Socially responsible practices in SMEs

Portuguese small and medium-sized enterprises (SMEs) have already implemented some corporate social responsibility (CSR) measures but these are not formally recognised. Since a large number of SMEs are certified in areas such as quality, environment, safety, hygiene and health at work, a partnership project led by the Ceramics and Glass Technological Centre concluded that the formal adoption of CSR practices in SMEs is possible.

A project directed at Portuguese small and medium-sized enterprises (SMEs) – ‘Being a responsible SME’ (SER PME Responsável) – was co-financed by the EQUAL initiative as part of the European Social Fund. The study proposed to develop and test a methodology of intervention among a set of SMEs, aiming to change management practices by consolidating corporate social responsibility (CSR) within these companies.

The European Commission’s Green Paper on Promoting a European framework for corporate social responsibility (169Kb PDF) explains CSR as ‘essentially a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment’. More specifically, the Green Paper identifies an internal dimension to CSR pertaining to human resource issues and also an external dimension reaching out to the local community, including business partners and suppliers, customers, public authorities and voluntary organisations, as well as the environment.

The SME project methodology included tools such as ‘communities of practice’, in order to share knowledge and experiences relating to CSR, as well as benchmarking measures, aimed at assessing the improvements obtained with the implementation of CSR practices. See below for further details on the study methodology.

Perceptions of internal and external CSR

Considering that CSR is a voluntary concern among companies, the project findings reveal an uneven adoption of CSR practices in Portuguese SMEs. According to the study, the SME owners and managers surveyed understood CSR in an inaccurate, vague and partial way. The concept is only recognised in some of the areas in which it applies and the respondents primarily viewed it as the internal responsibility to provide for their workers’ well-being and motivation, thereby improving company productivity.

At an external level, CSR is seen as a strengthening factor in enhancing companies’ profile and knowledge of the marketplace. All of the enterprises surveyed considered CSR as a competitive advantage but 25% of them referred to the inherent costs of implementing a CSR strategy as a significant disadvantage.

Workplace practices

Some 87% of the SMEs surveyed provide occupational training for their workers. However, while managers, management staff and supervisors attend external training in all areas of expertise, other workers only have access to training during working hours which is mostly job-specific.

Although 90.2% of the SMEs have safety, hygiene and health at work measures in operation, the study found that most of the companies do not have a structured plan or strategy in these matters.

About 80% of the SMEs engage in information and consultation practices but these are concentrated among supervisory staff. Questionnaires to workers and work meetings are the most common methods, used by 23% and 51% respectively of the companies surveyed. Such findings tend to indicate that the communication procedures are mainly hierarchical and unidirectional.

Most of the SMEs (79%) cited efforts to reconcile work and family life. Nevertheless, the managers and owners interviewed believe that such measures are more suitable for those doing office work than for workers in production, which is usually more strictly organised – often in shifts. The study also concluded that the presence of such practices is directly related to workers’ availability: SMEs are more flexible regarding work-life balance when workers are more responsible and available in their work.

Practices in the community, marketplace and environment

The majority of the SMEs surveyed, at 57%, stated that they had good relations with the surrounding community, through their reputation and open attitude. Nonetheless, their participation in local community activities is mainly financial and not actively community based.

Most SMEs provide information about their activity, products and services to clients, banks and state bodies in the areas of social security, tax and finances, and inspection. However, they neglect other entities such as non-governmental organisations (NGOs) and environmental agencies. More than two thirds of the SMEs surveyed, at 68%, have partnerships with other companies such as suppliers, clients, rivals or associates, and recognise the benefit of additional knowledge and a stronger bargaining capacity. At the same time, most of the SMEs (91%) collect, register and evaluate their clients’ opinions, generally through questionnaires.

Some 96% of the SMEs surveyed reported that they undertook measures to reduce their environmental impact. In this regard, the number of environmental practices is proportional to the enterprise size. Appropriate treatment of waste, such as separating waste, is the most common practice, adopted by 33% of the companies surveyed. The study concluded, however, that the implementation of this kind of practice is mostly due to legal requirements.

Conclusions

Since a large number of SMEs are certified in areas such as quality, environment, safety, hygiene and health at work – showing that they are open to change and innovation – the project team believes that the formal adoption of CSR practices in SMEs is possible.

About the study

The development partnership of the ‘Being a responsible SME’ project comprised the Ceramics and Glass Technological Centre (Centro Tecnológico da Cerâmica e do Vidro, CTCV), the Centre of Entrepreneurial Initiatives of Beira Aguieira (Centro de Iniciativas Empresariais Beira Aguieira, IEBA), the Centre of Professional Training for the Clothing and Textiles Industry (Centro de Formação Profissional da Indústria de Vestuário e Confecção, CIVEC), Primus MGV – Regional Development and Promotion (Primus – Promoção e Desenvolvimento Regional S.A, Primus), SL Consulting and the Institute for the Support of Small and Medium-sized Enterprises and of Innovation (Instituto de Apoio às Pequenas e Médias Empresas e à Inovação, IAPMEI). The project started in October 2005 and was due to end in September 2007.

The analysis was developed through questionnaires to companies, face-to-face interviews and focus groups with SME managers. A total of 143 SMEs responded to the postal questionnaire, which was sent to 400 SMEs, representing a response rate of 35.75%.

Study sample distribution, by company size (number of workers)
More than 62% of the companies surveyed employed between 10 and 90 workers, while 12.7% had between 171 and 250 workers.
Size %
10 to 90 workers 62.7
91 to 170 workers 24.5
171 to 250 workers 12.7
Total 100

Source: Analysis of corporate social responsibility in SMEs, 2006

On the basis of the questionnaire responses, enterprises which appeared further developed in terms of CSR were selected for a management interview; a total of 53 such interviews were conducted.

Reference

SER PME Responsável, Diagnóstico de Identificação de Práticas de Responsabilidade Social nas PME (in Portuguese, 202Kb PDF) [Analysis of corporate social responsibility in SMEs], Institute for the Support of Small and Medium-sized Enterprises and of Innovation, 2006.

Jorge Cabrita, CESIS - Centro de Estudos para a Intervenção Social

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