The role and dynamics of CSR in Swiss SMEs.

Corporate Social Responsibility (CSR) frameworks worldwide have been dominated by the concerns and needs of large companies whose highly formalised CSR management systems often failed in previous years to prevent anti-social and illegal behaviour. Thus, there is growing interest in informal processes, relationships and organisational cultures – and corresponding business models – that embed and exemplify CSR. It is proposed that detailed study of Small and Medium-sized Enterprises (SMEs) with informal and non-systematic approaches to CSR can shed light on the process and effect of cultural embedding of CSR values. This research focuses on a sample of SMEs in Switzerland to investigate the “raison d’etre” that make up such informal CSR. Firstly, using a stakeholder map methodology, it explored the current state of CSR in Switzerland and identified SMEs as being the most significant CSR stakeholders. A network analysis resulting in specific parameters confirmed the importance of SMEs and their pursuit of an unconventionally informal and idiosyncratic CSR core logic. By method of interviewing 40 SME owner-managers, the next research step examined in more detail such dynamics and patterns among Swiss small business CSR. A Delphi process aggregated the results into an overarching small business model for CSR – L’EPOQuE. This model has six key features: 1) a visionary Leadership approach, where the leader “is” the business and vice versa, 2) long-term and trust-based relations to Employees, 3) niche Products, 4) driven by networks and informal, flat Organisations, 5) by efficient Quality, and 6) by Education to establish ethics during work socialisation. A further Delphi process explored the features’ consistency with criteria of conventional models. It confirmed the six key features and encouraged at the same time slight modifications with regard to nomenclature of sub-features resulting in L’EPOQuE 2.0. This heightened the power of this CSR-driven approach to be a new template for informal set-ups, and niches. It emerges from the difficulties some mainstream business models have to satisfy the needs of business at the nexus of culture and economic rationale. The sixth section explored, in four focus group discussions, motives inherent to the role and dynamics of CSR in Swiss small firms. The results support earlier findings and confirm the intrinsic motivation in Swiss SMEs coming from their philosophy of stewardship and aspiration and ambition of excellent craftsmanship. Accordingly, Swiss SMEs are particularly looking at social and labour issues of CSR. This contrasts with the approach of Multinational Enterprises (MNEs), which are primarily interested in environmental aspects and assume a financial benefit from their engagement. This raises two arguments in CSR: one is that companies evidently can be competitive in CSR (and economically) with a flexible, ethics-based approach, which contradicts the exclusivity and predominance of the “business approach” and its formalised systems aiming at profit-maximisation. This suggests that CSR can be intrinsic to the business or extrinsic, so that, secondly, the question arises under what circumstances one is to be preferred over the other and what the cost of a mismatch would be. Ultimately, a comparative overview over 15 different countries to explore explicit vs. implicit CSR (using the categories of intent, codification, motives, and language) revealed a universally supra-national CSR approach in SMEs from Switzerland and elsewhere. Thus, it is concluded that SME culture and an informal CSR core logic are strongly formative and supersede forces of market economies, nationally cultural patterns, and language. Hence, CSR classifications of countries by their market system, as found in the comparative capitalism literature, do not match the practices in SMEs as they mirror neither their business nor CSR. This raises again questions on the universality and generalisability of unmediated, explicit management concepts, especially in the context of small firms. At the same time, this confirms L’EPOQuE 2.0 as spanning across business models, mirroring culturally independent key features of SME businesses. In other words, there is a much bigger portion of “SME” than “Switzerland” in L’EPOQuE 2.0.