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CSRD: SMEs and CSR 11 October 2010. Introduction Summary – Codes of Conduct and workers SMEs and CSR * Understanding SMEs * Importance of SMEs & CSR issues.

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Presentation on theme: "CSRD: SMEs and CSR 11 October 2010. Introduction Summary – Codes of Conduct and workers SMEs and CSR * Understanding SMEs * Importance of SMEs & CSR issues."— Presentation transcript:

1 CSRD: SMEs and CSR 11 October 2010

2 Introduction Summary – Codes of Conduct and workers SMEs and CSR * Understanding SMEs * Importance of SMEs & CSR issues The Business Case (?) CSR as a means of exclusion Exam/evaluation requirements

3 Summary: Codes of Conduct & Workers Codes of conduct  Ethical guidelines for company behaviour  Self-regulation, Private Authority  A means to respond to ’sweatshop critique’, image, branding  Company claims: Fulfilment of Codes = Proper working conditions  Few investigations, little knowledge (ETI + Nelson et al)  IA: Some improvements to some (outcome rights)  The limited improvements often counteracted by ’market development’ (pressure to deliver, lowering of prices,  Increasing informalisation, absence of proper government policies

4 SMEs and CSR Perceptions: SMEs don’t care about CSR SMEs lack resources to do CSR SMEs are main polluters

5 SMEs and CSR Understanding SMEs (Jenkins (2004))  Norms, models, thinking, agendas derived from large companies  SMEs are little big companies  SMEs are alike – homogenous  SMEs don’t care about CSR  Impacts SMEs policies (which are insufficient etc)

6 SMEs and CSR Understanding SMEs (Jenkins (2004))  All myths!  Situation among SMEs is different  Need to understand SMEs and their situation What is a Small and Medium-sized Enterprise (SME)?

7 SMEs and CSR Understanding SMEs (Jenkins (2004))  SMEs are many different things – heterogeneous  Quote (by Wilkinson): ‘..if what constitutes ‘smallness’ is contextual and possibly subjective and interpretational, then we need to examine what factors combine to explain patterns of ‘small’ business behaviour...’

8 Understanding SMEs & CSR FromTo SizeOne person200-250 employees SectorAgricultureManufacturing, Service MarketVillage, townCity, regional, global ProductStandardisedSpecialised Management Hierarchical (top- down) Flat (bottom-up) (Jeppesen, 2009)

9 Understanding SMEs and CSR Vives (2006):  Know little about practices  SMEs do numerous CSR practices  (Often) informally  Practices differ * Medium-sized more than small * More internal than external and environmental  Role of culture (religious values and norms)

10 Understanding SMEs and CSR Vives (2006):  Why such practices?  SMEs Different Motives * Profits, Making Products, Helping Others  Commitment of Founder/Owner highly influential  Context matters  Age (old vs. young), market, sector matter

11 SMEs and CSR Importance of SMEs and CSR:  Given that SMEs constitute 90% or more of all enterprises in an economy  What are the implications for CSR in development?  Why is it important to investigate CSR-issues relating to SMEs?

12 Importance of SMEs and CSR Implications for CSRD?  Most/all cases investigated will include SMEs  Involve environmental issues (Kasur), working conditions (safety and health, wages and freedom of association etc), and  Employment and growth (poverty and economic development)

13 Importance of SMEs and CSR Why is it important to investigate CSR-issues related to SMEs?  Possibilities for spreading ‘good practices’, win- win situations etc  Reveal problems of ‘win-win’, disclose power, conflicts, exclusion etc, understanding obstacles  View of Southern Voices (SMEs) – key to poverty and economic development

14 The Business Case Luetkenhorst 2004:  SMEs majority of firms (+90%)  Key to economic development, growth and employment (30-50% of output and 50-60% of employment)  Labour intensive  Important to social cohesion (reduce poverty, ensure more equality)  Innovative  Make economies more resilient  Produce in niche markets, flexible  Foster economic cohesion

15 The Business Case Luetkenhorst 2004:  Three types of SMEs A: In supply chains, B: Own export, C: Nationally oriented Note: States that type A is the interesting category!?  Support SMEs (linkages, capacity development)  Use PPPs  Exploit the win-win options!

16 The Business Case Luetkenhorst 2004: The Business case:  Cost savings  Enhanced staff loyalty  Improved government relations  Innovation and learning  Enhanced reputation  Consumer response

17 The Lack of Business Case Jenkins 2004:  Few stakeholders (mainly customers)  Risk, reputation and consumer pressure limited * No brands, little public awareness and contact * But consumer pressure at large firms going to SMEs!  Limited employee motivation & management time  CSR = costs & no extra markets  Limited profits & financial resources  No enforcement of regulation – why go beyond?

18 CSR a means of exclusion Fox (2004):  SMEs heterogeneous  Most SMEs are micro firms in the informal (service) sector  Little interest in tools and framework from large firms  SMEs in value chains – concerns only a minority of SMEs! * Either engage and implement codes etc – some do * Or not engage – others do  Supply chains (GVCs) are ‘rationalised’ = exclusion  The agenda needs to be changed!

19 Making sense of CSR to SMEs Fox 2004:  SMEs and CSR linked to the Sustainable Development agenda  BOP, Clusters and linkages, Business support & institutions  Make existing CSR-incentives relevant to SMEs  Assist in the transition (from informal to formal)  Make CSR more relevant * SMEs do carry out CSR practices (informally) * Provide appropriate incentives

20 SMEs and CSR: Summing up Business Case versus CSR as a means of exclusion? The business case is there – however in most cases not realised Need to understand SMEs and their situation(s) Focus on SMEs advantages (if engaged: quick to change & flexible, set strategies regardless of shareholder pressure, existing practices (though ad-hoc and informal) scaled up) Beyond Large firms’ agenda (set conditions, define rules of the game, down-ward pressure in GVCs) CSR (Codes of conduct, fulfilment of standards and requirements) intends to raise standards, but becomes a means of exclusion

21 Business Case versus CSR as a means of exclusion? Promoting the SMEs case: The role of governments and international organisations key (National) Governments to outline relevant industrialisation policies and (local governments) to implement programs (support to SMEs, incentives etc) International organisations to assist, e.g. Voice the concerns regarding GVCs (market development) Relate to Reed & Reed: What type of development?

22 Exam/evaluation requirements Essay exam:  Written  Max. 10 pages  Assessed by course teachers and internal examiners Evaluation criteria:  Learning objectives  Knowledge on the course curriculum

23 Exam/evaluation requirements Evaluation criteria (Learning objectives):  Understanding CSRD Concepts  Strengths and Weaknesses  Cultural and Social Contexts  Implications Firm Profitability Workers’ Conditions Environmental Conditions

24 Exam/evaluation requirements Evaluation criteria:  Knowledge of the curriculum:  Relate to most if not all lectures and many/most of the texts  Essay – clear structure: E.g. (short) Abstract, Clear Line of Argument, Substantiated by Evidence, Sufficient Use of References, Solid Conclusions, Future Implications

25 Exam/evaluation requirements Examples of former essay titles: Three types  1. The topic/curriculum related  2. The cross-cutting  3. The case/example based

26 Next session (week 44) Challenges to Ethical Trade and Fair Trade in South Asia: Child Labour and Caste-Based Discrimination Barrientos and Smith (2005). Fair Trade and Ethical Trade – Are the Moves Towards Convergence? Nicholls (2005). Thriving in A Hostile Environment – Fair Trade’s Role as a Positive Market Mechanism for Disadvantaged Producers The Economist (2006). Voting with Your Trolley – Can You Really Change the World by Just Buying Certain Foods? National Campaign on Dalit Rights (2008). Dismantling Decent-based Discrimination – Report on Dalits’ Access to Rights Khan (2007). Representational Approaches Matter


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