Small and medium-sized enterprises account for 99% of all business entities in the advanced industrial world. The importance of SMEs to the real economy is immense, particularly in outlying areas, where they often play a critical role in the life of the community. Finding ways to inject vitality into small businesses is clearly a high priority for industrial economies seeking to overcome the sluggish growth of recent years. At the same time, government policy can only accomplish so much in terms of promoting small business reform in today’s highly complex society. Each company needs to adopt strategies appropriate to its sector and tailored to its own circumstances. Corporate social responsibility has a significant role to play in such private sector-driven reforms.
CSR is, in fact, an essential element of business strategy for today’s SMEs. In some ways, SMEs are in a better position than large corporations to reap tangible benefits from socially responsible business practices. That said, SMEs also face unique challenges rooted in local conditions and the fundamental constraints surrounding small businesses.
Of course, “SME” is a broad category, encompassing relatively large organizations with the resources to adopt big-business approaches to CSR – appointing full-time personnel to dedicated CSR units, publishing CSR reports detailing their many initiatives, and so forth.
According to Andrea Newell in his article “Corporate Social Responsibility for Small Business”, CSR works for large and small organizations alike. There are a number of DON’TS that must be effectively followed through.
- Don’t try to beat the system or cheat. Take a shortcut or fabricate results and anyone finds out – your reputation takes a beating and there is no shortcut out of that.
- Don’t put in minimum effort and call it CSR. Recycling a few boxes doesn’t make you carbon neutral. It’s ok to start with small changes — just report their results honestly and grow from there.
- Don’t simply give money away without a plan. CSR does not equal philanthropy. It’s a long-term strategy, not a one-time financial donation.
- Don’t spend so much time writing a plan, that no one gets a chance to follow it. Formulate some simple strategies and implement them in a timely manner. CSR is too complicated. It doesn’t have to be.
- Don’t expect a direct financial ROI on CSR. Some returns are not easily measurable, and as a long-term strategy, some CSR initiatives might not show results immediately.
- Don’t base the success or failure of your program solely on that.
- Don’t communicate your CSR efforts in a weak or preachy way, either to your employees or your customers. This will undercut your sincerity and passion about your CSR initiatives. Neither your employees nor your customers will buy it. If you craft a solid CSR program, do it justice by communicating it confidently and clearly.
- Don’t give individuals responsibility without authority. This holds true in all aspects of a business.
- Don’t treat CSR as a separate company initiative. Incorporate it into all aspects of your company’s philosophy.
- Don’t measure without action. Measurement is a good first step. Then work toward improvement.
- CSR is expensive. Everyone is tightening their belts, and no one expects small companies to spend a large amount on fledgeling CSR efforts. Make small affordable changes. Some efforts, like turning down the thermostat, turning off the lights and recycling, can actually save companies money with a little effort and minimal financial output.
The rest of the list can be summed up like this: start small, be honest, and grow from there.
CSR is a fad or marketing gimmick? Studies and discussion this year alone show us that it’s not.
Many large companies have gotten a lot of press for their CSR efforts and some have gotten even more for their high-profile failures, so it’s easy to see why small companies might feel daunted by the idea of starting their own programs.
Many small businesses might feel that CSR isn’t necessary for them to do business, but studies and reports show that customers of businesses large and small care about CSR. In addition, many large companies are requiring their vendors to meet certain greenhouse gas measurement requirements as the price of doing business. Many small businesses might find CSR thrust upon them sooner than they think. It’s always better to craft your own program that is in line with your business and its strengths and values than to have it suddenly forced on you.
Essentially, the same principles hold true for companies large and small. Plan CSR around your core business values, integrate it into all parts of your business, implement what makes sense for your company in terms of effort and investment, get your employees on board and communicate honestly with your customers. In other words – get started and do your best, and your employees and customers will respect that.
This expose is adapted from articles by Kageyama Makoya and Andrea Newell.
