With some power comes great responsibility : Ethical dilemmas occurring during Swedish small and medium sized enterprises’ entry process in politically unstable markets

Abstract: Due to an increase of internationalization Swedish SMEs are faced with more issues regarding ethical dilemmas when entering foreign markets than they have been in the past. The ethical dilemmas, such as bribery and corruption, affect companies’ entry strategies in regards of moral standards and becomes an issue for markets that are characterised as being unstable. A common denominator for unstable markets is political instability which usually leads to an increase of ethical dilemmas. This thesis provides a deeper understanding to how Swedish SMEs enter politically unstable markets and how CSR can be used as a tool to identify and avoid ethical dilemmas. To enable this study a qualitative research was conducted to analyse the process of already established Swedish SMEs in politically unstable markets. By doing so, practical and theoretical implications could be identified, subsequently contributing Swedish SMEs with valuable information on how to enter politically unstable markets.   The outcome of this study suggests ethical dilemmas affect Swedish SMEs’ entry to politically unstable markets. In a market where ethical dilemmas are prominent SMEs ought to do a thorough risk analysis before entering the market and also select the mode of entry. This study concludes a trade based entry mode is most suitable for Swedish SMEs when entering politically unstable markets since local contact is crucial since it reduces the risks of entering the market. Furthermore, during the course of the study it became evident that CSR can be used as a moral framework to identify and avoid ethical dilemmas in politically unstable markets. CSR strategies provide moral and ethical guidelines for Swedish SMEs and thereby affect the selection process of markets and business partners. The findings of this thesis suggest there is a linkage between business ethics, CSR and entry strategies. Therefore, the research is valuable for Swedish SMEs who seek to enter politically unstable markets.