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Entrepreneurs
An investigation of Indian student and managers
attitudes towards entrepreneurs
and managers
Dennis Barber III 377
Miller School of Entrepreneurship, East Carolina University, Greenville,
North Carolina, USA Received 6 September 2018
Revised 13 January 2019
10 July 2019
Suhail Mohammad Ghouse Accepted 23 October 2019
Dhofar University, Dhofar, Oman
John Batchelor
University of West Florida, Pensacola, Florida, USA
Francesca Chaher
College of Business, University of West Florida, Pensacola, Florida, USA
Michael L. Harris
Miller School of Entrepreneurship, East Carolina University, Greenville,
North Carolina, USA, and
Shanan G. Gibson
College of Business and Technology, Texas A&M University Commerce,
Commerce, Texas, USA

Abstract
Purpose – The purpose of this study was to investigate the perceptions of business students in India
toward business managers (not self-employed) and entrepreneurs.
Design/methodology/approach – Students’ perceptions of the ethical behaviors of business managers
and entrepreneurs were measured using the Bucar and Hisrich (2001) model. The scale comprises 20
behavioral descriptors, and the students were asked to indicate the degree to which they believed
entrepreneurs and business managers would consider these actions as ethical.
Findings – Responses to general items of ethical behavior demonstrated a difference in the perception of
Indian students between business managers and entrepreneurs.
Originality/value – This study contributes to the field of entrepreneurship in two ways. One involves the
results of the hypothesis testing presented herein to evaluate the perceptions of business students in India
toward entrepreneurs and business managers. The second contribution is comparing these results to that of a
similar study using a US sample (Batchelor et al., 2011) to compare the differences in perceptions toward
entrepreneurs and business managers across these two nations.
Keywords India, Ethics, Management, Entrepreneurship
Paper type Research paper
Journal of Entrepreneurship in
Emerging Economies
Introduction Vol. 12 No. 3, 2020
pp. 377-398
There are differing perspectives on the ethical standing of entrepreneurs and business © Emerald Publishing Limited
2053-4604
managers. Managers face difficult decisions and ethical dilemmas on a regular basis DOI 10.1108/JEEE-09-2018-0091
JEEE (Fassin, 2005). Ethics in management often fall under either Kantian or Rawlsian
12,3 perspectives. Some studies suggest that no matter the perspective that is taken,
entrepreneurs behave in a manner that is ethically consistent with society in general
(Payne and Joyner, 2006). Entrepreneurship scholars suggest a need for more
investigation of entrepreneurial ethics and ethics researchers argue for more empirical
examination of ethics in a small business context (Harris et al., 2009; Spence and
378 Rutherford, 2003). Previous findings indicate that ownership options, such as profit
sharing, or a personal stake in the business can be drivers of ethical behaviors
particularly involving the use of company resources (Bucar and Hisrich, 2001). The
purpose of this study is to investigate the perceptions of business students in India
toward business managers (not self-employed) to entrepreneurs. Previous research in this
area has looked at how entrepreneurs face dissimilar issues, in general, than business
managers (Green, 1992) as well as a dissimilar set of ethical issues (Longnecker et al.,
1989). Previous research has investigated these perceptional differences on a domestic set
of students from the United States and found that perceptional differences do indeed exist
on how business students perceive entrepreneurs vs business managers (Batchelor et al.,
2011). Specifically, Batchelor et al. (2011) found that students perceived entrepreneurs to
be, on average, more ethical than their business manager counterparts. This article builds
on previous research in attempt to bring clarity to how business students in India, one of
the four largest emerging economies (often referred to as BRIC, Brazil, Russia, India and
China), perceive difference between entrepreneurs and business managers in their own
country.

Literature and theory

For decades, researchers have compared ethical perceptions toward business managers and
entrepreneurs (Bucar and Hisrich, 2001) and compared perceptions from multiple countries
(Veciana et al., 2005). For instance, Bucar et al. (2003) took an international cross-cultural
perspective in their comparisons and found that, on average US entrepreneurs were
perceived more ethical than those in Slovenia and Russia. Medlin and Green (2003) looked at
perceptional difference with regard to gender, experience, and age where they found no
difference for gender and experience but found younger business owners to be rated as less
ethical than older business owners. Batchelor et al. (2011) found that, using a US sample,
business students perceive entrepreneurs to be more ethical than business managers,
possibly due to exposure to large corporate scandals such as Enron, WorldCom and AIG.
The current study builds on this body of literature combining these differing aspects
(gender, entrepreneurial experience and nationality) of perceptions toward entrepreneurs vs
business managers into one comprehensive study and draws direct comparisons between an
Indian and US sample. Agency theory, stakeholder theory and stakeholder-agency theory
are used for hypothesis development and discussion.

Stakeholder theory
The underlying premise of the stakeholder theory is that organizations should address all,
or a set of, the stakeholders’ expectations (Brenner and Cochran, 1991). The theory argues
that decisions should be based on the interests of all of those who have a stake in the
organization (Jensen, 2002). This theory generally separates the stakeholders into five
groups: shareholders, employees, suppliers, customers and the community (Bucar et al.,
2003). Stakeholder theorists believe that managers need to take notice of this wide array of
stakeholders in order to succeed, and that the managers’ obligations towards the
stakeholders include, but are not limited to, the shareholders who own the firm (Freeman Entrepreneurs
et al., 2010). and managers
Managers and entrepreneurs prioritize and respond differently to each of these groups of
stakeholders. Therefore, by analyzing the differences in the managers’ and entrepreneurs’
reactions towards each group, we are able to identify and classify their behavior as ethical or
unethical.
According to Donaldson and Preston (1995), three “mutually supportive” approaches
underline the stakeholder theory: descriptive/empirical, instrumental, and normative. The 379
normative view is considered the theoretical foundation of the theory (Donaldson and
Preston, 1995, p. 66). Therefore, we highlight this approach regarding ethics. The normative
approach argues that regardless of financial performance, organizations should focus on
benefiting all stakeholders, and regardless of the ownership interest of each group,
stakeholder rights are intrinsic in that all groups merit consideration (Hasnas, 1998). This
theory gives rights to all stakeholders which can allow managers and entrepreneurs to
engage in more ethical behaviors since they have flexibility in deciding what is best for
society and the organization itself, instead of solely pursuing the increase of shareholder
wealth.
According to this theory, weighing and balancing the interest of all stakeholders is
crucial for the success of an organization (Bucar and Hisrich, 2001; Hasnas, 1998). It is not
uncommon to see companies focusing too much on specific stakeholder’s interests while
ignoring other stakeholder’s expectations, hurting the image and leading the company to
failure. Enron, for instance, engaged in unethical behavior and had its businesses truly
affected by focusing too heavily on the financial interests of the top members of the
organization while giving poor attention to its employees and customers. The way that
managers and entrepreneurs treat its stakeholders is an important indicator of how ethically
they behave. Tantalo and Priem (2016) agree that one can address multiple stakeholder
groups’ needs simultaneously. Thereby, using this synergistic approach allows one to
pursue both financial and ethical goals simultaneously, thus allowing for more ethical
decisions.
According to stakeholder theory, giving consideration to all stakeholders is the best
scenario; however, we know this is not always the case in practice (some choose not to while
others are incapable to do so). Agency theory, which we will see next, explains that the
agency relationship may make it more difficult for managers to consider the interests of all
stakeholders, while entrepreneurs have more freedom to behave ethically because they act
not bound by a principal-agent relationship that focuses more heavily on shareholder
interests.

Agency theory
Agency theory addresses the inherent conflict between principals/owners and self-interests
of their agents (Brock et al., 2008; Kim et al., 2005). It primarily concerns aligning the agent’s
self-interests with the interests and investments of the principal, protecting the principal
against harmful behavior of the agents (Arthurs and Busenitz, 2003; Jensen and Meckling,
1976).
In this theory, one party, the principal, delegates authority to the agent, who performs
some service on behalf of the principal (Hill and Jones, 1992; Jensen and Meckling, 1976;
Ross, 1973). Within the organizations, the business managers are considered the agents.
This theory aims at making this relationship between the agent and the principal as efficient
as possible by aligning their goals to ensure proper conduct on the part of the agent
(Eisenhardt, 1989). Outcome uncertainty, risk avoidance, and opportunism may create a
JEEE separation of goals and interests between the two parties, generating conflicts and problems
12,3 within the organization (Jones and Butler, 1992). In cases where the agent is the business
manager and the principal is either the owner, part of the board of directors, or an upper
level manager; the goal of the agent is to maximize profitability while “obeying the basic
laws and customs of society” (Solymossy and Masters, 2002, p. 237).
Profit maximization can generate conflicts since it may not always align well with other
380 ethical and community-oriented goals, such as charitable endeavors. Managers have to deal
with time and resources allocations when making decisions which affect the costs and
profits for the organization. Many times, managers opt for reducing expenses in order to
maximize profit as they feel pressure to fulfill, or even exceed, the principal’s expectations.
One example would be a manager who has to decide whether he or she will conduct an
optional safety tests or will forgo the test in order to reduce costs.
Further, agency theory argues that entrepreneurs and business managers have differing
perspectives towards profit maximization (Bucar et al., 2003). For instance, entrepreneurs
are able to behave more ethically since they can express their values more easily than
managers, as entrepreneurs are not restricted by directives from upper management
(Humphreys et al., 1993). Using the example above (regarding the product safety tests), an
entrepreneur has more flexibility to conduct the safety tests than a manager; the
entrepreneur acts without a principal and therefore, has the power and the freedom to
authorize the tests in case he or she believes that it is the morally correct choice. Here we see
that values and motivations are related to one another and how they influence the goals
(performing sufficient safety test) of the entrepreneur (Fayolle et al., 2014). Many times,
managers are put in difficult situations as they have less freedom, as hierarchical firms may
hinder highly morally developed decision-making (Solymossy and Masters, 2002; Weber,
1990; Elm and Nichols, 1993; Dupont and Craig, 1996).
This review of agency theory does not mean that managers will always act less ethically
than entrepreneurs; it postulates that business managers’ actions and ability to make
decisions can be restricted by superiors, sometimes resulting in less ethical behaviors. In
cases where the principal/agent relationship emphasizes ethical actions rather than
profitability, both business managers and entrepreneurs would have the same amount of
freedom towards their ethical decisions. However, in cases where the company is more
profit-oriented, the business managers might feel pressure to make decisions that are less
ethical but generate more growth/profitability (Cordeiro, 2008). Further, Bosse and Phillips
(2016) argue that when agents are treated fairly and norms of reciprocity are not violated the
agents are less likely to over pursue self-interest.

Stakeholder-agency theory
Stakeholder-agency theory incorporates the principles of both the stakeholder and agency
theory as its foundation. It combines the relationships of all five groups of stakeholders
(stakeholder theory) with the goal alignment between the principal and agent (agency
theory). In this model, firms are seen as a collection of contracts between different parties,
and the managers are considered the agent for all of the firm’s stakeholders and are
responsible for creating and optimizing value for them (Bucar et al., 2003; Asher et al., 2005;
Freeman and Evan, 1990; Hendry, 2001; Hill and Jones, 1992). This theory also argues that
bounded rationality, opportunism, and information asymmetry are inherent to principal-
agent relationships (Asher et al., 2005), these issues can lead to some managers overlooking
or disregarding various stakeholder interests.
A manager’s decisions affect all stakeholders, yet each stakeholder group does not exert
equal influence over the manager and his/her decisions. According to Hill and Jones (1992)
power differentials between stakeholders plays an important role, they describe this Entrepreneurs
situation as follows: “for two entities, A and B, there is a power differential in A’s favor and managers
when B depends upon A more than A depends on B” (Hill and Jones, 1992, p. 134). That is,
when the principal has substantial influence over the agent, or at least enough to make the
other stakeholders powerless, the classical agency theory can be applied. In cases where a
division of influence on a manager is observed, the managers’ decisions are more heavily
influenced by the other stakeholders, hence managers have a greater ability to rely on their
personal values rather than solely focusing on profit maximization (Jackall, 1988). Mitchell 381
et al. (2016) discuss how market-based organizations can pursue multiple goals
simultaneously. It is possible that this multiple goal strategy is more applicable to
entrepreneurs than managers, because entrepreneurs are freer to set their own goals.
Stakeholder-agency theory considers that both managers and entrepreneurs have the
same amount of freedom to make ethical decisions. In fact, their decisions might be more
influenced by non-manager stakeholders under this theory as compared to other theories.
Under agency theory (principal-agent relationship), for instance, this influence would not
occur. One example would be a case where a district attorney (agent) feels pressured to drop
a politically sensitive case by the mayor (principal), but at the same time the attorney knows
that hers or his reputation can be affected by doing so. Under agency theory, the agent
would probably drop the case since the theory enforces goal alignment. Under the
stakeholder-agency theory, the attorney would be inclined to make the more ethical decision,
going against the principal’s wishes.

Ethical perceptions in India

The agency, stakeholder and agency-stakeholder theories do not clearly identify who is
more ethical, entrepreneurs or business managers. Yet, they point to entrepreneurs as
having an advantage to act more ethically than business managers, as they have more
discretion over their behaviors as they are not constrained by agency issues, internal
bureaucracy, or firm pressures to maximize profit or growth. The empirical research in the
area has produced mixed results. Some literature paints business managers as less ethical.
For instance, Bucar et al. (2003) suggest that business managers are more likely to sacrifice
their personal values than entrepreneurs. Further, Bucar and Hisrich (2001) find that
managers are less ethical when it comes to internal interactions and Teal and Carroll (1999)
elaborate on how entrepreneurs are likely to reject some social norms allowing them more
discretion to act ethically. The negatives associated with entrepreneurs revolve around their
willingness to compromise their personal ethics in pursuit of growth and innovation.
Batchelor et al. (2011) specifically tested the perceptions of business students from the US
and found that these students, on average, perceived entrepreneurs to be more ethical than
business managers. One of the primary purposes of this study is to test if these perceptions
hold true internationally, specifically in India. The literature on the perceptions of natives to
India toward entrepreneurs and business managers seem more one directional than that of
the Unites States samples mentioned earlier. For instance, Monga (2005) found that, using a
sample of Indian managers, the constraints placed on managers by their firm may cause
some individuals to act less ethically than they would otherwise. This is consistent with the
findings of Barnett et al. (1994) that situational factors (such as firm level influences) alter
one’s behavior related to ethical decision-making. There are also indications that the ethics
of business managers in India is deteriorating over time, as Berger and Herstein (2014) find
the effects of globalization (i.e. the influence of large international corporations) have caused
the ethics of business managers to devolve since India has become one of the largest
emerging economies.
JEEE Hypotheses
12,3 As this study is an international (Indian) follow up study (to a previous domestic US study),
it is important to take into account the cultural differences from the US sample and those of
the current Indian sample. Some argue that the global economy has harmed business ethics
in India (at least in large corporations) (Berger and Herstein, 2014). This has caused many in
India to view large businesses as a “corrupting force” (Chakraborty, 1997). One of the faults
382 referenced with the negative forces of non-entrepreneurial businesses in India is that their
ethics activities center on community development rather than a pervasive system of ethics
that has larger societal positive effects. Further, even though many large businesses in India
have an official code of conduct policy, these policies are not well communicated or followed
by employees (Mahjan and Mahjan, 2016). For these reasons, it is reasonable to postulate
that Indian business students will perceive entrepreneurs to be more ethical than business
managers, because these entrepreneurs will have closer ties to the local communities (than
managers working for an international firm) and will use their discretional decision-making
in a way that benefits the individual and culture of their local communities. In all, the
literature and theory points to Indian business students perceiving entrepreneurs to be more
ethical than business managers, primarily due to the additional discretion entrepreneurs has
as compared to the business managers who must conform to constraints placed on them by
their firm. For this reason, we propose the following hypothesis:

H1. Students in India will perceive entrepreneurs to behave more ethically than
business managers.
Batchelor et al. (2011) found there to be no difference between business student perceptions
of students without prior entrepreneurial exposure. But this may not be the case for the
Indian sample in this study. As outlined prior, some scholarly literature indicates than many
Indian natives view the effects of international and national large companies of the ethical
practices of business in India to be negative (Berger and Herstein, 2014; Chakraborty, 1997).
These negative global perceptions of business may be higher in those without business
experience than those with such exposure.
Prior research has looked at how work experience influences the perceptions one holds,
as it affects attitudinal development. Work experience, especially full-time, is shown to
increase the ethical behaviors of students (Ruegger and King, 1992; Persons (2009). And
work experience with small or family business leads, on average, one to have a more
positive view of entrepreneurship than those without such experience (Peterman and
Kennedy, 2003; Reitan, 1996). This research could cause one to assume that prior
entrepreneurial exposure would lead business students with such exposure to perceive those
involved in any type of business active (either entrepreneurs or business managers) as more
ethical than someone who has never been exposed to business and relies heavily on
stereotypes to form their ethical perceptions on those engaged in business. For these
reasons, the following hypotheses test how prior entrepreneurial business exposure
influences ethical perceptions of entrepreneurs and business managers in India:

H2a. Entrepreneurs will be perceived as more ethical by Indian students with prior
entrepreneurial exposure than those without prior business exposure.
H2b. Business managers will be perceived as more ethical by Indian students with prior
entrepreneurial exposure than those without prior business exposure.
As much of the research on ethics shows females to be more ethical than males, research
related to the current study shows that female entrepreneurs (Bucar and Hisrich, 2001) and
female business managers (Marta et al., 2008) tend to be slightly more ethical than their male Entrepreneurs
counterparts. With regard to students, Smyth et al. (2009) found that female students were and managers
also more ethical than males. Additionally, Indian organizations are shown to be more
ethical than their Russian and Chinese BRIC counterparts (Ardichvili et al., 2012). In all four
cases (entrepreneurs, business managers, students, and Indian natives), the females from
India in the current study’s sample are shown to be, on average, more ethical than their
counterparts (Ardichvili et al., 2012).
Although females tend to be slightly more ethical than males, there is evidence that 383
females do not perceive entrepreneurs and managers the same. This perception generally
stems from the difference in flexibility of how managers and entrepreneurs can assist in
alleviating the negative effect of work-family conflict on their company’s stakeholders (i.e.
employees, customers and contractors). For instance, Williams and Alliger (1994) found that
75 per cent of female professionals experienced daily work-family conflict. Further, Martins
et al. (2002) found that work-family conflict decreased work satisfaction to a large extent
that it does to their male counterparts. In testing the perceptions of female business students
(using a sample from the USA), Batchelor et al. (2011) found that the females in their study
perceived entrepreneurs more ethical than did the males in the sample. They attributed this
difference to be due to the greater flexibility entrepreneurs have in ethical decision-making
because entrepreneurs are not as constrained by agency relationships as their business
manager counterparts. Further, Chell et al. (2016) found that females are more likely to be
social entrepreneurs than their male counterparts. This may further explain the perceptional
differences as female business students may be more likely to envision a female social
entrepreneur when they are completing the ethics survey. For these reasons, we tested to see
if gender differences exist in how business students in India perceive entrepreneurs and
business managers, as stated in the following hypotheses:

H3a. Entrepreneurs will be perceived as more ethical by female Indian students

compared to their male peers.
H3b. Business managers will be perceived as less ethical by female Indian students
compared to their male peers.
Further investigation of the ethical orientation of business professionals in strategic
economic partners, such as India, is critical in enhancing entrepreneurial opportunities.
Understanding the ethical perceptions of business managers and entrepreneurs from other
cultural contexts can provide insight for the development of organizational strategies
(Monga, 2005). We now turn to comparing the ethical perceptions of business students in the
US to those in India. Much of the research on the influence of business and globalization in
India describes the negative effects it has caused the country (Berger and Herstein, 2014). As
discussed previously, Indian natives are described as seeing business as a “corrupting force”
(Chakraborty, 1997). And Indian business managers self-report how their moral behavior is
often restrained by their firm (Monga, 2005; Barnett et al., 1994). As these negative
perceptions of the effects of business in India seem to be pervasive, we ask if business
students in India will rate both entrepreneurs and business managers as less ethical than
their American counterparts, as stated in the following comparative question:

CQ1. When compared to students in the USA, will students in India perceive
entrepreneurs as less ethical?
CQ2. When compared to students in the USA, will students in India perceive business
managers as less ethical?
JEEE Data
12,3 India is a culturally and geographically diversified country with inhabitants from different
backgrounds which could considerably affect the entrepreneurial intentions, a complex
process (Linan, 2008), and outlook of the respondents. A total of 187 students enrolled in
business and engineering courses from three large Indian institutions participated in the
survey and 127 responses were completely recorded and the remaining incomplete
384 responses were discarded. All surveys were completed online Five of the total respondents
were married. Male respondents dominated the survey at 83.6 per cent due to the nature of
the courses and averaged 22.6 years of age. The students responded were enrolled into the
courses of bachelor’s degree in technology, master’s degree in technology and the business
administration, it is expected that the gender differential would be higher in these fields.
According to the Ministry of Human Resource Development in India, only 28 per cent of
engineering and technology majors were female in 2014-2015 (Oberoi, 2016). The percentage
of male respondents is high as compared to the gender parity in Indian secondary education.
According to the World Bank, in 2013, the gender parity index was 0.9 while it was 0.7 in
2010[1].
Around 25 per cent of the respondents reported having worked for a small/
entrepreneurial firm in the past while 48 per cent stated that an immediate family member
has owned a small business. Around 17 per cent of the Indian students conveyed that they
have either owned a small business in the past or currently own a small business. When
asked what size company they would like to work for, 73 answered a corporation with more
than 500 employees, 42 answered small and medium enterprises (20-500 employees) and the
remaining 12 chose microenterprise with fewer than 20 employees.
Nearly 20 per cent of the participants did not know the highest level of education
obtained by their mothers compared to around 8 per cent not knowing their fathers’. Almost
79 per cent of the participants had at least one parent that finished high school. This is not
necessarily representative of the Indian population, in general. In 2014, around 68 per cent of
appropriately aged Indian children were enrolled in secondary education according to the
World Bank and this has been increasing over time[2]. It is not surprising that college
students’ parents are more educated when compared to the general public. Almost 34
per cent of the respondents had at least one parent that completed a bachelor’s degree and
around 21 per cent had at least one parent with a graduate degree.
Participants from the US were enrolled at two large universities located in the southeast.
There were a total of 116 usable surveys collected. Students were asked by their faculty
member to voluntarily complete the survey online. Participation was completely voluntarily;
some students were given extra credit for completion (up to the discretion of the faculty
member). The participants were 41 per cent male, 69 per cent Caucasian and 62 per cent had
prior entrepreneurial exposure through a family-owned business in their immediate family.
The average age was 26 years old. A full detailed analysis of this US sample was reported
by Batchelor et al. (2011) and this was used for comparison to the India data that was
collected for the current study. This data is used herein to draw comparisons between
business students in the US with business students in India. Therefore, the only new data
presented in this manuscript is the data from India, not the US data.

Methodology
Students’ perceptions of the ethical behaviors of business managers and entrepreneurs were
measured using the Bucar and Hisrich (2001) model. The instrument was developed using
five objectives. These included maintaining theoretical grounding, allowing for objective
and subjective perspectives, reflecting the likelihood of actual behavior in real business
situations, enabling the assessment of potential distortions of responses due to social Entrepreneurs
pressure and developing a questionnaire that is capable of being replicated in different and managers
cultures and economic environments. This strengthens the tool for use in different cultural
settings as this project aims to do. The initial findings from the employment of the
instrument lead to findings that are consistent with theory. The tool was tested on actual
entrepreneurs (founder or majority owner) and managers (middle or top). Both
entrepreneurs and managers felt they were dealt with fairly by the business, but a higher
percentage of managers (when compared to entrepreneurs) felt they had to sacrifice their 385
personal ethics to achieve the goals of the business.
The scale is comprised of 20 behavioral descriptors and the students were asked to
indicate the degree to which they believed entrepreneurs and business managers would
consider these actions as ethical. The response choices were presented in a five-point Likert
scale ranging from “always” to “never” with a lower score representing higher ethical
perceptions. For the US sample, high scale reliabilities were reported for the perceptions of
managers (a = 0.96) and entrepreneurs (a = 0.94). The reliabilities were also high for the
Indian sample for both constituents: managers (a = 0.83) and entrepreneurs (a = 0.81).
Data was also collected on gender, age, marital status, desire to start a business and
previous exposure to entrepreneurial ventures. The three types of exposure variables
included prior or current ownership, prior or current employment at a small business and
prior or current ownership of a business by an immediate family member. These measures
are not mutually exclusive. A participant may have reported exposure through multiple
channels. The following section discusses the normality of the sample distribution.

Analysis
Figure 1 shows the kernel density estimate overlaid with a normal distribution function. The
distribution is right-skewed and there is a non-parametric element on the right tail of the
density estimate. Further investigation of this tail reveals that this is not caused by outliers
and the data, therefore, is not normally distributed. The X-axis label “Manager Ethics”
represents the variable which averages the individual items into a scale. This scale is not
used for hypothesis testing but is important to demonstrate that averaging the scale leads to
a condition where parametric t-tests are deemed unreliable and invalid. The results for the

Kernel density estimate

0.04
0.03
Density
0.02
0.01
0

20 40 60 80 100
Manager Ethics Figure 1.
Kernel density estimate Kernel Density
Normal density Estimate and Normal
kernel = epanechnikov, bandwidth = 4.0049 Density
JEEE average scores for the ethics of entrepreneurs are similar. Both the Shapiro–Wilk and the
12,3 Shapiro–Francia tests for normality confirm that the average scores are not normally
distributed.
Since each Likert item should be considered separately and each produces an ordinal
dependent variable, central tendencies tests make interpretation of results difficult. Two
non-parametric approaches are used to test some of the hypotheses. The Mann–Whitney U
386 test is a non-parametric alternative to the standard t-test. The Mann–Whitney U test tests
the hypothesis that the dependent variables (ethics item) for each group (exposure) are from
the same distribution (null) using a z-score. The equality of medians is also useful for non-
parametric data. It compares the medians from each group to the median of the pooled data
to see how many observations are above and below the median. The test statistic from this
approach is a Pearson Chi-squared. A comparison of medians is relevant for ordinal data
such as the Likert scale format in this study. An investigation of the frequency of responses
offers a more detailed view of some of item results.

Results
Table I presents the percentages of Indian student responses for each of the Likert scale
items. For sake of analysis, “Never” and “Occasionally” have been combined and are titled
“Rarely”, and “Sometimes”, “Usually” and “Always” have been combined and are titled
“Often.” The titles are given to help better interpret the table of results and were not the
actual option choices for the respondents. The “Sometimes” option is not included testing
the first hypothesis. In many instances, around one-third of the respondents chose this
option and placing it with the other two categories could easily influence the results. The
preliminary results suggested that little information was lost by combining the two
categories, especially since there were multiple instances of zero observations for some
categories:

H1. Students in India will perceive entrepreneurs to behave more ethically than
business managers.
The results in Table I do not support for H1. The Indian students did not report a significant
difference in the ethical perceptions of entrepreneurs and business managers. Batchelor et al.
(2011) found that in the USA there was a statistically significant difference in the student
perception of ethics between entrepreneurs and business managers, that is, they found
entrepreneurs were perceived to behave more ethically. Even though there was no general
support for the hypothesis, it is general to note one of the findings. For the “Use ‘Code of
Ethics’ in decision-making”, 40.58 per cent of the respondents chose either Never or
Occasionally when reporting whether they believed that entrepreneurs behaved according
to the statement compared to 37.68 per cent reporting that business managers rarely use a
code of ethics. 31.88 per cent reported that business managers “Usually” or “Always” use a
code of ethics, but only 20.29 per cent reported that entrepreneurs do. There is no clear
pattern in the results by looking at the descriptive statistics. Since there was no manner of
distinguishing groups to test this hypothesis, descriptive results are used to test the
hypothesis and there is no reliance on statistical analysis.

H2a. Entrepreneurs will be perceived as more ethical by Indian students with prior
entrepreneurial exposure than those without prior exposure.
The exposure variable is a binary variable generated from three different questions in the
survey. If a respondent answered yes to any of the following questions, then they were
 Entrepreneurs Business
Entrepreneurs
(%) managers (%) and managers
Use “Code of Ethics” in decision-making Rarely 40.58 37.68
Often 20.29 31.88
Use company services for personal use Rarely 23.19 15.94
Often 7.24 13.04
Remove company supplies for personal use Rarely 21.74 20.29 387
Often 7.24 13.04
Overstate expense account by more than 10% Rarely 15.94 15.94
Often 13.04 35.46
Overstate expense account by less than 10% Rarely 24.64 30.43
Often 10.14 10.14
Use company time for non-company benefits Rarely 33.33 33.33
Often 10.14 10.14
Give gifts/favors to customers and/or suppliers for preferential Rarely 10.14 17.39
treatment Often 14.49 15.94
Accept gifts/favors from customers and/or suppliers for preferential Rarely 13.04 14.49
treatment Often 13.04 14.49
Blame an innocent employee for errors Rarely 21.74 26.09
Often 11.59 20.29
Claim credit for another person’s work Rarely 20.29 24.64
Often 7.24 18.84
Someone who calls in sick to take a day off Rarely 17.39 18.84
Often 13.04 15.94
Employees taking extra personal time Rarely 24.64 28.99
Often 10.14 13.04
The use of insider information for personal gain Rarely 27.54 30.43
Often 8.70 15.94
Authorizing select employees to violate company policy Rarely 31.88 34.78
Often 10.74 8.70
Failing to take action for employee violation of company policy Rarely 24.68 27.54
Often 10.14 14.50
Falsifying reports Rarely 24.64 31.88
Often 11.59 17.39
Hiring competitors’ employees to learn trade secrets Rarely 26.09 18.84
Often 11.29 15.94
Fail to report employee violation of law Rarely 26.09 31.88
Often 13.04 8.70
Divulge confidential information to outside parties Rarely 28.99 34.78 Table I.
Often 8.70 14.50 Item results by
Willing to sacrifice personal ethics to achieve business objectives Rarely 39.03 42.03 entrepreneurs and
Often 26.09 26.09 business managers

coded as having exposure: Have you ever owned or do you currently own a small business;
has anyone in your immediate family ever owned a small business; have you ever worked
for a small business (less than 20 employees)?
When looking at the items separately using a Wilcoxon rank-sum (Mann-Whitney U) test
and an equality of medians test, there was no overall difference in the item scores between
individuals with prior exposure and respondents without exposure. There was no support
found for this hypothesis. Even though no statistical difference was found, the following
items in Table II give a general idea of the differences in responses between those with and
without exposure. The responses for the chosen general items do not demonstrate a clear
JEEE Exposure
12,3 Yes (N = 37) (5) No (N = 32) (%)

Use “Code of Ethics” in decision-making

Never 21.62 28.13
Occasionally 18.92 12.50
Sometimes 43.24 34.38
388 Usually 16.22 18.75
Always 0.00 6.25
Willing to sacrifice personal ethics to achieve business objectives
Never 16.22 15.63
Table II. Occasionally 21.62 25.00
Frequency of Sometimes 35.14 34.38
responses for general Usually 24.32 21.88
items (entrepreneurs) Always 2.70 3.13

pattern in responses and the differences in the frequencies between respondents with and
without exposure experience are low:

H2b. Business managers will be perceived as more ethical by Indian students with prior
entrepreneurial exposure than those without prior exposure.
There was slight support for this hypothesis. Table III displays the Wilcoxon rank-sum
expected and actual values from the Mann-Whitney test and the number of observations
greater than the median from the difference in medians test. Only the 3 of 20 items found by
one of the tests to be statistically significant (p < 0.05) are included. The Chi-squared p-value
used in the difference of medians testing was continuity corrected. Empty cells in the table
represent values that were not statistically significant.
With the three items above demonstrating a statistically significance difference in their
underlying distributions between groups, a more granular look at responses is warranted.
Table IV presents the business manager results for each item’s response choices by
exposure group.
At closer look, the differences in responses between those with previous exposure and those
without are obvious. A larger percentage of the respondents reported that a business manager
was either “Never”, “Occasionally” or “Sometimes” use insider information for personal gain. A
larger percentage of those without exposure were likely to report that business managers
“usually” or “always” use insider information. This says those who have been exposed to small
business operations are more likely to report that business managers behave ethically than
those without exposure. A similar pattern can be seen for the last two items in the table.

Wilcoxon Rank-Sum Observations Greater than

(Expected in Parentheses) the Median
Exposure No Exposure Exposure No Exposure
(N = 37) (N = 32) (N = 37) (N = 32)
Table III.
The use of insider information for personal gain 1,127 (1,295) 1,288 (1,120) 9 18
Rank-Sum and
Hiring competitors’ employees to learn trade
Difference in secrets 1,132.5 1,282.5
medians results Fail to report employee violation of law 1,115 1,300
 Exposure
Entrepreneurs
Yes (N = 37) (%) No (N = 32) (%) and managers
The use of insider information for personal gain
Never 35.14 25.00
Occasionally 24.32 9.38
Sometimes 16.22 9.38
Usually 13.51 34.38 389
Always 10.81 21.88
Hiring competitors’ employees to learn trade secrets
Never 45.95 21.88
Occasionally 10.81 12.50
Sometimes 5.41 9.38
Usually 27.03 34.38
Always 10.81 21.88
Fail to report employee violation of law
Table IV.
Never 24.32 9.38
Occasionally 21.62 9.38 Frequency of
Sometimes 16.22 15.63 responses for
Usually 29.73 56.25 significant items
Always 8.11 9.38 (business managers)

H3a. Entrepreneurs will be perceived as more ethical by female Indian students

compared to their male peers.
Only 1 of the 20 items demonstrated a statistically significant difference in the
median response and a different underlying distribution between male and female
responses. This offers little support to the hypothesis at first look. However, the
wording on this item is more general than most of the other items. Table V displays
this item’s results.
Table VI investigates the responses for this item at a more granular level by gender. A
closer look at this item clearly demonstrates that males more frequently reported
entrepreneurs to “Never” or only “Occasionally” be willing to sacrifice personal ethics to
achieve business objectives. Females reported with much more frequency that
entrepreneurs will “Usually” be willing to make the sacrifice:

H3b. Business managers will be perceived as less ethical by female Indian students
compared to their male peers.
Again, the more general items presented statistically significant results by way of either the
difference in means or the rank-sum tests. Two of the items, seen in Table VII, in the
instrument give general statements for the respondents. Therefore, there is slight support
for this hypothesis. The statement involving the “Code of Ethics” has a statistically
significant difference in median values between genders. Of the 11, 7 females in the sample
had values for this item greater than the median value for the pooled data. The rank-sum did
not show a difference (p-value = 0.07) between male and female responses. The “Willing to
sacrifice” item also shows statistically significant difference between genders. However, the
rank sum results are significant and not the median test.
JEEE Table VIII presents a more detailed look at the responses to the two general ethics
12,3 statements by gender. Males reported that business managers either “Never”,
“Occasionally” or only “Sometimes” use code of ethics in decision-making. Females reported
that business managers usually make ethical decisions with a high frequency (63.64 per cent
of the time). However, these findings conflict with the last item. Females more frequently
reported that business managers would sacrifice personal ethics on behalf of the business.
390 As another check investigation of the relationship between the demographic variables,
exposure variables and the geographic location and ordinary least squares regression were
employed. Table IX presents the results. Two models were used. The explanatory variables
are the same for each model and include gender, marital status, age, entrepreneurial
exposure and geographic location. Gender (male/female), marital status (married/not
married), entrepreneurial exposure (yes/no) and geographic location (India/USA) are all
binary variables. Age is continuous. The dependent variable for Column 1 is the perception
of managers’ ethics, and for Column 2, the dependent variable is the perception of
entrepreneurs’ ethics. The estimation was conducted using robust estimate of variance
which leads to less biased results.

Wilcoxon Rank-Sum
(Expected in Observations Greater
Table V.
Parentheses) than the Median
Rank-Sum and
Male Female Male Female
Difference in
(N = 58) (N = 11) (N = 58) (N = 11)
medians results by
gender Willing to sacrifice personal ethics to achieve
(entrepreneurs) business objectives 1880.5 (2030) 534.5 (385) 12 6

Male (N = 58) (%) Female (N = 11) (%)

Willing to sacrifice personal ethics to achieve business objectives

Never 18.97 0.00
Table VI. Occasionally 25.86 9.09
Single item responses Sometimes 34.48 36.36
by gender Usually 17.24 54.55
(entrepreneurs) Always 3.45 0.00

Wilcoxon Rank-Sum Observations Greater

(Expected in Parentheses) than the Median
Male Female Male Female
Table VII. (N = 58) (N = 11) (N = 58) (N = 11)
Rank-Sum and
Use “Code of Ethics” in decision-making 1922.5 (2030) 492.5 (385) 15* 7
Difference in Willing to sacrifice personal ethics to 1914.5* 500.5 13 5
medians results by achieve business objectives
gender (business
managers) Note: *p-value # 0.05
 Male (N = 58) (%) Female (N = 11) (%)
Entrepreneurs
and managers
Use “Code of Ethics” in decision-making
Never 13.79 9.09
Occasionally 27.59 9.09
Sometimes 32.76 18.18
Usually 18.97 63.64
Always 6.90 0.00 391
Willing to sacrifice personal ethics to achieve business objectives
Table VIII.
Never 18.97 0.00
Occasionally 27.59 18.18 Frequency of
Sometimes 31.03 36.36% responses for general
Usually 18.97 45.45 items (business
Always 3.45 0.00 managers)

(1) (2)
VARIABLES Managers Entrepreneurs

Male 3.290 (2.358) 0.0857 (2.005)

Married 1.238 (3.333) 2.819 (2.867)
Age 0.183 (0.163) 0.303** (0.118)
Exposure 8.841*** (3.014) 1.339 (2.717)
India 9.184* (4.901) 3.707 (4.152)
Constant 56.31*** (4.612) 45.21*** (4.066)
Observations 184 184
R-squared 0.053 0.027
Table IX.
Notes: Robust standard errors in parentheses ***p < 0.01; **p < 0.05; *p < 0.1 Regression results

The low R-squared value for the models indicates the chosen independent variables explain
a small percentage of the variance of the dependent variable. However, some of the
independent variables were found to have a statistically significant relationship with the
dependent variables. For Model 1, both prior entrepreneurial exposure and being from
the Indian sample were related to a lower score on the ethics measure, which represents the
perception of more ethical behavior. For Model 2, only age was significant.
For comparative questions one and two, Table X demonstrates how the results from this
study compare to an earlier study using the same instrument with students in the US. Bear
in mind that this is a subset of the results from each country and it is solely demonstrative.
The means and standard deviations are for comparison and should not be used for
hypothesis testing since the assumption of normality is violated in the Indian data. The
comparison shows that students in the USA perceive entrepreneurs and business managers
to be more ethical than the students in India reported.

Discussion
This study contributes to the field of entrepreneurship in two ways. One involves the results
of the hypothesis testing presented herein to evaluate the perceptions of business students in
India toward entrepreneurs and business managers. The second contribution is comparing
these results to that of a similar study using a US sample (Batchelor et al., 2011) to compare
JEEE India US
12,3 Entrepreneurs (N = 69) (N = 116)

Overstate expense account by more than 10% Mean 2.32 1.7

SD 1.613 1.057
Accept gifts/favors from customers and/or suppliers for preferential treatment Mean 2.06 2.51
SD 1.74 1.245
392 Blame an innocent employee for errors Mean 2.19 1.62
SD 1.593 1.121
Falsifying reports Mean 2.2 1.53
SD 1.568 1.003
Fail to report employee violation of law Mean 2.3 1.7
SD 1.556 1.044
Divulge confidential information to outside parties Mean 2.01 1.52
SD 1.519 1.009
Use “Code of Ethics” in decision-making Mean 2.58 4.2
SD 1.13 0.102
Business Managers
Overstate expense account by more than 10% Mean 2.22 1.78
SD 1.705 1.094
Blame an innocent employee for errors Mean 2.43 1.91
SD 1.711 1.167
Failing to take action for employee violation of company policy Mean 2.31 1.81
SD 1.578 1.025
Falsifying reports Mean 2.23 1.77
SD 1.69 1.117
Fail to report employee violation of law Mean 2.17 1.73
SD 1.434 1.103
Table X. Divulge confidential information to outside parties Mean 2.2 1.78
Indian and US SD 1.596 1.104
Student perceptions Use “Code of Ethics” in decision-making Mean 2.87 4
comparison SD 1.123 0.105

the differences in perceptions toward entrepreneurs and business managers across these
two nations. For this reason, the discussion presented herein will address both points
(Indian student perceptions and US vs Indian differences) simultaneously.
Results for the Indian sample seemed to point in the same direction as theory predicts,
that is, significant differences in perceptions toward entrepreneurs and business managers,
with entrepreneurs viewed as more ethical. Prior research on Indian samples argued that the
organizational constraints placed on business managers may restrict their moral
development (Monga, 2005), many people in India see business (i.e. large multinational
businesses) as a corrupting force (Chakraborty, 1997), and globalization has caused ethics in
India to deteriorate (Berger and Herstein, 2014).
It could be that the US sample’s perceptions were biased by large scandals where the high
profile and very public corrupt business managers tarnished the perceptions these students
hold toward business managers and entrepreneurs were shielded from this damage because
they are perceived to be different (i.e. are motivated by more than just profit). Further, as social
entrepreneurship is such a hot topic in the US, it could be that the positive views of this
subclass of entrepreneurs exerted a positive effect on the perceptions toward entrepreneurs.
Students may intuitively understand stakeholder theory and perceive entrepreneurs to take a
more stakeholder perspective toward ethics. Thus, students may also view business managers
as agents required to pursue profit, as proposed in agency theory.
 With regard to the lack of significant findings in India, this could be due to the focus of Entrepreneurs
many large businesses in India toward community development instead of internal ethical and managers
development (Arora and Puranki, 2004). As Arora and Puranki (2004) argue, these large
companies spend the majority of their time and money toward community development and
lack focus on internal ethical development, such as working conditions and ethical treatment
of employees. It is possible that this external focus is having the desired effect as evidenced
in the results of these studies. As the business students have yet to begin working in these
large organizations, they are not aware of the internal ethical issues, they see the positive 393
side of the external economic development (i.e. new schools and social facilities) resulting in
a positive effect on their perceptions. Research by Ardichvili et al. (2012) may substantiate
this conclusion, as they found that employees from India and Brazil have more favorable
views of their organizations than employees from other BRIC countries.
Regarding stakeholder theory, large businesses in India focus on community
development creating a positive image for the business students in India that not only
shareholders are benefiting from but the community as a whole (multiple stakeholders). The
idea of strong collectivism may be responsible for these positive perceptions toward
business managers in India, while entrepreneurs may have more profitability issues that
prevent them from focusing on the community in the same way as large business managers
(Chell et al., 2016).
The findings of this study with regard to prior entrepreneurial exposure found no
difference between the perceptions the Indian sample held toward entrepreneurs but found
that those with prior entrepreneurial exposure did perceive business managers to me more
ethical than those without such exposure. This is consistent with prior research by Cordeiro
(2008) who found that entrepreneurs are less focused on ethical issues than business
managers and often lack the ability to address such issues. From a stakeholder perspective,
the influence of prior entrepreneurial exposure on perceptions toward business managers
may be due to a realization that business manager’s actions are guided by the desire to
please multiple stakeholders (i.e. the local communities and employees) resulting in more
ethical behavior than entrepreneurs that are free to chase purely financial goals (Bucar and
Hisrich, 2001). That is, individuals with prior entrepreneurial exposure (or exposure to small
business operations) may view business managers as more constrained to behave ethically
than those who do not have such exposure.
In the US sample, prior entrepreneurial exposure had no significant impact on the
perception of business managers and entrepreneurs. When comparing the US and Indian
sample, the only difference was in how business managers were perceived based on prior
entrepreneurial experience. This could be due to the focus of Indian companies on
community development and its effect on perceptions individuals in India have toward the
managers within these companies (Arora and Puranki, 2004). Further, when referring to a
technology firm in India, Crilly (2011) found that there was a strong focus by the managers
in working with all stakeholders in the overall ecosystem of the organization. This combined
with Hofstede’s (1984) finding of strong collectivism in India could be responsible for the
positive perceptions toward business managers by those with prior entrepreneurial
exposure. That is, the individuals in the sample may see the profitability issues (Chell et al.,
2016) faced by entrepreneurs as an impediment to ethical behavior that business managers
do not face to the same degree.
With regard to gender differences, there were no significant differences toward
perceptions of entrepreneurs in the Indian sample and only mixed support for business
managers. This is consistent with similar prior research showing no gender differences
when making such comparisons (Medlin and Green, 2003). The US sample found no
JEEE difference in perceptions toward business managers but did find significant differences in
12,3 perceptions toward entrepreneurs. In the original study by Batchelor et al. (2011) this
perceptional difference was related to work-family conflict. Martins et al. (2002) found that
females experience more work-family conflict than males. This was interpreted to mean that
in the US females perceive entrepreneurs to be more likely, and free, (as they are not limited
by agency issues) to accommodate when such issues arise. It could be that in India, such
394 accommodations by entrepreneurs are not made for work-family conflict.
One question answered in this study is that business students in the USA did perceive a
significant difference between the ethics of entrepreneurs as compared to managers, with
entrepreneurs being more ethical, but the students in the Indian sample did not perceive a
significant difference. The findings in the US sample were consistent with previous research
where theory argues that entrepreneurs should be perceived more ethical because they can offer
a more positive work environment with diverse responsibilities (Teo and Poon, 1994; Grubb,
et al., 2006) and enhance the cognitive moral development of their employees (Solymossy and
Masters, 2002). In addition, entrepreneurs have been found to be more committed and connected
to their local communities (Green, 1992; Solymossy and Masters, 2002).
Finally, as a group, business students in the US perceive both entrepreneurs and
business managers as more ethical than business students in India. We attribute this in
large part to the view by many in India that business, especially that which is a result of
increased globalization, is viewed as a “corrupting force” my many in India
(Chakraborty, 1997). As Berger and Herstein (2014) argue, the effects of foreign
influence in India have caused business ethics to deteriorate. This may have caused
many business practitioners, managers and entrepreneurs alike, to forgo the strong
ethnic ties (Zaheer et al., 2009) that have previously characterized those practicing
businesses in India to pursue more purely financial priorities. Another possible
explanation is that research has shown Indian firms to be behind their US counterparts
when implementing best practices (Teece, 2014; Knott, 2003). Many of these recent best
practices show a shift away from a shareholder focus to a stakeholder centered focus,
which would arguably increase ethical behavior. This lack of timely best practice
implementation, especially those relating to ethics, may explain the difference in
perceptions by the two samples.

Future research and practical implications

As far as the authors are aware, this article is the first academic article to questions if the
ethical perceptions of millennials in the US and a BRIC country differ. We did find
differences where US millennials had higher ethical perceptions of both entrepreneurs and
business managers than their Indian counterparts. Future research should delve into what
cultural and behavioral causes may have led to these differences. For instance, are the
branding and marketing campaigns in the US more effective at swaying the perceptions of
US millennials.
The practical implications of this study are simple. The reliance of Indian companies on
community building activities is not sufficient to sway the attitudes of their communities.
These organizations need to spend, as recommended by Mahjan and Mahjan (2016), more
time “injecting” values into their employees. Thus, Indian entrepreneurs and business
managers both need to focus more on internal ethical issues moving forward.

Conclusion
Business students in the USA perceive those who practice business as either managers or
entrepreneurs to be more ethical than do those in India. In addition, some differences
between the US and Indian sample were found with regard to prior entrepreneurial Entrepreneurs
exposure. The Indian sample in this study found no difference in perceptions regarding who and managers
is more ethical, business mangers or entrepreneurs, and few gender difference perceptions
were found, where more significant differences did exist in the US sample. The differences in
the US and Indian sample were largely attributed to the negative impact of globalization on
ethics in India and the delay in implementation of ethical best practices making their way to
Indian businesses.
These perceptual differences within the Indian sample should cause some concern
395
among leaders in that country. India plays an important role in the global economy, and it is
important that young college-educated adults have a positive ethical view of
entrepreneurship. If not, India may not fully realize its entrepreneurial potential. Various
annual reports from the Global Entrepreneurship Monitor have emphasized the importance
of entrepreneurship in developing countries, particularly among young adults. Among the
many benefits of entrepreneurship include product innovation, job growth, and the potential
influx of resources, particularly capital for business development. As such, it is critical that
this demographic in India has a favorable view of entrepreneurship as a career path,
including the ethics standards associated with such endeavors.
While our study focused on examining the perceptions of college students, it is important
to use these findings to better understand how to improve their ethical perception toward
entrepreneurship within this important population in India. Perhaps young adults in the
USA have more positive entrepreneurial mentors to learn from, or that a greater access to
resources provides a more optimistic view of business startup. Our findings seem to indicate
that the Indian educational model needs to place a greater emphasis on the positive benefits
of entrepreneurship and how new business startups can be launched in an ethical manner
within the Indian economy. This may also include changes in economic policies within the
country to encourage and promote entrepreneurship as a viable, and ethical, career path for
young people. There already exists a vast amount of entrepreneurial talent in India, and this
nation would be wise to develop within rather than watch these individuals migrate to other
countries like the USA to pursue their innovative dreams.

Notes
1. Available at: http://databank.worldbank.org/data/reports.aspx?source=education-statistics--all-
indicators
2. Available at: http://data.worldbank.org/topic/education?locations=IN&view=chart

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Corresponding author
Dennis Barber III can be contacted at: barberde17@ecu.edu

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