CSR and Competitiveness European SMEs - KMU Forschung Austria

CSR and Competitiveness - European SMEs’ Good Practice - Consolidated European Report 45
6 Impact of SMEs’ CSR Activities
Naturally, the question arises why private or public organisations – apart from humanitarian
considerations – should engage in Corporate Social Responsibility. Particularly for SMEs, being
characterised by more limited human and financial resources than larger enterprises there
needs to be a justification for investing time and/or money on issues not directly related to the
business objectives in the strictest sense. Succeeding in showing the relationship between the
engagement in CSR and an economically positive outcome for the company can, therefore, be
seen as an important triggering factor for convincing especially SMEs to engage in CSR.
However, as there hardly exist any specific data on the engagement of European SMEs in CSR
activities, even less statistic information regarding their effects on both, the companies and the
respective target group is available. This is not only to be attributed to the lack of central data
sources, but also (or mainly) to the fact that SMEs hardly do any monitoring of their CSR
activities (see above). Furthermore, in most of the cases it is not possible to clearly assign
business developments to individual activities as they are the result of the concerted actions
taken. Consequently, the following presentation on selected impacts focuses on qualitative
information, only supplemented by specific figures if available from individual research projects.
As regards companies’ assessment on the effects of CSR activities a differentiation between the
short and the long run has to be made. While in the short run (naturally) almost no distinct
outcome may be realised (so, for example only 15 % of small and 11% of medium-sized Polish
enterprises engaged in CSR mention to generate higher profits than those not performing such
measures (UOKiK, 2006)), in the long run an improvement of the enterprise’s competitiveness
is mentioned. The time until first results materialise is assessed to take several years. In some
case studies the company representatives estimated that it took more than five years until a
positive outcome could be related to the CSR activity. This, however, may constitute a
considerable problem taking into account the specific characteristics of SMEs and their urgent
striving for quickly seeing the effects of their business decisions. Consequently, it is not
surprising that a considerable part of SMEs is sceptical about the outcome of CSR. An Austrian
study, for example, found that only 12 % of the small enterprises and 26 % of medium-sized
ones engaged in any form of Corporate Citizenship expect a positive effect on the business
success from CSR activities (Deuerlein et al., 2003). These results, however, are in contradicttion
with the findings of the ENSR Enterprise Survey 2001 (European Communities, 2002)
suggesting that only about one quarter of the European SMEs effectively involved in external
CSR activities are unable to identify any business benefit derived from these activities, whereby
this share is higher among the smallest enterprises.
CSR activities of SMEs, on the one hand, may have effects on the company itself (“internal
effects”) and, on the other hand, on the respective target group, e.g. the society, the customers
or the environment (“external effects”) 52 . Not all CSR activities need to be characterised by
both, but in the majority of cases internal effects (e.g. a higher employees’ satisfaction) will also
result in external effects (e.g. a higher customer loyalty due to better service) and the other way
round. Furthermore, a differentiation can be made between direct effects directly resulting from
the measure (e.g. a lower fluctuation of personnel due to target group oriented HR measures)
and indirect effects (such as an increased competitive advantage due to a higher customer
satisfaction triggered by an improvement in the production process initially aimed at facilitating
work for the staff).
52 Consumers, for example, take advantage of the higher quality of products/services, reliable information about
products/services or more customer friendly service. Business partners realise better fulfilment of mutual agreements.
Employees benefit from better working conditions, a possibility to obtain new qualifications or other voluntary
contributions from the employer. The society/local community reaps an advantage from financial or material
contributions to the infrastructure or the economic and/or social development.