Exploring the role of islamic ethical training and business integrity in shaping ethical decision-making and business performance: a mediated–moderated analysis

Purpose The current investigation analyzes the effect of ethical instruction on the business integrity, accountability and performance among Muslim entrepreneurs in Karnataka, India. Using the Social Exchange and Planned Behavior theories, it investigates how Islamic values of fairness, trustworthiness and honesty promote moral decision-making, corporate integrity and responsibility in business operations. The study aims to further examine the moderating impacts of market competition intensity and cultural context on the interplay of ethical training and business results, thereby upholding the paradigm of business ethics. Design/methodology/approach A quantitative research design was employed using a structured online survey of 393 Muslim entrepreneurs from different sectors, including retail, hospitality, manufacturing and agriculture. The model was validated using Structural Equation Modeling (SEM) to test hypothesized relationships. Findings Findings from the study show that ethical decision-making mediates the relationship between business integrity and responsibility, which, in turn, affects performance. Leaders using Islamic values-based approaches create an atmosphere conducive to moral conduct, openness and stakeholder trust. Further, the relationship between business integrity and performance becomes heightened by market competition intensity. In competitive markets, ethical practices serve as essential differentiators. Indeed, cultural context enables a climate for the adoption and effective pursuit of Islamic principles in business. Practical implications It provides actionable recommendations for policymakers, religious institutions and industry leaders toward implementing Islamic ethical training programs that cultivate moral steadfastness and sustainable practices. Originality/value Integration of Islamic values into business strategies fortifies business performance, trust and sustainability, epitomizing Islamic ethics’ transformational role in excellence in the SME sector.