Corporate Social Responsibility: Why SMEs Adopt CSR

Corporate social responsibility (CSR) is a type of business self-regulation with the aim of being socially accountable. There is no one “right” way companies can practice CSR; many corporate CSR initiatives strive to positively contribute to the public, the economy or the environment


The importance  of corporate social responsibility

On the specifics of CSR’s strategic dimension in SME’s Gainulina and Setiawan (2017) notes, other traits vary from the other larger entities’ view. One of the essential characteristics is the vicinity to the local communities and consumers. A study by Sarkar and Searcy (2016) proposes proximity as criteria for assessing the stakeholders. Yet, Larran Jorge et al. (2016) also argue that proximity helps establish network links and suitable venues, particularly the interpersonal engagements through which the CSR capabilities and expertise are shared.

The background information for the study is mainly from prior studies in corporate social responsibility in SMEs. A percentage of researchers have explored what stimulates SMEs to operate in an inconsiderate manner. In the corporate social responsibility implementation literature, numerous ideologies explain the implementation reasons. The three theories are social capital theory, institutional theory, and stakeholder theory (Hoi et al., 2018). The stakeholder doctrine emphasises how SMEs can satisfy the anticipations of its stakeholders.

Institutional ideology helps to capture the procedure in which the SME’s have a direct impact from their surroundings to embrace specific perceptions and beliefs. In line with that, De Grosbois (2016) conducted a study and concluded that structured surrounding impacted the United Kingdom’s and Dutch SME’s strategy. Finally, the social capital theory focuses on social capital’s influence, which offers Small and Medium Enterprises to adopt and implement corporate social responsibility guidelines and processes.


Corporate Social Responsibility and SMEs


The origin of CSR

Bowen initially envisioned corporate Social Responsibility (CSR) within the modern era in 1950. It has augmented from a mere unwavering hypothesis to a sole determination of techniques (Maldonado-Erazo et al. 2020). Wickert (2016) notes that two philanthropic attributes are observed within the concept where CSR is categorized as a standardized procedure that commences by developing a goal, progressing to the design of the tactic to attain the goals, and finally ascertaining the techniques to evaluate the outcomes the effects generated from the actions established.

The second aspect represents a current tactic that has evolved towards tactical philanthropy,where the entity’s capacities or exclusive expertise are utilized to generate initiatives with a significant effect on society and optimize the benefits towards the organization (Wickert (2016). Since Bowen’s 1950 ideology, many scholars have attempted to describe CSR’s core dimensions through literature reviews, theoretical reasoning, and content evaluation. Based on some researchers (Agudelo et al. 2019), CSR is a management doctrine infusing the organization.

Currently, CSR is incorporated in SMEs. Still, the integration’s progress is not much visible with the same intensity as that of the larger corporations partly because of informal communication networks and the shareholders’ vicinity.


Pressures of CSR in SMEs


(Kapstien 2000, p.105) Society are embracing corporate social responsible actions because of NGOs and government pressure. Within society, institutions both Large and small also depend on the requirements to set CSR as a primary objective. However the inability to administer CSR in SMEs  not a priority due to financial, political, social and environmental constraints especially in developing countries.

Ethics is forced down upon various organizations without an understanding of the difficulties these organizations are facing within their region.An example is the United Kingdom and Nigeria.Nigeria has political issues, environmental problems  and a lack of funding from the government. Which makes it practically impossible for a country such as Nigeria to adopt clear CSR objectives.

The government is unwilling to fund these objectives which make it impossible to fund CSR goals such  as constructing wind turbines instead of oil production. Therefore pressures to have sustainable practice should include advantages and disadvantages in regions and identification of differences of large and small firm in order to justify aid of NGOs (Kapstien 2000, p.106).

Firms are at an immense disadvantage when ethics are necessary, because socially responsible investors , consumers, environmentalist and humans activist have the power of the media to portray these businesses as irresponsible.


Questions for Methodology

1.      Firstly, is CSR(corporate social responsibility) beneficial to your business? Why? How?
2.      You are CSR-focused but do you have the funds to continue?
3.      Has CSR been profitable for you? If not why do you do it?
4.      Are you doing CSR as a passion ? A pressure from government and NGOs or for your companies identity(perception)?
5.       Additionally, are you planning to differentiate yourself from other businesses with your products and services?
6.       Statistics show CSR is not profitable in the UK has this been true for you?
7.      Would you consider yourself unique because of CSR?
8.      Are you focusing on CSR because of the money or for the community?
9.      Furthermore, do you ever have to choose between business and ethics ?
10. Have more stakeholders associated with you because of CSR?

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