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Module 7

In the United States, there are 28 million small businesses generating 54% of sales (SBA, n.d.). The majority of research and publications on corporate social responsibility (CSR) are based on large organizations, but concern for people, the planet, and profit is not limited to multinational enterprises. Inyang (2013) reported that the greatest growth in new business is in the small and medium enterprise (SME) sector and that CSR initiatives factor into these business strategies. SMEs tend to focus their CSR efforts on community action and environmental sustainability. The greatest risks to effective implementation are funding constraints, adequate training, and employee adoption, although training and adoption likely factor into corporate buy-in as well. Kechiche and Soparnot (2012) are quick to point out that the definition and benefits of CSR are equivalent in small, medium, and large business. Certainly, the level of investment by larger organizations may yield more substantial impact on people, the planet, and profit. Because larger firms are better able to absorb fixed costs from CSR programs (Kechiche & Soparnot), they make more progress in the perspective of stakeholders, particularly with environmental initiatives. We also know that large firms may make larger and more devastating errors with environmental issues such as the 2010 Deepwater Horizon oil spill (BP) or the 1984 Dow Chemical gas leak in Bhopal, India. These are two examples of CSR issues that occurred despite adequate funding for training and monitoring. As we have explored in prior modules, the leadership and culture of an organization heavily influence employee reception and implementation of CSR regardless of company size.

An advantage of the SME is interest and agility in bringing CSR to emerging markets (Kechiche & Soparnot, 2012). Blomback & Wigren (2009) stated that CSR in small and medium-sized firms leverages social contracts with local business and ethical practices in the supply chain, and serves to establish legitimacy for the organization. SMEs find, however, that stakeholder expectations are not influenced by firm size, meaning that smaller organizations may struggle to demonstrate an equal level of commitment to people, the planet, and profit as their larger counterparts.

Just as quality management and management responsibility became strategic goals and familiar jargon in small and large business, CSR is equally touted as an advantage to internal and external stakeholders. Including these elements into a balanced scorecard has created focus and urgency to demonstrate sound citizenship to interested parties. Correspondingly, new business opportunities have emerged in the creation of tools for customer relationship management (CRM) and customer grievance management (GCM) (Garg, 2013).

In Module Seven you will finalize your project recommendations and outline your thoughts on implementation and opportunities. Whether you work in small, medium, or large business, people, the planet, and profit benefits to stakeholders are meaningful contributions of CSR.

References

Blombäck, A., & Wigren, C. (2009). Challenging the importance of size as determinant for CSR activities. Management of Environmental Quality: An International Journal, 20(3), 255–270.

Garg, A. K. (2013). Balanced scorecard and corporate social responsibility. International Journal of Management Research and Reviews, 3(7), 3178.

Inyang, B. J. (2013). Defining the role engagement of small and medium-sized enterprises (SMEs) in corporate social responsibility (CSR). International Business Research, 6(5), 123.

Kechiche, A., & Soparnot, R. (2012). CSR within SMEs: Literature review. International Business Research, 5(7), 97.

Small Business Administration. (n.d.). Small business trends. Retrieved from https://www.sba.gov/content/small-business-trends-impact