CSR and SMEs theory:

From large to small organizations

 • Classic • Classic • (C)SR in
MNC Small Business SMEs?
Ownership Shareholder Owner-manager as Discretionary
and principal principal and agent SR implicit.
control CEO agent Personal and family Responsibility
influence to family and
self
Governance Formalized Informal and personal No language
and and codified. or codification
reporting Professionali for SR
zation of mgt
Transactions Contract Relationship based in Personal trust
(internal based. embedded community Integrity
and Profit & networks. Honesty
shareholder
external) Reputation, status and
value max.
legacy
Power Hierarchical Flat, flexible, multi- O-M
structures Role tasking. responsibility
orientated for and
reliance on
employees
CSR Theory 1: CSR Pyramid
Be a good corporate citizen. Contribute
Phil- resources to the community; improved quality
anthropic of life

Be ethical. Obligation to do what is right, just

and fair. Avoid harm.
Ethical
Obey the law. Law is society’s codification of
right and wrong. Play by the rules of the game.
Legal
Be profitable. The foundation on which all
Economic others rest.

Carroll’s (1991) Pyramid of Corporate

Social Responsibility
 Phil- Phil-
anthropic anthropic

Ethical Personal integrity

Survival Ethical
Personal Integrity Survival
(1) To(a)self
To selfand
and family
family (2)(b)
ToTo employees
employees
Four-part
model of SME
Personal
social
Phil-
integrity responsibility anthropic
Survival Ethical
Philanthropic Personal integrity
Ethical Survival
(c) To the local community
(3) To the local community (4)(d)To
To business partners
business partners
CSR Theory 2: Stakeholder theory

Financiers

Employees Customers

Firm

Communities Suppliers
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Stakeholder Employees

Theory: Lge firm

Small local
SMEs customer
X
competitors

Owner- Business
manager(s)
Partners

Family
Supplier
‘The self’
Local
community
 Explaining the SME
Difference: An ethic of care

People are relational Valuing

and interdependent emotions

Meeting the needs of others

Inclusion of the private
for whom we take responsibility
sphere as territory for morality

Accepts
impartiality
Source: Derived from Held (2006:10-13)
 Masculinist
Interpretation of SHT
1) Corporations as autonomous entities
are bounded off from their external
environment
2) Corporations control their external
environment
3) The language of competition and
conflict best describes the character of
managing a firm
4) Objective thinking is needed to generate
strategy
5) Corporations structure power and
authority within strict hierarchies
(Derived from Wicks, Gilbert and Freeman ,1994)
Feminist
Interpretation of SHT
SMEs as webs of relations among
stakeholders
SMEs should thrive on chaos and
embrace environmental change
Communication and collective action
should describe the character of
managing an SME
Strategy as solidarity with decisions
based on responsibilities and
relationships
Structure power and authority
through decentralization and
empowerment.
 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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