The purpose of this study is to examine the antecedents of Islamic works ethics and peers influence towards unethical behavior among the small and medium enterprise owners in Malaysia. All variables were measured using 7-point Likert scale. Islamic works ethics, subjective norms, and unethical behavior are treated as exogenous variables. Questionnaires were distributed to 80 business owners in small and medium enterprise owners in Malaysia based on a random sampling method. The data was analyzed using multiple linear regression in SPSS. The finding supports two significant direct effects in the model, thus supporting the hypothesis that the Islamic work ethics and subjective norms (peer influence) have significant influence on the unethical behavior business owners. The result is discussed in the perspective of small and medium enterprise owners in Malaysia.
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