1. CSR and SMEs theory: From large to small organizations
Laura J. Spence

2. Thomas Holloway
(22 September 1800 – 26 December 1883) . Family of bakers, lived in France for a time, finally in 1836, he set himself up as a foreign and commercial agent in London.
A philanthropic and somewhat eccentric donor (he had an unconcealed prejudice against doctors, lawyers and parsons),
Thomas Holloway was a self-made multi-millionaire whose fortune had been made in patent medicines. He founded Royal Holloway College in 1879 after initiating a public debate inviting suggestions as to 'How best to spend a quarter of a million pounds or more'. It was his wife Jane who suggested a college for women as the means by which Holloway's money might effect 'the greatest public good'. Holloway's first great philanthropic enterprise, the Sanatorium at Virginia Water opened in The second, Royal Holloway College, largely inspired by the Chateau  Chambord in the Loire Valley, was opened by Queen Victoria in Built around two quadrangles, today it continues to impress as much by its size as by the exuberance of the roofline with its many towers and turrets. As solid as it is extravagant, it epitomises the wealth, optimism and spirit of philanthropy so characteristic of the Victorian age. It continues to provide a home for the the Royal Holloway Collection - a Picture Gallery of Victorian paintings by Millais, Frith and Landseer among others -  that was the final touch to Holloway's generous endowment.
Testimonials to the value of the pills can be found in newspapers all over the British Empire, including Indian, Australia and the North American colonies

3. inspired by the Chateau of Chambord in the Loire Valley
One of the first to offer higher education for women.
Royal Holloway admitted male undergraduates for the first time in 1965

4. Classic Small Business (C)SR in SMEs?
Classic MNC
Classic Small Business
(C)SR in SMEs?
Ownership and control
Shareholderprincipal
CEO 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
FROM EMPIRICAL RESEARCH
Business Ethics – the moral rules-in-use in organizations
CSR - consideration of, and response to, issues beyond the narrow economics, technical and legal requirements of the firm to accomplish social (and environmental) benefits along with the traditional economic gains which the firm seeks’ Aguilera et al, (2007, p.836-7). Focus on achievement of positive social change. EG: community involvement, stakeholder engagement, accountability, fair treatment of suppliers, fair marketing, fair competition etc

5. CSR Theory 1: CSR Pyramid
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.
Carroll’s model of Corporate Social Responsibility does not apply convincingly to small firms
Deep ethnographic studies will reveal different and more credible information about small business social responsibility than quantitative surveys
The ethics of care rather than more traditional ethical theories may provide a more suitable lens for understanding the motivations for small business approaches to social responsibility
Influencing CSR in SMEs will best be achieved by targeting:
Trade associations
(Appealing to) individual integrity
Family
Community
Business partners and networks
Acting with social responsibility in small businesses may in some instances exclude complete compliance with the law
Carroll’s (1991) Pyramid of Corporate Social Responsibility 5 5

6. Four-part model of SME social responsibility
Personal Integrity
Survival
Ethical
Phil-
anthropic
Personal integrity
Philanthropic
Personal integrity
(a) To self and family
(b) To employees
(c) To the local community
(d) To business partners
Survival
Ethical
Personal integrity
Phil-
anthropic
(1) To self and family
(2) To employees
Four-part model of SME social responsibility
In summary, Archie Carroll’s CSR pyramid is useful for understanding social responsibility in small business when:
Responsibility ‘to society’ is made relevant for small business by breaking it down into meaningful categories such as the self and family; employees; the local community and business partners
Key categories of social responsibility are survival (economic and legal); personal integrity of the owner-manager; ethical and philanthropic.
The order of priority within the CSR pyramid is differentiated according to the group to whom responsibility is orientated.
(4) To business partners
(3) To the local community 6 6

7. CSR Theory 2: Stakeholder theory
Theory developed by Edward Freeman (1984)
A stakeholder in an organization is…any group or individual who can affect, or is affected by, the achievement of the organization’s objectives (Freeman 1984:46)
Primary stakeholders are those stakeholders that have a direct stake in the organization and its success
Secondary stakeholders are those that have a public or special interest stake in the organization 7

8. Stakeholder Theory: SMEs
Business
Partners
The small business is more likely to be defined by their role as a stakeholder of other organizations than as a central organization in its own right.
The inside of the black box of the firm, is best represented by the owner-manager(s) of the business.
The key stakeholders for small businesses are likely to be employees, small local competitors, suppliers, local community, family and customers.
Stakeholder salience is influenced by proximity, which adds a new dimension to the ‘urgency’ perspective.
‘The self’

9. Explaining the SME Difference: An ethic of care
Feature
Reasoning
Meeting the needs of others for whom we take responsibility
Caring for a child at the fore-front of moral concerns.
Vulnerable human beings are dependent on others.
Claims of particular others are compelling regardless of universal principles.
Valuing emotions
Sympathy, empathy, sensitivity, and responsiveness are the kinds of moral emotions that are valuable for implementing reason.
Accepts impartiality
The compelling moral claims may be valid even when not universalizable
Inclusion of the private sphere as territory for morality
Common focus on public life overlooks the private domains of family and friendship, where women are often economically dependent and subject to a highly inequitable division of labour.
People are relational and interdependent
People start out as morally and epistemologically relational and interdependent. This contrasts to traditional conceptualizations of fully autonomous and rational individual agents.
Source: Derived from Held (2006:10-13)

10. Masculinist Interpretation of SHT Feminist
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.

11. Policy implications Cost rather than profit
Personal rather than compliance-based responsibility
Supply Chain Responsibility rather than customer pressure and codes
Acknowledge care as part of business practice
Importance of mentors, family, peers, networks and social capital
Sector approaches
Role for Regulation?
Focus on profit and the ‘business case’ to motivate social responsibility is misguided – but cost focus will attract some attention
Responsibility is keenly felt by SME owner-managers, but because of personal relationships not government intervention
Supply chain pressures should not assume the simple transfer of codes/standards from large customers to small suppliers is unproblematic. Whole supply chain approach needed.
Role for Regulation? Levels the playing field

12. 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

13. 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 13

14. Professor Laura J. Spence
Royal Holloway, University of London, UK