RISK MANAGEMENT AND BUSINESS ETHICS: RELATIONS AND IMPACTS IN THE GCC

The purpose of this study is to examine the relationship between risk management and business ethics in the GCC region. The financial crises and the scandals of big corporations because of unethical issues raised awareness about the significance or compliance with business ethics in business entities. It becomes clear that unethical actions may have a devastating impact on business in terms of reputation loss and financial fines imposed by regulatory bodies. This suggests that business ethics risk must be considered with due care by business organizations. In this sense, business ethics are linked to risk management. In this study, we utilized a questionnaire survey that was directed to 970 individuals from five different Gulf countries namely: Bahrain, Saudi Arabia, Kuwait, Oman and UAE. The research instrument consists of 16 different items that measure the main dimensions of risk management and business ethics. We tested the reliability of the questionnaire using Cronbach Alpha. The overall reliability of the questionnaire is 0.792 and the reliability levels for the main dimensions of both risk management and business ethics were found to be satisfactory. The findings reveal that ethics has a strong relationship with risk management in the sense that an effective and efficient risk management cannot be achieved without ensuring ethics compliance by all parties involved. All managers of an organization must maintain ethicality to ensure other employees follow their steps. Business ethics risk management must be based on a solid model that covers the steps of identifying, assessing and facing ethical risks. Notably, the study indicates that compliance with business ethics risk management ensures the sustainability and profitability of the business throughout the GCC region.