While corporate social responsibility (“CSR”) has been a topic of discussion for larger businesses for a long time, relatively little attention was paid to CSR and small businesses. However, as governments have come to realize the importance of small businesses—small- and medium-sized enterprises (“MSEs”)—to their economies as drivers of employment, research and guidance on management topics for MSEs has become more prevalent. While managers of small businesses rightly have concerns about the costs associated with many CSR projects, and non-governmental organizations have not spent as much time and effort on monitoring CSR among SMEs, more and more SMEs are beginning to appreciate the potential benefits of having some type of CSR initiative, even if it scaled down to fit the size of the firm and the relatively meager resources available. For example, as larger companies have integrated supply chain management into their CSR initiatives SMEs seeking to become supply chain partners have been forced to take a hard look at their efforts with respect to social responsibility, particularly the ways that they treat their workers and the impact of their operations on the environment. Another driver of CSR among SMEs is their dependence on their relationship with the local community. While larger companies operate in numerous locations around the world, SMEs have one primary site and depend heavily on the strength and support of the community surrounding the site. As such, it is incumbent on SMEs to act in a socially responsible manner in their interactions with community members and support community efforts in areas such as education, health, safety and general welfare.
In spite of the above-referenced benefits of embracing CSR, SMEs reasonably complain about finding the time and resources to collect the necessary information, develop and implement CSR strategies and continuously engage with stakeholders. Owners and senior managers of SMEs typically wear a number of different hats already and adding CSR leadership assignments often seems to be just too much. Fortunately, the size and scope of activities of SMEs may actually make it easier to find information and reach out to important stakeholders. For example, since SMEs are already closely linked to their communities and dependent on them for customers, labor and supplies it is generally a small step to extend the relationship into social responsibility projects. In the same vein, SMEs often have higher levels of employee participation in decision making and this facilitates worker engagement of health and safety, product quality and service and implementing eco-friendly manufacturing processes.
While small businesses operate under resource constraints that make it impractical for them to implement comprehensive CSR initiatives on the scope of those that have been adopted by larger companies, they nonetheless can begin by referring to the same authoritative international instruments such as the Organisation for Economic Co-operation and Development (“OECD”) Guidelines for Multinational Enterprises and the UN Global Compact Principles, each of which are intended to be applicable to organizations of all sizes. Governments and business associations have also created and published guides and other resources relating to a wide range of SME management topics including the use of environmental management systems by SMEs and adopting the management systems framework of the International Standards Organization to the SME context. Other resources tailored to the particular needs of small businesses seeking to implement a CSR initiative include the “Introduction to Corporate Social Responsibility for Small & Medium-Sized Enterprises” available online from the European Commission with links to other European Union publications and tools on CSR and SMEs; and the CSR handbook for SMEs developed by the Caux Round Table, an international network of principled business leaders working to promote moral capitalism.
The business opportunities associated with CSR have become too important to be ignored by small business owners. A number of studies have provided support for the proposition that a large percentage of consumers, far more than a mere majority, would consider switching from their existing brand to another one associated with a cause that they approve of. The numbers are even higher among millennials, which is important since that group is projected as being responsible for 30% of retail purchases and making up almost half of the workforce by 2020. Surveys also indicate that consumers have extremely high levels of trust in, and loyalty to, brands that have an authentic social cause as their foundation. In addition, a majority of consumers in the general population have used social media to engage around a CSR-related cause. In fact, social media and other technology tools have made it easier for consumers and others to investigate and evaluate a company’s CSR practices and widely report issues and problems that they may encounter. Companies cannot ignore CSR and risk swift and drastic damage to their reputations as well as potential legal problems if they fail to put safeguards in place and proactively integrate social responsibility into all aspects of their operations and their relationships with suppliers and the communities in which they operate.
Chapters or Articles in Books
Articles in Journals
Government and Other Public Domain Publications