Small and Medium Sized Enterprises (SME's) , Stakeholders and Social Responsibility
Researcher Heledd Jenkins
Background
Business has come under increasing pressure to demonstrably engage in activities which are described as Corporate Social Responsibility (CSR). Whilst many such activities come under legal compliance, such as environmental legislation, business is encouraged to go beyond this and assume a role previously occupied by the public sector, providing public services such as supporting education and becoming involved in the governance of communities (Curran et al. 2000). CSR has traditionally been associated with the corporate sector but recognition of the growing significance of the SME sector (Fuller, 2003, UNIDO, 2002) has led to an emphasis on their social and environmental impact. However, many such initiatives, and indeed much thinking about SMEs and CSR, are based on a range of unfounded assumptions about SME behaviour, furthermore this recognition of SMEs is incomplete at best (Curran, 1999), with a continued emphasis in research and the media on the characteristics of large firms (Storey, 1994), and most research on the topic of best practice is based on the related notions of competitive advantage, quality and benchmarking as they relate to larger organisations (Massey, 2003). Conventional approaches to CSR are based on the assumption that large companies are the norm and have been predominantly developed in and for large corporations (Jenkins, 2004). Another assumption is that SMEs are 'little big companies' (Tilley, 2000) and that advances to engage companies in CSR can simply be scaled down to 'fit' SMEs.
Recent trends show that there is some growth in the engagement of SMEs in the CSR agenda (Joseph, 2000; MORI, 2000; DTI, 2001, 2002; EC & Observatory of European SMEs, 2002; Grant Thornton, 2002; Irwin, 2002). There is a growing recognition that the issues that are important for CSR are as relevant for small companies as they are for large companies.
However, the motivational pressures that may engage SMEs in CSR are not the same as for large companies. While the growing visibility and global impact of large companies and brands has heralded calls for greater transparency and accountability, SMEs remain largely invisible and unlikely to see CSR in terms of risk to brand image or reputation. For SMEs, issues closer to home are far more likely to hold their attention such as employee motivation and retention and community involvement. Realistically, 60% of SMEs are simply content to survive (Baker, 2003), as long as they are making a decent living there is little need to reduce the bottom line with CSR related schemes. There are basic CSR issues that all SMEs have a responsibility for, amongst them the creation of a good working environment where diversity is encouraged, the fair distribution of wealth in a community, and the protection of the environment. SMEs are often portrayed badly in relation to such basic responsibilities (Gibb, 2000; Hillary, 2000; Bacon et al. 1996). However, as the findings of this research demonstrates, this isn’t necessarily the case, and there are companies in the UK who’ve decided to embrace the concepts of CSR and sustainability and who exemplify good practice.
The project aims to begin to address the current predominant focus on CSR practices and initiatives in large companies by taking a ‘bottom-up’ approach, and exploring CSR initiatives and practices in SMEs. Whilst a number of studies based on what SME owner-managers think about CSR exist (Joseph, 2000; MORI, 2000; DTI, 2001, 2002; EC & Observatory of European SMEs, 2002; Grant Thornton, 2002; Irwin, 2002), the companies studied differ as they were chosen as ‘exemplars’ of CSR in SMEs. The aim of this study therefore is to progress understanding of both the limitations on and opportunities for CSR in SMEs through the exploration of exemplary characteristics in the study companies. An exemplar may be variously described as something or someone to be copied, ideal and commendable.
As a result of this study a practical online guide to CSR for SMEs has been developed. The ABC of CSR for SMEs.
