Academic journal article Academy of Entrepreneurship Journal

'Social Responsibility and the Small Business

Academic journal article Academy of Entrepreneurship Journal

'Social Responsibility and the Small Business

Article excerpt

INTRODUCTION

In the current business environment, 99.7% of United States businesses have fewer than 500 employees. Approximately sixty-seven percent have less than ten. (U.S. Census, 2007) These businesses make up fifty one percent of gross domestic product (GDP), and account for nearly 50% of U.S. employment (U.S. Census, 2007; U.S. Small Business Administration office of Advocacy, 2007). Social Responsibility (SR) has been given little attention as to the extent to which small businesses embrace the idea (Cambra-Fierro, J., Hart, S and Polo Redondo, Y, 2008; Dean, T., Brown, R., and Bamford, C., 1998). The literature has been dominated by large multinational firms (Williamson, D., Lynch-Wood, D., and Ramsay, J., 2006).

Studies on small and medium businesses in Western Europe have provided some focus in the area of social responsibility. The focus has been on drivers and determinants of SR, (Darnall, N., Henriques, I, & Sadorsky, P., 2009) resource availability, (Aragon-Correa, J, Hurtado-Torres, N. Sharma, S., and Garcia-Morales, V., 2008), and how it is managed (Jenkins, H., 2006). These studies suggest that small and medium businesses react to SR in different ways. A summary of these differences are as follows:

At large companies SR consists of a formal initiative involving reports and third party audits commonly beyond the capabilities of small business (Fassin, Y., 2008). The flat structure of small businesses results in fewer people being involved in decisions and the personal values of CEO/Owners they become the drivers of SR (Jenkins, 2006).

SR in small businesses tend to be driven more by concern for employees and their families than by external stakeholders (Darnall, et al., 2009; Murillo & Lozano, 2006).

Typically, they have fewer resources--especially financial, and also fewer trained personnel and time to devote to SR matters. This makes understanding and operationalizing SR more difficult (Aragon-Correa et al, 2008; Lepoutre & Heene, 2006).

Fewer studies have been carried out in the U.S., and they have focused on environmental management programs (Cordano, Marshall, and Silverman, 2009; Marshall, Cordano, & Silverman, 2005), the degree of the owner's and manager's commitment, leadership, and support for the community (Besser, 1999; Besser and Miller, 2004). There have been a few empirical studies that have explored the role of owner/manager and their beliefs in adopting SR (Marshall et al, 2005; Murillo & Lozano, 2006; Quin, 1997).

STUDY METHOD

Semi-structured interviews were the primary method for this study. Consequently, the research followed the recommended approach by Corbin and Strauss for this type of study (Corbin and Strauss, 2008). This involved a recommended method for data collection and analysis of using a rigorous method of open, axial, and selective coding of interview transcripts. Constant comparison of codes across interviews helped tease out themes and isolate findings.

SAMPLE

Twenty-six CEO/owners (or otherwise primary decision makers) of small or medium sized, privately owned manufacturing companies participated in the study. Half of the sample represented firms who had publically proclaimed a commitment to CSR. These were identified from media reports, the CSRWire (www.csrwire.com) or by online searches. The other half of the sample consisted of CEO/owners of manufacturing firms whose CSR orientation was unknown to us. These participants were sourced using the principle researcher's professional network and through association lists (www.bcorporation.net). We also asked respondents to recommend other prospective interviewees. All companies represented in the study were located in the US, involved in manufacturing activities and not publically traded. Hoovers and Reference USA databases were checked to determine the total number of employees, the ownership structure, and contact information for the owner or CEO. …

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