What is CSR?

Corporate social responsibility is basically a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. Corporate social responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the Concept of sustainable development to the companys level. Over the last years an increasing number of companies worldwide started promoting their Corporate Social Responsibility strategies because the customers, the public and the investors expect them to act sustainable as well as responsible. In most cases CSR is a result of a variety of social, environmental and economic pressures. Obstacle of CSR ?

This is the case especially for Small and Medium Enterprises (SMEs). As a result a few of these small businesses are beginning to take their CSR activities seriously. Research has established that there are a number of major obstacles hindering the application of good CSR practices and policies into SMEs. What are some of these obstacles and how can you overcome them? Lack of awareness It is a fact that many SMEs have little knowledge of CSR. SME owners and managers often do not fully comprehend the demands from the stakeholders and therefore do not fully realize how much they value CSR. In some cases, SMEs may have a greater understanding of CSR issues but lack understanding on how to begin implementing a CSR program. Finally, there is significant ignorance about the benefits that can be gained from good CSR practices. Your business should invest in programs of creating awareness about the importance of CSR. Lack of human resources Many SMEs claim that they lack the human resource that they can assign to CSR practices. In addition, many management systems being used by SMEs are very unproductive, inefficient and wasteful of human resources. In order to develop good CSR policies and practices, your business should focus on recruiting/training staff that will be able to head and develop CSR initiatives. Competing codes of conduct and multiple requirements A major concern for many business owners and managers is connected to competing codes of conduct from different customers. Such duplication is expensive and frustrating to suppliers. To avoid this, you business should help customers agree on common standards to be adhered to. Costs SMEs constantly face the challenge of tighter budgets brought about by rising costs of material, energy and wages. Therefore, most are unable to spend much money on CSR initiatives. However, CSR activities can be carried out at any level. Even if your business has limited funds, you could create a separate CSR budget so as to ensure unnecessary expenditures are avoided.

Selection of appropriate, low cost initiatives will enable you to carry out CSR activities with your limited budget. Over-emphasis on inspections and cheating Many SMEs are guilty of not complying with codes of conduct. Many SME owners and managers have the perception that they can not do business and make profits while adhering to codes of conduct and regulation. Your business, however, does not have to 'cut corners' to remain in business. You need to dialogue with key stakeholders and find a balance between making profits and full implementation of CSR codes of conduct.

Stakeholders ?

Stakeholder priorities
Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors), communities in the areas where the corporation operates its facilities, regulators, academics, and the media. Branco and Rodrigues (2007) describe the stakeholder perspective of CSR as the inclusion of all groups or constituents (rather than just shareholders) in managerial decision making related to the organizations portfolio of socially responsible activities.[32] This normative model implies that the CSR collaborations are positively accepted when they are in the interests of stakeholders and may have no effect or be detrimental to the organization if they are not directly related to stakeholder interests. The stakeholder perspective suffers from a wheel and spoke network metaphor that does not acknowledge the complexity of network interactions that can occur in cross sector partnerships. It also relegates communication to a maintenance function, similar to the exchange perspective.