Corporate Social Responsibility Practices and Company Size among Global Manufacturers

INTRODUCTION This study examines the CSR activities of SMEs (small- and medium-sized enterprises) in several countries. Several past studies examine the motivation and subsequent CSR activities of larger firms. A developing body of literature considers the role of CSR at smaller firms. SMEs are an important segment to examine because in some countries their role in employment and the economy is significant. This study provides a unique perspective on the actual practices of companies in several countries. The study provides insight useful to both practitioners and policymakers. Practitioners can understand the role of CSR and its value even if it occurs outside the more formal corporate framework in evidence at larger firms. Policymakers focusing on CSR activities that benefit society need to first understand what SMEs are currently doing before developing additional regulation or incentives for them. LITERATURE REVIEW The corporate social responsibility literature is large and growing and includes a broad range of issues and activities, even though there is no one set definition of what constitutes CSR. Any observed differences in CSR for SMEs and larger firms could result from differences related to the motivation and benefits as perceived by the corporation or constraints faced by one firm size as compared to another. Examining cross-cultural differences in addition to firm size is also important. Regulations or cultural differences might create differences even among companies of similar size. There is a body of literature mapping the basic activities or concerns of companies that practice CSR. There are several aspects of corporate activity examined by Egri and Ralston (2008) who provide a comprehensive review of corporate responsibility research from 19982007. Of the 321 articles reviewed, the largest number (37%) focused on ethics, followed by governance (25%), environmental (19%) and CSR (18%). Furthermore, the majority of the articles surveyed focused on one country (56%), with the U.S. being the country most frequently studied, followed by China; but overall, most of the countries included in those studied were economically well developed. Our study examined investments in CSR activities of various sized firms from North America, Europe, Asia, Australia, and Africa. Some of the countries included are those frequently overlooked by the CSR literature, including Albania, Hungary, Nigeria, Macedonia, Fiji and Poland. Furthermore, environmentally related issues such as waste reduction, recycling, and pollution prevention are included. According to Tilley (2000), "environment as an ethical issue has been rarely investigated," when it comes to small firms. The literature as it relates to firm size includes both theoretical, case studies and empirical studies of a particular industry or country. Some theoretical research lacks an empirical test while other studies use case studies or a limited data set in either one industry or country to examine the issues. The focus of this study is unique in its focus on a broad set of companies in different industries and countries. Companies were asked a series of questions about their practices instead of whether or not they implemented CSR. This is important since smaller firms may engage in CSR activities without first developing the kinds of formal organization structures larger companies use to develop and implement it. The motivation to implement CSR activities and practices may also be different at small as compared to larger firms, so focusing on the outcomes is relevant. Smaller firms may engage in CSR for very different reasons than larger firms. Jenkins (2004) considered CSR theory and possible differences for SMEs and larger firms. He concludes that the less formal structures at smaller firms mean CSR is often dependent on the owner or manger. Fassini (2008) indicated large companies have a formal process for reporting and implementing CSR while smaller firms have a less formal process. …