csr and smes theory: from large to small organizations laura j. spence
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CSR and SMEs theory: From large to small organizations
Laura J. Spence
• Classic MNC
• Classic Small Business
• (C)SR in SMEs?
Ownership and control
ShareholderprincipalCEO agent
Owner-manager as principal and agent Personal and family influence
Discretionary SR implicit.Responsibility to family and self
Governance and reporting
Formalized and codified.Professionalization of mgt
Informal and personal No language or codification for SR
Transactions (internal and external)
Contract based. Profit & shareholder value max.
Relationship based in embedded community networks. Reputation, status and legacy
Personal trust Integrity Honesty
Power structures
Hierarchical Role orientated
Flat, flexible, multi-tasking.
O-M responsibility for and reliance on employees
Economic
Legal
Ethical
Phil-anthropic
Be a good corporate citizen. Contribute resources to the community; improved quality of life
Be ethical. Obligation to do what is right, just and fair. Avoid harm.
Obey the law. Law is society’s codification of right and wrong. Play by the rules of the game.
Be profitable. The foundation on which all others rest.
CSR Theory 1: CSR Pyramid
Carroll’s (1991) Pyramid of Corporate
Social Responsibility
Personal Integrity
Survival
Ethical
Phil-anthropic
Survival
Personal integrity
Ethical
Phil-anthropic
Ethical
Philanthropic
Survival
Personal integrity
(a) To self and family (b) To employees
(c) To the local community (d) To business partners
Four-part model of SME
social responsibility
Survival
Ethical
Personal integrity
Phil-anthropic
(1) To self and family (2) To employees
(3) To the local community (4) To business partners
CSR Theory 2: Stakeholder theory
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Employees
Communities Suppliers
Customers
Financiers
Firm
Lge firm customer
X
Family
Local community
Supplier
Small local competitors
Employees
Owner-manager(s)
Stakeholder Theory: SMEs
Business
Partners
‘The self’
Explaining the SME Difference: An ethic of care
Source: Derived from Held (2006:10-13)
Meeting the needs of others for whom we take responsibility
Valuing emotions
People are relational and interdependent
Accepts impartiality
Inclusion of the private sphere as territory for morality
MasculinistInterpretation of SHT
Feminist Interpretation of SHT
1) Corporations as autonomous entities are bounded off from their external environment
SMEs as webs of relations among stakeholders
2) Corporations control their external environment
SMEs should thrive on chaos and embrace environmental change
3) The language of competition and conflict best describes the character of managing a firm
Communication and collective action should describe the character of managing an SME
4) Objective thinking is needed to generate strategy
Strategy as solidarity with decisions based on responsibilities and relationships
5) Corporations structure power and authority within strict hierarchies
(Derived from Wicks, Gilbert and Freeman ,1994)
Structure power and authority through decentralization and empowerment.
Policy implications
Cost rather than profitPersonal rather than compliance-based responsibilitySupply Chain Responsibility rather than customer pressure and codesAcknowledge care as part of business practice Importance of mentors, family, peers, networks and social capitalSector approachesRole for Regulation?
Entreprenurs vs owner-manager
Family firms
Sectors
Virtual firms
Partnerships
Venture capital owned
Entrepreneurial type
Transition economies
Ecopreneurs
Franchises
Informal economy
Social enterprises
Sole traders/no employees
Remember, SMEs are:• different in nature, not just size from
large firms• often unfamiliar with corporate
jargon • often led by people who do not want
someone else telling them what to do
• characterised by multi-tasking and fire-fighting
• deserve our respect• should not be underestimated
& can teach a lot to large firms
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