Do SMEs approach social responsibility differently? This week’s articles consider the question.
Is CSR different in SMEs?
The existing analysis of heterogeneous social responsibility (SR) in small and medium enterprises (SMEs) has considered the effects of individual factors. However, no holistic analysis has been performed on how different factors of heterogeneity interact and how they collectively affect SR in SMEs.
Here, authors Narvaiza and Altuna propose a new systemic approach—employing the social capital concept—with the aim of identifying how and why SR is built diversely in SMEs. In particular, the authors focus on a positive and holistic perspective that integrates the factors proposed in the literature into the social capital construct. Through a case study of four Spanish SMEs, this article proposes a systemic approach to the study of heterogeneous SR in SMEs.
Aragón, C., Narvaiza, L. & Altuna, M. 2016. Why and How Does Social Responsibility Differ Among SMEs? A Social Capital Systemic Approach.
Journal of Business Ethics, 138(2), 365–384.
Nuances in CSR in SMEs
Corporate Social Responsibility (CSR) amongst Small and Medium Enterprises (SMEs) is often characterised in the literature as unstructured, informal and ad hoc discretionary philanthropic activities. Drawing insights from recent theoretical/analytical frameworks (i.e. Crane et al., in Corporate social responsibility: Readings and cases in a global context, 2013; and Valente and Crane, in Calif Manag Rev 52(3):52–78, 2010), and on empirical data collected from both Nigeria and Tanzania, Amaeshi et al. found that CSR practices in SMEs are much more nuanced than previously presented.
In addition, SMEs undertake their CSR practices to varying degrees in multiple spaces—i.e. the workplace, marketplace, community and the ecological environment. These CSR practices go beyond philanthropy and in some instances involve institutional works aimed at addressing some of the institutional gaps in the environments where these SMEs operate.
This paper makes a contribution by drawing attention to the multiple spaces of CSR practices amongst SMEs, and the institutional works they do, which are often taken for granted in the extant literature. The authors provide a unique perspective—by arguing that what is frequently conceptualised as philanthropic CSR in Africa is (or may include) ‘institutional works’.
Amaeshi, K., Adegbite, E., Ogbechie, C. et al. 2016. Corporate Social Responsibility in SMEs: A Shift from Philanthropy to Institutional Works.
Journal of Business Ethics, 138(2), 385–400.
Internal drivers and performance outcomes of green business strategy in small firms
Growing detrimental effects on the bio-physical environment have been responsible for a large number of small firms to adopt a more strategic stance toward exploiting green-related opportunities. This article aims to shed light on how internal company factors help to formulate a green business strategy among small manufacturing firms, and how this, in turn, influences their competitive advantage and performance.
Based on data received from 153 small Cypriot manufacturers, the authors propose and test a conceptual model anchored on the Resource-based View of the firm. The findings underscore the critical role of both organisational resources and capabilities in pursuing a green business strategy. The adoption of this strategy was more evident in the case of firms operating in more harmful, as opposed to less harmful, industries.
The implementation of a green business strategy was found to generate a positional competitive advantage, with this association becoming stronger under conditions of high regulatory intensity, high market dynamism, high public concern, and high competitive intensity. It was also revealed that this competitive advantage is conducive to gaining heightened market and financial performance.
This study makes a fivefold contribution:
it injects a theoretical perspective into a relatively atheoretic field,
underlines the role of organisational resources/capabilities as drivers of eco-friendly initiatives,
highlights the often neglected strategic aspects of small firms’ ecological business activities, stresses the contingent role of external forces in moderating the positive impact of small firm green business strategy on competitive advantage, and
focuses on the performance implications of the small firm’s engagement in environmental operations.
Leonidou, L.C., Christodoulides, P., Kyrgidou, L.P. et al. 2017. Internal Drivers and Performance Consequences of Small Firm Green Business Strategy: The Moderating Role of External Forces.
Journal of Business Ethics, 140(3), 585–606.
The fine jewellery industry: CSR challenges and institutional forces facing SMEs
There has been limited coverage of the corporate responsibility (CR) practices of small and medium-sized enterprises (SMEs) in the mainstream CR literature. Furthermore, there has been no systematic analysis of the responsibilities of the high value jewellery industry and jewellery SMEs in particular.
This study explores the potential for harm and value creation by individual stakeholders in fine jewellery production. Using the harm chain and institutional theory to frame this investigation, the authors seek to understand how small businesses within the fine jewellery industry respond to the economic, social and environmental challenges associated with responsible jewellery production, and to investigate how they perceive and negotiate the tensions between responsibility and the resistance derived from the operational norms of secrecy and autonomy within the industry.
Exploratory research provides illustrative examples of how complex harm networks operate within and across the fine jewellery industry, and demonstrates the inter-relationships that exist across the different stages of the fine jewellery harm chain.
Findings suggest that institutional forces are coalescing towards a more responsible agenda for the fine jewellery industry. Moreover, while CR is a tool to disrupt harmful institutional norms and practices within such an industry, it requires the co-creation of new transformative business models and multi-stakeholder involvement including firms (SMEs and MNEs), trade associations, non-governmental organisations and consumers.
Solutions include national and international legislation, price adjusted certification routes for small firms, harmonisation of industry CR standards to reduce overlap in certification and regulation and gem and precious metal “track and trace” schemes.
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Marylyn Carrigan, Morven McEachern, Caroline Moraes and Carmela Bosangit. 2017. The Fine Jewellery Industry: Corporate Responsibility Challenges and Institutional Forces Facing SMEs.
Journal of Business Ethics, 143(4), 681–699.
The effect of a perceived business case on small firms’ social engagement
The business case for social responsibility (BCSR) is one of the most widely studied topics in the business and society literature that focuses on large firms. This attention is understandable because large firms have an obligation to shareholders who, as commonly assumed, seek to maximize returns on their investments, in turn, pressing corporate managers to show that firms’ expenditures in social engagement would pay off.
Small firms, on the other hand, rarely face such pressures, yet the BCSR logic is increasingly applied to small firms as well. The primary objective in this paper is to examine whether and how much do small firm owners’ perceptions of BCSR affect the firm’s social engagement.
In finding a fine-grained answer to those questions, Panwar et al. consider BCSR as a two-dimensional construct consisting of tangible and intangible benefits, and also integrate the BCSR perspective with the slack resource perspective to offer a motivation-capacity lens to examine firm’s social engagement.
Drawing on a multi-industry sample of 478 small firms in the US, the authors find that while small firm owners’ perceptions about potential tangible benefits of social engagement are not related to the firm’s social engagement, perceptions about potential intangible are positively related. Firm’s financial performance is also positively related to its social engagement, but there is no interaction between potential benefits and financial performance.
This study contributes to an improved understanding about small firms’ social engagement, which still remains an understudied area. Results are in line with studies which argue that firms’ social engagement is a response to institutional factors.
Rajat Panwar, Erlend Nybakk, Eric Hansen and Jonatan Pinkse. 2017. Does the Business Case Matter? The Effect of a Perceived Business Case on Small Firms’ Social Engagement.
Journal of Business Ethics, 144(3), 597–608.
Beyond environmental regulations: SMEs in Arab markets
The recent global increase in environmental regulation does not necessarily signal improvement in firms’ ecological imprints. Like many markets, the Arab world is struggling to implement environmental compliance measures among local firms. For Arab countries, the reliance solely on formal policies to improve local firms’ ecological footprints may be risky given the evident institutional challenges to enforce environmental regulations, specially post the Arab Spring.
Drawing from the literature highlighting the merits of combining formal and informal controls to ensure successful implementation of a strategy, the authors argue that the emphasis for regulation must be accompanied by an emphasis for developing environmental ethics of individuals, who are the expected implementers of any environmental policy.
In that light, authors Abdelzaher and Abdelzaher propose that the Eco-Islam phenomenon can serve as an influential and effective foundation for building organisational cultures with stronger environmental ethics among local small and medium enterprises (SMEs). The authors explain the underlying maxims of Eco-Islam then conduct qualitative research among experts preaching or practicing the concept to gain better insights into the potential of leveraging it in Muslim-majority Arab countries. Finally, the writers conclude with insightful implications for local SMEs in the region.
Dina M. Abdelzaher and Amir Abdelzaher. (2017). Beyond Environmental Regulations: Exploring the Potential of “Eco-Islam” in Boosting Environmental Ethics Within SMEs in Arab Markets.
Journal of Business Ethics, 145(2), 357–371.