
no ob ain hei paymen s on ime, hey will no be able o engage in communi y ac i i ies.
The same will happen when SMEs a e buye s. Thei limi ed abili y o pu chase in la ge
quan i ies om la ge companies could nega i ely a ec hei businesses’ ope a ions and
pe o mance h ough being cha ged highe p ices o smalle olumes (Madden e al.,
2006), ul ima ely ha ing an impac on hei engagemen ac i i ies. The e o e, we decided
o explo e he ela ionship be ween e hical leade ship and communi y engagemen , as
mode a ed by he ea men o SMEs as supplie s and cus ome s.
Ou esea ch ma e s because he es ablishmen and g ow h o en ep eneu ial busi-
nesses plays a pi o al ole in he u u e economic and social de elopmen o Sou h A ica.
Howe e , many ma ke s a e domina ed by la ge companies, making i di icul o small
businesses o access hese ma ke s and compe e o he esou ces hey need in an e hi-
cal manne . This si ua ion exis s, despi e B oad-Based Black Economic Empowe men
(B-BBEE) legisla ion, which incen i izes co po a e Sou h A ica o become mo e inclusi e
by in eg a ing p e iously disad an aged en ep eneu ial businesses in o hei alue chains
(Shai e al.,2019). Howe e , in p ac ice, en ep eneu s expe ience he exe cise o co po a e
powe in such inclusi e supply chains o he ex en ha i ac i ely damages he abili y o
he en ep eneu ial businesses o su i e and g ow. En ep eneu ial businesses ha a e
Adm. Sci. 2025,15, 72 3 o 18
embedded in local communi ies because o hei e hical managemen p ac ices migh ha e
o ind a way o o se he exe cise o co po a e powe .
The manusc ip is o ganized as ollows: Fi s , we p esen ed he in oduc ion, which
p o ided he heo e ical aming o he s udy. Second, he li e a u e e iew del es deepe
in o explaining he s udy’s key concep s and he o mula ing o he concep ual model.
Thi d, he me hodology sec ion explains how he da a we e collec ed and analyzed. Fou h,
we p esen he s udy’s indings, ollowed by he discussions o he indings agains he
exis ing li e a u e. The s udy concludes by p o iding he implica ions o p ac ice and
sugges ions o u u e esea ch.
2. Theo e ical F amewo k
2.1. E hical Leade ship
The mo al challenges aced in unning and managing o ganiza ions ha e made e hical
leade ship impo an in oday’s business wo ld (Amo y e al.,2024). E hical leade ship
is de ined as he “demons a ion o no ma i ely app op ia e conduc h ough pe sonal
ac ions and in e pe sonal ela ionships, and he p omo ion o such conduc o ollowe s
h ough wo-way communica ion, ein o cemen , and decision-making” (B own e al.,
2005, p. 120). In simple e ms, e hical leade ship is he mo al conduc o a leade in a way
ha ollows ules and p omo es he wellbeing o s akeholde s (Banks e al.,2021). Mo al
conduc includes beha io al quali ies, such as hones y and us wo hiness, p omo ing
e hics among employees, and gi ing employees he oppo uni y o aise e hical ques ions
(Sla ec Gomezel & S i a ,2023).
While e hical leade ship has been s udied ex ensi ely in gene al managemen and
leade ship li e a u e (Banks e al.,2021;Peng & Kim,2020), he en ep eneu ship space
app ecia es he ole o e hical leade ship o en ep eneu s (Pauceanu e al.,2021). This
allows en ep eneu s o play a signi ican ole in enhancing he e hical o ien a ion o hei
businesses (Sla ec Gomezel & S i a ,2023). Wi hin en ep eneu ial ac i i ies, he ocus
has been on he an eceden s and ou comes o e hical leade ship. The an eceden s esea ch
shows ha e hical leade ship eme ges om he en ep eneu ’s own alue sys em ha is
used o manage he e hical challenges wi hin he o ganiza ion (Lingwa i & Mamabolo,
2023). The ocus on he ou comes o e hical leade ship wi hin he en ep eneu ial businesses
e eals ha en ep eneu s wi h e hical leade ship can d i e hei i ms’ g ow h (Sla ec
Gomezel & S i a ,2023). Ou esea ch ocuses mo e on expanding he esea ch o include
he ou comes o e hical leade ship. We a gue ha en ep eneu s wi h e hical leade ship
ai s and capabili ies will ha e a s onge engagemen wi hin hei communi ies.
2.2. Communi y Engagemen
Communi y engagemen is embedded wi hin he CSR engagemen esea ch (Ba-
auskai e & S eimikiene,2021). I can be a gued ha communi y engagemen is he c i ical
pa o he i m’s CSR jou ney ha ensu es sha ed alue c ea ion (Rudi o e al.,2022). A
ecen sys ema ic li e a u e e iew showed ha he e is a g owing numbe o esea ch
s udies on SMEs engaging in CSR ac i i ies wi hin hei communi ies (Odu o e al.,2024).
These la es indings show ha li e a u e is shi ing om he ea lie ocus o CSR wi hin
la ge companies o showcasing small businesses (Russo & Tenca i,2009). SMEs a e al eady
deemed sui able o being in ol ed in CSR because o hei po en ial o app oach social
ac i i ies pe sonally and in o mally, as hey connec be e o he needs o he communi ies,
and hey a e known o engage wi h he communi ies ou o eal in e es (Panwa e al.,
2016). Fu he , hei p oximi y o communi ies enables SMEs o be pa o communi y
ac i i ies, despi e he sho age o esou ces (Beckmann e al.,2023). SMEs in indus ies ha
ha e less egula ions end o in eg a e CSR ac i i ies in hei business models o sha ed
Adm. Sci. 2025,15, 72 4 o 18
alue a he han hose in highly egula ed indus ies, o example manu ac u ing, which
a e manda ed by laws (Pillai e al.,2022). This means ha engagemen in social issues is
inhe en ly con ex -speci ic (Nicoa a & Kadile,2024).
Wi hin he en ep eneu ship li e a u e, i was no ed ha small en e p ises iew com-
muni y engagemen as a du y, one ha is no o be beg udged bu accep ed willingly
(Beckmann e al.,2023;Madden e al.,2006). The au ho s explained ha he signi ican
d i e o communi y engagemen is o con ibu e o local causes and o be seen as being
ac i e in he communi y. The wo k o small en e p ises wi hin communi ies is seen h ough
bo h ac i e and passi e ac i i ies. These ac i i ies include dona ions, p o iding aining,
and suppo ing olun ee wo k (Lo enz e al.,2016). We a gue ha e hical leade s wi hin
en ep eneu ial businesses p omo e communi y engagemen . Howe e , his ela ionship
will be in luenced by how SMEs as cus ome s and supplie s a e ea ed by o he s akehold-
e s, such as la ge businesses. As la ge businesses con ibu e o he e enue o SMEs, in
u n, his enables en ep eneu s o engage wi h hei communi ies.
2.3. Powe Asymme y in Buye –Supplie Rela ionships
Business ac i i ies o SMEs in ol e engaging wi h di e en la ge companies as sup-
plie s and cus ome s. Buye –supplie ela ionship dynamics a e ancho ed in he supply
chain, and hus help us o unde s and how en ep eneu s engage wi h la ge companies
(Scuo o e al.,2017). Resea ch has ocused mos ly on SMEs as supplie s and how hey
manage buye s’ expe iences o compe i i e ad an age (Kuma e al.,2022). These small
businesses ensu e ha hey mee hei buye s’ expec a ions by enhancing hei sus ainabil-
i y o ien a ion, hei managemen capabili ies and hei echnological capabili ies (Kuma
e al.,2022). Unde s anding he na u e o he ela ionship be ween he en i ies is impo an
because i has implica ions o he pa ies in ol ed du ing he engagemen , ega dless
o hei size (Mo issey & Pi away,2006). Bo h he buye s and supplie s would wan
he ela ionship o wo k o he achie emen o a compe i i e ad an age, o ganiza ional
esou cing, cos educ ion, and inno a ion (Maleki e al.,2023); he e o e, ensu ing ha
he ela ionship is success ul and is buil on us is c i ical in achie ing he desi ed goals
(Chen & Lewis,2024).
Al hough small businesses pa icipa e in buye –supplie ela ionships, hese en i ies
migh no ha e a no ewo hy pu chasing and selling powe (Adams e al.,2012). The eason
o hei limi ed pu chasing powe could be he ac ha hey a e esou ce-cons ained and
disad an aged because o hei size, and some a e no adequa ely capable o deli e ing
goods and se ices on a la ge scale (D o skie & Okanga,2016;Mo issey & Pi away,2006).
These ac o s esul in asymme y, which alloca es powe o he be e - esou ced en i y,
hus esul ing in a powe imbalance (Touboulic e al.,2014). When he powe is applied
by he be e - esou ced o ganiza ion in a ai manne , i a ec s he achie emen o a ious
o ganiza ional goals. These include economic, en i onmen al, and social sus ainabili y
o bo h buye s and supplie s (Talay e al.,2020). Ano he pe spec i e a gues ha he
nega i e impac could be mo e se e e o he less-powe ed en i y (Touboulic e al.,2014).
Fo example, small Sou h A ican i ms ha eel bullied by la ge businesses sell di ec ly o
he public (Nabee & Swanepoel,2021).
The e a e a ious ins ances whe e SMEs a e able o na iga e he exis ing powe
imbalance. Fo example, in e nally, SMEs can use echnical adap a ions o hei p oduc s
and se ices o gene a e cong ui y be ween hei pa ne s (Soon o n hum e al.,2020). Some
SMEs also adjus hei p ice s a egies o ensu e ha hei p ices a e p e e able o hose
o hei compe i o s, hus gi ing hem mo e le e age o engage la ge companies (Nabee
& Swanepoel,2021). Howe e , his p icing s a egy could a ec he p o i abili y o he
business (Ouppa a e al.,2024), and long e m, hei sus ainabili y. Ex e nally, SMEs can
Adm. Sci. 2025,15, 72 5 o 18
le e age he s ong connec ions hey ha e wi h communi ies o con inue hei ac i i ies,
ega dless o he powe dynamics hey expe ience om he la ge companies (Beckmann
e al.,2023). Las ly, SMEs a e in cons an nego ia ions wi h hei cus ome s as a way o
minimizing he powe imbalance (Nabee & Swanepoel,2021;Ouppa a e al.,2024).
The exis ing li e a u e has ocused on SME as ei he a supplie o buye in di e en
s udies, wi hou explo ing SMEs as bo h supplie s and buye s in he same o single
s udy (Adams e al.,2012). Ou s udy explo ed he expe iences o scena ios when hese
businesses engage wi h la ge companies o pu chase goods and when hey sell goods o
hese big businesses.
2.4. T ea men o SMEs as Buye s
The owne –manage o a small business is esponsible o making pu chases and
main aining he ela ionships wi h supplie s (Mo issey & Pi away,2006). Despi e he
owne –manage ’s good in en ions o main aining ela ionships as a buye , he business’s
size asymme y can in luence he le els o coope a ion which a pu chasing SME could
expec om a la ge supplie (Mudambi e al.,2004). Fo example, small and medium
en e p ises do no ha e adequa e pu chase olume; he e o e, hey o en expe ience powe
asymme y (D o skie & Okanga,2016;Touboulic e al.,2014). The small business’s lack o
powe when compa ed o la ge businesses makes i challenging o small businesses o
eques lowe p ices and nego ia e o be g an ed be e e ms and condi ions (Finley,1984).
In o he wo ds, he deg ee o closeness o he la ge company and he SME, e en asking o
p ice educ ions, is dic a ed by he la ge supplie s (Mo issey & Pi away,2006). Howe e ,
an en ep eneu wi h speci ic manage ial and beha io al cha ac e is ics will de e mine he
app oaches o s a egic pu chasing ac i i ies (Talay e al.,2020).
2.5. T ea men o SMEs as Supplie s
In mos cases, in hei ole as supplie s, la ge businesses wo k o ensu e ha small
businesses adhe e o hei equi emen s (Touboulic e al.,2014). I was ound ha
ma ke -o ien ed SMEs ha supply la ge companies end o ha e a compe i i e ad an-
age (Maina des e al.,2022). In Sou h A ica, la ge companies pu hei small business
supplie s h ough he supplie de elopmen p og ams o ensu e ha hey deli e quali y
p oduc s and se ices (Shai e al.,2019). Howe e , he lack o equi ed capabili ies ( inan-
cial and ope a ional) o be able o deli e and he liabili y o hei small size expose small
businesses o some o m o bullying by la ge companies (Nabee & Swanepoel,2021). Fo
example, he la ge business, in i s ole as he mo e powe ul i m, could ac oppo unis-
ically and make ag eemen s ha will a o i s own in e es s a he han hose o a small
business (Touboulic e al.,2014). O he examples o bullying include la e paymen s and
long paymen e ms, which will a ec he pe o mance o he small en e p ise in a nega i e
manne (Nabee & Swanepoel,2021;Ouppa a e al.,2024). Un o una ely, in such si ua ions,
he less powe ul i m migh be eluc an o collabo a e, o e en migh eel p essu ized o
wo k wi h hei supplie s on hei e ms (Touboulic e al.,2014).
2.6. Hypo heses De elopmen
Figu e 1is he concep ual model o he s udy. The model shows ha e hical leade ship
in luences communi y engagemen . Howe e , he ela ionship is dependen on how la ge
companies ea SMEs as buye s and supplie s.
Adm. Sci. 2025,15, 72 6 o 18
Adm. Sci. 2025, 15, x FOR PEER REVIEW 6 o 19
2.6. Hypo heses De elopmen
Figu e 1 is he concep ual model o he s udy. The model shows ha e hical
leade ship in luences communi y engagemen . Howe e , he ela ionship is dependen
on how la ge companies ea SMEs as buye s and supplie s.
Figu e 1. Concep ual model.
The ou comes o e hical leade ship a e mos ly s udied om wi hin he o ganiza ions,
ocusing on employees and o ganiza ional pe o mance (Peng & Kim, 2020). T an e al.
(2023) epo ha b oade e hical leade ship p ac ices could esul in i ms’ communi y
engagemen s, which ul ima ely ha e an impac on he employees’ commi men o he
i m. Fu he , e hical leade s play a c i ical ole in encou aging employees o be p o-social
(E a e al., 2020). The e o e, o ganiza ions need o ha e e hical leade ship, which is an
elemen beyond gene al o pu e leade ship, o achie e hei sus ainable s a egies (Saha
e al., 2020). While hese s udies ha e been conduc ed in he b oad managemen li e a u e,
he e is a need o explo e e hical leade ship in he con ex o SMEs embedded in
communi ies (Pauceanu e al., 2021; Wig en-K is o e son e al., 2022). Based on hese
discussions, we sugges ha :
Hypo hesis 1. The e is a posi i e ela ionship be ween e hical leade ship and communi y
engagemen .
We u he a gue ha he ela ionship be ween e hical leade ship and communi y
engagemen is con ingen on o he ac o s. We in oduce he ea men o SMEs as buye s
o mode a e he ela ionship. When SMEs buy om la ge companies a easonable p ices,
and i hey ecei e easonable p ices o he goods hey pu chased, hey will be able o
conduc he communi y engagemen ac i i ies. Howe e , i SMEs a e bullied and o ced
o pay high p ices o p oduc s pu chased om la ge e aile s, hey will no be able o
conduc hei communi y engagemen ac i i ies. SMEs can be ega ded as cus ome s i
hey ha e he capaci y o pu chase signi ican quan i ies om big businesses (D o skie &
Okanga, 2016). Bulk pu chases ma e o big businesses because o he po en ial sales
e enue. The e o e, big businesses would op o supply an SME i he e is he po en ial
o consis en , ongoing pu chases. The e o e, we hypo hesize ha :
E hical leade ship Communi y
engagemen
T ea men as buye s
T ea men as supplie s
H1
H2
H3
Figu e 1. Concep ual model.
The ou comes o e hical leade ship a e mos ly s udied om wi hin he o ganiza ions,
ocusing on employees and o ganiza ional pe o mance (Peng & Kim,2020). T an e al.
(2023) epo ha b oade e hical leade ship p ac ices could esul in i ms’ communi y
engagemen s, which ul ima ely ha e an impac on he employees’ commi men o he i m.
Fu he , e hical leade s play a c i ical ole in encou aging employees o be p o-social (E a
e al.,2020). The e o e, o ganiza ions need o ha e e hical leade ship, which is an elemen
beyond gene al o pu e leade ship, o achie e hei sus ainable s a egies (Saha e al.,2020).
While hese s udies ha e been conduc ed in he b oad managemen li e a u e, he e is
a need o explo e e hical leade ship in he con ex o SMEs embedded in communi ies
(Pauceanu e al.,2021;Wig en-K is o e son e al.,2022). Based on hese discussions, we
sugges ha :
Hypo hesis 1. The e is a posi i e ela ionship be ween e hical leade ship and communi y engagemen .
We u he a gue ha he ela ionship be ween e hical leade ship and communi y
engagemen is con ingen on o he ac o s. We in oduce he ea men o SMEs as buye s
o mode a e he ela ionship. When SMEs buy om la ge companies a easonable p ices,
and i hey ecei e easonable p ices o he goods hey pu chased, hey will be able o
conduc he communi y engagemen ac i i ies. Howe e , i SMEs a e bullied and o ced o
pay high p ices o p oduc s pu chased om la ge e aile s, hey will no be able o conduc
hei communi y engagemen ac i i ies. SMEs can be ega ded as cus ome s i hey ha e
he capaci y o pu chase signi ican quan i ies om big businesses (D o skie & Okanga,
2016). Bulk pu chases ma e o big businesses because o he po en ial sales e enue.
The e o e, big businesses would op o supply an SME i he e is he po en ial o consis en ,
ongoing pu chases. The e o e, we hypo hesize ha :
Hypo hesis 2. The ea men o SMEs as buye s mode a es he ela ionship be ween e hical
leade ship and communi y engagemen .
Resea ch has shown ha he e a e be e o ganiza ional ou comes when he supplie
and buye a e in a us ing ela ionship (Saha e al.,2020;S upinski & Wi ek-Hajduk,2024).
The b eak in us , especially when he e is powe asymme y, could ha e unin ended
consequences. Fo example, esea ch conduc ed in a Sou h A ican con ex shows ha
Adm. Sci. 2025,15, 72 7 o 18
he dominan beha io (o la e paymen s and un ai penal ies o la e deli e y) by la ge
and powe ul en e p ises a ec s he cash low o SMEs (Nabee & Swanepoel,2021). Some
o ms o dominan beha io s include he abuse o powe , absence o anspa ency, in imi-
da ion, un ai p ac ices, and business oppo unism (Ouppa a e al.,2024). Addi ionally,
powe ul cus ome s could p essu ize SMEs by ha ing s ingen echnical equi emen s
o speci ica ions o p oduc s and se ices (S ekelo um e al.,2024). Fu he mo e, la ge
i ms could impose SME compliance wi h hei CSR ac i i ies (D. A. Baden e al.,2009; D.
Baden e al.,2011). Acco dingly, SMEs a e hen o ced o adop hese CSR equi emen s o
keep hei cus ome s. Such dominan beha io ends o lead o he SMEs isking losing
con ac s, compe i i eness, and p o i abili y (Nabee & Swanepoel,2021;Ouppa a e al.,
2024). The ea o losing business limi s he en ep eneu s om being able o, o e en
conside o, e alia e agains la ge i ms, which esul s in hem con inuing wi h business
ac i i ies despi e he un ai p ac ices (Nabee & Swanepoel,2021). The e o e, ou s udy
hypo hesizes ha :
Hypo hesis 3. The ea men o SMEs as supplie s mode a es he ela ionship be ween e hical
leade ship and communi y engagemen .
3. Resea ch Design and Me hods
3.1. Resea ch Design
Ou philosophical app oach in conduc ing his esea ch was posi i is in na u e,
guided by he logic ha a single eali y exis s (Webe ,2004). In o he wo ds, we ocused on
es ing how e hical leade ship con ibu es o communi y engagemen , while he ela ionship
is mode a ed by he ea men o SMEs as buye s and supplie s. Fu he , we used he
deduc i e app oach o de elop hypo heses om he exis ing li e a u e (Edmondson &
McManus,2007). These hypo heses we e pa o es ing he heo e ical pe spec i es on
e hical leade ship, communi y engagemen , and powe asymme y. Ou esea ch design
was a su ey collec ing da a a one poin in ime. We used quan i a i e me hods o
collec he da a om SMEs in Sou h A ica. En ep eneu ship in Sou h A ica is gaining
momen um (Bowmake -Falcone e al.,2023), hus making he coun y a sui able con ex
o explo e how hese small businesses engage wi h la ge companies.
3.2. Ope a ionaliza ion o Va iables
We used he GIBS E hics Ba ome e , which has been buil on a igo ous and com-
p ehensi e assessmen ool, de eloped a Ha a d Business School (HBS) o assess he
ex en o which o ganiza ions adhe e o global no ms and s anda ds a ound business
conduc (Paine e al.,2005), based on he Global Business S anda ds (GBS) Codex. Using
ocus g oups made up o subjec ma e expe s, he GIBS E hics and Go e nance hink
ank con ex ualized and localized he HBS ool, ensu ing ha i also add esses speci ic
Sou h A ican p oblems and challenges—especially wi h ega d o “ ans o ma ion” and
“co ec ion o his o ical w ongs”.
Ou mo i e o adap ing he ques ions was based on he no ion ha Sou h A ica’s
business en i onmen has su e ed he consequences o he apa heid e a (Shai e al.,2019).
Du ing he e a, black people (A ican, Colo ed, and Indian) we e seg ega ed and did no
ha e access o any business suppo (Shai e al.,2019). As a esul , he Sou h A ican
go e nmen in oduced egula ions, known as B oad-Based Economic Empowe men , o
p o ide p e iously disad an aged g oups wi h an enhanced access o economic oppo u-
ni ies (Shai e al.,2019). Some o hose economic oppo uni ies include p og ams such as
supplie de elopmen ac i i ies. The go e nmen equi es co po a e businesses o ini ia e
Adm. Sci. 2025,15, 72 8 o 18
p og ams o suppo SMEs as supplie s. This means ha SMEs ha e he oppo uni y o
expe ience being supplie s and cus ome s. This con ex ual se ing in luenced ou decision
o include he ea men o SMEs as supplie s o big companies. Conside ing he challenges
acing many SMEs in Sou h A ica, ou aim was o adap he ques ionnai e o ensu e ha i
was locally ele an while emaining aligned wi h he global amewo k. In adap ing he
ques ionnai e, we also ollowed Odu o e al. (2024), who a gue ha he e is a need o s udy
he A ican coun ies o unde s and he cul u al nuances a ec ing communi y engagemen
and CSR ac i i ies.
The GIBS E hics Ba ome e measu es 68 beha io s and 6 cons uc s, cu ing ac oss
key s akeholde ela ionships. Bo h quan i a i e and quali a i e da a we e collec ed and
analyzed o he pu pose o his pape . In he p esen s udy, he ocus was on ou cons uc s:
SMEs e hical leade ship, communi y engagemen , ea men o SMEs as buye s, and
ea men o SMEs as supplie s. While SMEs’ e hical leade ship highligh s he e hical
o ien a ion o en ep eneu s, he ea men o SMEs as buye s and supplie s e eals he
le el o big co po a e companies’ e hical leade ship. The size o he big co po a e companies
se es as an ad an age and he e o e, i makes hese en i ies mo e powe ul han SMEs.
Dependen a iable: SMEs’ communi y engagemen ocuses on he key ac i i ies
un by he small business in he communi y, hei s akeholde ocus, communi y de el-
opmen , and how hey engage wi h he cul u al en i onmen . The measu es included
conside ing he iews and needs o he communi y, c ea ing employmen and unning
impac ul ac i i ies.
Independen a iables: SMEs’ e hical leade ship shows how hey un hei businesses
on a daily basis by inco po a ing e hical p inciples. E hical leade ship ocuses on being
hones , anspa en , making e hical decisions, and ea ing people equally.
Mode a o s: The ea men o SMEs as supplie s explains he in e ac ion expe iences
hey ha e when supplying goods and se ices o la ge businesses. The measu es included
co po a e cus ome s b eaking hei p omises; paying la e han 30 days om he da e
o in oice; being o ced o en e con ac s ha a e un ai jus o ob ain he se ice; and
co po a e cus ome s abusing hei powe and ea ing SMEs un ai ly.
Las ly, he ea men o SMEs as cus ome s shows how hey a e ea ed when hey buy
goods and se ices om la ge businesses. Measu es included p ice conside a ions se by
co po a es; he quali y o p oduc s and se ices supplied by co po a es; clea e ms and
condi ions; and he gene al ea men o SMEs in compa ison o la ge co po a e supplie s.
Con ol a iables: The con ol a iables included he SME’s age, size, and indus y
(S ekelo um e al.,2024). We chose o include he speci ied con ol a iables o se e al
easons. Fi s , he SME size will ha e an impac on communi y engagemen ac i i ies. La ge
SMEs ha e CSR p og ams, h ough which hey engage wi h communi ies. Second, he
SMEs’ age also has an impac on communi y engagemen and he way i is able o in e ac
wi h he la ge companies. Fo example, old SMEs a e embedded in hei communi ies
and will ha e ob ained legi imacy o ope a e (Beckmann e al.,2023). I means ha olde
i ms will ha e be e communi y engagemen han new i ms ha a e s ill in he p ocess
o ob aining hei legi imacy o ope a e. Las ly, some indus ies, such as manu ac u ing
and pha maceu icals ha ollow s ic ules and egula ions, engage in CSR ac i i ies as an
obliga ion om go e nmen (Pillai e al.,2022).
3.3. Da a Collec ion
Since he e is no publicly a ailable comple e lis o SMEs in Sou h A ica, su ey
links we e emailed o p i a ely held da abases o 40,000 business owne –manage s. In
Sou h A ica, small en e p ises employ up o 250 people and hei e enue does no exceed
220 million ZAR (12 million USD) (Depa men o Small Business,2019). The esea che s
Adm. Sci. 2025,15, 72 15 o 18
he no ion ha communi y engagemen is a he seen as a mo al du y ha is accep ed
olun a ily (Beckmann e al.,2023;Madden e al.,2006).
In sum, he indings demons a ed he signi icance o e hical leade ship in achie ing
o ganiza ional and socie al ou comes, despi e o he con ex ual ac o s. The e o e, esea ch
in buye –supplie ela ionships should conside in eg a ing e hical leade ship o unde -
s and he in e ac ion be ween he buye s and supplie s. Fu he mo e, he inclusion o
e hical leade ship could enhance he unde s anding o how powe asymme y can be
le e aged in he buye –supplie ela ionships.
Las ly, ou s udy p o ided insigh s in o he ole o SMEs as supplie s and buye s in a
single s udy. This is con a y o he exis ing li e a u e ha ocused sepa a ely on he SMEs
as supplie s o buye s. Pe haps, u u e esea ch could ma ch SMEs wi h hei buye s and
supplie s o unde s and he powe dynamics wi hin hei ela ionship.
6. Conclusions
Ou s udy’s main con ibu ion was iden i ying he ole o e hical leade ship in SMEs’
communi y engagemen when hey a e buye s and supplie s o la ge companies. I was
e iden ha he e hical leade ship p ac iced in SMEs is he key d i e o communi y en-
gagemen , despi e he challenges hey encoun e when engaging wi h la ge co po a es. The
indings showed ha he ea men o SMEs as supplie s and buye s did no mode a e he
ela ionship be ween e hical leade ship and SMEs’ communi y engagemen . These indings
sugges ed ha e hical leade ship is ins umen al in o e coming con ex ual challenges.
The e o e, en ep eneu s a e encou aged o adop e hical leade ship as a p ac ice ha will
enable hei SMEs o unc ion, e en in a pe ilous con ex . Fu he , despi e he SMEs being
ea ed un ai ly by la ge businesses, hey con inued o engage wi h hei communi ies and
deli e se ices. These indings demons a ed ha communi y engagemen d i es he e y
pu pose o SMEs’ exis ence when d i en by e hical leade ship.
No esea ch is wi hou limi a ions. The i s limi a ion was ha he inal sample size
was no he ue ep esen a ion o he popula ion ha was su eyed. As a esul , he
s udy canno make gene aliza ions based on he sample ha was s udied. Mo e esea ch is
equi ed o es he s udy’s hypo heses and heo e ical a gumen s in o he con ex s. Second,
ou da a we e collec ed c oss-sec ionally, showcasing he powe dynamics a a poin in
ime. Fu u e s udies should conside unde s anding communi y engagemen and powe
dynamics aced by SMEs om a longi udinal pe spec i e. Thi d, ou esea ch was limi ed
in demons a ing he e ec s on indus y. Communi y engagemen and powe dynamics
can di e om one con ex o ano he ; he e o e, i would be o bene i o ha e indus y-
speci ic s udies. Fou h, he s udy elied on sel - epo ed da a ob ained om he SMEs,
po en ially leading o sel - epo bias. Fu u e s udies could ocus on how la ge companies
engage wi h SMEs. Also, he s udies could conside he a ec ed communi ies’ pe spec i es.
Las ly, he s udy e e enced he la ge company esea ch due o limi ed esea ch on how
SMEs in e ac wi h la ge companies as supplie s and cus ome s. The e is a need o mo e
esea ch o unpack he ela ionships ha SMEs ha e wi h la ge businesses. Such esea ch
will also p o ide insigh s in o SME empowe men and bullying when hey a e engaging
wi h expe ienced businesses.
Expanding on he u u e esea ch sugges ions, we s udied he di ec ela ionship
be ween e hical leade ship and communi y engagemen . The e o e, u u e esea ch could
explo e he media o s o he ela ionship, as well as he mode a o s o con ex ual ac o s
ha explain he ela ionships. The s udy ound ha he mode a ing ole was no suppo ed;
he e o e, u u e esea ch could ocus mo e on quali a i e s udies o unde s and he expe-
iences o SMEs as cus ome s and supplie s; pe haps he e a e o he ac o s ha explain
he ela ionship.
Adm. Sci. 2025,15, 72 16 o 18
Au ho Con ibu ions: A.M. con ibu ed o he concep ualiza ion o he s udy and leading he
w i ing p ocess. K.M. con ibu ed o he concep ualiza ion o he s udy, w i ing he manusc ip and
quali a i e da a analysis. G.P. con ibu ed o de eloping he esea ch ins umen and he collec ion o
he da a. All au ho s ha e ead and ag eed o he published e sion o he manusc ip .
Funding: This esea ch was unded by E-squa ed In es men s.
Ins i u ional Re iew Boa d S a emen : E hical clea ance was ob ained om he Go don Ins i u e o
Business Science (Da e: 21 Ap il 2020).
In o med Consen S a emen : In o med consen was ob ained om all subjec s in ol ed in he s udy.
Da a A ailabili y S a emen : The da a used in his a icle a e no eadily a ailable because o he
p i acy s a emen .
Con lic s o In e es : The au ho s decla e no con lic s o in e es .
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