SME too! Why SMEs Must Sign up to CRS

Frank Vidal

Dean of the Audencia Group.

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André Sobczak

Associate Dean for Research, Audencia Group, Nantes, France

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    Frank Vidal and André Sobczak assess a study by Audencia Nantes that suggests that small companies are ignoring the benefits of corporate responsibility initiatives.

    Over the last decade, corporate social responsibility (CSR) has moved from being a fad or fashion to a top priority for business leaders across the world. An increasing number of large companies now no longer see the integration of social and environmental challenges into their core strategies and management practices as an additional burden but as a strong driver of innovation and new business models.

    This good news for the planet and its people also seems to be a guarantee of firms’ long-term economic health. Some business schools, in particular those committed to the United Nations’ Principles of Responsible Management Education (PRME),have actively supported this development through their research, teaching and executive education. However, one large part of the business world seems to be missing the point.

    Research shows that small and medium-sized enterprises (SMEs) not only lack knowledge of CSR but are also very sceptical about a concept apparently invented by and for multinational companies and the business schools that co-operate closely with them. Many leaders of SMEs see CSR at best as a marketing tool that far from corresponds to the real practices of multinationals and, at worst, as a new constraint imposed by those multinationals on their suppliers and subcontractors. However, it would be a pity to exclude these companies from the CSR movement. The majority of people work not in multinationals but in medium, small and very small companies.

    If CSR is to have a lasting effect on the planet and its people, those with workforces of hundreds (or even tens) rather than thousands need to be on board. If, at the level of individual SMEs, CSR strengthens a company’s economic success, it seems important not to exclude them from this opportunity.

    Business schools have a major responsibility to adapt their own activities and discourse towards SMEs in order to change SMEs’ perception of CSR and to support them in developing appropriate strategies in the field. Choosing a CSR approach in line with the size and culture our smaller firms can allow responsible actions to have a real effect on profits.

    A study carried out by the CSR Chair at Audencia Nantes, a business school in the west of France, backs this up. The Audencia research team linked up with the Banque de France, a bank, and the country’s network of young business leaders to assess if responsibility and profitability do indeed go hand in hand. The study confirmed that a strong and positive link does exist between CSR and the financial health of SME firms. In late 2014, in another study, Audencia asked bosses of medium, small and very small firms to give their views on CSR issues.The results speak for themselves; these business leaders are far from convinced of the value of CSR and of the positive impact it can have on their financial results.

    For the full article, you can view the PDF or listen to the podcast.

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