Does size matter?

Responsible Management in Small and Medium Enterprises


In my previous blog on social entrepreneurship I pointed out that many people hesitate to follow a meaningful career path because they believe it is too risky or that profit has to be the greatest goal. In this blog I would like to highlight the possibilities of small and medium enterprises that seek for profit and a meaningful impact at the same time.

One might think that SMEs cannot have any real influence in the business world, but did you know that they account for 60-70% of employment and 55% of GDP in the OECD countries? Lower hierarchies, short decision making and communication processes, a high motivation for innovation and adaptation are only some benefits that SMEs can have. Back in the days, small and medium sized enterprises might have had a limited influence and were defined by the number of employees, its annual turnover and balance sheet, thus it might have been more attractive to work for well-known and worldwide recognized enterprises. However, with growing opportunities of the internet and media, even small companies can have a worldwide influence. WhatsApp, for example, had only 55 employees but served 420 million monthly users.

As you can see, these small players have many positive features and are playing an important role in the business world – not only because of the amount of SMEs on the market, but also because they are usually a supplier or customer of a big company. On the one hand, SMEs can have a collective impact and might have the power to change the way the business world is working. On the other hand, many SMEs lack financial resources in order to improve their businesses in a responsible manner. This is where big companies can play an important role in supporting their suppliers through capacity building or knowledge transfer whilst simultaneously improving their sustainability strategy and minimising the impact throughout their supply chain.

Even though multinationals can support their suppliers, there are many environmental, economic or employee related issues SMEs can change, even with only limited resources. The improvement of working conditions, work-life balance, health and safety issues, fair prices or ethical advertising are not necessarily expensive and will be recognized by employees as well as customers. Investments in areas such as skill development, waste reduction, recycling or quality can even save money and will most certainly track the attention of costumers as well as potential investors.

The German company “LR Facility Services”, for example, provides German classes for employees with migration background free of charge, organises workshops around environmental issues and has created a charity project in Sri Lanka, right after the Tsunami destroyed the livelihood of thousands of people in 2004. Another example of responsible management can be recognized in the “Denkstatt GmbH” in Austria. This small consultancy company is not only working in the field of environmental and sustainability issues, but follows strong values such as respect, honesty and open mindedness. Furthermore, the Denkstatt GmbH carries out different activities in order to maintain the well-being of their employees. The company is not only offering fruits and drinks free of charge, but the employees also prepare meals for one another and benefit from several sports activities as well as flexible working hours. All of this does not only create a positive atmosphere, but also leads to a low fluctuation of the employees and has a positive impact on the clients.

We have to realize that size does not matter in order to follow a responsible business strategy – what matters is a person with strong values who is willing to follow this strategy and who is not afraid of investing part of the profit in important issues. With the right motivation and people behind it, even small and medium enterprises have the ability to make changes in the way they treat their employees, supplier, customers and other stakeholders.

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