When discussing CSR in business, a commonly held belief is that this can only be confined to larger corporations who have the capacity to run and fund a dedicated department. Due to their low margins and comparatively small sphere of influence, SMEs are often overlooked in this area. Could this be true? Are SMEs capable of adopting CSR into their strategies? Recent seminars at EOI as well as research into this topic, show that CSR can be just as relevant, if not more so, to the overall strategy of SMEs.
There are often various factors that drive SMEs towards CSR oriented practices. These could be reflected as their role of suppliers in a larger supply chain, where clients demand that their partners adopt social or environmental requirements in their production processes. Many large corporations – such as The Body Shop – carefully select their partners according to their ethical attributes.
More frequently however, SMEs are being called upon to integrate CSR into their philosophy from the point of their inception. Indeed CSR can be seen as creating new business paradigms – many SMEs position themselves as a “love brand” and are established with their social or environmental motivations clearly embedded in their image. The UK transport company Big Green Coach has a reputation that hinges on their environmental philosophy – with every ticket bought through their website, 5sq ft of Amazon rainforest is sponsored. It is clear that this provides impetus to their customer base and contributes greatly to their overall success.
CSR however is not only a tool that can be used to reach out to external stakeholders. The adoption of CSR practices in many ways starts at home. Employee satisfaction and motivation are key to the success of a business. Small by nature, SMEs are flexible and therefore able to adopt new practises quickly. Employee incentives such as flexitime, home-office days, team “outs” and a comfortable working environment are all concepts that can be easily adopted by SMEs. From personal experience, I know how small gestures such as free drinks, fruit or a staff “games room” can really boost overall morale and help to increase productivity.
The size of an SME also allows employees to become more involved than in just one set position. Allowing employees to vary their tasks promotes staff training, the transfer of knowledge and can provide employees with the sense of belonging while working towards a shared goal.
By creating such foundations based on ethical principles, SMEs can then channel this resource when seeking to have a wider impact. Employees who feel engaged by their employer are more likely to participate in “extracurricular” social or environmental projects. Moreover when CSR becomes less of a detached activity and more of a company’s philosophy, they can use this to project their “unique” reputation as an advantage when approaching new trading partners.