Corporate social responsibility in small and medium enterprises in Pietermaritzburg.

Abstract

Corporate Social Responsibility (CSR) has been identified and adopted by large businesses as a business strategy that is used to enhance company performance. It is globally used to link business and society through sustainable development and good governance. Studies show that CSR in Small and Medium Enterprises (SMEs) is under researched and is still associated with large firms, even in emerging economies where SMEs play a pivotal role in the economic development of their countries. The main objective of this study is to explore the nexus between CSR and SMEs in Pietermaritzburg in South Africa. In particular, the study explores the perceptions, the drivers of CSR activities in SMEs, the challenges of implementing CSR initiatives and the strategies employed by SMEs to overcome some of the challenges they encounter. A non-systematic literature review approach was conducted where insights were drawn from a wide range of secondary sources such as peer reviewed journal articles, non-peer reviewed publications on the topic. Mixed methods was used to collect primary data. An exploratory sequential design was adopted as a mixed method technique to understand the interplay between CSR concepts in SMEs. Two hundred and forty-three (n=243) respondents participated in the study in their capacity as entrepreneurs, managers or supervisors and employees. A convenience sampling technique was used to select participants for the study. A thematic analysis technique was used to analyse qualitative data. Statistical Package for Social Science (SPSS) computer software was used to analyse quantitative data. The empirical findings reveal that SMEs acknowledged CSR as business concept. The results indicated that their CSR activities are mainly hampered by lack of finance, management skills shortage, and minimal access to information and shortage of manpower. Finally, the results revealed that SMEs prefer to engage in partnerships with each other or large businesses when implementing CSR initiatives. Government should introduce regulatory framework as policy (e.g. tax incentives) that encourages SMEs to engage in CSR programs. This approach will redefine the voluntary nature of CSR and mitigate some of the daily challenges SMEs encounter in their pursuit for sustainable growth.