Effects of ethnicity and gender on ethically driven small business performance

Abstract

PurposeThe authors test several hypotheses to analyze the influences of community-mindedness, ethical and social responsibility, culture, and gender on performance and job satisfaction.Design/methodology/approachUsing PLS-SEM the authors employ data gathered from a survey administered to a panel of 192 small business owners from across the US We compare the findings across ethnic groups, which result in significant path coefficients.FindingsGreater community mindedness and corporate social responsibility (CSR) lead to better performance, and that leads to greater satisfaction. Collectivism enhances these relationships, while female owners who are more community minded experience greater performance.Research limitations/implicationsOne limitation of the current study is the self-reporting nature of all the questionnaire items. In an effort to limit the potential negative effects of self-reporting, the authors conduct necessary validation to help ensure that our instrument measures what it is supposed to measure conceptually.Practical implicationsAs hypothesized, the influences are mostly positive relationships. Stronger community-mindedness leads to stronger business performance for Hispanic owners. On the contrary, White owners' performance significantly decreases.Social implicationsThe findings recommend that collectivism is the way to go. Small business owners should have a collective feeling for the community they live in and do business with. This generally leads to better business performance and subsequent satisfaction in life.Originality/valueOne major contribution of this study is to compare and contrast the findings across the two largest ethnic groups in the US – Whites and Hispanics. Another contribution of the study is to determine how social and ethical responsibilities affect business performance and satisfaction.