Csr in Sme

CORPORATE SOCIAL RESPONSIBILITY IN SMES ( half- size and Medium Enterprises) THE LITERATURE REVIEW The importance of Corporate Social right (CSR) has been increasing rapidly over the past few years (Crawford and Scaletta, 2005) although meaning of the term CSR remains a subject of much debate (Roberts, 2003 Hopkins, 2003). The reason bottom the debate is that the beliefs and attitudes on the nature of CSR obligate varied over time (Hill et al. , 2003).However, according to European Commissions Green Paper on CSR (2001), CSR is a concept whereby the companies integrate affectionate and surroundal concerns in their daily business operations and in their interaction with their stakeholders on a voluntary basis. On the some other hand, CSR can also be understood as the business theatrical role to sustaincapable development (EC, 2002). Regardless the definitions, CSR is all about effectively managing the relationships that can simulate the business and taking responsibility for the consequences that running the business has on society (Mallen Baker, 2008).Again, the arguments so far shows that all organizations have an impact on society and the environment through their operations, products and services and through their interaction with key stakeholders and therefore CSR is important in all firms, grand and fine (Williams, 2005 Hopkins, 2003 Roche, 2002). But it seems that less research have been made regarding the engagement of CSR in SME (Vyakarnam et al. , 1997 Schaper and Savery, 2004 Perrini et al. , 2006 Spence et al. , 2000).This literature review has been prep ared with the aim of clarifying the engagement of CSR in SMEs. Small and Medium Enterprises as defined by DTI and EU are those organizations with a turnover of under 40 million Euros (? 27 million) and either has employees below 250 or over 25% owner- make outd is proven to be important both numerically and economically since the last couple of decades (Jenkins H. , 2004). According to the re search conducted by UNIDO (2002), SMEs advance up over 90 per cent of businesses ecumenical and account for between 50 and 60 per cent of employment.Similarly, a recent research suggests that SMEs (Small & Medium Enterprises) in the UK may make a social contribution worth up to ? 3bn each year about ten times that of large corporations (BITC, 2002) which proves their equal importance like companies. *Unlike in large organizations, the self-control and management of small organizations seems to be more closely related (Spence and Rutherfoord, 2001). Thus, control remains in the hands of one of the owners, potentially enabling him or her to make personal choices about the allocation of resources (Spence, 1999).As described by Burns, 2001 small businesses are like social entities that revolve around personal relationships, which are a lot short of cash, likely to operate in a single market, who find it difficult to diversify business risk and are vulnerable to the loss of customer s. Thus, in SMEs, the acceptance of CSR is largely a factor of the personal attitudes of the owner/manager (Hopkins, 2003 Perez-Sanchez, 2003). Improved image and reputation. Improved trust and understanding. Better market position. More business. increase employee motivation. Increased attractiveness to potential recruits.Cost savings and increased efficiency. Risk management The overwhelming motivating factor for SMEs to engage in CSR is not outside(a) pressure but an internal drive to doing the right thing or putting something back or showing entrepreneurial spirit(Jenkins H. , 2001). *However, from the viewpoint of SMEs, CSR heart and soul to pay attention toward social and environmental responsibility (Southwell, 2004). Similarly, Grayson (2005) suggests that, researchers and practitioners should recognize that lots of small firms are already doing things that benefits society, but those are not described as CSR.Another important element in the field of CSR research is stakeh older theory. There is an inherent acceptance that all business has stakeholders and appropriate management of which can friend reduce risk and improve all companies social responsibility (European Commission and Observatory of European SMEs, 2002 Irwin, 2002). However, stakeholder research has tended to focus on corporation or large company. But the nature of stakeholder relationship for SMEs may not be drastically different (Jenkins, 2004).Stakeholder relationships for an SME may be based on a more informal, swear basis and characterized by intuitive and personal engagement with less of a gap between the relative power and influence of company and stakeholder whilst large companies are far more likely to engage in carefully planned, formal strategic stakeholder management (Jenkins, 2004). Thus, SMEs approach to CSR is likely to influence according to the way they manage their key stakeholder. Brussels, 2001, Green Paper for Promoting a European Framework for Corporate Social Res ponsibility, Commission of the European Communities, COM (2001)366 final, p. 6. Burns, P. 2001, Entrepreneurs hip and Small Business, Hampshire Palgrave. Business in the conjunction (BITC), 2002, _Engaging SMEs in community and social issues_. Cohen, A. P. , 1985, The_ Symbolic Construction of Community, _London Routledge. EC and Observatory of European SMEs, (2002), _European SMEs and Social and Environmental Responsibility_, no(prenominal) 4, Enterprise publication, p. 12. Fuller, T. 2003, Small Business Futures in Society, Futures 35 (4), 297-304. Hill, R. , Stephens, D. and Smith, I. (2003), Corporate social responsibility an examination of individual firm behaviour, Business and Society Review, Vol. 08 No. 3, pp. 339-64. Irwin, D. , 2002, Encouraging Responsible Business, Small Business Service, London. Jenkins, H. (2004), A Critique of Convectional CSR Theory An SME Perspective, Journal of General Management, Vol. 29 No. 4. Pp. 37-57. Mallen Baker, (2008), Arguments against corporate social responsibility redoubled, Business Respect, 26 October, Issue Number 139. Perez-Sanchez, D. (2003), Implementing environmental management in SMEs, Corporate Social Responsibility and Environmental Management, Vol. 10 No. 2, pp. 67-77. 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(2006), Social and environmental responsibility in small and medium enterprises in Latin America, Journal of Corporate Citizenship, Vol. 21, pp. 39-50. Vyakarnam, S. , Bailey, A. , Myers, A. and Burnett, D. (1997), Towards an understanding of ethical behaviour in small firms, Journal of Business Ethics, Vol. 16 No. 15, pp. 1625-36. Williams, A. (2005), Consumer social responsibility? , Consumer Policy Review, Vol. 15 No. 2, pp. 34-5.