Elsie Kundai Mapeto Final Draft

Topic: The impact of corporate ethical behaviour on the profitability of the
retail industry in Zimbabwe.
By
KUNDAI ELSIE MAPETO

C14122919S
Supervisor: Mr M.CHUFAMA
A research project submitted to Chinhoyi University of Technology, School of

Entrepreneurships and Business Sciences, Department of Marketing, in partial fulfilment
of the requirements of the award of the Bachelor of Science honours degree in
International Marketing.
Chinhoyi, Zimbabwe
Year: 2017
1|Page KUNDAI ELSIE MAPETO C14122919S

Table of Contents
List of Tables ............................................................................... Error! Bookmark not defined.
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Release Form ............................................................................... Error! Bookmark not defined.
Declaration ................................................................................... Error! Bookmark not defined.
Approval Form ............................................................................. Error! Bookmark not defined.
Acknowledgements ................................................................................................................... 14
Abstract ..................................................................................................................................... 15
LIST OF FIGURES .................................................................................................................... 5
LIST OF TABLES ...................................................................................................................... 6
CHAPTER ONE .............................................................................. Error! Bookmark not defined.
INTRODUCTION ....................................................................... Error! Bookmark not defined.
1.0 Introduction .................................................................... Error! Bookmark not defined.6
1.1 Background to the study ................................................ Error! Bookmark not defined.6
1.2 Statement of the problem .............................................................................................. 18
1.3 Research Objectives ...................................................................................................... 19
1.4 Research Questions ....................................................................................................... 19
1.5 Significance of the study ............................................................................................... 19
1.6 Scope of the study ......................................................................................................... 20
1.7 Research Limitations ....................................................... Error! Bookmark not defined.
1.8 Definition of terms.21
1.9 Organisation of report21
1.11 Chapter Summary ......................................................................................................... 23
CHAPTER TWO ........................................................................... Error! Bookmark not defined.4

LITERATURE REVIEW ......................................................................................................... 24
2.0 Introduction ................................................................................................................... 24
2.1 Ethics............................................................................................................................. 24
2.2 Corporate Ethics............................................................................................................ 25
2.3 Unethical practices in retail sector ................................... Error! Bookmark not defined.
2.4 Causes of unethical practices ........................................... Error! Bookmark not defined.
2.5 Impact of ethics .............................................................. 3Error! Bookmark not defined.
2.6 Theoratical Framework ................................................................................................ 36
2.7 Research Gap ................................................................................................................ 37
2.8 Chapter Summary ......................................................................................................... 38
CHAPTER THREE ......................................................................... Error! Bookmark not defined.
METHODOLOGY ...................................................................... Error! Bookmark not defined.
3.1 Introduction ...................................................................... Error! Bookmark not defined.
3.2 Research Design............................................................... Error! Bookmark not defined.
3.3 Target Population ............................................................. Error! Bookmark not defined.
3.4 Sampling Methods and Techniques ................................. Error! Bookmark not defined.
3.5 Sampling Frame ............................................................... Error! Bookmark not defined.
3.6 Sample Size ...................................................................... Error! Bookmark not defined.
3.7 Sampling procedure ......................................................... Error! Bookmark not defined.
3.8 Research Instrument......................................................... Error! Bookmark not defined.
3.9 Data Analysis Plan ........................................................... Error! Bookmark not defined.
3.10 Limitations ....................................................................... Error! Bookmark not defined.
3.11 Summary .......................................................................... Error! Bookmark not defined.
CHAPTER FOUR............................................................................ Error! Bookmark not defined.
DATA ANALYSIS, INTERPRETATION AND PRESENTATIONError! Bookmark not defined.

4.2 Data cleaning ................................................................... Error! Bookmark not defined.
4.3 Sample Demographics ..................................................... Error! Bookmark not defined.
4.4 Unaided recall of data collection methods ....................... Error! Bookmark not defined.
4.5 Reported use of data collection methods ......................... Error! Bookmark not defined.
4.6 Preferred data collection methods .................................... Error! Bookmark not defined.
4.7 When current users started using MDCS ......................... Error! Bookmark not defined.
4.8 Perceived advantages and disadvantages of MDCS ........ Error! Bookmark not defined.
4.9 Rating of MDCS on key aspects ...................................... Error! Bookmark not defined.
4.9.1 Performance Aspects................................................ Error! Bookmark not defined.
4.9.2 Cost Aspects............................................................. Error! Bookmark not defined.
4.9.3 Data Quality Aspects ............................................... Error! Bookmark not defined.
4.9.4 Time Aspects ........................................................... Error! Bookmark not defined.
4.9.5 Technical Aspects .................................................... Error! Bookmark not defined.
4.10 Conclusion ....................................................................... Error! Bookmark not defined.
CHAPTER FIVE ............................................................................. Error! Bookmark not defined.
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONSError! Bookmark not

defined.
5.2 Summary of Findings ....................................................... Error! Bookmark not defined.
5.2.1 Factors influencing adoption of MDCS by market research firms in ZimbabweError!

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5.2.2 Factors impeding adoption of MDCS by market research firms in ZimbabweError!

5.2.3 Reasons why current user still alternate between paper based data collection and MDCS on
some surveys? .......................................................................... Error! Bookmark not defined.

5.2.4 Policy issues that can be considered to encourage use of MDCSError! Bookmark not
defined.
5.3 Recommendations ............................................................ Error! Bookmark not defined.
5.3.1 Technology .............................................................. Error! Bookmark not defined.
5.3.2 Organisation ............................................................. Error! Bookmark not defined.
5.3.3 Environment ............................................................. Error! Bookmark not defined.
5.4 Limitations of the Study................................................... Error! Bookmark not defined.
5.5 Areas of further study ...................................................... Error! Bookmark not defined.
Appendix I Study Questionnaire ............................................... Error! Bookmark not defined.
Appendix II Statistical Analysis Tables .................................... Error! Bookmark not defined.
References .................................................................................... Error! Bookmark not defined.
LIST OF FIGURES
Figure 1.1: Technology, Organisation, Environment (TOE) Framework: (Baker, 2011)Error!

Figure 2.1: Basic Components of MDCS: Jung, 2011 ..... Error! Bookmark not defined.
Figure 2.2: Proportion reporting ever using MDCS: (Ruzawi and Matare, 2015) ... Error!
Figure 4.1: Sample Breakdown by Employee Level ........ Error! Bookmark not defined.
Figure 4.2: Sample Distribution by respondent sex .......... Error! Bookmark not defined.
Figure 4.3: Duration with company analysed by employee levelError! Bookmark not defined.
Figure 4.4: Unaided recall of data collection methods ..... Error! Bookmark not defined.
Figure 4.5: Reported use of data collection methods ........ Error! Bookmark not defined.
Figure 4.6: Reasons for preferring MDCS ........................ Error! Bookmark not defined.
Figure 4.7: Reasons for starting using MDCS .................. Error! Bookmark not defined.
Figure 4.8: MDCS Performance Ratings .......................... Error! Bookmark not defined.
Figure 4.9: MDCS Performance Ratings - Mean Ratings out of 5Error! Bookmark not defined.
Figure 4.10: MDCS Cost Ratings ..................................... Error! Bookmark not defined.
Figure 4.11: MDCS Cost Ratings - Mean Rating out of 5 Error! Bookmark not defined.
Figure 4.12: MDCS Data Quality Ratings ........................ Error! Bookmark not defined.
Figure 4.13: MDCS Data Quality Ratings - Mean Rating out of 5Error! Bookmark not defined.
Figure 4.14: MDCS Time Ratings .................................... Error! Bookmark not defined.
Figure 4.15: MDCS Time Ratings - Mean Ratings out of 5Error! Bookmark not defined.
Figure 4.16: MDCS Technical Aspects Ratings ............... Error! Bookmark not defined.
Figure 4.17: MDCS Technical aspects Ratings - Mean Rating out of 5Error! Bookmark not
defined.

LIST OF TABLES
Table 3.1: Sample Strata Composition ............................. Error! Bookmark not defined.
Table 3.2: Sample Size Breakdowns ................................ Error! Bookmark not defined.
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Table 4.2: Sample Age Distribution ................................. Error! Bookmark not defined.
Table 4.3: Sample distribution by level of education ....... Error! Bookmark not defined.
Table 4.4: Reasons for using a particular data collection methodError! Bookmark not defined.
Table 4.5: Period using MDCS ......................................... Error! Bookmark not defined.
Table 4.6: Advantages of using MDCS ............................ Error! Bookmark not defined.
Table 4.7: Disadvantages of using MDCS ........................ Error! Bookmark not defined.
Table 4.8: Reliability Analysis Statistics on Performance IssuesError! Bookmark not defined.
Table 4.9: Reliability Analysis Statistics on Cost Issues .. Error! Bookmark not defined.
Table 4.10: Reliability Analysis Statistics on Data Quality IssuesError! Bookmark not defined.
Table 4.11: Reliability Analysis Statistics on Timing IssuesError! Bookmark not defined.
Table 4.12: Reliability Analysis Statistics on Technical IssuesError! Bookmark not defined.
RELEASE FORM

Name of student: MAPETO KUNDAI ELSIE
Title of the research project: The impact of corporate ethical behaviour on the
profitability of the retail industry in Zimbabwe.
Programme for which the
Project was presented: International Marketing
Year granted: 2017
Permission is hereby granted to the Chinhoyi

University of Technology Library to produce single
copies of this project and to lend or sell such copies
for private, scholarly, or scientific research purposes
only. The author reserves other publication rights
and neither the project nor extensive contracts from
it may be printed or otherwise reproduced without
the authors written permission.
Permanent address: 8287 G.V Way

Glen-View8
Harare
Students signature:
Date:

DECLARATION
I, Kundai Elsie Mapeto do hereby declare that this research report is the result of my own work,
except to the extent indicated in the acknowledgements, references and by comments included in
the body of the report, and that it has not been submitted in part or in full for any other degree to
any other university.
Kundai Elsie Mapeto
Name of student
November 2017
Date

APPROVAL FORM
The undersigned certify that they have read and recommended to the Department of , School
of Business Sciences & Management, Chinhoyi University of Technology, for acceptance; a
project titled, The impact of corporate ethical behaviour on the profitability of the retail industry
in Zimbabwe, submitted by Kundai in partial fulfilment of the requirements for the Bachelor of
Science in International Marketing
Mr M.Chufama
Name of Supervisor
Signature
Date
10 | P a g e K U N D A I E L S I E M A P E T O C 1 4 1 2 2 9 1 9 S
CHINHOYI UNIVERSITY OF TECHNOLOGY
Total Mark
SCHOOL OF BUSINESS SCIENCES & MANAGEMENT
%
DEPARTMENT OF
RESEARCH PROJECT MARKING GUIDE
Name of student: Mapeto Kundai Registration number C14122919S
Area of focus Considerations Examiners comments Mark

awarde
d
Formulation of Is it worth researching on? Is it /5

the research researchable? Does it add value?
topic
Does it give a concise picture of
Abstract the study in terms of the /5
purpose, methodology, major
findings and recommendations?
How well-formulated is the
Chapter 1: background to study, statement /10
Introduction of the problem/knowledge gap,
research questions, objectives,
etc.?
Adequacy of coverage of the
literature in view of the topic,
Chapter 2: relevance of the literature, extent
Literature to which the candidate /20
Review demonstrated competence in
reviewing the literature, proper
use of citations and presentation
of references.
Is it clear how the study was
Chapter 3: conducted in terms of /15
Research population, sampling,
Methodology instruments, data collection, data
analysis, etc.?
Have data been well-presented in
ways that are informative and
Chapter 4: easy to understand? How well
Results and have data been analyzed to
discussion respond to the demands of the /20
study? Are research questions
adequately answered? Has the
candidate adequately discussed
the results?
Chapter 5: Is the summary concise and
Summary, precise? Are the conclusions
conclusions and accurate, reasonable and drawn /15
recommendation from the findings? Are the
s recommendations tenable?
General presentation in terms of
Overall formatting, language, neatness /10
Presentation and readability, etc.
Any other comments:

Name of Examiner: Signature.Date
Dedication
To my mother Otilia, without her caring support it would not have been possible, to the memory
of my grandmother Febbie Guguta, who had great love for me
Acknowledgements
Joshua1:5b As I was with Moses, so I will be with thee; I will not fail thee, nor forsake thee.
My sincere gratitude goes to the Almighty who is always with me as quoted by the above verse.
This report was never a solo effort. Special thanks to the Almighty for the grace He has shown
me since birth. It is to the courteous of the Chinhoyi University of Technology through the
Faculty of Marketings Knowledge Diligent, Integrity and its good relation with Business
Industries that I am writing this report today. I owe a great many thanks to a great many people
who helped me in making this report to become a reality.
I express my gratitude to my friends and colleagues Faith, Tafadzwa and Tariro for their
unwavering support throughout the whole process of writing this report through sharing of ideas
and advices.
Abstract
Ethical behaviour is of paramount importance in any business. Ethical behaviour is explained

using a number of theories and have all differing view-points. Of interest to this study were
deontological and teleological theories. Deontological theories of ethics place emphasis on
adhering to ethical principles or duties and fulfilling obligations while, teleological school of
thought views morality of an action upon the consequences of the outcome. This creates a
quandary on ethical practices based on who is assessing the practice and from which school of
thought bearing in mind that the core purpose of any corporate is to make profits. This study
adopted deontological theory to explain ethical behaviour of retail firms. A positivist approach
was adopted for the study while a quantitative research methodology was used with a
questionnaire being used a tool for data collection. Data was collected using a case study and OK
Zimbabwe limited was used as a case study for the retail sector in Zimbabwe. The study targeted
a sample of 394 staff members of OK Zimbabwe and a response of 63 was attained. From the
responses, data was analyse using SPSS where a reliability, factor analysis and regression
analysis was conducted. From the factor analysis the study adopted two factors Appreciation of
Ethics and Application of Ethics. The main aim of the study was to measure the existence of the
relationship between ethical behaviour and profitability. This was realised after a regression
analysis that the relation is positive and it is 58%. This meant that of the profitability of retail
firms 58% is from retail firms ethical practice. The study also noted that retail firms are faced
with major challenges including government laws and regulations like The Indigenisation Act
requires that all foreign owned companies to have at least 51% of their shareholding being held
by local Zimbabweans. At the time of conducting this study the country was facing a huge
economic, foreign currency and cash crisis as a result the most affected were the retail sector
who have the mandate of handling cash on a day to day basis. Another regulation was the SI64
instrument that inhibits importation of some good while the local industry is not producing as
expected. With such huge hurdles before them, retail firm would rather be dealing with their core
business and liquidity challenges in the country were affecting their main operations as such it
was better for the retail sector to focus on core business rather than with ethical behaviour that
may not give immediate rise in profitability.
CHAPTER ONE
Introduction
This chapter provides an overview on ethical business practices. The background of the research
is presented first. In the background section, a broad view of the ethical and unethical business
practices is given. A focus on unethical business practices in Zimbabwe is also presented as the
area in which the study will focus on. After the background section, statement of the problem
follows presenting why the need to for this study in Zimbabwe. From the statement of the
problem the research objectives are derived and so are the research questions. This then gives
rise to the hypothesis section. The hypothesis gives the study what it is going to be testing. The
value of the study is given in a section called the significance of the study. This section outlines
who is to benefit from the study. The scope of the study is then given. This section defines who,
when and how is the research going to unfold. A limitations section shall be given where the
challenges that might befall the study are given as well as their possible solutions. Lastly, the
chapter ends with a summary under Chapter summary section.
1.1 Background to the study

Ethical problems are not unique to any one region but the world over including the United States
and Europe. Furthermore, top business and government officials in Japan were caught in a major
influence peddling scheme. Similar charges have been brought against top officials in South
Korea, the Peoples Republic of China, Brazil, Pakistan, and Zaire (Nikels, McHugh, and
McHugh, 2002). Nigeria, Kenya, and Cameroon are listed as one of the worst corrupt countries
in the world by Transparency International and anticorruption pressure group founded by a
former World Bank official (Nikels, McHugh, and McHugh, 2002).Masaka (2011) noted that
several studies have been conducted on the issue of corporate ethics. However, these studies
have been conducted primarily in the United States, Europe, and Asia. Despite the importance of
good corporate ethics, one of the regions whose studies on the subject matter are in their infancy
in the sub-Saharan African nations. Extensive reviews of the literature on this issue shows that
very little research have been conducted in this region to examine this problem due to lack of
empirical research on this topic.
A number of immoral economic practices such as black market trading, speculative pricing of
commodities and profiteering also characterised this tumultuous period in post-independence
Zimbabwe. The gravity of these practices in the economy was heightened after the government
published Statutory Instrument (SI) 302 of 2002 on Control of Goods (Price Freeze) Order on 15
November 2002 [Kanyenze (2004) Masaka (2011)] that extended the list of commodities
covered by the price freeze. This makes unethical business behaviour not a new phenomenon in
Zimbabwe.
Good corporate ethics is a branch of philosophy that deals with moral values. Companies in
Zimbabwe have been affected by stunted growth and one school of thought suggests that it is as
a result of their ethical behaviour and stringent investment policies. Biti (2015). Zimbabwe as a
nation has been going through a cash crisis and went through a hyper inflationary environment
between the years 2000 and 2008. In July 2008 inflation rates rose up to 231 million percent
according to the Central Statistical Office by September 2008 inflation peaked to 500 billion
percent. Biti (2015). During the same period, it was noted that retailers are more corrupt when it
comes to the issue of registration and acquiring trading licences. In fact, for a retailer to fully
register they require a lot of licences for example warehouse licence, liquor licence among other
licences.
In 2015 The Reserve Bank of Zimbabwe introduced bond coins to ease the small notes and the
change crisis that had hit the retail sector. This then culminated in the Reserve Bank of
Zimbabwe further introducing an investment incentive in the form of bond notes. The bond notes
were pegged at the same rate as the United State dollar. This became a bone of contention in the
retail as most retailers felt short changed as most of their products were coming from the external
market. However, given the fact that Zimbabwe experienced unprecedented unethical business
behaviour during the period 2007-2008 as a result of the managed exchange rates and a weak
currency, the introduction of the bond notes has seen a rise in informal traders selling their wares
at the doorsteps of most retail shops competing with the licensed retailers. Issues of corporate
unethical behaviour have been on the rise and will continue to do so if they remain unchecked.
Mupakame (2014), reported that retailers in Zimbabwe now have three pricing scheme after the
introduction of the bond notes. The three prices are one for using electronic transfers, the other
one is for cash while the other price is for customers using mobile transfers. This automatically
pushed the prices of most commodities up. In the retail sector, a sales person may ignore ethical
standards in order to meet sales targets. Gilman (2003) explains that many organisations commit
ethics suicide, because they became vulnerable by creating ethics programmes that fulfilled
only minimal legal standards with little or no thought for effective implementation. Currently in
Zimbabwe vendors sell their wares directly on the front of established shops. This has given rise
to a number of vendors selling similar products that the retailers are selling in their respective
shops. It is alleged that the same retailers are pushing more of their products through these
vendors who do not pay rent or rates. Mupakame (2014).
1.2 Statement of the problem
Zimbabwes economy is well known across the globe for its stringent and harsh requirements for
setting up any new start-ups. Above all, the global economic down turn has not spared the
economy. Coupled with investment legislations that favour locals at the expense of much needed
foreign direct investment, this has led to many firms being involved in unethical practices for
their survival. In the end this has seen many local products being less competitive in the highly
competitive environment in today's global economy leaving many companies with little or no
option but to become practioners of bad corporate ethical behaviour so that they can sustain their
businesses.
With ethical behaviour in the retail industry, corporates are by nature worried about making
profits and may justify their action on the outcome of their respective actions. On the other hand,
consumers and other players look at corporate as players who must abide to specified rules.
These diverging views create a difference in perception and expectation around ethical
behaviour. As such, this study will unpack the relationship that exist between profitability of the
retail industry and unethical practices that have become so rampant in the retail industry from a
deontological perspective.
1.3 Research objective
The main objective of this study is to determine the relationship between corporate ethical
practices and profitability in the FMCG.
1.3.1 Sub Objectives

1. To explore corporate ethical practices that may affect retail operations in the Zimbabwe
2. To identify factors that may hinder retail organisations to practice good ethical standards
3. To analyse the impact of unethical practices
4. To identify other intervening factors than ethical practices that can enhance company
performance
1.4 Research Questions

1. What are the corporate unethical practices that are occurring in the retailers industry?
2. How has the profitability of the industry been affected as a result of the unethical
corporate business practices?
3. What are the key pillars of dealing with unethical corporate practices in the retail
industry?
4. What are intervening factors than ethical practices that can enhance company
performance?
1.5 Significance of Study
This study will provide a critically the relationship that exist between the ethical practises and
profitability in the retail sector. This has immediate benefits to the retailers both existing and
aspiring. Secondly, the business community will also appreciate the impact of the relationship
above all the economy as a whole. Thirdly, the research will add knowledge to the body of
knowledge about investment in Zimbabwe. Lastly, but most importantly the consumers will
benefit in a big way. This is further explained below;
1.5.1 To retailers
This study will be of paramount importance to retailers in so far as they will be well familiar of
both the corporate ethical and unethical challenges they face and how they should be guided in
avoiding unethical practices.
1.5.2 To business community

The research is of great importance to the business community as a whole as it can become the
benchmark and example on how not to do business or how to do business ethically in Zimbabwe.
Furthermore, the study can be a source of ethical pot of call for potential investors in Zimbabwe.
1.5.3 To the Consumers
Consumers are the drivers of any business as such once they too appreciate the ethical
and unethical business practices within the retail sector they can be assert to them. Above
all, they too can become whistle blowers to any unethical behaviours by retailers.
1.5.4 To the body of knowledge
This research can be used in the future as a source of valuable secondary data as this information
was collected specifically for this study. The study will also provide information to other
scholars and research on the same area or other areas associated with corporate business ethics.
1.6 Scope of the study (Delimitations of the study)

This study will focus on corporate business ethics in the retail sector in Zimbabwe. Focus shall
be drawn only on business unethical practices in the established retail sector. The study will be
limited to the retailers in the FMCG firms and major retail operators OK Zimbabwe limited, TM
and Spar will be used as case studies to the research. The researcher will obtain information from
the multiple branches of the retail shops. Customers to these retail operators shall be randomly
chosen from the main branch. The study shall be conducted over a period of six months in
Harare.
1.7 Limitations of the Study
1.7.1 Fear of providing unethical issues by the customers. To avert this challenge, the research
shall seek consent form management that all the data collected shall be treated confidentially and
the respondents will sign a consent form. Furthermore, there shall be identification or hand
writing to be used in the questionnaire.
1.7.2 Use of academic jargon to capture academic theories. The researcher shall design the
questionnaire in a manner that will be less technical. The use of likert scale shall be dominant in
the questionnaire.
1.7.3 Lack of management support. In order to get management support, the researcher shall seek
expressly written consent and support from top management of the retail outlets so gain
management support to the study.
1.8 Definition of terms

1.8.1 FMCG Fast Moving Consumer Goods.
1.9 Organisation of the report
This report will be made of five chapters.
Chapter One
The first chapter will provide the report synopsis. In this chapter, an overview on ethical business
practices shall be given beginning with the background of the study, followed by a statement of
the problem. The research objectives are derived from the statement so are the research
questions. Other sections to be given include the hypothesis section, the significance of the
study, the scope of the study and a limitations section.
Chapter Two
The second chapter is the literature review chapter. This chapter shall provide an in depth
analysis on the subject under study. A number of sections shall be given as they pertain to
business ethical issue. The sections will give an in depth analysis of ethical issues by giving the
theories of ethics as they relate to profitability and the retail sector.
Chapter Three
The third chapter shall deal with the research methodology of the study. This chapter will give an
outline on the research philosophy and the method of data collection together with how the data
will be sampled and analysed.
Chapter Four
The fourth chapter shall be discussing the results of the collected data. In this chapter data shall
be presented and the results discussed as provided from the statistical tool SPSS.
Chapter Five
This is the last chapter, the chapter shall give an analysis of the results in detail. In this chapter
conclusions will be drawn together with recommendations for future work.
1.0 Chapter Summary
This chapter provided an overview on ethical business practices. The background of the research
was presented first. In the background section, a broad view of the ethical and unethical business
practices was given. A focus on unethical business practices in Zimbabwe was also presented as
the area in which the study will focus on. After the background section, statement of the
problem followed presenting why the need to for this study in Zimbabwe. From the statement of
the problem the research objectives were derived and so were the research questions. This then
gave rise to the hypothesis section. The hypothesis gave the study what is going to be testing.
The value of the study was given in a section called the significance of the study. This section
outlined who is to benefit from the study. The scope of the study was then given. This section
defined who, when and how is the research going to unfold. A limitations section was also
presented where the challenges that might befall the study were given as well as their possible
solutions.
CHAPTER TWO
Literature review
Introduction
The purpose of this chapter is to review literature on corporate ethics that is relevant to retail
business operations with the intention of exploring existing theory on the subject. Firstly an
appreciation of what ethics entails is given. Then the corporate ethics is defined in broader sense.
This is followed by an outline of unethical practices in the retail sector from a research
perspective. A section on the causes of unethical behaviour in Zimbabwe shall presented next.
This then followed by the general impact of unethical behaviour. A section on other factors that
affect performance of corporate is shall be given in summary. The major theories that define
ethics shall be given in a section called theoretical framework. Lastly, chapter looks at the gaps
in literature that exist pertaining to profitability and business ethics.
2.1 Ethics
There has recently been an increased focus on workplace ethics for at least two reasons. First, the
recent well publicized ethical lapses at companies such as Enron, WorldCom and Tyco illustrate
what can occur as the result of an informal unethical culture created by top management.
Second, recent research has indicated that perceptions of appropriate corporate behaviour ethical
or socially responsible behaviour can positively impact customer purchase behaviour Sen and
Bhattacharya (2001). Business ethics is concerned with morals and up right behaviour. Deviant
behaviour and unethical activities need to be corrected at an early stage Kasambira and Nyamuda
(2001). Business ethics goes hand in hand with morality. In understanding what is right and what
is wrong and act accordingly is the basis of ethical conduct. Ethical behaviour in business is
behaviour which is consistent with principles, norms, values and standards of behaviour society
expects. Kasambira and Nyamuda (2001). For the purposes of this study, the researcher shall
adopt the Kasambira and Nyamuda (2001) definition of ethics.
According to Coffman (2003) it is a train that looks at one's ethical gauges on the ethical
benchmarks of a general public. It asks how these gauges apply to our lives and whether these
norms are sensible or irrational that is whether great reasons or poor ones help them. Business
ethics are a set of moral principles for arriving at a decision, which is consistent with the values
of an organisation Holme (2008). Ethical business values shape and inform management
behaviour and can directly influence employee satisfaction and their job performance.
2.2 Corporate Ethics
According Moore (2009), understanding business ethics can be tricky as this field is broad,
frequently incorporating many concerns such as corporate governance, social duty, notoriety
administration, precise bookkeeping and evaluating, reasonable work hones and natural
stewardship among others. In addition, Drumwright and Murphy (2001) postulates that corporate
ethics for the most part tends to the whole extent of duties and commitments that an organization
has to each of its partners like customers, representatives, investors, suppliers and the
community. Furthermore, Pfeiffer (2004) argues that the idea of "corporate ethics" can be
somewhat hard to characterize however keeps on saying ethics itself is a wide idea independent
from anyone else without including the business part. An assortment of specialists can
pontificate on the most ideal approach to expand benefit however there is some shrewdness to
morals being a constructive part of income.
Business ethics are ethics that instil a sense inside an organization's workers on the best way to
direct business capably. Costa (1998). This additionally concurs with Pheifer (2006) who
propounds that business ethics basically is an art of human cooperation that advances a positive
notoriety in the commercial centre. Pheifer (2006) further notes that while producing includes
individuals, it has a tendency to be progressively the activity of machines under human bearing.
Business, even at the most astounding corporate level is about human connections and interface.
It is about truth, straightforwardness, respectability, and trust, among an entire arrangement of
other particular segments. At the end of the day, business is the demonstration of trade and ethics
is the thought of how it is led.
2.3 Unethical practices in the retail sector operations in Zimbabwe

Ethics are made up of pillars which are the establishments of ethics and they incorporate
trustworthy, respect, responsibility, fairness, caring and citizenship. Holme (2008). In Zimbabwe
the post dollarization period the economy attracted more players into the retail industry, with a number of
international franchises also entering the fray. For example, Kentucky Fried Chicken (KFC) returned to
Zimbabwe in early 2014, intensifying competition and generating discomfort amongst old players.
Established businesses have also employed aggressive tactics against competitors to remain economically
viable and reduce competition. For example, when Innscor reduced prices drastically, many fast-food
became more vulnerable and were compelled to close their businesses because of loss of competitiveness
and declining profits. Mkono (2012).
It is not common in Zimbabwe to have consumers complain about the product state, pricing or
promotional aspects. It is however, complaints on unethical products marketing that are awash in
the Zimbabwean media to such an extent that the government has been called in to be vigilant on
errant retailers. There have been stories of products being sold when they are expired and falsely
labelled among other claims. All this mayhem set in with the product shortages era experience
between 2008 and 2009 at the height of the Zimbabwe economic decline. As businesses faced
operational challenges, customers were given a lower hand since the sellers market replaced the
buyers market. This made retailers to ignore following customer oriented marketing mix
principles. One episode of product unethical practices is illustrated by a story by Kondo (2013)
where a Harare man was demanding $15, 000 from TM supermarket as compensation for
damages suffered after he purchased and ate a sausage roll with a metal object in it.
A survey conducted by Vutete and Chikosha (2014) on the grocery retail in Harareconcluded
that;
2.3.1 Most of the grocery retailers sell old food cooked in their in- store
kitchens for some days
Percentage analysis show that 68.1% of customers generally agreed to this statement. The food
cooked bysupermarkets is recycled for days, until it loses taste, freshness and nutrition value. It
is the major cause of healthexpenses by customers due to diarrhoea and even cholera. They mix
up the old meat with green vegetables to trickcustomers into believing that everything is new.
2.3.2 Grocery retailers sell products with deceiving volumes, weight and sizes
A significant mean value of 2.50 was derived from 210 respondents. This shows that many
customers agreed to the statement. A mean value of 2.50 and a percentage value of 55.3%
generally agreed that retailers offer products with deceiving volumes, weights and sizes.
Products that are generally sold using slack packaging include cornflakes, powdered milk, potato
crisps and other cereals. Customers will be buying these expecting higher satisfactions than what
is really offered by the contents.
2.3.3 Grocery retailers sell some products without information on their usage
and origin
Selling products without information on their usage and origin assumes that customers are
always conscious and they know everything and was found to be bad in the study. This deprives
them on their right to be informed. Products like bar soaps, vegetables, buns, meat, and tissue
paper are sometimes seen without labels, but customers were being expected to buy even without
basic information.
2.3.4 Grocery retailers sell GMO products that can have side effects on health
There is evidence that genetically modified products are occupying some shelves of most
grocery retailers in Harare. Such product categories include milk, grapes, chicken meat, soya
bean milk, and some fish.
2.3.5 Grocery retailers are selling products that are expired
This could be caused by stocking products not wanted by customers and taking time to sell these.
Some retailers could be doing it to avoid loss and inconvenience of returning back to suppliers or
destroying such goods. Such products sold after expiry dates include canned meat, biscuits,
imported juice drinks, snacks and chocolates and bread.
2.3.6 Grocery retailers sell products that are of poor quality and not safe to
use or consume
Consumers generally felt that many products sold by grocery retailers meet the quality and basic
safety levels.
2.4 Causes of unethical business practices by retail organisations in Zimbabwe
In Zimbabwe there are a few recorded cases of exploitative practices submitted by associations,
customers or their supervisors. The specialist will consider a portion of the deceptive practices
found in business, for example, defilement, pay off and those identified with business items,
valuing approaches, obtaining, and publicizing and organization representatives. Major causes of
unethical behaviour in the retail sector has gravitated around five key issues namely corruption,
tax evasion, price settling, price separation and dumping Below of these common causes of
unethical practices in Zimbabwe.
2.4.1 Corruption
Corruption is the abuse of open or corporate position or power for private pick up. For instance,
when an organization influences an administration authority or somebody working in another
organization with a specific end goal to acquire business, she or he is thought to be engaged with
an untrustworthy conduct. Any association that has a tendency to bulldoze the business situation
by degenerate practices may make colossal benefits and even end up noticeably charming to the
partners, yet such practices will damage the picture of the association over the long haul.
Kasambira and Nyamunda (2000). In the retail sector in Zimbabwe, corruption has been reported
with most firms resorting to selling their products on the informal market using vendors to push
their wares. It is further alleged that as a result of the shortage of foreign currency, retailers have
been buying the foreign currency on the informal market.
2.4.2 Tax avoidance
Any association making immense benefits by duping the exchequer by going around the
assessment laws will likewise be against morals of social duty of the business. Brenner et al
(1997). An association paying charges and obligations instantly and fairly according to laws is in
reality contributing income to the government and this income at last goes to the general public
by methods for welfare measures and infrastructural improvement. Miller (2001), notes that a
morally stable association may contribute a part of its benefits by taking part in humanitarian
exercises for the welfare of the general public. Costa (1998) notes that it is very likely that
benefits may appear to have a converse association with business morals. Yet, morally stable
business can run easily like all around oiled hardware and is well on the way to run longer and
more grounded when contrasted with tremendously productive contenders who need moral
principles.
Sukunda, a petroleum retail firm evaded paying taxes for its imported fuels and lied their
products were destined for Zambia. The firm was eventually caught. They cited high tax rates
and harsh exports conditions as the reason why they had to evade tax and sell their products at a
relatively low price at the time.
2.4.3 Price settling
Price settling is an assertion between business contenders to offer a similar item or

administration at a similar cost. All in all, it is an understanding expected to eventually push the
cost of an item as high as could be allowed, prompting benefits for every one of the vendors.
Value settling can likewise include any consent to settle, peg, rebate or balance out costs. The
primary element is any concession to cost, regardless of whether communicated or suggested.
For the purchaser, in the interim, the training brings about a marvel like cost gouging. Costa
(1998).
Hult et. al, (1999) are of the idea that price settling requires connivance between at least two
vendors. The reason for existing is to organize estimating for common advantage to the
detriment of purchasers. Vendors may consent to offer at a typical target value set a typical
"least" value, purchase the item from a provider at a predefined "greatest" value, cling to a value
book or rundown cost; take part in agreeable value promoting; institutionalize budgetary credit
terms offered to buyers; utilize uniform exchange stipends; confine rebates; cease a free
administration or fix the cost of one segment of a general administration; hold fast consistently to
beforehand declared costs and terms of offer; build up uniform expenses and mark ups; force
required extra charges; intentionally decrease yield or deals with a specific end goal to charge
higher costs; or deliberately offer or "pool" markets, regions, or clients.
By and large, as indicated by Hult et. al (1999) that value settling is unlawful however, it might
in any case be endured or even authorized by a few governments at different circumstances,
especially among those whose nations are creating economies. In neo-established financial
aspects, value settling is wasteful. Bates (1999).Healthy rivalry for the most part benefits the
clients yet when contenders now consent to settle thee value 'it implies the market factor has
been prohibited from deciding the cost thus it turns out to be terribly deceptive.
2.4.4 Price separation
Miller (2001) stipulates that value discrimination exists when offers of indistinguishable
merchandise or administrations are executed at various costs from a similar supplier. In a
hypothetical market with culminate data, no exchange expenses or restriction on auxiliary trade
to forestall arbitrage, value separation must be an element of restraining infrastructure and
oligopoly markets, where showcase power can be worked out. More so, the minute the vendor
tries to offer a similar decent product at various costs, the purchaser at the lower cost can
arbitrage by pitching to the customer purchasing at the higher cost yet with a modest markdown.
Be that as it may, Dunlop (1998) contend that market erosions in completely focused retail
showcases take into account a restricted level of differential valuing to various customers. Value
segregation additionally happens when it costs more to supply one client than it does another, but
then the provider charges both a similar cost.
The impacts of value segregation on social productivity are misty; commonly such conduct
prompts bring down costs for a few shoppers and higher costs for others. Hultet. al (1999) argues
that yield can be extended when value segregation is exceptionally productive, however yield
can likewise decay when separation is more compelling at extricating surplus from high-
esteemed clients than growing deals to low esteemed clients. Regardless of the possibility that
yield stays steady, value segregation can decrease proficiency by misallocating.
Lee (2000) is of the opinion that value separation can be seen where the necessity that
merchandise be indistinguishable is casual. Lee (2000)further gives an illustration saying that the
purported "premium items" counting moderately basic items, for example, cappuccino contrasted
with customary espresso have a value differential that is not clarified by the cost of generation. A
few financial experts have contended this is a type of value segregation practiced by giving a
way to customers to uncover their readiness to pay. We need not bother with a magnifying
instrument here to see that there is a lot of dishonest direct in value discrimination.
2.4.5 Dumping
Dumping happens where an organization offers an item in a focused market at a misfortune. Jefi
(1990). Donnelly (1995) takes this further and points out that organization loses cash for every
deal, the organization plans to compel different contenders out of the market, after which the
organization would be allowed to raise costs for a more prominent benefit. This certainly has an
extreme impact of ripping off the purchasers and this is horribly untrustworthy. Zimbabwe like
most African countries has been a dumping ground for goods from China and Europe. And
dumping has been going on unabated for years. The dumped good are usually sold at a very low
cost than the locally manufactured goods. This practice has contributed to the deterioration of the
locally produced goods as a result of the major difference in pricing.
2.4.6 Mental evaluating
Mental evaluating, according to Jefi (1990) lowers the cost of thing, generally by one penny or
nearby identical, to trick clients into deduction the cost is by one means or another less than
the value point the dealer has set. This works since individuals tend to focus just to the most
noteworthy digit in the cost.
While the above mentioned are not the only causes of unethical practice in the retail sector in
Zimbabwe. There are other factors and causes like mental evaluation where retailers use a value
or figure to the nearest value. For example the use of 19.999 instead of values 20 or 19. To the
clientele they will see only the first value which is 19. This is quite rampant in the retail sector
and as a result of its continued usage it has since been normalised. Another cause may be
exploitation of the staff and exploitation of the economic downturn to mention but a few.
2.5 An analysis of the impact of unethical practices

Unethical business practices have varying impact to business and the communities they operate
in. The key tenants that have been identified as impacting business include trust, fairness,
honesty and integrity, loyalty and justice among others.
2.5.1 Trust
Trust is a major building obstruct for without it, no business managing can be gone into without
a plenty of formality, principles and directions. Where that was the situation, business managing
was substantially less demanding than today where the yearning for profitability has implied that
a man's pledge can never again fundamentally be trusted. In business ethics, trust is vital for the
supply chain and success of the business from the client perspective. Costa (1998). While
businesses may thrive and make profits as a result of unethical practices, the long term effect to
the business is lack of trust from the customers and from their trading partners. Businesses that
have failed in many instances have suffered customer loyalty emanating from compromised
trust. A good example is TM Pick n Pay the issue of sticker pans many people gave up because
each and every time a customer goes to redeem his/ her pan they could give an excuse. Many
customers have not yet received their pans especially in Chinhoyi.
2.5.2 Fairness
Fairness is another conventional esteem, which has been overwhelmed in any business dealings
by the yearning of one gathering to show signs of improvement of the other party. This is upheld
by Albaum et.al (1998) who says that another conventional estimation of balance of chance
remain something to be strived for yet from time to time found practically speaking despite the
fact that in Africa the correspondence of chance among various races has enhanced essentially
since autonomy. Unfair trading practice constitutes unethical business practices. This may have
immediate too long term effects on the businesses. Retail industries are customer driven
industries and hence once they learn of being unfairly treated the business is highly likely to fail
and close down. The effect in the long run will be difficult to correct as customers will constantly
refer to the earlier way they had been unfairly treated.
2.5.3 Honesty and integrity
Tragically, lying is never considered as unpardonable it used to be in the past and numerous
businesspeople will stoop to lies keeping in mind the end goal to acquire a business advantage.
However as indicated by Costa (1998) lies perpetually get discovered, and future business
courses of action between those gatherings end up plainly outlandish. Truly and uprightness
ought to be foundational esteems for any individual from an association, without them it is
difficult to keep up ethical standards. Any dishonesty trading and or association within the retail
sector sadly amounts to loss of customers. Any firm in the retail industry that operates
dishonestly risks losing licence or face prosecution. Naturally customers will not be too keen to
associate with firms that have a criminal record.
2.5.4 Loyalty
Another conventional esteem which merits more prominent pride of place is that of devotion.
Sadly, gone are the days when you could depend on a worker to work in your association
through various challenges. Wyburd (1998) notes that these days numerous workers are enticed
to move to occupations for a couple of additional dollars in their compensation bundle. However,
devotion is a valuable product and associations that develop it, advantage boundlessly in
troublesome circumstances. Customer loyalty can be defined as the heart of business success in
the retail sector and hence performance can also be based on loyalty as well. So once customer
loyalty is compromised as a result of unethical business practices, it is difficult to restore and
subsequently affecting business operations.
2.5.5 Justice
The last but not least conventional esteem is that of equity. A general public without equity, in its
essential foundations, cannot be a decent society. Obviously, everybody has clear thoughts of
equity when a wrong has been done to them. Dandekar (1992). However, many think that it is
hard to see equity when they are the ones in the receiving end. Many attempt to excuse or
legitimize their activities so they can get the products of their shameful dealings without
encountering the blame raised by their inner voice. Unjust trading in the retail sector may include
unjustified pricing and many other ill and unethical practices. Where there is no justice in
trading, key stakeholders will realise it, and the effect can be catastrophic. The effects may to
some extent include legal actions and closure of business.
2.5 Other factors influencing company performance

The determinants of financial performance have been studied by researchers from various
disciplines including economics, strategic management, accounting and finance for a relatively
long period of time. In general, findings suggested that profitability measures tend to converge
towards long run average values that are specific to each firm. In their meta-analysis, Capon et.al
(1990) reviewed 320 empirical studies and identified several strategic, environmental and
organizational factors affecting financial performance. According to the results reported by the
authors, industry concentration, growth, market share, geographic dispersion of production,
research and development expenditures and size measured by sales have a positive impact on the
financial performance of the companies. On the contrary, the majority of the studies analysed
reported a negative relationship between financial performance and variables such as debt,
diversification, imports and exports. Subsequently, many more recent studies investigated these
and additional factors as potential determinants of firm performance. Capon et.al (1990).
In their study, Giovanis and Ozdamar (2014) analysed the determinants of company profitability
using the US Compustat database for the years between 1976 and 2009. The authors
demonstrated that firm size and debt have positive effects on profitability but only up to a certain
point after which the relationship becomes negative. The assets-to-sales, on the other hand, were
found to have a negative impact on profitability at the beginning, but, after some point, the
relationship becomes negative. Analysis further showed that debt ratio, higher levels of
inventory, and growth are negatively related to profitability as measured by return on assets
while liquidity and size have a negative impact on profitability.
2.6Theoretical Framework
There are two common theories that explain ethical behaviour namely deontological and
teleological. Teleological moral theories locate moral goodness in the consequences of our
behaviour and not the behaviour itself. According to teleological moral theory, all rational
human actions are teleological in the sense that we reason about the means of achieving certain
ends. Moral behaviour, therefore, is goal-directed. In business there is nothing inherently wrong
with making profit from a teleological perspective. Birnbacher (2003). What makes making a
profit morally wrong thing to do at any particular time and place are the possible consequences.
The issue has moral significance in so far as it affects persons. So from the teleological point of
view, human behaviour is neither right nor wrong in and of itself. What matters is what might
happen as a consequence of those actions in any given context. Thus, it is the contextualized
consequences that make human behaviour, good or bad, right or wrong. Mill (1953).
From a teleological standpoint, corruption, for example, could not be judged to be inherently
right or wrong independent of the context and the foreseeable consequences. If for instance a
retail firm acquires its products corruptly, many moral theorists would argue that morality
requires an analysis of my motives that brought about that behaviour. However, from a
teleological perspective, motives really have nothing to do with the rightness or wrongness of the
act. What really matters lies in the potential pains and pleasures associated with the short-term
and long-term. Bentham (1988)
Deontologists believe that morality is a matter of duty. They believe that one has moral duties to
do things that are right to do and moral duties not to do things that are wrong. Whether
something is right or wrong doesnt depend on its consequences. Rather, an action is right or
wrong in itself. Most deontological theories recognise two classes of duties. First, there are
general duties we have towards anyone. These are mostly prohibitions, for example do not lie, do
not murder among others. But some may be positive, for example helping people in need.
Second type of duty are duties undertaken because of particular personal or social relationships.
Deontologists believe that once a promise has been made, it has to be kept. Bentham (1988)
Actions are the result of choices, and so should be understood in terms of choices. Choices are
made for reasons, and with a particular purpose in mind. These considerations determine what
the action performed actually is. So deontology argues that an action type is not known unless
the intention is known. Furthermore, an action should be judged whether an action is right or
wrong by the agents intention. Mill (1953).
In relation to this study, retailers have a moral obligation to conduct themselves in actions that
are in themselves right. The retailers further have an obligation to follow laws, bi-laws and
operational standards of retailing in Zimbabwe in their actions. For purposes of this study and to
further understand the actions of the chosen retailers, the researcher adopt deontological theory
to assess the retailers actions using the five key tenants of ethics namely trust, justice, fairness,
loyalty and integrity and honest.
2.7 The research gap
From the discussion above, it can be deduced that businesses do appreciate good ethical conduct
but for their survival they opt otherwise. In so doing some of the above mentioned companies
from across the globe had the bore the brunt of such activities. Studies on factors affecting firm
performances have been carried out and reasons have been proffered over the years. What then
remains is given the current report sporadic activities of unethical business practices within the
retail sector in Zimbabwe what has been its impact on the profitability of the retail firms. There
has been limited studies to that has explored the relation of ever it exists and so is if it exists
there is no literature to support its strength to date in Zimbabwe. As such, this study will explore
this phenomenon in broader detail.
2.4 Chapter Summary
The purpose of this chapter was to review literature on corporate ethics that is relevant to
business operations with the intention of exploring existing theory on the subject. Firstly an
appreciation of what ethics entails was given. Then the corporate ethics was defined in broader
sense. Firstly an appreciation of what ethics entails was given. Corporate ethics was defined in
broader sense. This was followed by an outline of unethical practices in the retail sector from a
research perspective. A section on the causes of unethical behaviour in Zimbabwe was also
presented. This was followed by the general impact of unethical behaviour. A section on other
factors that affect performance of corporate was given in summary. The major theories that
define ethics were given in a section called theoretical framework. The chapter ended by looking
at the gaps in literature that exist pertaining to profitability and business ethics.
CHAPTER THREE
3.1 Introduction
This chapter firstly presents the research design where research tools to be used for the study is
explained. The population sample of the study then follows. In this section the population and
sample frame of the research are given. Sampling procedure follows where an outline of how the
sampling will be carried out together with the sampling method. The next section is the data
collection procedure. In the data collection procedure section, an outline is given on how data
will be collected together with the data collection tool and method being given. Data analysis and
presentation approach section provides an overview on how data analysis will be conducted and
furthermore how it will be presented. This is then followed by a section on validity and
reliability where validity of data shall be explained and how it will be achieved. Lastly, ethical
considerations and methods used to conduct the research are given. In this section, a brief is
given on what are the ethical considerations that the researcher will put in place throughout the
study.
3.2 Research design

Research design states how the researcher is going to gather data in order to answer the research
questions. Case studies are typically used to understand a phenomenon in a particular context
Olivier (2009). A number of tools can be used in research Olivier (2009). Some of the tools are
as explained below;
Table 3.2 Research Tools
Research Tool Explanation

Literature Survey Involves thorough survey of literature which has already been
published to look for relevant information
Surveys Surveys are used to gather large amounts of data from a sizeable
population in a highly economical way and usually use
questionnaires
Case Studies Mainly used to understand a phenomenon in a particular context
Research Tools: Olivier, (2009)
This research is based on checking the proposition that there is a relationship between two
variables namely ethical corporate practices and profitability. In other words this is a study of
effect-of-causes. This research focuses on the major retail firms in Zimbabwe namely Ok
Zimbabwe Limited, Spar and TM and it seeks to generalise the findings from the case study
across the retail sector in Zimbabwe hence the study will adopt a case study as a tool of choice.
This study will further adopt a positivist paradigm where quantitative approach will be adopted.
A quantitative approach seeks to cover a lot of items and generalisations can be made for those
items. Quantitative research uses correlation analysis to reduce error or bias. In quantitative
research the researcher is detached from the study to avoid bias. This is achieved by observing
the study independently without participating or interacting with the studied subjects. Scotland
(2014).For the purposes of this study, the researcher will use multiple case studies since the
study is meant to test the existence of the relationship between two variables namely ethical
corporate practices and profitability in the retail sector in Zimbabwe. Zainal (2007).
3.3 Population and sample

Olivier (2009) suggested that that there is need for the researcher to understand what the
population is, otherwise the results will not be useful. In this research the FMCG targeted firms
OK Zimbabwe Limited. The population is the retail sector, while in sample shall be drawn from
OK Zimbabwe staff. The researcher shall choose respondents firms databases with no specific
goal of focusing on particular characteristics of a population that are of interest. To get a better
appreciation of the population, the researcher will use Yamane (1967) formula for calculating the
sample size to be used for the study. Yamane (1967) suggested a formula for calculation of
sample size from a population. According to him, for a 95% confidence level and p = 0.5, size of
the sample should be N/ (1+N(e*2)).
Where, N is the population size and e is the level of precision. In our case, the total population is
the total staff of Ok Zimbabwe and this according to the OK Zimbabwe limited database was
4044 according to their annual report of 2017. So the sample to be used for the study will be
computed as follows;
4044/ 1+((4044(0.05*2)).
This computation assumes a confidence level of 95%. The sample size to be used for the study
shall be 363.999 and this translates to 394 employees shall be targeted.
3.4 Sampling procedure

Sampling is the use of a subset of the population to represent the whole population. Mugera,
(2013). Mugera, (2013) further notes that sampling techniques can be categorised in two ways
namely probability sampling and non-probability sampling. With probability sampling there are
equal chances that any particular case from the population will be chosen. Non-probability
sampling is a sampling technique where the samples are gathered in a process that does not give
all the individuals in the population equal chances (equal probability) of being selected. There
are a number of probability sampling methods available which include those presented in Table
3.3 below:
Table 3.3 Sampling Techniques

Sampling Type Definition
Cluster Sampling frame is a list of clusters and not individual cases
and data is collected from every case within each selected
cluster
Stratified In situations where the sample frame can be split into different
categories then stratified sampling can be used. It allows
different categories of the sampling frame to be represented as
random or systematic sampling is done on each strata.
Multi Staged Is a development from cluster sampling where a subsequent
random selection is done on clusters until a few clusters are
left.
Systematic Involves samples at regular intervals from the sample frame.
Simple Random Involves selecting samples randomly from the sample frame.
Simple random sampling is accurate and not affected by
geographical location, however it is unsuitable for small
sample sizes, costly if sampling frame not computerised and it
is difficult to explain
Sampling Techniques: Saunders et al, (2009)
Since the sample is relative large and the sample is also generally homogenous, the researcher
shall adopt a simple random sampling technique. The respondents shall be randomly chosen to
respond to the questionnaires. But there may be some guidance from the Human resources
department in as far as locating the respondents is concerned.
3.5 Research instruments

Zainal, (2007) states that case studies can use both qualitative or quantitative methodologies and
the researcher having adopted a quantitative methodology shall adopt a tool from the quantitative
approach in this case a questionnaire. There are different types of questionnaires that can be used
to conduct research. Saunders et al, (2009) identified the different types of questionnaires as
depicted in the Figure below:
Figure 3.4 Types of questionnaires Source: Saunders et al,(2009).
Questionnaires can be categorized into self-administered questionnaires which are completed by

the responded and interviewer-administered questionnaires which are completed by the
researcher. Self-administered questionnaires can be useful when the sample is spread
geographically, the sample size is large, the questionnaire has closed questions and the
researcher does not have direct contact with all the participants whilst the interviewer-
administered questionnaire can be used when the researcher has face-to-face or telephonic
contact with the participants, the sample size is relatively low and the questionnaire has some
open complicated questions.
Self-administered questions can be implemented using internet and intranet-mediated

questionnaires, postal questionnaires and delivery and collection questionnaire. Internet and
intranet mediated questionnaires can be used if the participants are computer literate and can be
contacted by email, internet or intranet Saunders et al, (2009). Postal and delivery questionnaires
can be used when the participants are literate and can be contacted by post or physically by
address, name or organisation Saunders et al, (2009). Interviewer-administered questionnaires
can be implemented by structured interviews which are done with face-to-face contact with the
participants and the telephone questionnaire in which the interviewer telephones the participant.
This research involves a relatively large sample size such that it is costly and not feasible for
using the interviewer-administered questionnaires. The questions to be used in the questionnaire
will be closed questions hence the self-administered questionnaire will be used for this research.
The hand delivery and collection type of questionnaires has been selected for this research. In
this researchers case, hand delivered self-administered questionnaires will be adopted as these
are easy and can reach out to as many respondents as expected by the researcher. The data to be
collected from the questionnaires will be quantitative data.
3.6 Data collection procedures

In Chapter 2, the key elements that make up ethical corporate behaviour were identified and will
be used as the main constructs of the questionnaire. The questionnaire will have a total of 7
sections comprising of the 5 main views one ethical corporate behaviour, one on demography
and one on profitability. These questions will be used to gather information in order to check test
the existence of the relationship of corporate ethical practises and profitability. Likert scales will
be used to structure some of the questions. Likert scales are used to specify the degree to which a
particular statement applies to the respondent Olivier, (2009). For example a question could
require the respondent to choose 1 to 5 where 1 is the least important and 5 the most important.
Saunders et al, (2009) and Olivier, (2009) suggest that there is need to select a small group from
the selected sample and trial run the questionnaire through a pilot study so that the questionnaire
is refined to ensure that there are no misunderstood questions. The final questionnaire will be
sent to the head offices of OK Zimbabwe, TM and Spar in Harare so that the questionnaire is
refined and problems resolved earlier to ensure that the data collected will be meaningful.
3.7 Data analysis and presentation procedures

Descriptive statistical analysis is done first before inferential statistical analysis in order to get
insight of the demographic variables of the sample used. Reliability Analysis is done to ensure
that all scales have good internal consistency. Saunders et.al, (2009) describes internal
consistency as involving correlating each question with all the other questions. In this study the
Cronbachs alpha will used to measure internal consistency. Regression analysis will be
conducted during data analysis to test the existence and strength of the relationship between
ethical corporate practice and profitability. Graphical presentation of the analysis shall be
presented. Tables and figures from SPSS results shall be used to present the data.
During reliability analysis, views that have an alpha value less than 0.5 will be deleted for further
analysis. Only views with an alpha value above 0.5 will be used for factor analysis. Variables
with factor loadings less than 0.5 are removed before regression analysis will be done. Finally
regression analysis shall be done. This regression analysis will be done to check the existence of
the relationships between ethical corporate practises and profitability. Conclusions are then
drawn based on both the descriptive and inferential statistical analysis.
3.8 Validity and reliability

The data collected from the questionnaires is then analysed and processed using SPSS which is a
computer programme for statistical analysis. Reliability analysis shall be conducted to test the
reliability and consistency of the questionnaire. Saunders et al, (2009) describes internal
consistency as involving correlating each question with all the other questions. In this study the
Cronbachs alpha will used to measure internal consistency of the questionnaire.
3.9 Ethical considerations
3.9.1 Participation in this study is very important to the researcher and participants are free to
choose not to participate and you may also stop participating at any time without any negative
consequences. In this regard, all participants will sign a consent form acknowledging their
consent.
3.9.2 The responses provided by the respondents will be treated as strictly confidential. This shall
also be in cooperated in the consent form.
3.9.3 The identities of the respondents will not be published or released to anyone. In instances
where the organisations do have an ethics committee, this proposal will have to be approved by
the respective managements of the three firms.
3.10 Chapter summary

This chapter presented the research design where research tools to be used for the study were
explained. The population sample of the study then followed. In this section the population and
sample frame of the research were given. Sampling procedure followed where an outline of how
the sampling will be carried out together with the sampling method was given. The next section
was the data collection procedure. In the data collection procedure section, an outline was given
on how data will be collected together with the data collection tool and method. Data analysis
and presentation approach section provided an overview on how data analysis was to be
conducted and furthermore how it will be presented. This was then followed by a section on
validity and reliability where validity of data was explained and how it will be achieved. Lastly,
ethical considerations and methods used to conduct the research were given. In this section, a
brief is given on what are the ethical considerations that the researcher will put in place
throughout the study were outlined. In the next chapter, Chapter 4 Results and Discussion, data
shall be presented in greater depth as explained above.
CHAPTER FOUR
Data Presentation and Analysis
4.0 Introduction
As presented in the previous chapter, Chapter 3: Research Methodology, this research takes a
positivist approach in responding to the research questions stated in Chapter 1: Introduction. A
quantitative approach was adopted and questionnaires where used to collect data from the
selected sample frame. Saunders et al, (2009) noted that data collected in its raw form conveys
little message unless it if processed into information. This chapter uses statistical techniques to
analyse the data collected in order to make conclusions on the relationship between ethical
behaviour and profitability. Inferential statistical analysis then follows. Reliability analysis was
done to ensure that all scales are coherent. This was done by calculating internal consistency
using Cronbachs alpha. Factor analysis was done to reveal the hidden associations between the
independent variables. Finally linear regression analysis is then done to reveal the extent to
which ethical behaviour impacts profitability.
4.2 Data Collection process

Data was collected using questionnaires, from the OK Zimbabwe branches in Chinhoyi Harare
and Norton. OK Zimbabwe has a branch network of over 18 branches across the country. With
each branch having an average 50 employees out of the three branches a total of 40
questionnaires being sent out to each of the branches. The response was relatively high despite
the small sample.
4.2.1 Position of the respondents

The positions of the respondents who participated in this research were captured during data
collection. The respondents roles were defined by the respondents as they are defined within
OK Zimbabwe Limited. The questionnaires were distributed to all the departments and the
respondents would define their positions. The definitions are as shown in Figure 4.1: Position of
Respondents.
From Figure 4.1: Position of Respondents, it can be noted that the majority of the respondents
occupied at least an ordinary position within the staff members of OK Zimbabwe.
Figure 4.1 Position of Respondents
The number of respondents was made up of Management, Supervisor and Ordinary staff was 20,
9 and 34 respectively. This implies a greater proportion of the respondents were ordinary staff
members who are directly involved with the implementation of ethical behaviour of OK
Zimbabwe with clientele of OK Zimbabwe. The fact that the majority of the respondents were
ordinary staff members and a relatively good number from management has implications on
relevancy of the data. Ethical behaviour and standards are developed, effected and influenced by
top management of any organisation and cascades down to ordinary staff members. With part of
respondents being managers, decisions on applicability and impact of ethical behaviour on the
firms profitability were well sought. Furthermore, the fact that some managers did respond to
the study, this naturally improved confidence that the respondents understood the questions and
conclusions can be drawn from the data.
4.4.1 Gender of the respondents

Gender of the respondents who participated in this research was captured during data collection.
The respondents gender were naturally were categorised into two male and female. The
questionnaires were distributed according to these departments and the questions were coded
according to the respective genders.
Figure 4.2 Gender of respondents.
From Figure 4.2: Gender of Respondents it can be deduced that the majority of the respondents
from OK Zimbabwe were females. And these constituted about 67% of the respondents to the
study. This shows that the majority of the respondents are also reflective of the gender parities
within OK Zimbabwe Limited making the respondents to the study a true reflection of OK
Zimbabwe.
4.2.2 Educational qualifications of the respondents
The demographic section on the questionnaire also captured the educational qualifications of the
respondents. The educational qualifications were categorised into Diploma, Undergraduate
degree and Postgraduate qualification. These categories were coded as shown in Table 4.1:
Educational Qualification of Respondents.
Figure 4.3 Educational Qualifications of Respondents.
With 47.6% of the respondents being holders of a diploma, while 20% of the respondents each
held a degree as a qualification and the rest of the respondents which is about 32.3% of the
respondents had a postgraduate. The mode for the educational qualifications carried two
meanings firstly that most the respondents in the sample held a diploma and over a third of the
respondents had at least a postgraduate qualification. Therefore meaningful conclusions can be
drawn from the data collected from this sample population assuming people with a both a
diploma and a postgraduate qualification can translate to mean understanding of ethical issues
within OK Zimbabwe.
4.3 Inferential statistics
4.3.1 Statistical analysis approach

Descriptive statistics would be more than adequate if data is collected from the entire population
or the study is only interested in the sample used (Olivier, 2009). This study seeks to generalise
the results from the selected sample across the whole population of the retail sector in
Zimbabwe. In this study regression analysis is used to determine the causation effect between the
ethical behaviour and profitability, were ethical behaviour is the dependant variables and
profitability is the independent variable.
In order to ensure that the inferential statistics generated from this study are reliable, reliability
analysis was conducted. In this study we use the internal consistency as a measure of reliability
on all scales. The Cronbachs alpha was computed for ethical behaviour variables namely usage
and general ethics, fairness, honesty, loyalty and justice views.
Items were deleted until there was no further improvement in the value of Cronbachs alpha
could be done. Factor analysis was then performed on the remaining independent variables.
Factor analysis was used to reveal hidden association between the independent variables.
Variables with factor loadings less than 0.50 were deleted in order to remain only with variables
with significant factor loadings in line with a benchmark of 0.5(Hair et al 2006), before
proceeding to regression analysis. The factors in the factor matrix generated from this study were
renamed and used to establish the ethical variables impacting profitability in the retail sector.
4.3.2 Reliability Analysis
4.3.3 Reliability Analysis for General Ethical View

The five variables were used to represent the General Ethical view. In order to assess whether the
data from the five variables make a reliable scale the Cronbachs alpha was computed. In an
initial reliability analysis, alpha for the eight variables was0.123. See Appendix B for initial
reliability statistics for General Ethics, Profitability, Honesty, Loyalty and Justice Variables.
Deleting variable variables successively only improved the value of alpha from 0.123 to 0.672.
The final value of alpha was an acceptable value of 0.672 indicating that the remaining three
variables formed a scale with reasonable internal consistency reliability. Tables 4.1: Reliability
Statistics or General Ethical View and 4.2: Item-Total Statistics for General Ethical view, shows
the final Reliability statistics and Total item statistics respectively.
Table 4.1 Reliability Statistics for General Ethical view

Reliability Statistics
Cronbach's
Alpha Based on
Cronbach's Standardized
Alpha Items N of Items
.672 .677 3
Table 4.2 Item-Total Statistics for General Ethical view
Scale Mean Scaler

if Item Variance if Corrected Item-Total Squared Multiple
Deleted Item Deleted Correlation Correlation
Rating Of Staff Understanding Of

7.05 1.078 .465 .221
Ethics
Staff Application Of Ethics 6.75 .805 .530 .282
Customers Not Aware of Ethics 8.94 .835 .480 .232
Table 4.1: Reliability Statistics for General Ethical View shows the value of Cronbachs value of
alpha on the remaining items used the in the analysis. In the table, it sows three variables that
were used and the highest value of alpha that can be attained of 0.672 is shown as the value to be
adopted for the view. This was done for all the other views with views that had a loading alpha
value of less than 0.5 was deleted and as not used for further analysis. .
Table 4.2: Item Total Statistics for General Ethical View shows the total items that were used for
the computation of the Cronbachs alpha value. The correlations of the variables are also shown.
Of importance to the study is the attainable value of alpha after deleting one of the variables. The
Total Item Statistics gives the study an idea of the actual remaining variables of the view to be
used for further analysis. It further helps in making decisions on when to stop or continue with
reliability analysis as it gives either a decrease or an increase in the alpha value after deleting a
specific variable. So the Total Statistics provides measure to assess the extent of the set of
reliable variables that will make up view. In the case of General Ethical View the remaining
three variables are what will reliably make up the view.
After the reliability analysis, a total of two views Fairness and Loyalty were removed for further
analysis. During the reliability analysis a number of variables were also removed. As such out of
the initial six views only four views namely General Ethical, Profitability, Honesty and Justice
remained for factor analysis.
4.4Factor Analysis of Ethical Behaviour

Principal component analysis with varimax rotation was conducted to assess the underlying
structure for the remaining General Ethical, Profitability, Honesty and Justice View variables.
The assumption on independent sampling was met where the KMO Bartlet value was 0.576
which is above the acceptable 0.5. This was attributed to the good sampling target used for this
study. The assumptions of normality of variables and the variables being correlated at a moderate
level were checked. Stephens, (2000) suggests that factors from factor analysis should explain at
least 70 percent of the total variance, however studies use even 40% and below so long as they
recognize that the factors may not represent the full domain.
Table 4.3: KMO and Bartlett Test shows that the first two factors have Eigen values greater than
one and these factors explain 59.256 percent of the total variance shown in Table 4.4 : Total
Variance Explained hence above the threshold suggested by Stephens, (2000) compared to the
four factors suggested by the Screen plot. Figure 4.4: Screen Plot supports the use of two factors
as the graph has an elbow at the third factor. These first two factors explain 59.256 percent of the
total variance hence meeting the threshold by Stephens, (2000).
Table 4.3: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .576
Bartlett's Test of Sphericity Approx. Chi-Square 372.708
Df 36
Sig. .000
Table 4.4: Total Variance Explained
Total Variance Explained
Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Factor Total % of Variance Cumulative % Total % of Variance Cumulative %
1 3.514 39.042 39.042 3.510 38.996 38.996
2 1.819 20.214 59.256 1.823 20.260 59.256
Figure 4.4: Screen Plot
To buttress the fat that the study adopts a two factor analysis, a screen lot was computed. Figure
4.4: Screen Plot shows a bend at the third factor. This allows for the fact that the first two factors
will only be considered for further analysis of the data.
Table 4.4: Total Variance Explained shows the total contribution of the two remaining views
after all the factor analysis has been done. The two views contribute 59.256% to the ethical
behaviour being measured. It is important to appreciate that some studies would even accept a
contribution of around 40% but the recommended value of total contribution is 50%. This is
what the Total Variance Explained explains and computes. The contribution of the two factors is
significant and relatively high and is made up of critically two main factors variables that will
be used to interpret the results of the study.
A two factor solution was then adopted for this study. Table 5.22; Rotated Component Matrix
displays factor loadings from the rotated factors, with loadings less than .50 omitted to remain
with variables with significant factor loadings according to a guide of factors above 0.5. (Hair et
al, 2006). The factors are grouped according to their relations.
Table 4.5: Rotated Component Matrix
Rotated Factor Matrixa
Factor
1 2
StaffApplicationOfEthics .564
CustomersNotAwareofEthics -.540
RatingOfStaffUnderstandingOfEthics .603
RetailersUseCertifiedSuppliers -.861
RetailersConcentrateOnProfit -.689
RetailersDontAdhereToMandate -.710
ContinueTradingWithHonestRetailers .880
RetailersNotConfirmingToLawOnCash .696
PolicingOfRetailersLimited .852
Rotated Component Matrix
After deleting conflicting variables, the remaining variables are represented in Table: 4.5:
Rotated Component Matrix. From the Table: 4.5: Rotated Component Matrix, the variables that
had a correlation above 0.50 were deleted and these are Retailers Use Certified Suppliers and
Policing Of Retailers Limited as they had no significant value to add to further analysis. As a
result, the matrix remained with a total of seven variables. The negative values are ignored and
are treated in their absolute nature at this level of analysis. The Rotated Component Matrix is
useful in that the any acceptable factor must have a minimum of two variables. If a factor is
computed and has one variable then that factor will not be included for further analysis.
Therefore in this studys case all factors were made up of more than two variables.
Table 4.6: Retained factor matrix for Ethical behaviour variables.
Retained factor matrix Ethical behaviour Variables

Variables Names
Factor 1 Appreciation of Ethics
Continue Trading With Honest Retailers 0.880
Retailers Not Confirming To Law On Cash 0.692
Policing Of Retailers Limited 0.852
Factor 2 Application of ethics
Staff Application Of Ethics 0.564
Customers Not Aware of Ethics 0.563
Rating Of Staff Understanding Of Ethics 0.603
The remaining variables formed a new two factor matrix. Among the variables, one is the
independent variable that is Retailers Concentrate on profitability. The two main factors that
were formulated are Appreciation of Ethics and Application of Ethics. The resulting renamed
according to context and relation Table 4.6: Retained factor matrix for Ethical behaviour
variables shows the variables that were retained for further analysis. The factors have been
renamed to suit their relations. It is only variables with a loading above 0.5 that have been
retained as the rest have been deleted as they were of no significant value to the study. The
remaining six variables are the major variables to be used or a regression analysis. The variables
are the main variables that contribute to the impact of profitability. Any variable that had a
loading of less than 0.5 had an insignificant contribution to the impact of profitability on ethical
behaviour.
4.5 Regression Analysis

Multiple regression was conducted to determine the best linear combination of the ethical
behaviour factors namely General Ethics, Honesty and Justice in predicting profitability scores.
Since regression analysis requires one independent variable, the Profitability variable was used
as the dependent variable. Independent variables were also aggregated according to their
conceptual groupings from factor analysis. An initial regression analysis of ethical behaviour and
profitability variable revealed that there was a problem of multi collinearity and the variables that
had a correlation value greater than 0.80 were deleted to deal with collinearity. The value of a
correlation of 0.8 shows that the variables are measuring either the same thing or are conflicting
in what they are measuring, hence the need to remove one of the two conflicting variables.
However, after considering that the sample used was very small and that VIF values were less
than 10, collinearity was regarded as mild and therefore ignored. See Appendix D for statistics
on collinearity. The p value for the F statistic was .005 which is less than .1 hence the regression
model regarded as statistically significant. Successive regression analyses were done removing
the variable with the highest significant value until the p value for the p statistic was less than .1.
A p value of .1 was used taking into consideration that a small sample was used in the study.
Assumption of linearity and correlated errors were checked and met. Normally distributed was
also met. See Figures 4.5 4.8below.
Figure 4.5: Scatter plot showing distribution of residuals.
From the scatter plot above, there is normal distribution of respondents and the residues are not
too far away from the centre which is quite normal. Above all the residue is not too many and
this reflects a fair representation of the respondents. This means that the study used a fairly
normal distributed sample making the results reliable and a fair view of the retail sector.
Table 5.23: Anova Statistics shows that F = 15.298, p=0.00. The model consists of Appreciation
of Ethics and Application of ethics factors. For a model to be accepted the p value should be
less than 0.05 and in this studys instance, the p value is 0.00 which is quite significant. Table
5.24: Regression Model Summary displays the model summary showing the adjusted value of R
squared to be 0.580. This indicates that 58,0% of the variance in profitability can be explained by
the model. This indicates a relatively strong positive explanation on impact that ethical behaviour
has on profitability of retail firms. This is also an indication that it is not only ethical behaviour
of retail firms that impact profitability even though the greater part of a retail firms profitability
is impacted by its ethical behaviour. In fact other factors as explained in chapter 2 do influence
and impact profitability of retail firms.
Table 5.24: Anova statistics
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 41.524 6 6.921 15.298 .000b
Residual 25.333 56 .452
Total 66.857 62
Anova statistics.
Table 5.25: Regression model summary.
Model Summaryb
Model R R Square Change Statistics

Adjusted R Std. Error
Square of the
Estimate R Square Change F Change
1 .788a .621 .580 .673 .621 15.298
4.6Conclusion
This chapter summarised the statistical analyses performed on the data in order to answer the
main aim of study as stated in Chapter 1. The study concluded that there is a strong positive
relationship that exist between ethical behaviour and profitability. There is a 58.0% impact on
profitability from ethical behaviour. Other factors outside of ethical behaviour that do impact
profitability, the reasons why firms may not practise ethical behaviour are discussed in Chapter
5: Summary and Conclusions.
Firstly reliability analysis was done on all the scales to ensure that the scales were coherent using
the Cronbachs alpha. Variables were deleted until there was no further improvement in the
value of alpha. The remaining independent variables were used in factor analysis in order to find
associations amongst them. Variables with factor loadings less than 0.50 were deleted. The
resulting factors were then named according to the concepts they were aligned to and the
resulting factors were Appreciation of Ethics and Application of ethics.
Regression analysis was then done using the factors identified during factor analysis. The
regression model was made of original general ethics, profitability, honesty and justice variables.
The findings from regression analysis were that there is a relatively strong positive relationship
between retail firms ethical behaviour and profitability.
CHAPTER FIVE
Summary, Conclusions and Recommendations
5.1 Summary of findings

The primary objective of this study was to determine the relationship between corporate ethical
practices and profitability in the FMCG. Findings of the study revealed that 58% profitability of
retail firms profit is determined by their ethical behaviour. This shows that ethical behaviour do
have a relatively huge influence on profitability in the retail sector in Zimbabwe. This further
means that there are other factors which account for the remaining 42% of profitability of the
firms in the retail sector besides ethical behaviour.
As indicated in chapter 4, the researcher managed only to get 63 responses from a targeted 394.
The 63 responses was still a relatively low number for analysis but it was from the 394 responses
that the researcher was going to get credible and reliable responses for the study. From this we
can note that there still is limited support to research work especially as it relates to ethical
matters as is noted from the generally low response. The case of OK Zimbabwe provided a
classic example of such. The retail firm has a strong presence in most cities and towns across the
country and hence it was a classic example to measure ethical issues. Given the economic
context as explained in Chapter 1, ethical issues can be secondary to making profits but given the
results of the study there may be need to look at ethical issues prior to considering merely
making profits. In fact, once ethical behaviour is positive and acceptable then profits will begin
to rise.
From the factor analysis, ethical behaviour factors that seem to be coming out from the study are
General Ethical, Profitability, Honesty and Justice Factors. These factors critically are the vital
factors that collectively contribute to the ethical factors that impact the profitability of retail
firms. Worth noting is the strong positive relationship that exist between ethical behaviour and
profitability. With a notable positive 58% of the profitability of the retail sector being impacted
by ethical behaviour.
5.2 Conclusions
Conclusions can be drawn from findings of this study. Ethical behaviour has a relatively high
influence on the profitability of retail sector. From the study, 58% of the profits that the retail
sector earns can be attributed to their ethical behaviour. There is need however, for organisations
and retailers in this case to particularly appreciate from this study that good ethical behaviour
raises profitability by a 58% margin. Conversely, other factors other than ethical behaviour do
contribute 42% of the performance of the retail firms. Below is a brief analysis of the objectives
of the study.
5.2.1 Retail ethical practices

Zimbabwe has a three pricing scheme after the introduction of the bond notes. The three prices
are one for using electronic transfers, the other one is for cash while the other price is for
customers using mobile transfers. This automatically pushed the prices of most commodities up.
In the retail sector, a sales person may ignore ethical standards in order to meet sales targets.
Currently in Zimbabwe vendors sell their wares directly on the front of established shops. This
has given rise to a number of vendors selling similar products that the retailers are selling in their
respective shops. It is alleged that the same retailers are pushing more of their products through
these vendors who do not pay rent or rates.
The SI64 was gazetteer to curb an influx of the imported products on the shelves of retail firms
an also to protect local industry. But with the local industry not producing as expected this has
led to most retailers resorting to clandestinely source for the imported goods.
5.2.2 Hindrances of retail organisations to practicing good ethical standards.

In the context of ethical behaviour, the resulting factors were Appreciation of Ethics and
Application of Ethics as important factors. This automatically means that for retail firms to
better appreciate the aspects of ethical behaviour and the respective impact on profitability those
two factors are critical. Appreciation of Ethics factors explain a lot about firms understand their
ethical obligations not only as enshrined in statues and missions but as far as these are
internalised to the general staff. Application of Ethics factor is largely concerned on how the
ethics are then delivered and applied within and outside the retail firms by the retailers. In other
words, retailers have two major factors they must deal with so that they can fully implement
issues of ethical behaviour so it can effectively impact profitability.
5.2.3 General impact of unethical practices

Once retailers do not observe their ethical behaviour mandate they are bound to lose out 58% of
their profits. The retail sector if it continues to practice in unethical behaviour their performance
will go down. It goes without say that the study has managed to prove beyond doubt that
unethical behaviour will cost retail firms of their profits if they do continue with the practice.
5.2.4 Other contributing factors to retail organisations performance.

Other factors other than ethical behaviour that affect performance of an organisation do
constitute 42% of performance of the organisation. The Indigenisation Act requires that all
foreign owned companies to have at least 51% of their shareholding being held by local
Zimbabweans. This alone means that retail firms that are foreign owned must meet this
requirement and will rather not invest in ethical behaviour instead deal with the laws of the land
exclusively first.
Zimbabwe at the time of conducting this study was facing a huge economic, foreign currency
and cash crisis as a result the most affected were the retail sector who have the mandate of
handling cash on a day to day basis. With such a huge hurdle before them, retail firm would
rather be dealing with their core business and liquidity challenges in the country were affecting
their main operations as such it was better for the retail sector to focus on core business rather
than with ethical behaviour that may not give immediate rise in profitability.
5.2 Recommendations
This study measured the relationship that exists between the ethical practises and profitability in
the retail sector. The study revealed that there exist a relationship between ethical behaviour and
profitability and the extent of the relation is relatively high. The impact of this relationship varies
to retailers both existing and aspiring so does it to the business community and the body of
knowledge. This is further explained below;
5.2.1Retail ethical practices
The retailers are now aware of how they must treat ethical behaviour within and outside the firm.
The resulting impact once good ethical behaviour is practised is a positive rise in profitability of
the retail firms by 58%. Hence, investing in good ethical behaviour is of paramount importance
for any for profit retail firm.
5.2.2 Hindrances of retail organisations to practicing good ethical standards.
The business community as a whole can now make reference to this study as a way of
encouraging retailers to implement good ethical practices. The use of empirically supported
evidence like this study will act as a benchmark for other sectors in the business community.
More importantly ethical behaviour will be treated with care and caution. Furthermore, this study
will be a source of ethical pot of call for potential investors in Zimbabwe. This will be one way
to help retail organisations deal with the issues that have been hindering them from practising
good ethical behaviour as they are aware of the cumulative effect of unethical behaviour.
5.2.3 General impact of unethical practices

Consumers are a critical player in the profitability and performance of retail players.
Consumers will use this study to enrich themselves on their knowledge of ethical mandates
of retail firms. Armed with the knowledge that retail firms that do not practice good ethical
behaviour tend to lose out they can demand better ethical practises from the retail sector.
5.3 Future Research
This research used a quantitative methodology and questionnaires for data collection using case
of OK Zimbabwe. A quantitative methodology is by nature limited by its inability to probe
further. Researchers can employ a qualitative methodology in future and probe even further. As
such there is need to have a similar study done from a teleological perspective so that the views
of the retail firms can be captured based on their founding mandates as business firms.
This study was a case study, attempting to know many things about using one thing. In other
words the study only could have missed so many aspects on the subject ethical behaviour in the
retail sector. A survey approach can be adopted for further studies, allowing for an all-
encompassing assessment on ethical behaviour in the retail sector as it impacts profitability to be
made. However, the study has provided a benchmark for studies on ethical behaviour in the retail
sector and profitability.
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Appendix
Questionnaire
CHINHOYI UNIVERSITY OF TECHNOLOLOGY
The impact of corporate ethical behaviour on the profitability of the retail industry
in Zimbabwe.
Research conducted by:

Elsie Kundai Mapeto
Cell: +263 778 776 779
cucyelsiemapeto@gmail.com
Dear Respondent,
You are invited to participate in an academic research study conducted by Elsie Kundai Mapeto
who is a BSIM Marketing student from the Department of Marketing Chinhoyi University of
Technology (CUT).
The objective of the research study is to determine the relationship between corporate ethical
practices and profitability in the FMCG. The study seeks to get an in depth appreciation of
corporate business ethical issues in the retail sector. The findings from this research will be
useful in providing insight on the unethical issues within the retail sector and how they have
affected profitability of the sector.
Kindly note the following:

This study involves questionnaires and will require about one hour of your time.
Please be assured that the answers you give will be treated as strictly confidential. The
identities of the respondents will not be published or released to anyone.
Your participation in this study is very important to the researcher. You may, however,
choose not to participate and you may also stop participating at any time without any
negative consequences.
Please contact my supervisor, Mr Chufama +263772120582 if you have any questions or
comments regarding the study.
Thank you for taking the time to participate in this study.
___________________________ __________________
Elsie Kundai Mapeto Date
Questionnaire:
Section 1: Demography information of the respondents:
Gender of Respondent Male Female
Position of Respondent Management Supervisor Ordinary
Qualification of Respondent Diploma Degree Post grad
Kindly answer all the questions below by marking the appropriate response using the scale below to
indicate your opinion:
Strongly Disagree Disagree Neutral Agree Strongly Agree
1 2 3 4 5
Section 2
Question Rating
Section A: General Ethics
Murphy, (2001) postulates that corporate ethics for the most part tends to the whole extent
of duties and commitments that an organization has to each of its partners like customers,
representatives, investors, suppliers and the community
1. Retailers in Zimbabwe observe business ethics in their 1 2 3 4 5
conduct
2. Zimbabwes retailers are consistent in the application of 1 2 3 4 5
business Ethics in their operations
3. Staff in retail outlets do not apply business ethics. 1 2 3 4 5
4. Retail outlet staff understand retail business ethics. 1 2 3 4 5
5. Customers are not aware of retailers business ethics. 1 2 3 4 5
Section B: Profitability
6. Retailers use only certified and screened suppliers for 1 2 3 4 5
their products.
7. Retailers are overpricing and leading to huge profits. 1 2 3 4 5
8. Retailers have only concentrated on making profits over 1 2 3 4 5

other issues like customer satisfaction
Section C: Fairness
9. Retailers in Zimbabwe do price their goods and services 1 2 3 4 5
fairly.
10. Retailers provide fair treatment to staff. 1 2 3 4 5
11. Customers to the retail firms are not fairly treated by the 1 2 3 4 5
staff.
12. Retailers trade fairly amongst themselves. 1 2 3 4 5
Section D:Honesty
13. Retail firms are honest in their campaigns and prices 1 2 3 4 5
14. Retails do not adhere to their retail mandate. 1 2 3 4 5
15. Most staff in retail firms are not honest. 1 2 3 4 5
16. Retailers do not honestly advertising their promotions 1 2 3 4 5
17. You would only continue trading with an honest retail 1 2 3 4 5

firm.
Section E:Loyalty
18. Retailers are not loyal to their clientele. 1 2 3 4 5
19. Retailers are not loyal to their local suppliers. 1 2 3 4 5
20. Retailers are loyal to their staff. 1 2 3 4 5
21. Customer loyalty to retail firms is dependent on firms 1 2 3 4 5
loyalty to the same customers.
22. Customer loyalty can increase profitability of retail firms. 1 2 3 4 5
Section F:Justice
23. Retailers are just in their promotions. 1 2 3 4 5
24. Retail firms have not been conforming to the laws of 1 2 3 4 5

Zimbabwe on cash hoarding.
25. GMOs are still being sold in the retail shops. 1 2 3 4 5
26. Policing of retailers is limited. 1 2 3 4 5
27. Trading within the laws of the retail industry increases 1 2 3 4 5

retailers profitability.

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Topic: The impact of corporate ethical behaviour on the profitability of the

retail industry in Zimbabwe.

KUNDAI ELSIE MAPETO

A research project submitted to Chinhoyi University of Technology, School of

1|Page KUNDAI ELSIE MAPETO C14122919S

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LIST OF FIGURES .................................................................................................................... 5

LIST OF TABLES ...................................................................................................................... 6

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1.2 Statement of the problem .............................................................................................. 18

1.3 Research Objectives ...................................................................................................... 19

1.4 Research Questions ....................................................................................................... 19

1.5 Significance of the study ............................................................................................... 19

1.6 Scope of the study ......................................................................................................... 20

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1.8 Definition of terms.21

1.9 Organisation of report21

1.11 Chapter Summary ......................................................................................................... 23

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2.0 Introduction ................................................................................................................... 24

2.2 Corporate Ethics............................................................................................................ 25

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2.6 Theoratical Framework ................................................................................................ 36

2.7 Research Gap ................................................................................................................ 37

2.8 Chapter Summary ......................................................................................................... 38

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5.2.1 Factors influencing adoption of MDCS by market research firms in ZimbabweError!

5.2.2 Factors impeding adoption of MDCS by market research firms in ZimbabweError!