Corporate and Social Responsibility – CSR for smaller businesses
Corporate Social Responsibility for SME’s
|‘CSR is it not about philanthropy, but about fundamental business practices’Guy Ryder, General Secretary of the International Confederation of Free Trade Unions, speaking at the United Nations Global Compact Summit, Shanghi, China, 2006|
Corporate Social Responsibility (or more recently social responsibility) has increased in importance around the world. Much of the content of the reports focus on large company’s and statistical analysis – all very well but for small lean business like mine and yours we need a different approach.
This page aims to explore CSR – Corporate Social Responsibility from the practical stance of the smaller business. For CSR to be adopted as a principle, it needs not only to be understood, but practical steps provided to make this valuable concept accessible and sustainable – in other words – you as a manager needs to know what and how you can do this easily and today.
Is CSR important to SME’s?
Yes CSR is important, and yes it can help us be more effective, efficient and most importantly more profitable.
In 2002 a survey of Small-Medium sized Enterprises (SME) attitudes to CSR conducted by MORI sponsored by the DTi, it found that:
- A large number of SMEs were already engaged in social responsibility where defined as a contribution to the community, relations with employees and protection of the environment
- Training, employment and education were the top priorities for SME investment
- SMEs were not yet defining social responsibility as an issue that could be integrated into all core business activities.
So why is it relevant?
Managers and owners in smaller businesses are often heard asking…
- ‘I am increasingly being asked for information on environmental and community issues as part of tendering for contracts and from larger clients and I don’t know where to start.’
- ‘My business is struggling to recruit, motivate and retain good staff.’
- ‘How can I ensure that I run an environmentally friendly business without costing me a lot of time and money?’
- ‘I have a business to run with limited resources, so how can my business benefit?’
Corporate Social Responsibility – a definition:
A responsible business is achieving commercial success in ways that honour ethical values and respect people, communities and the natural environment. These businesses minimise any negative environmental and social
impacts and maximise the positive ones.
Approaches to CSR
- There are several approaches to Corporate Social Responsibility (CSR)
- The Three-P Approach to CSR:
- Level 1: Principles of social responsibility
- Level 2: Processes of social responsiveness
- Level 3: Products (or Outcomes) as they relate to the firm’s societal relationships
We need to adopt these as appropriate for our business. For many of us we will only work at level one with some elements of level 2.
What does a sustainable and responsible company look like?
- It is run for and can be seen to be run for the benefit of profit, people and planet.
- It integrates responsible business practice so that it is built in to business purpose and strategy rather than being a bolt-on to business operations.
- Employees value it as a great place to work.
- Customers and suppliers value it as a good business to do business with.
- The community values it as a great neighbour.
- Investors and financiers value it as worth investing in.
- It has a good health and safety record.
- It has environmentally friendly premises.
Keeping it simple and adding value:
11 simple things you can do today to apply CSR principles to your business
CSR Benefits for your business The business benefits will vary depending on the business, the specific actions proposed and the effectiveness with which they are implemented. Often, the kinds of business benefits which other smaller companies have reported, include:
- Attracting, retaining and developing motivated and committed employees.
- Winning and retaining consumers and business customers.
- Improving business reputation and positive publicity.
- Maintaining and improving their licence to operate from the local community.
- Cost and efficiency savings.
- Networking and speaking opportunities.
- Anticipating future legislation and protecting yourself
Why get started with CSR?
- The need to increase profit
- The need to reduce costs
- The personal values of the owner manager/CEO
- Questions being asked by large business customers
- Developing a new or revised business strategy
- Writing a business plan
- Newspaper/trade magazine article
- Talk at a local chamber of commerce or business club
- Employee’s suggestion
- High utility bills/costs
An ACTION plan for Social Responsibility
A simple approach to introducing CSR in a structured way.
|Assess||Whatever you do should be relevant for your business as well as society. Think about the issues that affect you, your staff and your business and what you can do to help support these. Assess where you currently are so you have a benchmark to measure future progress against.This may be formal or informal.|
|Commit||To a statement of what being a responsible business
means to your business and to clear ethical values from the top down.
Appoint a champion/s to ensure the commitment is followed through. You need a champion who walks the talk. The champion, like any boss, has to model the behaviour they want to see in their co-workers if they are going to be credible. They also need to be given the authority to make any necessary changes.
|Tell||Set out your ethical and business cases, communicate them and promote them at every opportunity. Make responsible business an agenda item on all team meetings.
Communicate to staff, clients, customers, suppliers and others what you are doing.
It is not boasting to tell people what you are doing. Establish effective, two-way dialogue with your key stakeholders (those who can affect or are affected by your business).
There are real business benefits to informing people through local/trade press, notice boards, newsletters, websites and achieving awards.
|Integrate||Responsible business behaviour across different functions and activities within the business.
Identify issues that are affecting your bottom line and how responsible
business practices can help address these.
Prioritise things which you can do as a) early wins; (b) things that will need to take some time to prepare; and (c) long-term goals.
List the risks that your company faces or might face and the actions you need to take to address these.
|Organise||The project management, the details, relevant business resources and set targets.
Look at one off, individual and team building activities.
Look at building a long term relationship with community organisation/s.
Communicate the aims and boundaries to all staff and stakeholders.
Collate the results and thank any staff for their involvement.
Make sure all staff know about and are able to get involved in your responsible business practices/ opportunities.
|Nurture||Involve your clients and supply chain. Once your programmes are established you can have greater impact and raise your profile by widening your resources.
Clients and suppliers will be surprisingly grateful you asked and usually very willing to get involved.
Measure and report what you are doing and feedback the learning into your business planning.
Measuring the benefits you have made to the business and the wider community helps motivate staff, customers and investors. Reporting can be done informally through word of mouth, staff team briefings, presentations to business networks or more formally through management systems and achieving relevant standards.
If you integrate responsible business practices into the way you run your business and proactively communicate what you are doing, you not only increase your business success but the benefit to society as well.
By communicating what you do to a wider audience and by giving your business a voice, you will find that you inspire many others to do the same and your example could lead to much bigger impacts. By keeping quiet about what you do, you might be missing out, so shout about it and you might be surprised at the results.
Effective Promotion of CSR
Promoting that you are approaching your business in a CSR way can enhance your business opportunities, doing this is one thing… telling others about it is quite another.
Areas to focus on:
Business Principles, Defining your Purpose, Innovation, Know the law, Managing risks, Measuring success, Sharing good practice
What are the theories and business principles which drive successful businesses?
Here you can dip into information on the law and its implications for your business. There is also information about how to measure the intangibles e.g. how can you measure increased customer loyalty? Plus you’ll find useful signposts and pointers as to where you can find more information on each topic.
Better payment, Developing skills, Diversity, Equality, Health and safety, Managing resources, Marketing with a cause, Minimising waste, Volunteering
If you want to save money through managing waste more effectively how do you go about it? What about health & safety? In a recent survey* 60% of small and medium sized business owners said that they had been asked about their practices in this area by a large corporate customer. Make sure you’re one step ahead of the game and start by reading the guide to health and safety contained within this section.
Employees, Customers, Suppliers, Communities
Stakeholder is an umbrella term, which covers every group of individuals you deal with as a business.
Here we focus on four stakeholders- your employees, the community, your customers and your suppliers. By listening and talking to these groups on a regular basis you can really improve your business’s reputation and it doesn’t cost a fortune.
Corporate Social Responsibility
(CSR) or Corporate Responsibility is about managing your business to achieve both commercial and social benefit. In essence it’s about managing your social, community and environmental impacts to help you improve results, reduce risks and enhance your reputation. It is also about growing your business in a way that has value for everyone connected to it.
For the majority of SME’s and small businesses, it is not about copying what the ‘big companies’ do, but to use these principles in the way we work. This means treating them as principles, not yet another administrative burden. So measure them…no!
Useful pages on CSR
Please note. This page has been flagged for continuous development – please visit again soon.
In the coming weeks this will be as comprehensive as our PESTLE page. Your feedback and comments are welcome.
This page has been developed by Mike Morrison – Principle consultant at RapidBI.
You are free to use any of the SWOT tools on this page, however if you wish to use this page on a web site please credit us and link to our home page, and keep all links intact.