In my other blog concerning social enterprise, I mention my belief that businesses are developed by their founders to initially fill a void and serve the people in one way or another. In the case of Apple, Steve Jobs and Steve Wozniac wanted to bring the power of computers to the everyday person. In the case of Unilever, William Lever sold soap to save lives. In the case of Warby Parker, the four founders sought to create boutique-quality eyewear at a revolutionary price and ultimately strive to give everyone the right to see.
When companies are small, and as is the case for many SMEs in that they are often managed by their owners, the founder vision is typically at the heart of everyday decision making. SMEs typically have a more intimate connection with the community in which they operate because of the innate ties they have with their employees, partners, and suppliers who many times are based in the same community. This intimate connection fosters a more socially responsible enterprise in itself, without much conscious effort in doing so, simply due to the fact that so many personal connections are present and they are already so involved.
One question that was brought up in class was who should SMEs be responsible to?
Well like every functional business, SMEs are ultimately responsible to their stakeholders. The case could be made that SMEs have less impact than large companies, and while yes this is theoretically true, collectively SMEs have considerably more impact than bigger players. The case also could be made that SMEs would carry a heavier financial burden in practicing socially responsible measures, but time and time again SMEs have shown that socially responsible practice creates a considerable competitive advantage in todays marketplace. Well thought out measures and strong strategic implementation can carry heavy weight the success of an SME, as the key to success can arguably be sustainability.
So in trying to see what drives SMEs to take on more socially responsible practices, a number of things make the list: stipulations from larger corporations for their supply chain, customer and societal expectations, and then the aforementioned founder influence and competitive advantage derived from CSR all can be seen as drivers.
The impact SMEs might have may not be of gargantuan size as their larger counterparts, but they are indeed capable of doing some good. Just like any business, conscious efforts in achieving sustainable excellence pay for themselves in hedging risk and driving business opportunities. For these reasons alone, CSR should be at the helm of SME business operations. If not enough, the proximity of SMEs to many of their stakeholders should almost intrinsically drive their responsibility, and oftentimes does.