Corporate social responsibility in small firms;
illusion or big business?
An exploratory study within small firms on corporate social responsibility and the
relation with firm performance
E. Swinkels s1669621 August 2008
University of Groningen, the Netherlands Faculty of Economics and Business Master Small Business and Entrepreneurship
First supervisor: Dr. M.J. Brand Second supervisor: Dr. L. Dam
ABSTRACT
Corporate social responsibility (CSR) in small firms has received relatively limited attention over the last few decades in CSR literature. In understanding CSR behaviour of small firms, this seems to be a serious omission. In this study, first a conceptualisation of CSR behaviour by combining existing CSR literature is developed. This conceptualisation is used to study the phenomenon of CSR in small firms. Based on the conceptualisation an online questionnaire to test CSR in small firms is created. We will look at the extent of CSR activities of small firms and the main motivation to perform these activities. Based on the answers of 645 small firm business owners we show that CSR behaviour does appear in small firms. The main motive of firms to behave socially responsible deals with personal motives of the business owner. We also analysed if CSR behaviour has a positive influence on the performance of small firms and their business owners. From this analysis, we can conclude that firms with a high score on CSR have a significant higher development of customer satisfaction and professional development of the business-owner, but no significant relation with traditional performance measurement standards like turnover and profit.
Key words: Corporate social responsibility, small firms, motives, firm performance
INTRODUCTION
“After half a century of development of public intervention which rose during the sixties, this principle figures again on the agenda. The long-standing myth of an economy of perfect or quasi-perfect competitions, where nobody would be able to exercise any form of domination, has lost its credibility. From the second half of the 20th century a new paradigm occurred according to which the objective of the firm is no longer limited to the increase of profits in the interest of shareholders. Next to the objective of making profit, the enterprise must take care of satisfying the public. This leads to the development of a new concept; corporate social responsibility” (Galavielle, 2004: 10).
argue that business exists to serve the greater community as well as direct beneficiaries of the company’s operations. (Snider, Hill and Martin, 2003).
As quoted at the beginning of this article, Galavielle (2004) describes a new paradigm towards the objectives of the firm in relation with CSR. He explains why these objectives are expanded with aspects related to the satisfaction of public interest (Galavielle, 2004: 10). Other CSR advocates argue both that normative principles demand redistribution by firms. If firms do not meet the expectations of society with regard to their social performance they will be faced with government actions (Baron, 2001).
Crane, Matten and Spence (2008) also address the impact of society on firms acting socially responsible. Because of media pressure, major environmental disasters and governmental regulation there has been a growing interest among the public in the impact of enterprises on contemporary life. The growing interest and attention in the business press, among governments, ventures and political leaders maintained and stimulated the interest of the public (Campbell, 2007). In addition, a body of academic literature has merged around it (Campbell, 2007). Several authors stress the fact that the activities of an organisation effect upon the external environment. These authors have suggested that an organisation should therefore be accountable to a wider audience than simply its shareholders (Crowther and Rayman-Bacchus, 2005).
Kolk (2003) adds to these findings that during the fifties, a modernisation of CSR raised because of a growing interest of the individual wellbeing of employees, the environment and the community. The care of a broader social and natural environment of the firm was not only seen as a possibility to limit risks of a possible comeback of public or administrative regulation, but also to improve the image of the firm among customers and employees and to turn social issues into opportunities.
During the sixties and the seventies, a growing attention for fundamental and human rights raised. On a local and global scale, people realised that production, distribution and consumption created negative externalities for the environment (SER, 2000). In the same time, several worldwide environmental disasters like Tsjernobyl, Ukraine, fed the discussion on environmental aspects. As a result, the interest in social and environmental aspects of firms started to grow in the world of business.
Why consider CSR in a business venture
The first motive, which is frequently dealt within the literature, can be associated with a defensive attitude of a firm. A firm considers CSR to prevent the firm from doing any harm or damage. As explained before in the introduction, the current debate about social and environmental issues of businesses has forced companies to react to this global pressure. Firms realised that propping up oppressive regimes, being implicated in human rights violations, polluting the environment or deliberately harming their customers, were practices that had to be reconsidered if they wanted to survive in society at the end of the 20th century (Crane et al., 2008). In that line, it can be said that companies feel they are forced to react to the external pressure by incorporating values in their firm like integrity, ethics and environment to meet the expectations of the public and their stakeholders (Graafland, Eijffinger and Smid, 2004). This motive pertains to a response to, or anticipation of, a threat (Baron, 2001). When firms do not meet the expectations of the public, they may see their reputation founder with a negative impact on market shares and profitability (Graafland et al., 2004). This motive argues that, without the presence of stakeholders’ pressure, a firm would probably not apply CSR within the company (Hoevenagel, 2004).
The second motive for business ventures to consider CSR is related to the opportunities and benefits rising from adapting CSR within the daily business of a venture. Companies are acting socially responsible because it is beneficial for their business. This is an opportunity motive. This argument is supported by the growing body of evidence suggesting that there are numerous tangible and intangible benefits from CSR (Grayson and Hodges, 2004; Greening and Turban, 2000; Orlitzky, Schmidt and Rynes, 2003). The natures of the benefits identified in these studies vary. Common themes include increased employee motivation and improved firm image. While these authors have not proved a causal link between strong social and financial performance like profit, turnover and image, others did. Dam (2008), for example, concludes from his empirical analysis, based on secondary data of large financial firms and financial markets, there are indeed strong causallinkages between CSR and corporate financial performance.
CSR from a small firm perspective
These findings in the CSR literature seem convincing. And since CSR has become a widely discussed topic in recent years, the question arises: what is the small firms stand on CSR? (Wilson, 1997). SMEs may not have significant influence individually (Spence, Schmidpeter and Habisch, 2003), together they do constitute a significant part of the Dutch and European economy and society. For example in 2006, SMEs accounted for 99,7% of all Dutch enterprises and produced almost half of the total turnover of all Dutch enterprises (Hoevenagel, 2004). In terms of employment, the share of SMEs is even larger: almost six out of ten jobs are located within SMEs (Bangma and Peeters, 2003). Given the significant scale of small business in nearly every economy, their aggregate achievements have major effects worldwide (Jenkins, 2006). Because of the overall presence of SMEs, it is strange that research on a topic like CSR in relation to small firms has not been accomplished in a broader extend. Is the fact that we fail to hear about this only because there has been no research, or are small firm owners, compared with large firms, less socially concerned?
Some authors respond to these questions by declaring that CSR is only a case for large firms in which small firms have nothing to do. They believe small firms do not experience the external pressure of government and the public. They also expect difficulties with CSR in small firms because of limited resources like financial resources, managerial time and knowledge (Nooteboom, 1994). As an example, these authors believe that the lack of knowledge and time can mean that small firms experiment less with new businesses and activities. A small business owner will not experiment with something new when there is no assurance that the experiment will produce positive output (Beemsterboer et al., 2001).In line with CSR, this can mean that the small business owner will not have time to invest in CSR activities when there is a lack of prove of positive output from the CSR activities. Moreover, since so little research on this topic in small firms is realised, it seems a logical result that small firms do not enter the CSR discussion.
Are these arguments a legitimate reason to conclude that CSR in small firms is an illusion? When taking a closer look at SME literature, it shows that the difficulties of SMEs mentioned before, do not actually form a barrier for CSR. According to Jenkins (2006), these barriers could be approached as a challenge that needs to be overcome through innovation. SMEs have many other characteristics that can aid the adoption of CSR (Jenkins, 2006).
First, small firms are characterised as flexible, creative and innovative (Beemsterboer et al, 2001; Nooteboom, 1994; Jenkins, 2006). Because of informal and flat structures, small firms can respond quickly to changing circumstances. The American State of Small Business (1983) reported that small firms (with less than 10 employees) produced two-and-half as many innovations as large firms per employee (Nooteboom, 1994). This finding could be applied to the development of innovative approaches towards CSR. Further, there is usually a direct contact between suppliers and customers, which provides the company to perceive adjustments and possibilities in an early stage. This can be an advantage in relation with CSR behaviour. (Beemsterboer et al, 2001; Hoevenagel and Uit Beijerse, 2000). For example, a small firm may be able to take rapidly advantage of new niche markets for products and services that incorporate social and/or environmental benefits in their value (Jenkins, 2006).
Secondly, the owner-manager of small firms is closer to the organisation compared to large firms (Jenkins, 2006). More than 90% of all Dutch firms have less than 10 employees. In these cases, it is most likely that the manager of the firm is also the owner. This results in intertwined ownership and management of the firm. In that case, the success of the firm is for one’s own account, which leads to a high motivation and commitment of the manager (Nooteboom, 2003). In addition, an owner-manager can easily influence the values and culture of the company because of its small size and power (Jenkins, 2006). In line of CSR, this means that the owner-manager can support and promote CSR throughout the company.
The characteristics related with SMEs, mentioned above, seem to make it plausible that CSR can exist in small firms. Small firms seem to have the characteristics and resources to aid the adoption of CSR. However, this does not imply that CSR behaviour of small firms is equal to that of large firms. Instead, we can imagine there are certain differences and some similarities. Do small firms for example, experience the same motivations for CSR behaviour or are they similar to the motivation types discussed before?
of the firm live in the local community, the suppliers are mostly locally located, and the firm is closely involved with the local society. This orientation is most of the time related to a high presence of moral responsibility of the business owner and other employees of the firm (Southwell, 2004). The local involvement and responsibility towards the local environment makes it plausible that small firms have a defensive motive to apply CSR in their business.
Moreover, what about the opportunity motive for CSR behaviour? Are small firms experiencing advantages as a result from CSR behaviour (Hoevenagel, 2004)? Do small firms behave socially responsible because they believe it will increase profits or customer satisfaction? It is not only interesting to find out if the opportunity motive is experienced by small firms to perform CSR, but also to find out if these opportunities are really present. When CSR objectively, turns out to be big business for small firms, it could motivate small firms to consider CSR activities in their firm too.
By having a critical look at small firm and CSR literature, another motivation can be added to the previous discussion. Next to the local pressure of stakeholders and experienced opportunities in relation with CSR, a small firm can have a third inducement to start with CSR. Evidence suggests that the majority of small firm owners believe that organisations, similar to themselves, should pay attention to their social and environmental responsibilities (Southwell, 2004). A large firm owner might also experience this responsibility, but issues closer to home, such as employee motivation and community involvement, are far more likely to hold the attention of small firm owners (Jenkins, 2006). A small business owner can personally be convinced it is important to consider social and environmental issues while doing business.
This personal motive seems to relate to individual characteristics of the owner-manager. Jenkins (2006) notes that SME behaviour is often understood in terms of the psychological characteristics of the entrepreneur. SMEs tend to have a personalised style of management and lack formal management structures with specialised staff. These characteristics vary and are depending on individual personalities and differing ownership structures. They will influence the company’s approach to CSR. However, personal characteristics like gender, age or ethnicity can also influence CSR behaviour. The most common form of SMEs is the owner-manager firm where ownership and control is incorporated in the same person. This lends legitimacy to personal decisions made on how to use company resources, such as on CSR related schemes, and allows a degree of autonomy in how CSR is approached (Jenkins, 2006).
Definitions of corporate social responsibility
Corporate social responsibility means something, but not always the same to everybody. To some it conveys the idea of legal responsibility; to others it means socially responsible behaviour in an ethical sense (Garriga and Melé, 2004). Because several issues are at stake, defining corporate social responsible behaviour for enterprises is not a straightforward exercise (Campbell, 2007). As a result, authors of CSR studies define CSR differently. To search for differences and similarities in these definitions an overview of several definitions of CSR literature is presented in table 1.
Take in table 1
Most authors define CSR based on actions or activities. An example of such a way of defining is the definition ofMcWilliams and Siegel (2001). They are focussed on an active approach towards CSR and define CSR as ´actions that appear to further social good beyond the interests of the firm, that which goes beyond the law´. Campbell (2007), also defines CSR in the perspective of an action, but is more focussed on preventing harm towards stakeholders of the company. Hoevenagel (2004), Kolk and Pinkse (2006) and Ybema (2001) relate the definition of CSR to activities of the firm that create value for society and the firm which cannot do harm to the stakeholders of the firm.
A second group of authors define CSR in a more passive way. Matten, Crane and Chapple (2003), for example, defined CSR as the ´responsiveness of businesses to stakeholders’ legal, ethical, social, environmental and economical expectations´. This broad definition has a stakeholders’ orientation and is focussed on the responsibilities of businesses in line with pursuing a long-term economic development. Perrini, Pogutz and Tencati (2006) define CSR as objectives of the firm on economical, social and environmental aspects in relation with company stakeholders. Finally, Kok, Weile, McKenna and Brown (2001) relate CSR to the use of resources of the firm to benefit society.
What comes to the forein most of the definitions, is that CSR is related with benefits for society and the company (Campbell, 2007; Hoevenagel, 2007; Kolk and Pinkse, 2006; Ybema, 2001). According to Hoevenagel (2007), the basic concept of an organisation is focussed on enterprise continuity, profit and turnover. Most authors also agree on the association of CSR with activities that go beyond the law (Campbell, 2007; Hoevenagel, 2007; Kolk and Pinkse, 2006; McWilliams and Siegel, 2001; Perrini et al., 2006). A company is not obligated by law to act socially responsible, because it is based on its own intention (Hoevenagel, 2004).
are therefore less convenient. The three other studies that used an active definition in line with activities are in our opinion not complete. Campbell (2007) and Ybema (2001), for example, do not mention anything about the voluntarily aspect of CSR behaviour. In most of the other studies and in our own opinion, this aspect cannot be missed within the CSR definition. Therefore, these definitions are less suitable. McWilliams and Siegel (2001) use an active definition of CSR but they do not incorporate the aspect of the benefits for the firm within their definition. Their definitions of CSR behaviour is limited with actions that appear to further social good. This win-win aspect of CSR clearly shows why CSR is distinguishing itself from a single theme like charity.
Overlooking all definitions and their related aspects, in this study, CSR will be defined as `conscious, voluntarily activities of a firm which create value for society and the company’. In this definition, the society is defined as the people of the public, the government, the environment, suppliers, customers and competitive firms. This definition is based on the definitions of Kolk and Pinkse (2006) and Mc Williams and Siegel (2001).
Categories of CSR activities and behaviour
Within CSR literature, some authors do not use a general definition of CSR. Instead, they developed certain categories of CSR behaviour. Strikingly, none of the authors who use categories present a general definition of CSR within their research and vice versa. Authors either use a general definition of CSR or divide CSR behaviour in several categories and subcategories. Table 2 shows an overview of CSR categories of these latter studies. Each category consists of several subcategories.
Take in Table 2
When taking a closer look at the several categories, it shows that not all categories are at the same level of analysis. The category of ´ethics´ defined by Wilson (1997) is focussing on fair and honest behaviour of the firm. This seems to be related to the presence of norms and values of the firm, or a general value statement. This kind of ´ethical framework´ guides the accomplishments of the overall mission of the behaviour towards the stakeholders. Categories like ´employees´, ´suppliers´ and ´community´ are more related to firm behaviour focussing on the interest of these stakeholders.
For example, paying attention to the reduction of energy and the amount of waste by the firm (Jenkins, 2006: Snider et al., 2006).
When overlooking the several categories, the conclusion is that authors differ in their ways of defining and dividing the categories of CSR. Therefore, we decided to create our own categorisation in which categories are grouped at the level of activities that create value for the stakeholders of the firm and the firm itself. The four categories of stakeholders that are used in this study are ‘environment’, ‘employees’, ‘supply chain’ and ‘community’. This categorisation is the result of combining and grouping the categories mentioned in table 2.
The stakeholders ´customers´, ´suppliers´, ´shareholders´ and ´competitors´, mentioned by Graafland et al. (2004), Jenkins (2006), Snider et al. (2003) and Wilson (1997), are all part of the supply chain of the firm. Therefore, they are grouped as one concept ´supply chain´. In most CSR studies, the stakeholders ´employees´ and ´environment´ are mentioned as separate stakeholders. Furthermore, Wilson (1997) and Jenkins (2006) identify the concept ´community´, which we believe is similar to the stakeholder ´society´, mentioned by Snider et al. (2003) and Graafland et al. (2004). In our conceptualisation of CSR stakeholders, we identify this stakeholder as ´community´ to prevent confusion with the term ´society´, which is used as a broader concept in the general definition of CSR.
Figure 1 shows a summary of the conceptualisation of CSR. The CSR activities in relation with the four stakeholder groups together, determine the total CSR behaviour of a firm.
Take in figure 1.
CSR behaviour of small firms in practice
As concluded before, most studies concentrate on describing and analysing CSR within large firms.
Small businesses CSR studies may be hampered by the assumption that limited opportunities hamper small firms to behave socially responsible. Small firms have gained the reputation of being less capable of fulfilling CSR than large firms (Thompson and Smith, 1991). Admittedly, the magnitude of resource investments small businesses may be limited compared to large businesses. Nonetheless, an enlightened view of CSR, suggests that small firm’s social actions are only limited by the imagination of small business owner managers (Thompson and Smith, 1991). By the large number of small firms and the presence of motives for CSR behaviour as discussed before, CSR by small firms seems indeed an interesting and relevant phenomenon.
perform or not perform CSR activities. Do socially responsible firms experience benefits from these activities? Alternatively, are there other aspects that motivated the business owner for CSR? Which considerations exclude CSR activities are mentioned by small firm owners? The identification of these motivations could be interesting and useful for researchers, governments or other parties that are concerned with stimulating companies to act corporate social responsible.
Finally, we will analyse the relationship between CSR and firm performance. Although CSR performance studies have been performed among large firms, there are no similar studies from small businesses. If we can demonstrate an empirical relationship between CSR and firm performance, this may be an extra (opportunity) motivation for small firms to put more effort in CSR.
METHODOLOGY
Procedure and sample
The current study was part of a larger study by order of the Dutch Chamber of Commerce in the region ‘Gooi- Eem- and Flevoland’. During the second quarter of 2008, a research was conducted among nearly 3000 companies in the region. The sample was composed of companies who subscribed themselves voluntarily to the regional panel of the Chamber of Commerce. The panel consists of small, medium and large firms.Every quarter of the year, this panel is asked to fill in ten basic questions on the conjuncture of their firms continuing with questions about a varying and unknown theme. The percentage of the respondents who stopped the questionnaire after the ten basic questions was 3%. This percentage is in line with the number of respondents that stopped after these questions in previous questionnaires (2 – 3 % of the total respondents).
At the end of the first quarter of 2008, a brainstorm session was performed with two small firm specialists and one intern from the Chamber of Commerce and two CSR consultants from the Dutch CSR organisation1. The aim of this session was to collect and discuss the missing information and questions, which were left after analysing CSR literature, to complete the questionnaire for this study.
Tests for representativeness
To test whether the results of the sample of this study can be generalised to the population, a few tests were conducted to test representativeness. We first used Chi-Square tests to compare demographics of respondents with the population (appendix 2). This population is represented by all firms with 1 to 10 working persons (for more then 15 hours per week) which are registered within the regional commercial register of the Chamber of Commerce. We found significant differences with respect to the region, number of working persons and the industries (χ² = 4.674, p = .03; χ² = 10.138, p = .01; χ² = 161.860, p = .00). Despite of the significant results of these tests we find the respondents representative for the population because the extent of these differences are rather small. The differences between the observed and expected number of working persons lie between the two and three percent. The large sample size seems to be the cause of the significance of these small differences. The differences between the industries are identified in a larger extend (between 2 and 23%). These significant differences seem to be caused by the overrepresentation of the firms from the business services (observed value = 56,4%; expected value = 33,2%). The differences between the regions are limited up to nearly 4 %. When relevant, we will consider these differences while analysing the results.
We further compared the responses along the variable ´total CSR score´ in this study between early respondents and late respondents by using a Two Sample T-test. The early respondents answered after the first mailing or the first reminder of the questionnaire, the late respondents answered after the second or third reminder. No significant differences were found between early and late respondents in terms of the variable total CSR score (t = .723, p = .47). This test indicates that systematic differences between respondents and non-respondents as regards this key-variable are not to be expected (appendix 2).
Measures
A questionnaire (presented in appendix 32) to obtain the data for this study . Unfortunately, for the CSR topics that were analysed in this study, there are no validated measurements for the CSR topics. Therefore, we created our own constructs and CSR items by combining the information and
1 MVO Nederland
measurements methods from CSR studies and a brainstorm session with small firm and CSR experts.
Appendix 4 presents the details on this brainstorm session.
Scores on CSR activities
We measured CSR activities of the firms on a selection of three concepts from CSR literature. As described before CSR was conceptualised by the four concepts ´environment´, ´community´, ´supply chain´ and ´employees´. Because of the sample of this study, nearly 65% are self-employed firms; we decided to dismiss the concept ´employees´ of the measurement of the total CSR score. Therefore, the variable ´total CSR score´ was measured by adding up the non-weighed scores of the CSR concepts ´environment´, ´community´ and ´supply chain´. The content of each concept is explained below (also see table 3).
Take in table 3.
Environment. We asked the respondents to rate their firm behaviour on six items related to the environment, based on studies of Graafland et al. (2004) and Jenkins (2006). Four of those items were related to the sub concept sustainable production, the other two items with the sub concept sustainable procurement. For all questions, ratings were made on a seven-point scale ranging from ´completely disagree´ (1) to ´completely agree´ (7).
Community. The involvement of the firm with the community was measured on five items with two answer possibilities ´agree´ (1) or ´disagree´ (2). These items were developed by combining measurements used in the studies of Graafland et al. (2004), Hempel-Merkelbach (2007), Jenkins (2006) and Wilson (1997).
Supply chain. The items of CSR behaviour in relation with the supply chain were based on the studies of Graafland et al. (2004), Jenkins (2006) and Wilson (1997). This concept was measured with eight items on a seven-point scale ranging from ´completely disagree´ (1) to ´completely agree´ (7). The items of the supply chain were related to three sub concepts of the supply chain. The first sub concept is ´customer satisfaction´ and was measured with three items. ´Respect for the supply chain´ is the second sub concept of the supply chain and was measured with two items. The last three items were used to measure the sub concept ´the environment and employee policy of suppliers´. A detailed overview of the questions asked per concept is shown in appendix 5.
respondent answered with a negative or neutral answer, it means that they do not behave socially responsible at all. Therefore, these firms received a score of zero for CSR behaviour. In that way, only the positive answers determine the extent of CSR behaviour of the firm.
The answers, ‘completely disagree’ (1), ‘disagree’ (2), ‘disagree a little’ (3) and ‘neutral’ (4), of the concepts ‘environment’ and ‘supply chain’ were recoded as zero. The answer ‘agree a little’ (5) was recoded as one, ‘agree’ (6) was recoded into ‘two’ and ‘completely agree’ (7) was recoded into ‘three’. The concept ‘community’ was measured on a different scale. To equal the answers of this concept with the other concepts the positive answer compared to CSR behaviour ‘agree’ (1), was recoded into a score of three. Finally, the answer ‘disagree’ (2) was recoded as zero. In this way, only the ‘positive’ answers determine the extent of CSR behaviour.
Motivation for CSR behaviour
The companies that indicated they performed social responsible activities were asked to a ranking of their motives for CSR activities. The three motives described in the introduction (defensive, opportunity and personal), were used as the basic motivations for CSR behaviour. The questions on the opportunity and personal motive included two different answer possibilities based on a combination of the motivations mentioned in the studies of Graafland et al. (2004), Hempel-Merkelbach (2007), Jenkins (2006) and Wilson (1997) and the outcomes of the brainstorm session. These sources were also used for the measurement of the defensive motive, which included three different answer possibilities.
The respondents could select a maximum of three motives for CSR activities, which had to be ranked from the main motive (1) to the third main motive (3). We have looked at the motives from the different rankings and found no differences between the answers. Therefore, in this study, only the main motive was used in the analysis. Details on the motives are presented in appendix 12.
Firm performance
Control variables
Firm size. We asked the respondents to fill in the amount of working persons which work for more than 15 hours per week in the firm. The answers of the respondents were recoded into three firm size classes; self-employed firms (1 working person), small firms (2 till 10 working persons) and medium and large firms (more then 10 working persons). In some analysis, we spitted the small firm into two groups; micro-small firms (2 till 5 working persons) and small-small firms (6 till 10 working persons).
Region. The respondents were asked to allocate the region in which their firm is located. They could choose between two answer possibilities, the region ‘Flevoland’ or the region ‘Gooi- and Eemland’. These answers were based on the specification in the commercial register of the Chamber of Commerce
Industry. We asked the respondents to allocate the type of industry their firm belongs to. They could choose between eight industry types namely, ‘agriculture and fishery’, ‘industry’, ‘construction industry’, ‘retail trade, catering & hospitality industry’, ’transport and communication’, ‘financial services’, ‘business services’ and ‘public & community authorities. These industries were based on the specification in the commercial register of the Chamber of Commerce. Within the analyses, we recoded the eight industries into three industry types. The first three industries were recoded as the industry type ‘production industry’, since these industries are related to producing goods and materials. The retail trade, catering and hospitality industry was recoded into the industry type ’tangible service industry’, since this industry mainly produces tangible services like clothing, food or a hotel room. The last four industries were recoded into the industry type ‘intangible service industry’. The transport & communication, financial services, business services & public and community authorities industries mainly produces intangible services like financial advice, consultancy etc.
A specified overview of the questions of the questionnaire in this study related to the measurement of all variables, sub variables and items is shown in appendix 6.
Data analysis
A Two Sample T-test and the Mann-Whitney U test was carried out to test for differences of the scores per CSR concept. The scores on the concepts ‘environment’, ‘community’ and ‘supply chain’ were analysed on differences between small firms and medium and large firms.
Motivations for CSR behaviour. To find out if self-employed firms, small firms, medium and large firms and firms from the three different industries differ in their motives for CSR behaviour, the Chi-Square test was conducted. Because the variable ‘motivation’ is a nominal variable, this test was chosen.
Corporate performance. The effect of CSR behaviour on firm performance was tested to find out if CSR behaviour leads to a larger firm performance. To test this effect, Spearman’s correlations were calculated. The Spearman’s correlation is best suited for an ordinal variable, like the six items of firm performance. Finally, we analysed differences in firm performance between firms with a low and a high score on the total CSR score and the score on the three CSR concepts. To test these differences, the Mann-Whitney U test was performed.
RESULTS AND DISCUSSION
Identification of CSR behaviour
The purpose of the first research area was to identify CSR behaviour of small firms and to find out if there were any differences of this behaviour related to firm size and type of industry.
Activities of all CSR concepts were identified to a certain extent in small firms. For example, 60% responded with a positive answer (agree a little, agree or completely agree) towards the environmental question ‘my firm recycles and re-used materials’. More then 30% of the respondents agrees on the question that his or her company supports social projects or organisations with advice, and almost 60% of the respondents answered positive to the question ‘my firm check delivered products/materials on safety before using’. Appendix 8 shows a detailed overview of the accomplishment of the extent of CSR behaviour of small firms.
A score per CSR concept was created after recoding the answers on the questions related to the CSR concepts. Table 4 shows the average scores on the CSR concepts of all small firm respondents. The respondents score an average of 5.13 on the environmental activities. Compared to the maximum total score of 18.00, this is a comparative score of 28.44 %. The community has a comparative score of 24.00 % (2.88 in relation with the maximum score of 12.00). The highest score relates to the supply chain. The score is 7.04 in relation with the maximum score of 24.00 is a comparative score of 29,33 %. By adding up the total scores of the CSR concepts, a CSR score of 15.05 is calculated. In relation with the maximum score of 54.00 this is a comparative score of 27.87 %.
With the identification of all scores mentioned above, we can say that CSR is present in small firms. There are probably firms who do not behave socially responsible at all, some firms behave socially responsible in a small extent and some firms might have integrated CSR completely in their firm. To have a closer look at the deviation of CSR behaviour among these firms a few tests for differences are accomplished. By comparing the scores of CSR behaviour among firms from different size classes and industries, the deviation of CSR can become clearer. Do larger firms, for example, have a higher total CSR score compared to small firms? Are there any differences in CSR behaviour among the firms from different industries? The answers to these questions are presented below. First, differences of the total CSR score between firms from different size classes and industry types are discussed, followed with the analysis of differences in the scores of the CSR concepts ‘environment’, ‘community’ and ‘supply chain’ between small firms and medium and large firms.
Differences of the total CSR score & firm size. Both, the Two Sample T-test and the Mann-Whitney U tests (appendix 9) show a significant difference of the total CSR score between self-employed firms and small firms (t = - 5.20, p = .00; U = 35649.50, p = .00). Self-employed firms score an average of 13,69 compared to a score of 17,47 of the remaining small firms. This means that self-employed firms behave less socially responsible compared to the remaining small firms. All small firms scored 15.04 on total CSR behaviour, medium and large firms score an average of 20,71. Compared to all small firms this is a significant higher score (t = - 5.19, p = .00; U = 15497.50, p = .00). The scores of micro-small firms and small-small firms are close together (17,30 compared to 17,97). The tests show that this little difference is not significant (t = -.52, p = .60; U = 4671.00, p = .40). Micro-small firms and small-small firms are equal in their total CSR behaviour.
These results signify that, the bigger the size of the firm, the higher the score gets on CSR behaviour. The boarder for this statement seems to be from self-employed firms to small firms and from small firms to medium and large firms. These results are partly related to the literature, mentioned before. CSR indeed, is possible in small firms. This can be caused by the characteristics of small firms like flexibility and creativity, mentioned in the previous literature. However, compared to medium and large firms, small firms do lack behind in CSR behaviour. Hoevenagel (2004) mentions in his study that medium and large firms posses more resources like time, money and knowledge. He links these characteristics with explaining why CSR in medium and large firms is present in a larger content compared to small firms.
industry and the intangible service industry nearly differ from each other (14,44 compared to 14,62). The tests show that this small difference is not significant (t = .24, p = .88; U = 14904,500, p = .95). The two different service industry show a high significant difference between the total CSR score (t = .63, p = .01; U = 40607,00, p = .01). The tangible service industry is also more socially responsible compared to the intangible service industry.
Differences of the scores on the CSR concepts & firm size. The analyses before showed that small firms had a significant lower score on total CSR behaviour compared to medium and large firms. To have a closer look at the accomplishment of these differences, the scores per CSR concept of small firms are compared with medium and large firms. Appendix 11 shows the results of the tests for differences on the CSR concepts ‘environment’, ‘community’ and ‘supply chain’.
Medium and large firms show a higher mean score on all CSR concepts compared to small firms. Small firms, for example, have a mean score of 7.04 on the concept ‘supply chain’, compared to a mean score of 9.55 for medium and large firms. The higher scores of the concepts ‘community’ and ‘supply chain’ are significant (t = - 7.33, p = .00; U = 13498,00, p = .00; t = - 4.20, p = .00; U = 17718,00, p = .00). This means that small firms perform activities towards the community and the supply chain in a smaller extent than medium and large firms do. The difference of the score on the environment is a lot smaller than the difference of the other CSR concepts (mean score of small firms = 5,13 compared to a mean score of 5,43 of medium and large firms). This tests for difference show no significantly difference between small firms and medium and large firms (t = -.607, p = .54; U = 23461,50, p = .61). Between small firms and medium and large firms, there is no difference in CSR behaviour towards the environment. Compared to the other scores, this score is the most striking one. Small firms medium and large firms seem to have an equal interest in environmental activities.
As discussed before, past studies expect difficulties with CSR in small firms because of limited resources. This study shows that these difficulties do not actually form a barrier for CSR for small firms, but probably cause the smaller extent of CSR behaviour in small firms compared to large firms. According to Jenkins (2006), these barriers could be approached as a challenge that needs to be overcome through innovation. Small firms have many other characteristics that could aid to adoption of CSR (Jenkins, 2006).
statement, we will analyse the results of the motivations for CSR behaviour of small firms and medium and large firms and of small firms from different industries in the next paragraph.
Motivations for CSR behaviour
The second research area was related to the main motivation for small firms to start with CSR. The demographics of the motivations for CSR behaviour are shown in table 5. The motivation with the highest frequency is the personal motivation (74 %). Most of the small firms, which consciously perform CSR activities, behave socially responsible because of a personal reason. Either the business owners of the firms personally believe it is necessary to behave socially responsible, or they do it because they believe it is necessary for the environment. Still, almost a quarter of the firms (32 %) behave socially responsible because they believe CSR is related with opportunities for their firm. Only 3% of the respondents mentioned one of the defensive motives as the main motivation to start with CSR.
Take in table 5.
Differences of CSR motivations & firm size. By comparing the main motivation for CSR behaviour of self-employed firms with small firms and medium and large firms, we can find out if the main motivation for CSR behaviour depends on firm size. The Chi-Square test (appendix 12) showed no significant difference in the main motivation between self-employed firms, small firms and medium and large firms (χ² = 3,297, p = .51). For all firms, the personal motive is the main motive for CSR behaviour, followed by the opportunity motive. These results show that the main motivation for CSR behaviour is not depending on firm size. This is contradictory with the thoughts of CSR literature. Hoevenagel (2004), for example argued in his study that in most cases of CSR behaviour in a firm, the defensive motive is predominant because of the high social pressure from external parties compared to small firms.
Differences of CSR motivations & industry. The Chi-Square test (appendix 13) showed no significant differences in the main motivation between firms from different industries (χ² = 4.660, p = .32). The main motivation for CSR behaviour is not depending on the type of industry or the type of product/service a firm is producing.
The relation between CSR and firm performance
The last research area is related to the analysis of CSR behaviour and firm performance. If an empirical relationship between CSR and firm performance can be demonstrated, this may be an extra motivation for small firms to put more effort in CSR. The Spearman’s correlations of the total CSR score and CSR concepts with the six firm performance items are provided in table 6. The concept ´environment´ only correlates with customer satisfaction (r = .09, p = .03). The ´community´ has a very low significant relation with turnover, business owner satisfaction, image and the development of the business owner (r = .09, p = .03; r = .10, p = .02; r = .13, p = .00; r = .16, p = .00). The test with the concept ‘supply chain’ showed small relationships with image (r = .09, p = .03), development of the business owner (r = .13, p = .00) and customer satisfaction (r = .17, p = .00). Finally, the total CSR score has a low correlation with image (r = .10, p = .02), development of the business owner (r = .15, p = .00) and customer satisfaction (r = .16, p = .00). All significant relations of CSR behaviour and firm performance have a very low coherence with items of firm performance. CSR behaviour has only in a very small extent influence on items of firm performance.
Take in table 6.
Another way to test if CSR has an influence on firm performance is to test on differences in firm performance between firms with a low and a high score of CSR behaviour. We analysed differences in firm performance between firms with a low and a high score on the total CSR score and the score on the CSR concepts ‘environment’, ‘community’ and ‘supply chain’ (appendix 14).
The influence of CSR behaviour on profit, turnover and business owner satisfaction. The Mann-Whitney U tests showed no significant relations between CSR behaviour and firm performance items ‘profit’, ‘turnover’ and ‘business owner satisfaction’. This means that corporate socially responsible activities do not directly affect the profit, turnover of the firm or the satisfaction of the business owner. Because of the domination of the personal motivation for CSR behaviour of business owners, it is remarkable that no significant differences were found between CSR behaviour and business owner satisfaction. When a business owner is personally convinced that CSR behaviour is necessary, it seems plausible to expect that when a firm behaves socially responsible, this leads to a growing satisfaction of the business owner. The activities are a reaction on his or her own ‘wish’ or believe. It turned out that the extent of satisfaction of the business owner seems to be depending on other factors like, for example, the profit rate or market share.
performance items ‘profit’ and ‘turnover’ because of the ‘distance’ of these items with CSR. CSR behaviour first has to affect the satisfaction of the customers before it can affect the turnover and the profit of the firm. When taking a closer look at the start of CSR behaviour according to firms themselves, it turns out that nearly 47 % of the firms started with CSR activities shorter then three years ago. It seems that a possible effect of CSR behaviour on ‘profit’ and ‘turnover’ possibly needs a longer period of time before it becomes visible.
The influence of CSR behaviour on the development of the business owner. Although the business owner satisfaction did not seem to be influenced by CSR behaviour, the results show that the development of the business owner partly is. The firms with a high score on the CSR concepts ‘community’ and ‘supply chain’ have a significant higher score on the development of the business owner compared to firms with a low score on these CSR concepts (U = 32257,00, p = .00; U = 39475,00, p = .04). CSR activities towards the community and the supply chain are positively related with the way business owners are developing themselves. The firms with a high total CSR score also have a significant higher score on the development of the business owner (U = 39151,00, p = .00). In seems plausible that the business owner decides to implement socially responsible activities in its firm. Before making this decision, the business owner could have informed on CSR with colleagues or CSR experts. In a way, the business owner prepared itself, which could have leaded to a form of development.
The influence of CSR behaviour on the image of the firm. The results of the test show that firms with a high score on the concept ‘community’ have a significantly higher score on the development of the image of the firm compared to firms with a low ‘community’ score (U = 32488,00, p = .00). Firms that, for example, support local projects with advice or business materials, have a higher development of the firm image. The image of the firm is probably based on the experience with customers, local public and suppliers of the firm. These stakeholders seem to incorporate the CSR activities towards the community in a high extend, when determining their opinion on a firm.
The pressure of the local environment of a small firm, including its customers, suppliers, competitors, local public and government can have a large influence on the firm. The results now seem to show, that when a firm does fulfil the demands and wishes of the public, it leads to a higher development of the customer satisfaction.
By overlooking the results, it can be said that CSR in small firms is more complex than some authors claim it to be. Table 7 provides the taxonomy of all results related to the research areas in this study.
Take in table 7.
CONCLUSION AND IMPLICATIONS
Concluding remarks
Overall, the measurement of CSR behaviour towards the environment, the community and the supply chain, showed that CSR is no illusion for small firms. Activities of all CSR concepts were identified to a certain extent in small firms. Activities in relation with the environment and the supply chain scored higher than CSR behaviour towards the community. Still, the results of the study do show CSR behaviour in small firms to lag behind CSR behaviour of larger firms, especially so in the fields of the community and the supply chain. This probably caused the total CSR score of large firms to be significantly larger than that of small firms.
An interesting connecting to the identified CSR behaviour of small firms compared to larger firms, are the results linked with the motivation for CSR behaviour. Since the total CSR score of large firms turned out to be significantly larger compared to small firms, it was expected that large firms had more need to behave socially responsible. This could be because of external pressures and the search for opportunities experienced by firms. However, the results showed a different scenario. Business owners from all firms, small and large, are personally motivated to adopt socially responsible behaviour in their firm. The opportunity and defensive motives are far less dominant. The difference in the extent of CSR behaviour between firms with different sizes is not based on the main motivation for CSR behaviour. In addition, despite the overrepresentation of firms from the business services industry, no differences in motivation were found among small firms from different industries. All small firms, medium and large firms, nondependent on the industry of the firm, experience the same motivations. Characteristics of firms like the possession of financial and human resources and size can possibly cause this difference.
the business owner and a higher rate of customer satisfaction, compared to firms with low average CSR scores.
Overall, there can be concluded that CSR can be placed at the core of everyday business decisions of firms. CSR is certainly no illusion for small firms. As Jenkins (2006) predicted in her study, CSR is less of a ´add-on´ that small firms do not have time and money for, but more a case of ´just the way we do things´. It turns out that, to a certain extent, social and environmental values and actions are integrated into the business life of all businesses, small and large. Although some relations between CSR and firm performance are identified, one question of conscious remains; since the personal motivation for CSR behaviour is dominating all business owners, how important is the relation of CSR and firm performance for firms.
Limitations of this study
The first limitation of this study concerns the subject of using self-reports of the respondents when assessing the main motivation for CSR behaviour and the determination of the presence of social responsible activities. The results of these variables can be overestimated because respondents gave socially desirable answers. These limitations might give an incorrect image of reality.
The second limitation of this study concerns the measurement of the items of firm performance. It was not possible to test with the exact profit and turnover figures. Instead, we asked the respondents to asses the items of firm performance with a relative increase or decrease. Although it is difficult to objectively measure items like customer satisfaction and development of the business-owner, objective figures of the traditional performance measurement items profit and turnover can be included in further research.
Third, the conceptual model for measuring the extent of CSR behaviour did not took socially irresponsible behaviour of firms into account. A firm may do many activities in favour of the supply chain and contribute heavily to social projects but systematically foul the environment. This blind spot must be taken into account and should receive attention in further research.
Finally, because no earlier studies of CSR in small firms exist, we cannot compare the results with similar studies. Further research might fill this gap in CSR literature.
Practical and theoretical implications
self-employed firms. The concept ‘employees’ was included in the conceptualisation of CSR behaviour and since because it was mentioned in most CSR literature. Therefore, it is interesting and useful to examine this CSR concept in future research.
Secondly, this study can be improved by analysing the scores of the total CSR score based on weighted scores of factor analysis. In this study, we used non-weighed scores to measure CSR behaviour, since there were no validated measurements from other studies. It might be interesting to compare the non-weighed scores with the weighted scores to find out if there are differences in the results.
Third, further research of CSR focusing on the different industries can be interesting. This study only focused on differences of the total CSR score among firms from different industries. The results show differences in some extent. It is only not clear how these small differences of the total CSR score were accomplished. It can be possible that firms either scored very low on the CSR concept community and very high on the concept environment or visa versa. In that case, when the total CSR score is calculated firms might have the same total CSR score. When analysing the CSR concepts among the industries, it becomes clear how the firms scored on each CSR concept.
Also, this study can be improved by comparing the correlations on firm performance and CSR behaviour with the respondents’ perceptions on the relation between firm performance and CSR. It might be possible that the perceptions and the real firm performance differ from each other. A firm might believe that the image of its firm is improved because of the socially responsible activities of its firm, while the firm performance figures do not show a significant relation between CSR behaviour and an improvement of image.
TABLE 1
CSR definitions and related aspects from existing CSR literature
CSR definitions Related aspects
Campbell (2007) Actions of companies that do not knowingly could do harm to their
stakeholders. If they do cause harm to their stakeholders they must then rectify it whenever the harm is discovered.
1. Benefits society
2. Beyond the core business 3. Preventing harm for stakeholders
Hoevenagel (2004) Conscious and structural focus on the social role of the company in a way that
is focussed on activities beyond the law and leads to added value for the company and society.
1. Beyond the law
2. Structural and conscious
3. Benefits society and the company 4. Transparency
Kolk and Pinkse (2006) The activities of a company that create extra value for the company and
community, but which do not belong to the core business of the company and which are not legally obligated.
1. Benefits society and the company 2. Beyond the core business
3. Beyond the law
Kok et al. (2001) The obligation of the firm to use its resources in ways to benefit society
through committed participation as a member of society, taking into account the society at large and improving welfare of society, at large gains for the company.
1. Benefits society 2. Welfare improvement
Matten et al. (2003) The responsiveness of businesses to stakeholders´ legal, ethical, social,
environmental and economical expectations, adopted by companies aiming to pursue long-term economic development, consistent with promoting social needs and protecting the environment.
1. Orientation on long-term economical development
McWilliams & Siegel (2001)
Actions that appear to further social good beyond the interests of the firm and that which go beyond the law.
1. Benefits society
2. Beyond the core business 3. Beyond the law
Perrini et al. (2006) The voluntary integration of economic, social and environmental objectives in
the relationship with company stakeholder networks.
1. Beyond the law
2. Relationship with stakeholders and own business at large
Ybema (2001) The conscious focus on the activities of the firm on the tree dimensions,
people, planet and profit which results in a long term contribution to society.
1. Beyond the core business
TABLE 2
Categories and related subcategories of CSR behaviour from existing CSR literature
Source Categories Subcategories
Graafland et al. (2004) Employees Suppliers Customers Society Shareholders Competitors Ethics
Equality; development; integrity; safety;
Safety of product; working conditions; environmental safety of the product; respect;
Quality of the product; environment-friendly; respect; Environmental effects; contribution to local projects; poverty suppression; reintegration unemployed persons; accessibility Trade with foreknowledge;
Respect for competitors; prevent collusion
Code of conduct; ISO certification; external audits; social reports; social handbook; ethical committee; ethical training
Jenkins (2006) Environment Employees Supply chain Community
Energy; waste
Social & professional development; diversity; safety Customers; suppliers; competitors
Donating; sponsoring; involvement Snider et al. (2003) Environment
Customers Employees Stockholders Competitors Society
Concern for the larger ecology in relation with waste and energy Respect, fairness, transparency
Employee development, health, diversity, work-life balance Honesty and integrity, high level of commitment
Meet ethical demand, transparency, respect Community based activities and human rights Wilson (1997) Customers
Employees Ethics Community
Profits
Customer satisfaction; prices; good customer relations; keeping a neat store
Wages, salaries & working conditions; provide jobs; employee relationship
Honesty; fairness
Donations and involvement in community activities; avoid damage to the environment; live within the law; pay your taxes and license fees, member of the Chamber of Commerce
FIGURE 1
Conceptual model of CSR behaviour of a firm
CSR behaviour of the firm Environment Community Supply chain Employees
=
Conscious and voluntaryTABLE 3
Content of CSR concepts used to measure CSR behaviour in small firms
CSR concept Variables Content Sources
Environment Sustainable production
Sustainable procurement
Re-use and recycling schemes
Investment in new technology to recycle and re-use material Investment in new technology to minimise waste
Use energy of renewable sources
Procurement of sustainable products and services
Hempel-Merkelbach, 2007; Jenkins, 2006
Graafland et al, 2004; Jenkins, 2006
Community Involvement Contribution to social projects/organisations
Reintegration program of disabled people
Donate a percentage of profits to social projects/organisations Sponsorship of social projects/organisations with money Work experience places for students/trainees
Jenkins, 2006; Wilson, 1997; Graafland et al, 2004; Hempel-Merkelbach, 2007
Supply chain Customer satisfaction
Respect of the supply chain
Environment & employee policy suppliers
Developments on safety of the product
Handling complaints according to a standard procedure Continuously searching for improvements of the product Good customer relations
Open house policy for customers, suppliers and competitors
Measurement of key performance indicators and apply feedback when necessary
Respect towards suppliers
Consider the environmental and employee policy of its suppliers, and if necessary, let it influence its choice on doing business with the suppliers.
Wilson, 1997
Graafland et al, 2004; Jenkins, 2006
TABLE 4
Average recoded scores of small firms on the CSR concepts
Environment Absolute score Percentage of the maximum score Stimulating the use of public service 0,29 9,67
Safe on energy, water and material 0,7 23,33
Waste minimisation 0,74 24,67
Attention for re-use and recycling schemes 1,26 42,00
Use of sustainable products 1,05 34,67
Incorporation of sustainable production of suppliers 1,09 36,33 Total average score: 5,13 28,44
Community Absolute %
Support social projects/organisations with money 0,98 32,67 Support social projects/organisations with business
materials
0,40 13,33
Support social projects/organisations with advice 0,93 31,00
Offering internship to students 0,57 19,00
Total average score: 2,88 24,00
Supply Chain Absolute % Checking products on safety before using 0,80 26,67 Handling complaints according a fixed procedure 1,14 38,00
Improving the product/service 1,93 64,33
Influence of stakeholders on environmental behaviour 0,57 19,00 Measurement of annoyance for environment 0,25 8,33 Incorporation of labour issues of suppliers 0,55 18,33 Incorporation of sustainable products of suppliers 1,08 36,00 Incorporation of sustainable production of suppliers 0,72 24,00 Total average score: 7,04 29,33
TOTAL AVERAGE CSR SCORE: 15,05 27,87
TABLE 5
Descriptive statistics of the main motivation for CSR behaviour of small firms, which consciously behave socially responsible
Main motive Items Absolute %
Opportunity motive I believe it creates opportunities for my firm 42 13 It leads to a positive increase of the image of my firm 31 10
73 23
Personal motive I personally believe it is necessary 219 67 I believe it is important for the environment 23 7
242 74
Defensive motive My customers were asking for it 1 0
I believe it was necessary for the continuity of my firm 10 3 It is necessary to stay up with the competition 0 0
11 3
326 100
n = 326
TABLE 6
Correlations between CSR behaviour and firm performance
M SD 1 2 3 4
1. Score on total CSR behaviour 5.16 4.15 2. Score on environment 3.18 3.32
3. Score on community 7.30 5.00 .18***
4. Score on supply chain 15.64 9.16 .37*** .30***
5. Profit .45 .74 .04 -.00 .07* .03
6. Turnover .54 .74 .05 -.021 .09** .05
7. Business owner satisfaction .34 .66 .07* -.01 .10** .07*
8. Image .66 .53 .10** .02 .13*** .09**
9. Development business owner .64 .54 .15*** .06 .16*** .13*** 10. Customer satisfaction .62 .51 .16*** .09* .08* .17***
*** p < .10 Spearman’s correlation; n = 645
TABLE 7
Taxonomy of the results of the analyses in this study
Analysis Test(s) Result
*Differences of the total CSR score between firms from different size classes
1. Between self-employed firms and small firms T-test + MWU SFs have a significant higher total CSR score compared to self-employed firms
2. Between micro-small firms and small-small firms T-test + MWU There is no difference of the total CSR score among micro and small-small firms
3. Between all small firms and medium and large firms T-test + MWU MLFs have a higher total CSR score compared to SFs
* Differences of the total CSR score between firms from different industries
1. Between the production and tangible service industry T-test + MWU Firms from the TSI have a small significant higher total CSR score compared to the PI
2. Between the production and intangible service industry T-test + MWU Firms from the production and the ISI do not differ in the total CSR score
3. Between the tangible service and intangible service industry T-test + MWU Firms from the TSI have a significant higher total CSR score compared to the ISI
* Differences of CSR concepts between small firms and medium and large firms
1. CSR concept ‘environment’ T-test + MWU The score on the environment does not differ among SFs and MLFs
2. CSR concept ‘community’ T-test + MWU MLFs have a significantly higher score on the ‘community’ compared to SFs
3. CSR concept ‘supply chain’ T-test + MWU The score of the ‘supply chain’ is significantly higher for MLFs, compared to SFs
*Differences in motivation for CSR behaviour
1. Between firms from different size classes χ²-test Self-employed firms, SFs and MLFs have no different motives for CSR behaviour
Analysis Test(s) Result
*Correlation between CSR behaviour and firm performance items
1. Profit Spearman A small correlation between profit and activities towards the community
2. Turnover Spearman A small correlation between turnover and activities towards the community
3. Business owner satisfaction Spearman A small correlation between business owner satisfaction and activities towards the community and the supply chain
4. Image Spearman A small correlation between image and activities towards the community and the supply chain
5. Development of the business owner Spearman A small correlation between development of the business owner and activities towards the community
and the supply chain
6. Customer satisfaction Spearman A small correlation between customer satisfaction and activities towards the environment, community
and the supply chain
*Differences of firm performance between firms with high and low score on CSR behaviour
1. Differences of firm performance between firms with a high and low score on ‘environment’
MWU Firms with a high score on the environment have significantly higher scores on customer satisfaction
compared to firms with a low environment 2. Differences of firm performance between firms with a high
and low score on ‘community’
MWU Firms with a high score on the community have significantly higher scores on image, development of the
business owner and customer satisfaction compared to firms with a low community score 3. Differences of firm performance between firms with a high
and low score on ‘supply chain’
MWU Firms with a high score on supply chain have significantly higher scores on development of the business
owner and customer satisfaction compared to firms with a low supply chain score 4. Differences of firm performance between firms with a high
and low score on ‘total CSR score’
MWU Firms with a high total CSR score have significantly higher scores on image, development of the
business owner and customer satisfaction compared to firms with a low total CSR score
Legend:
T-test = Two Sample T-test SFs = Small firms TSI = Tangible service industry
MWU = Mann-Whitney U test MLFs = Medium and large firms ISI = Intangible service industry
