A Little Help from My Friends: Assessing the Adjustment of Small and Medium-Sized Enterprises to Corporate Social Responsibility

Abstract

With growing environmental and social awareness, corporations are facing rising pressure to engage in corporate social responsibility (CSR); small and medium-sized enterprises (SMEs) are no exception. With operational constraints in resources and time, SMEs may attempt to boost their CSR through external sources. Adopting the perspective of stakeholder theory and drawing from the literature on socialization, this research suggests that the extent to which an SME adjusts to CSR principles mediates the relationship between CSR performance and SME stakeholder knowledge and interaction. This article tests the hypotheses with an online survey of SME owner-managers. The results show a mediating impact of organizational CSR adjustment over and above the direct effects of stakeholder knowledge and stakeholder interaction on CSR performance. The findings also suggest that organizational CSR adjustment directs CSR performance, enabling employees to engage in effective and efficient CSR activities. Theoretically and managerially relevant implications for researchers and SMEs are discussed.

Keywords: Corporate social responsibility; CSR; Organizational adjustment; Small and medium-sized enterprises; SME; Stakeholder theory

JEL Classification: M31