Abstract:
Developing countries are facing a formidable unemployment challenge due to a combined effect of slow economic
growth and rapid increase in population. In Kenya, Economic Recovery Strategy (ERS) estimates that 500,000
jobs would be created annually with 88% of these generated by small and medium size enterprises. Yet, the
attrition level is alarming. It has been shown that for every 100 new enterprises started in a year, 60 percent close
down within the first year, and those that survive the first year, 40% are likely to close in the second year (Kenya
1998; 1999). The question that begs answers is, why so? One untested theory has been unfair competition and
unethical behavior of the small and medium enterprises. This leads to low confidence, and trust and difficulties in
sustaining customers as well as establishing long lasting networks. This study explores the extent to which SME’s
embrace business work ethic. It seeks to answer questions as to how much the growth of SMEs is affected by work
ethics or lack of it. The study employed expost facto survey design among small manufacturing enterprises in
Eldoret Municipality with respondents sampled through proportionate random sampling in clusters based on
geographical location. This paper measures the perception of the entrepreneurs on the relative importance of
ethical practices and social responsibility in business. It goes further to highlight core competencies that can be
leveraged to prepare small and medium size manufacturing enterprises engage in ethical practices
