Ethics and corporate social responsibility in Latin American small and medium sized enterprises: Challenging development

Abstract

Considering the lack of substantive scientific or theoretical studies about ethics in small and medium sized enterprises (SMEs) in Latin America, this paper examines the context of an existent paradox, based upon the perspective of experts and academicians of Latin America and the Caribbean. These countries live different realities, due to their respective European cultural influences, as well as to racial and economic issues. Such facts impact the size and characteristics of their industries. On the other hand, the SMEs face more similarities in the region, so they will be treated as a group in the discussion of ethics and corporate social responsibility (CSR) in Latin American SMEs. As this topic has not been sufficiently investigated in this geographic area, the objective of this exploratory study is to offer a contribution for future research. It raises the main dilemmas and intends to explain how legislation and common practices enable and perhaps lead SMEs to choose unethical strategies to survive and compete in the market. These enterprises are growing in number and in job creation, but do not participate in the Gross National Product in the same proportion. Informality, tax evasion and corruption are gradually caused or erode morality in business, but can contribute to corporate social responsibility in the region. The paper tries to show positive and negative aspects of apparently unethical practices and discusses challenging ways to solve complex problems that are common in most Latin America.