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Abstract
This study adopts a strategic approach to corporate social responsibility (CSR), puts forward a model of CSR activities that enhance small and medium enterprises (SMEs) growth, and argues that by aligning CSR activities with the competitive strategy of the firm, SMEs enhance firm growth. We test this model using multinomial logistic analysis and data from a survey with 211 U.K.‐based SMEs. We find that CSR activities related to the community enhance firm growth for all SMEs, but especially for firms adopting a cost leadership strategy, and that CSR activities related to the workforce are crucial to avoid sales decline, especially for SMEs adopting a differentiation or a quality‐driven strategy. We also find that environment‐related CSR activities are not beneficial for SMEs' growth and that human rights–related CSR activities slow growth for firms adopting a differentiation or a quality‐driven strategy. Finally, we put forward managerial and policy recommendations.
* Part of the data used within this paper was accessed through the Centre for Employment, Competitiveness and Growth at the University of Kent, Canterbury, UK. The views and opinions expressed within this paper are not necessarily those of the data supplier.
* Part of the data used within this paper was accessed through the Centre for Employment, Competitiveness and Growth at the University of Kent, Canterbury, UK. The views and opinions expressed within this paper are not necessarily those of the data supplier.
Notes
* Part of the data used within this paper was accessed through the Centre for Employment, Competitiveness and Growth at the University of Kent, Canterbury, UK. The views and opinions expressed within this paper are not necessarily those of the data supplier.
20. In this paper, we use the EU's definition of SMEs, as in Appendix 1.
21. For further discussion of comparison of proportions tests, see Cumming and Zambelli (Citation2010).
22. We calculate the cumulative proportions by database and the differences between these proportions. We then identify the maximum difference between our sample's cumulative proportions and the BISs (Citation2010) cumulative proportions and compare it to the critical value of D for the Kolmogorov–Smirnov test. As our result is smaller than the critical value, we cannot reject the null hypothesis. For further discussion of the Kolmogorov–Smirnov test, see Cohen and Holliday (Citation1996).
23. We merged into one the two decline categories suggested by OECD (between 5 and 20 percent decline and more than 20 percent decline, respectively) because of the very few observations we had in each of these categories.
24. High growth firms are defined as “all enterprises with average annualized growth greater than 20 percent per annum, over a three‐year period. Growth can be measured by the number of employees or by turnover” (Eurostat‐OECD Citation2007, p. 61).
25. The remaining SMEs operate in Agriculture, but there is no need for an additional dummy.
26. We refer here to the relative log odds of declining rather than growing fast, stagnating rather than growing fast or growing slow than growing fast, as specified.
27. We calculate the cumulative proportions by database and the differences between these proportions. We then identify the maximum difference between our sample's cumulative proportions and the BIS (Citation2010)'s cumulative proportions and compare it to the critical value of D for the Kolmogorov–Smirnov test. As our result is smaller than the critical value, we cannot reject the null hypothesis. For further discussion of the Kolmogorov–Smirnov test, see Cohen and Holliday (Citation1996).
Additional information
Notes on contributors
Carmen Stoian
Carmen Stoian is lecturer in International Business in the Kent Business School at the University of Kent.
Mark Gilman
Mark Gilman is senior lecturer in Human Resource Management in the Kent Business School at the University of Kent.