Never in the history of business has there been such a great deal of regulation. All businesses, no matter their size, are being held under a variety of judgmental microscopes, wielded by government regulators, hardened unforgiving unions and the socially connected service demanding public, whose opinions and attitudes towards the behaviour of corporations has never been greater.
Associated largely with multinational groups, where a paranoia-inducing media waits in the wings like a pack of hungry wolves, the trends from CSR (Corporate Social Responsibility) are beginning to trickle down to many of the world’s SMEs (small to medium enterprises), forcing their entrepreneurial owners into a state of reorganisation and community focus.
In a nutshell, corporate responsibility refers to the obligations of a firm,. There are many different definitions of CSR, but from a SME’s perspective, it should cover issues such as its carbon footprint and ethical treatment of its employees. It is also about being willing to go beyond the minimum legal requirements, where such efforts can place it among the most forward-thinking and desirable companies in the world.
An example of CSR would be how China-based Swire Beverages Ltd, which bottles Coca-Cola in the Far East, invested in water conservation measures in all of its plants. Such a decision by the company wasn’t due to a law being imposed, but simply the company’s decision alone, showing awareness of its impact on China’s growing water crisis.
CSR used in this way has been adopted by many SMEs as a strategic approach that can hold many benefits; these include a strengthened reputation for the brand and an enhanced level of trust with the key stakeholders of the business. The majority of SMEs are run by their founders; this enables them to be more personal. In a lot of instances, these business owners become champions for their local community.
Recently, the highly successful property portal Zoopla hit the headlines by deciding to pull out of its £5 million Premier League football club sponsorship deal early. West Bromwich football club lost the sponsorship of the portal, after one of their top players celebrated a goal with an anti-Semitic gesture. Little did the striker realise that Alex Chesterman, the founder of Zoopla, was in fact Jewish. In spite of the negative circumstances that surrounded this incident, it gave Zoopla a somewhat ironically positive nationwide amount of press.
A far more extreme and ultimately ill-fated case, surrounded Aaron Feuerstein, the CEO of Malden Mills in Massachusetts. Unrelentingly, after a fire destroyed their factory, the CEO kept paying the salaries of his workers while their new factory was being built. Regrettably, this gracious decision left the company bankrupt. Such a feat reveals the depth of commitment that can exist, not only for the employees, but also for the local community.
The founders of SMEs have a great opportunity to learn from the failings of the larger firms whose public image can be destroyed instantly by petty corner cutting. There have been numerous scandals caused by a lack of proper ethical conduct on the part of SMEs and that includes major tax evasion. Early in 2014, Prime Minister David Cameron decided to intervene and take matters more into the government’s hands. This led to keener consideration of CSR by companies that previously had not worried about ‘following the rules’. The government has strengthened requirements for revenue transparency with the introduction of such regulations as the Anti-Bribery Act 2010 that prevents many of the commonplace “backhanders” that take place behind the business curtains.
This year, the European CSR Award Scheme was announced which together with many of the media’s already successful awards, will continue to encourage business owners to use CSR to strengthen their.
