Corporate Social Responsibility for Small and Medium Enterprise

Transcription

1 Corporate Social Responsibility for Small and Medium Enterprise Dr. F. Zafar 1, Z.Hussain 2, Z.Musab 3 1 PhD.University of Derby, England currently working in GCU, Lahore, Pakistan Dr.F.Zafar@gcu.edu.pk 2 MBA continue, Institute of Business & Management, UET Lahore, Pakistan Zahidhussain16@live.com 3 MBA continue, Institute of Business & Management, UET Lahore, Pakistan zmusab@yahoo.com Abstract-The corporate social responsibility in the world has got immense attention to carter the market leaders for their company s success. The study mainly focus the influence of corporate social responsibility on small medium enterprises to evaluate codes of conducts, global value chain, small medium enterprise policy, small medium enterprise social responsibilities, labor rights, multi-stakeholders initiatives and their responsibilities. Furthermore this research has acknowledged that government s role is very necessary to implement these social responsibilities by the corporation. In conclusion this study has assessed the limitations that firms in the world need to be aware of the standards to which they will be held accountable in today increasingly globalized market. Keywords-Corporate Social Responsibility (CSR), Small and Medium Enterprises (SMEs) and Strategic Corporate Social Responsibility (SCSR), CSR drivers. I. INTRODUCTION We have discussed about the relation between the corporate social responsibilities in small medium enterprise as how corporate social values are important in the gain of corporate social responsibilities, design a structure of CSR what are the gaps which are occurring between employee and firm. Governments also play a great role in maintaining the CSR policies between the legal compositions. Discussed one case of Netherland which are the policies they are adopting their culture. Small and Medium Enterprise generating GDP of 40% to 50% also tell about the activities in European countries are doing regarding SME's. It also plays a very great role in development of CSR in SME's. II. Corporate Social Responsibility Corporate social responsibility in business is the continuing commitment to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. [1] CSR is a set of values and activities of companies in order to integrate environmental, social and economic and governance considerations into their business model and to support the sustainable development of their communities [2]. A. Business gain of CSR Bowen [6] estimated businesses to provide social goods for example: a) Standard of living is high; b) Economic Progress and security increases; c) Freedom, justice and rules. d) Development of person B. Structure for CSR GAP describes their current position rather than stages in their development of CSR [8]. It has four threads : a) The sustainable solutions in their supply chain including improving working conditions, monitor suppliers factories into their business practices, and collaborating to drive the industry change. b) By making GAP for employees, people can build and flourish their careers. c) By involving community from their foundation to their volunteerism. d) For business functioning, environment, energy, health and safety are necessary factors.

2 C. Role of any Government and CSR Government s four possible roles are [9]: a) Mandating for enabling CSR actions related to legal compositions b) Facilitating the existing firms. D. Case study: Knowledge and Information Center specially for CSR in Netherlands This center is managed by CSR Netherlands. The center has four activities [10]: a. To collaborate with businesses in order to get better access to companies and also to solve the needs ; b. To collaborate with institutions of entrepreneurs in order to include the CSR information and activities; c. To collaborate and promote with international trades like international trade of companies; d. To distribute and promote the CSR topics like human resource management, marketing etc; III. Small and Medium Enterprise c) Partnering with corporations related to CSR actions. d) Endorsing for providing understanding and knowledge. The phrase SME has various types of businesses ranging from your single artisan work at home and creating handicrafts in order to sophisticated software-producing corporations selling with specialized worldwide niches. Both the United States and the Europe generally use the same threshold of fewer than 10 employees for small offices. In the EU, SMEs comprise approximately 99% of all firms and employ between them about 65 million people. Globally SMEs account for 99% of business numbers and 40% to 50% of GDP [11]. A. Small and Medium Enterprise in Europe Small, micro and Small and medium enterprises in which often employee less than 250 people and which have an 12-monthly turnover not necessarily exceeding 50 million euro and an annual harmony sheet complete not out performing 43 million euro [14] B. GDP of Ten Countries Table 1 GDP of countries Sr Country Lowes Highes Last Previo No. t t us 1 Kuwait China Iran Japan Malaysia Singapore Qatar Pakistan Thailand Vietnam giff1fnapfj fodpdg giff2fnapfj fsddg giff3fnapfj fisgndppdg

3 Fig 4 GDP of THAILAND Fig 5 GDP of PAKISTAN gif f6ffnapfj fodpdd giff7fffnapfj fo SGD giff8fffnapfj f SGPGDG giff9fffnapfj fgdfd ISD gif11ffffnapfj ffo DSP

4 C. Corporate Social Responsibility among different Small and Medium Enterprise Small businesses are different from big corporations just due to quantity of resources readily available, strategies, owners, importance regarding managerial valuations, level regarding involvement and stakeholder prioritization. These elements impact the different ways that CSR is usually perceived and practiced within SMEs compared with big companies. Values of person from the owner or manager impact the Corporate Social Responsibility strategy from the firm, since small establishments are seen as an absence of the separating between possession and administration. [16]. D. Strategic Corporate Social Responsibility and Organization Strategic CSR may be including by several organizations specific variables that influence CSR benefits. As a regulator, CSR inside Tools refer to F. Role of SME's in economic Development SMEs contributed around 60% of Australia s industrial value added in In Morocco, for example, 93% of industrial firms are SMEs, accounting for 38% of the production, 33% of investment and 30% of exports. The estimated 91% of the formal business entities in South Africa that are SMEs contribute 52 57% to GDP [21]. In 2006/7, the contribution made by micro and small businesses to India s GDP was only around 6%. Even so, manufacturing SMEs accounted for around 40% of industrial output, and 40% of all exports [22]. IV. Relationship between CSR and SME We have examined the relationship between CSR and SMEs in Italy. There are a number of reasons for the limited degree of commitment of the majority of SMEs to formalized CSR actions. Italian firms own rules, functions and set ups that safeguard a socially liable firm. Good cultural circumstance, resources and also needs with the firm, strategic CSR pursuits could address combining economic, ecological, social, stakeholder and also voluntary measurement related difficulties [17]. E. Significance of Small and medium Enterprise Small as well as medium-sized firms play a vital role in the Australian economic system. They displayed around 2 million for trading the firms in July 2007 as well as employed about 42% involving total labor force in Quarterly report. They are generally estimated to own contributed about 46% involving Australia's low domestic product or service throughout Inside OECD nations, SMEs paid for over 95% involving firms as well as % of work [19]. Ministry of Labor and Social Affairs [26] conducted on a sample of around 400 companies, suggests that the most frequent CSR initiatives in Italy are: training activities (89%); safeguarding employees health (82%); support of the local community (72%) and control of product safety (67%) and environmental impact (62%). These companies usually adopt CSR tools such as employee involvement programs (83%); sponsorships (75%); donations (51%); direct investments (47%) and management systems (42%). The survey in conducted in the city of Denmark where the issues of Corporate Social Responsibility in Small and Medium Enterprise addressed in supply chain [30]. A. Frame Work (A model for strategic CSR and SME's Growth) Strategic Approach Business Growth Micro Company CSR Market Place SME Growth Increase in Export Increase in GDP CSR Environment Growing Market CSR Human Right SME's Growth Due to CSR [37] Business with Internal and External links

5 A model for strategic CSR and SME's Growth Through prioritizing the stakeholders, SMEs influence social investment capital and improve their growth [33]. CSR activities may contribute to help firm growth should they are aligned while using competitive strategy with the firm, consequently cost command, differentiation as well as quality push. Finally, to contextualize the relationship between CSR and also firm growth we take into account several organization and market characteristics [35]. This framework is used to enhance the reliability of study and able to feed back to policy makers, civil society and SMEs managers through the recommendations put forward in this study. We focus on firm growth rather than other performance measures as among SMEs sales growth is a widely used long term measurement of performance [36], consistent with the notion of sustainability of firms [37]. V. Suggestion/Limitations CSR has been fueled from the increasing rapidity of businesses worldwide in enhancing performance and by simply continued economic deregulation and also trade reforms which are putting stress on firms to enhance their efficiency and interact to market calls for and disorders. Firms in neighborhood need to learn the specifications to which they'll be held dependable in currently increasingly globalized Reference [1] Paul Hohnen, w. work off, Corporate Social Responsibility an Implementation Guide for Business International Institute for Sustainable Development, ISBN page 1-115, 2007 [2] Pareena Prayukvong & Matt Olsen, w. work off, Promoting Corporate Social Responsibility in Thailand and the Role of Volunteerism The NETWORK of NGO and Business Partnerships for Sustainable Development (The NETWORK Thailand), page 1-41, 2009 [6] Sen, S 2011, "Corporate Social responsibility in small and medium enterprises: application of stakeholder theory and social capital theory", DBA thesis, Southern Cross University, Lismore, NSW. [8] Wright, P. (2007), Corporate social responsibility at GAP, Human Resource Planning, Vol. 30. [9]Keith F.Snider, BartonH.Halpern, ReneG.Rendon & MaxV.Kidalov w. work off, Corporate social responsibility and public procurement: How supplying government affects current market. A low a higher level CSR action seems surprising for the relatively high-income degrees of the Caribbean countries along with the numerous international firms that appeal to Northern consumers within the tourism sectors. VI. Conclusion Growing interest in CSR worldwide is inserting increased pressure on organizations worldwide, to combine such concepts so as to compete successfully. Such pressures can be institutionally based originating from governments along with regulators, or they might be derived from local communities as well as the non-governmental, activist market. As government and SMEs are not taking interest before but know with the growing values of the company and demand by the infrastructure by the company polices CSR playing a great role to establish the small firms. SMEs that pursue a differentiation or a quality driven strategy can achieve fast growth and in particular avoid sales decline by implementing CSR activities related to the workforce. SMEs that implement CSR activities related to the environment do not benefit from these in terms of growth, regardless of the competitive strategy pursued. Finally, the impact of CSR activities on SMEs growth can be enhanced through specific strategies and policies. To make our economy grow our SMEs also have to implement the CSR policy to serve the society and give the more benefit to human. managerial orientations Journal of Purchasing & Supply Management, page 63 72, 2013 [10] Gerald Berger, Reinhard Steurer, Astrid Konrad, André Martinuzzi, "Raising Awareness for CSR in EU Member States: Overview of government initiatives and selected cases", Vienna University of Economics and Business Administration, Vienna, May 2007 [11] Md. Kayssar Ahmed, "Corporate Social Responsibility Practices of Commercial Banks in Bangladesh: A Case Study on Southeast Bank Ltd", IOSR Journal of Business and Management (IOSR-JBM), Volume 12, Issue 1 (Jul. - Aug. 2013), PP [14] The new SME definition Journal of the European Union C 118 of 20 May 2003 [16] Marcello Coppa & Krishnamurthy Sriramesh, w. work off Corporate social responsibility among SMEs in Italy Public Relations Review, page 30 39, 2013 [17] Mario Fernando & Shamika Almeida w. work off, The organizational virtuousness of strategic corporate social responsibility: A case study of the Sri Lankan family-owned enterprise MAS Holdings European Management Journal, page , 2012

6 [19] OECD 2000, Small and medium-sized enterprises: Local strength, global reach, viewed 9 October [21] Abor J. and Quartey, P. (2010), Issues in SME Development in Ghana and South Africa, International Research Journal of Finance and Economics, 39: [22] Ghatak, S. (2010), Micro, Small and Medium Enterprises (MSMEs) in India: An Appraisal [26] Perrini, F., S. Pogutz and A. Tencati: 2006, _Corporate Social Responsibility in Italy: State of the Art_, Journal of Business Strategies 23(1), [30] Pedersen, E.R, "The many and the few: rounding up the SMEs that manage CSR in the supply chain". Supply Chain Management: An International Journal, Vol. 14, pp , [33] Russo, A. and F. Perrini (2009) Investigating stakeholder theory and social capital: CSR in large firms and SMEs. Journal of Business Ethics 91: [35] BIS-Department for Business Innovation & Skills (2010) Corporate Social Responsibility: A Government Update. [Online] at: Accessed 8 September [36] Chong, H. G. (2008) Measuring performance of small and medium-sized enterprises: The grounded theory approach. Journal of Business and Public Affairs 2(1): [37]European Commission (2002) Corporate Social Responsibility- A Business Contribution to Sustainable Development. Luxembourg: Office for Official Publications of The European Communities [30] Pedersen, E.R, "The many and the few: rounding up the SMEs that manage CSR in the supply chain". Supply Chain Management: An International Journal, Vol. 14, pp , 2009.