An Investigation into SMEs’ Awareness of Corporate Social Responsibility Practices in Punjab, India

Abstract

The largest contributors to Indian economy are small and medium enterprises (SMEs), mostly operating in the unorganized sectors and geographically dispersed across towns and Tier II cities of India. These SMEs are majorly involved in export of semi-finished and finished goods or tie up with MNCs. These organizations, within the vortex of their operation, engage in CSR activities by conducting philanthropic activities at the local level, unmindful of the obligatory guidelines that require MNC’s to deal only with those SMEs that are ethical and have a positive focus towards CSR activities. This paper investigates the level of awareness, familiarity, sources and obstacles of CSR of the SMEs in the Punjab region of India. It elucidates that nearly half the population of SMEs are not familiar with the concept of CSR, and those familiar are largely export-oriented clusters such as knitwear and sports goods. Even these organizations are informally performing CSR activities through local level philanthropy. Therefore, it is deemed necessary that information should be dissipated to CSR through NGOs, government and local business associations. It is suggested that government engagement in the processes should familiarize SMEs with CSR activities.

Keywords: Corporate Social Responsibility, Philanthropy, Net Worth, SMEs, Stakeholders, MNCs