Navigating Ethical Dilemmas in Resource-Constrained Businesses: Insights from Tanzania

Small and Medium Enterprises (SMEs) play a vital role in employment creation, income generation, and poverty reduction in developing economies, yet their ethical conduct is often assessed using normative frameworks unsuited to resource-constrained contexts. This study examines ethical decision-making among Tanzanian SMEs using a mixedmethods convergent parallel design. Data were collected through questionnaires from 79 SME owners and interviews with 20 entrepreneurs across mainland Tanzania. Analyzed through descriptive statistics and thematic analysis, and interpreted using institutional theory and the ethics of care, findings show that ethical dilemmas are structurally embedded, shaped by survival imperatives, relational accountability, and harm minimization, underscoring the need for context-sensitive ethics and institutional reform.