CSR in SMEs – Intrinsically Driven?

In my other blog concerning social enterprise, I mention my belief that businesses are developed by their founders to initially fill a void and serve the people in one way or another. In the case of Apple, Steve Jobs and Steve Wozniac wanted to bring the power of computers to the everyday person. In the case of Unilever, William Lever sold soap to save lives. In the case of Warby Parker, the four founders sought to create boutique-quality eyewear at a revolutionary price and ultimately strive to give everyone the right to see.

When companies are small, and as is the case for many SMEs in that they are often managed by their owners, the founder vision is typically at the heart of everyday decision making. SMEs typically have a more intimate connection with the community in which they operate because of the innate ties they have with their employees, partners, and suppliers who many times are based in the same community. This intimate connection fosters a more socially responsible enterprise in itself, without much conscious effort in doing so, simply due to the fact that so many personal connections are present and they are already so involved.

One question that was brought up in class was who should SMEs be responsible to?

Well like every functional business, SMEs are ultimately responsible to their stakeholders. The case could be made that SMEs have less impact than large companies, and while yes this is theoretically true, collectively SMEs have considerably more impact than bigger players. The case also could be made that SMEs would carry a heavier financial burden in practicing socially responsible measures, but time and time again SMEs have shown that socially responsible practice creates a considerable competitive advantage in todays marketplace. Well thought out measures and strong strategic implementation can carry heavy weight the success of an SME, as the key to success can arguably be sustainability.

So in trying to see what drives SMEs to take on more socially responsible practices, a number of things make the list. Stipulations from larger corporations for their supply chain, customer and societal expectations, and then the aforementioned founder influence and competitive advantage derived from CSR all can be seen as drivers.

The scale in which SMEs might be able to impact many not be of gargantuan size as their larger counterparts, but they indeed are capable of doing some good. Just like any business, conscious efforts in achieving sustainable excellence pay for themselves in hedging risk and driving business opportunities. For these reasons alone, CSR should be at the helm of SME business operations. If not enough, the proximity of SMEs to many of their stakeholders should almost intrinsically drive their responsibility, and oftentimes does.

 

Comments Off on CSR in SMEs – Intrinsically Driven? / 23 Apr 2014 por Jacob Jon Pallone
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Loving a Job = Success

Looking for a job? Nowadays, most of us aim at working in a popular multinational corporations which is well known by our family members, friends, and colleagues… But is that our best choice or should we consider other options?

Small Medium Enterprises are sometimes underestimated due to the number of workers they enclose. Nonetheless, they offer a wide range of positive features that one must consider when searching for a job. Flexibility is a characteristic of SMEs which enables the company to act and response quickly to any external or internal challenge. But not only this, employees´ responsibilities can also be flexible allowing them to expand beyond his or her own job duties. Hence,  giving them the possibility to to grow their potential while positively contributing to the  prosperity of the business.

In addition, the structure of SMEs allows team work.  It is not rare that in big companies two people working in different departments do not ever meet while working for the business. In small medium enterprises,  the story seems completely different. Team work is encouraged and the engagement of the employees is advocated. It is also reckoned that such enterprises tend to take care of their employees while appraising their performances. The reason why, is merely because the success of the enterprise is to great extent based on the personal success of its workers. Therefore, employees could be seen as the greatest assets, as mentioned by Mulcahy.

Only with the dedication and determination of the  employees, the enterprise can succeed and generate value not only for the shareholders but for the rest of parties involved. Therefore, it is essential to provide an environment that takes under consideration the well being of the employees. This does not mean having a confortable physical space, but a work environment where the employees are actively asked about their work load and their flexibility of their schedules.

Considering the social aspects is or should be the responsibility of a business and more commonly this is  not only being addressed in Small medium enterprises but fostered.

So, have you changed your mind?

 

Comments Off on Loving a Job = Success / 23 Apr 2014 por inescamarero
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Energy Efficiency Directive: A success or a failure?

The EU ETS is the main European scheme in charge of the limitation of carbon emissions for over 11,000 installations accounting for almost half of the EU emissions, which has been seen, recently, poor in its actions as a result of the interaction of this policy tool with the complementary policies such as the ones addressing renewable energy deployment or energy efficiency. This is why when thinking about energy efficiency policies should we ask ourselves:  Are we on the correct direction? What is interaction with the other policies?

During the 90s European countries decided to make a commitment towards global climate challenges under the UNFCCC, adopting the Kyoto Protocol, which targeted GHG emissions reductions, but it was quickly acknowledged that a transition towards an efficient and low-carbon energy system was needed. In 2005, the Emissions Trading System (ETS) was launched, setting a price to carbon emissions, as the main tool to achieve emissions reductions in the covered sectors towards meeting the Kyoto Protocol for the period 2008-2012. Early in 2009 the 2020 targets were set, aiming towards a economy-wide 20% reduction of GHG emissions relative to 1990 levels (setting most of the burden on the EU ETS covered sectors), an increase in the renewable energy supply of 20% and also an improvement of energy efficiency of 20%, i.e., the 20, 20, 20 goals for 2020. However, unlike the first two objectives, efficiency was not translated into binding legislation until 2012, which delayed action making it more difficult to reach the energy efficiency objectives.

Energy efficiency is one of the most cost-effective ways to enhance security of energy supply by reducing its demand, and to reduce emissions of greenhouse gases and other pollutants. Despite all this positive characteristics it seems that the energy efficiency target will be hard to meet by 2020. EU Member States, failed on looking towards the great benefits from the correct implementation of this policy, which could be summarized in a reduction of the amount of energy imports of 200 billion € annually could be achieved by 2020, or the creation of new green collar jobs and business opportunities could arise.

In an attempt to address these problems, in 2012, a new framework with binding goals was established: the Energy Efficiency Directive, which ensures the achievement of the Union’s 20% target. However there was lack of agreement on targets at national levels and as a result the target is only binding at the EU level. On the bright side there was agreement upon binding sectoral measures, with, e.g., higher impact in the buildings sector (one of the highest emitting sectors, together with transport).

It was stated that all EU Members would be required to have a more efficient use of energy through all the stages of the energy chain (from transformation to consumption). As an example energy companies will be requested to reduce energy sales by 1.5% every year among their customers, compensated by an improvement in the technology used in the heating system, installing double glass windows or insulating roofs.

Also with this new directive, each individual nation will have to draw an energy efficiency roadmap target to make the whole building sector more efficient by 2050. On the other hand they will have to achieve energy savings during the obligation period (January 2014- December 2020) assuring energy efficiency implementation in households, industries and transport sector.

Buildings owned by the public sector, to set the example, will have to renovate a 3% of the building owned by the government of each country, to promote energy efficiency in society.

In additions to this each Member State will have until the 30^th April 2013 to present national target, running the risk that if the European Commission finds it insufficient to meet the 2020 goals they can ask the to redefine them.

This directive will have the aim to be revised during the first semester of 2014, but if the Commissions considers that the progress made are inexistent or too small, other further and harsher legislation will be implemented for the EU members.

Another big issue that impedes the correct implementation of Energy Efficiency is the barriers that it confronts. One of these barriers is the lack of awareness and access to information.  Accessing this information is too expensive for the governments, what makes countries see that initial investment in energy efficiency, too costly for solutions at such a long term. Although as the main problem to achieve energy efficiency is the high financial restrictions, a correct time horizon should help to achieve this goal (area in which they are lacking to make the correct movements to move towards this path). Finally also the risks that investors face are extremely high, having uncertainty in when the payback periods will start and if it will start.

The main difficulty that energy efficiency is facing towards its effective implementation is the boundaries between the European Directive and the national laws applied by Member States, characterized by their heterogeneous positions with respect to energy efficiency, as some have a more proactive attitudes and others only comply with mandatory measures. If a degree of adjustment and integration could be achieved it would finally translate to a better situation of European Energy Efficiency policy.

Furthermore, as noted earlier, the Energy Efficiency Directive seems to be misaligned with the 20% emission reduction goal economy-wide relative to 1990, and notably when it comes to the EU ETS covering half of the total emissions and its 21% reduction goal relative to 2005. Currently the EU ETS has a surplus of allowances and the EC foresees that such surplus will continue beyond 2020. If fully implemented, the Energy Efficiency Directive would indirectly further increase the surplus of allowances under the EU ETS by 2020, further undermining the price signal which is already too low as a result of the economic crisis and the deployment of renewable energy to achieve the Renewable Energy goals. This would be the case unless the EU manages to create credibility on its cap and trade or, at least, puts forward the structural changes that would get the market on the right tack that shifts the short-term prevailing focus towards mid- to long-term horizons.

 

Thus should we really in this new directive? Should we really on this alignment between the EU ETS and Energy Efficiency directive to stop the increase of the surplus of allowances? If we formed part of the EU ETS, maybe this should be some question that we should be asking ourselves when refereeing to energy efficiency. Because at the end of the match what do we want to reach? A victory from both sides (EU ETS and Energy Efficiency Directive) on their targets? Or loss because of shortage of coordinate steps?

Reference:

• European Commission, Energy Efficiency Directive. Available at: http://ec.europa.eu/energy/efficiency/eed/eed_en.htm
• Euractiv (2012), Parliament gives final green light to energy efficiency directive. Available at:http://www.euractiv.com/energy-efficiency/european-parliament-gives-final-news-514732
• Energy Efficiency Watch. Good practice ways out of energy debt. Available at:http: //www.energy-efficiency-watch.org/fileadmin/eew_documents/Documents/EEW2/Good_practice_ways_out_of_energy_debt_BROCHURE.pdf

Comments Off on Energy Efficiency Directive: A success or a failure? / 23 Apr 2014 por mariagutierrez
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CSR in SMEs

Initiatives in favour of the workforce as a win-win option

SMEs, Small and Medium Enterprises. Despite their name, they play a very influential role in the economy and have a relevant impact as they represent the more widespread form of enterprise in the European Union. According to the latest EU annual report on SMEs, in 2012 there were about 20 million European companies in this category: they provided employment to about 87 million people – being two thirds of the total jobs in Europe for that year – and delivered almost 60% “of the gross value added generated by the private, non-financial economy in Europe during 2012”.

What is the role they can play in sustainability and Corporate Social Responsibility (CSR) initiatives?

An important factor to highlight about SMEs is the characteristics differentiating them from large corporations. Generally speaking, large companies might benefit of scale economies, be more structured, and have more resources, to name a few. On the other hand, being smaller it can mean to be more agile and flexible – having fewer rules, less bureaucracy and more efficiency – to be closer to the territory and to the people, as well as to enable more personal relationships in the workplace.

Due to these features – and to the fact that CSR practices not necessarily need complex or costly programmes – it implies that the important role that SMEs play economically can also be translated into a strong potential to leverage sustainability – as well as grant a return (in terms of both intangible and tangible benefits) to the company itself.

In this blogpost I would like to focus on CSR actions tuned in favor of the workforce: even simple and straightforward initiatives can have a relevant positive impact for both parties. How?

A SME could improve the working conditions and the atmosphere of the workplace, for instance providing time and space to relax or rest, parental benefits, flexibility in the working hours (technology facilitates this), possibility to work from home and to find the right work/life balance.

Then it might be easier for a SME to be open to the dialogue, call the employees to participation and give them a voice: this process can provide mutual valuable information. For a SME it could also be easier to empower employees and give them trust, make them feel part of the company. Promoting shared values to stimulate employees and drive their actions could be another big driver to have the workforce aligned with the company’s vision and mission.

It is interesting to note that these processes – opposite than in larger corporations where CSR is developed with formal structures and sets of procedures – are often informal and more intuitive in SMEs.

And what are the results of implementing these actions? On one side, it can clearly improve the employees’ job satisfaction but also increase their creativity and innovation. In exchange, the company gains from the increased motivation, commitment and engagement of its workforce, which becomes more loyal. Passionate and motivated employees who share the company’s values can become also the first and free-of-cost advocates of the company’s products / services (advocacy is an important and growing trend in the purchasing patterns, driven by the social media and eased by the digital interconnectivity).

With simple and successful CSR initiatives a SME over time can attract the best talent, create a stronger bond and increase retention, lowering the employee turnover (which is a big big issue in China at now for instance). A fair remuneration is obviously important but not enough on its own.

As a result, there is an increase in employee productivity as well as in competitiveness of the company. CSR addressed to the employees is a win-win option and the agile structure of a SME might even make it easier to implement it.

Comments Off on CSR in SMEs / 23 Apr 2014 por guidopreti
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SMEs and Job Creation in Oman

Oman has seen astonishing growth since the Renaissance in 1970. In terms of economic growth, Oman’s GDP has grown to over $80 billion annually thanks in large part to oil and gas revenues (approximately 70% of GDP). While the steady flow of income has given the government the means to invest in public services and infrastructure, other developmental indicators, such employment, have not been advancing at the same rate. Big business came with the promise of revenues and jobs, but by its very nature ‘big business’ is limited in its ability to fulfil the second half of that promise. Large industries are more efficient, and focus on technology for the large part of their activities, and thus tend to require less human resources, leaving them restricted and incapable of meeting the growing needs for jobs. Moreover, the jobs that are created require sophisticated skills, as opposed employment opportunities for high-school and college graduates entering the workforce.

The issue of youth unemployment in particular became one of contention during the Arab Spring movements. In 2011 a wave of protests broke out in the country’s two largest cities, the capital Muscat, and industrial hub Sohar. Calling primarily for jobs, better wages, lower living costs, and a crack down on corruption, the protests lasted over a period of two months. In order to maintain legitimacy, the government has made the government place job creation firmly on the agenda for coming years (Logan, 2012).

The question is, if big business has been unable to provide, and the public sector can only create so many jobs, what is the future for the Omani job market?

In high income countries, SMEs represent a driving force for economic growth, bringing in approximately 50% of GDP, and providing 80% of total employment. In Oman these figures are significantly lower, ranging from 13-14% of GDP just 15-20% of total workforce (Muscat Daily, 2013).
The government recently recognised the need to channel funds into the SME sector, which though weak represents 90% of all private sector employment as the majority are ‘micro-enterprises’ (less than 5 employees). Currently, the growth of these micro-enterprises is limited as a result of lack of access to credit, due to high interest rates, and unrealistic collateral requirements. In 2013, the government  created a new fund specifically for SMEs, and the Central Bank of Oman (CBO) mandated all banks to allocate 5% of credit to SMEs by the end of 2014 (Muscat Daily, 2013).

In addition to capital, SMEs also require support through business and management skills training, skills which have proven to be make or break for many SMEs. In addition to a funding role, big businesses has the potential to accelerate the development of SMEs through knowledge and skills transfer, for the mutual benefit of all. As the CEO of Oman Oil, one of the countries largest oil companies, rightly identified “job creators will be our subcontractors and the large number of SMEs who will be their subcontractors”. Furthermore  it reduces government pressure on large industries to create jobs that are unnecessary. Finally, a vibrant and healthy community, and business environment  is necessary to ensure the successful growth all businesses, regardless of size.

Today, Oman’s economy heavily relies on revenues from fossil fuels, and as the world moves towards a low carbon economy (albeit slowly), diversification of economy is necessary to safeguard the country’s future, and contend with its growing population. Oman has an estimated population of 3.1 million people (2011 census), which is predicted to reach 5 million by 2050. With youth unemployment a controversial issue, the needs of the population extend further than money, and meaningful employment, and stable income is necessary for the country to advance on other developmental indicators. SMEs represent a potential for economic growth, and job creation that must be pursued, and that can only be accomplished through collaboration.

 

Sources:

Joseph Logan (2012) Oman protests suggest jobs, reforms fall short. Retrieved 21/04/2014 from:

http://www.reuters.com/article/2012/07/04/oman-crackdown-idUSL5E8HLB2620120704

Muscat Daily Online (Dec 2013) SMEs, the engines of economic growth
http://www.muscatdaily.com/Archive/Business/SMEs-the-engines-of-economic-growth-2rl4

Parambi, Raphael (Feb 2014) SME development in Oman: Working with the mighty. Retrieved 22/04/2014 from:
http://main.omanobserver.om/?p=55164

Comments Off on SMEs and Job Creation in Oman / 23 Apr 2014 por asyamarhubi
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The Small Ingredient of The Future

The multinational companies: a vast majority of us would certainly think that working on a company of this kind could satisfy all our working needs, but haven’t you ever thought about other alternatives? What about SMEs?

The traditional business, the massive machine that tries to inundate the whole market and have the ability to produce continuous profits, is normally seen as the most profitable and proactive in changes. Is this totally true?

SMEs are starting to be the alternative, the flavor that sticks after a tasty dish of food. They have the capacity of being innovative, creative, practical, profitable and also able to have a certain harmony with the society and the environment. They are able to give voice to solutions that society demands, or doesn’t even know that they are demanding, which that big companies are not even able to hear or to see before it becomes a problem.

source: www.entrepreneur.com

Small sometimes is seen as a weakness, but why not turning it the other way round? Small companies are able to make movement much quicker than big once. If there is a certain problem with the product that they offer or the perception that customers have of the product, they are able to change the path much quicker because they are lighter. One of this movements in a big company would take ages to be made, having too much overweight to achieve the goal on time.

SMEs are innovation, creativity, inspiration and proactiveness. They feed day after day with this basic ingredients, as if they don’t have them on their daily activities they won’t be able to push to create that gap in the business world that they want to occupy.

What about CSR? Are this small business able to introduce it in their business concept? Many small companies apply CSR into the core business without even knowing what this means, because it forms part of their name, of their essence and their reason. As companies are much smaller, it much easier to achieve the objective that has been labeled under the CSR concept. Focus is easier to maintain, without running the risk of losing it along the path. They feed people all around the world!! SMEs represent more than 90% of the business that exist in developing countries!! They are certainly the future.

SMEs are the actual providers of employment in our unstable society. The massive problem of unemployment has more possibilities of being solved than with this concept, and giving the employee a reason for committing as well as meaningful job to perform day after day and the possibility of increasing their skills, sharing a same area of values that helps them achieve together the final goal.

source: globalapprenticeship.com

Therefore lets try to make SMEs the future…the ingredient? LOVE!! Make employees, consumer, suppliers, the environment and the shareholders LOVE your brand, your concepts and your ideas, and instead of making it “YOUR’S” make it “OUR’S”…if we manage this we will be positively influencing all of our stakeholders, making a better society and achieving our final goal with a 100% success.

Have you changed your mind? Where do you want to work know?

 

Comments Off on The Small Ingredient of The Future / 23 Apr 2014 por mariagutierrez
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CSR in BILBAO WATER COMMITTEE

FIRST CSR REPORT 2011

Bilbao Water Committee is a company stablished in Bilbao in 1997, including the 43 municipalities of Bizkaia in the Basque Country (Spain). This company provides water to this region including the whole process and the cleaning activities that it needed in order to supply this area with a high quality water. In addition, they manage the sanitation of water, the spill of industrial waste and the different relationship with the municipalities and companies involved in the process.

Taking into account the activities of this company, they are cautiously aware of the environmental damage and they tools to protect the environment as a way of making business. However, now in a proactive way they are trying to move to a social responsibility model. For that, in 2011 the company showed the first CSR Report. As a first model, they shared with the community the most important figures in order to achieve the transparency with the society. But, the mainly goal that they wanted to achieve is the efficiency and the correct use of water, looking for ways to reduce the waste water.

The CSR activity of Bilbao Water Committee is based on different activities for the community sharing good environmental practices, activities to reduce the bad use of water and different types of visits to the cleaning plants of the company. For achieve this goals, they project a strategy plan with some targets with indicators in order to measure the results of these activities.

Furthermore, they organized some conferences about water management to share the good skills that they have learned during these years, with other companies and government coming from other regions and countries. Bilbao Water Committee won a prize of good practices of engineering and sustainability in 2013.

Finally, I would like to comment that this company is an example of proactivity in a field that is close related with the environment but is aware of the other parts of sustainable development: society and business.

 

Comments Off on CSR in BILBAO WATER COMMITTEE / 23 Apr 2014 por guillermojoselatorre
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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.

Comments Off on Does size matter? / 23 Apr 2014 por claravalentinakupper
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Stakeholder Dialogue… practice it!

When people think about Corporate Social Responsibility (CSR) they usually relate it to big companies or multinationals, even people who work for an SME (small and medium enterprises) may do the same, without realizing that it has also to do with them. The problem is that many SMEs do not know what to do or where to start applying these practices beyond some basic actions like recycling paper or reducing electricity consumption. If you ask me I would say there is no magic answer for everybody, but you can find out what you need to through DIALOGUE.

In the context of CSR it is known as stakeholder dialogue, and you will need it for every phase of a plan, from collecting information or data, to developing the actual plan, implementing it and then measuring, controling and reporting the results. The Collective Leadership Institute developed The Dialogic Change Model, which divides the stakeholder dialogue in 4 phases:

The model requires the participation of both parties until the end, do not forget it is a dialogue, not a monologue. Engaging with your stakeholders is not easy, but dialogue helps to facilitate the process because it represents a combined effort from the beginning. Identifying the issues and possible solutions are the result of collective thinking. In order to succeed practice your communication skills, be clear and precise, explain your intentions and listen carefully to the opinion of others. Make sure to establish together shared goals and objectives, the results should be a win-win situation.

The purpose of CSR is to contribute to sustainable development, which is, I believe, the most important challenge of our times. The isolated actions of one SME may seem irrelevant, but with so many microenterprises and SMEs around the world their impact in terms of employment, GDP and pollution matters. Here is where the role of CSR gains its importance and the only way forward is by taking action, starting with stakeholder dialogue. For a small company it may sound overwhelming, nevertheless by working with the stakeholders they will not be alone. What if a big company turns out to be one of their customers or suppliers? they have the capacity to assist a smaller one in this path.

So think about your supply chain, the environment, the government, your employees, your shareholders and the community. Learn about your product or services, the impacts your activities may have and dialogue with the parts involved to understand the bigger picture, to bear in mind different approaches and to come up with innovative social, environmental and economic solutions. For an SME employees may be the most important stakeholder, but do not be afraid to widen up your scope and have meetings with others to create a space where they can commit to change. The opportunities are there, it is up to you to take advantage of them and be the one who makes the first move.

Remember that your efforts may not save the world, but at least you will be the one trying to make a difference.

Comments Off on Stakeholder Dialogue… practice it! / 23 Apr 2014 por yvonneroca
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CSR in SMEs – A Force from Within

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.

Comments Off on CSR in SMEs – A Force from Within / 22 Apr 2014 por davidthorpe
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