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

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Presentation on theme: "CSR and SMEs theory: From large to small organizations Laura J. Spence."— Presentation transcript:

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

2 Thomas Holloway


4 Classic MNC Classic Small Business (C)SR in SMEs? Ownership and control Shareholder principal 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. Professionali zation of mgt Informal and personalNo 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

5 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 societys 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 Carrolls (1991) Pyramid of Corporate Social Responsibility

6 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

7 CSR Theory 2: Stakeholder theory 7 Firm FinanciersCustomersSuppliersCommunitiesEmployees

8 Owner- manager(s) Employees Small local competitorsSupplier Local community Family Lge firm customer X Stakeholder Theory: SMEs Business Partners The self

9 Explaining the SME Difference: An ethic of care Source: Derived from Held (2006:10-13) Valuing emotions Meeting the needs of others for whom we take responsibility Accepts impartiality Inclusion of the private sphere as territory for morality People are relational and interdependent

10 Masculinist Interpretation 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.

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?

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

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