RESOURCES: The New ISO 26000 Standard for CSR (Part 2)

This series of blog posts looks at the new ISO 26000 standard for corporate social responsibility. In five parts, it summarizes the report, How Material is ISO 26000 Social Responsibility to Small and Medium-sized Enterprises (SMEs)?, written by Oshani Perera in Sept, 2008.

PART II: RESULTS OF THE SME SURVEY ON ISO 26000 SOCIAL RESPONSIBILITY

DO STANDARDS FURTHER RESPONSIBLE ENTERPRISE IN SMES?
NCPCs and consultants provided an informative evaluation of how standards were contributing to sustainable enterprise in SMEs. They viewed standards primarily as starter tools to introduce companies to sustainable enterprise. They do not, however, consider standards to be of high value in raising skills, diversifying core product/service offerings, or ensuring legal compliance, which are essential aspects of business longevity.

DO STANDARDS ENCOURAGE MOCK COMPLIANCE?
Even though SMEs are heterogeneous in size and working structure, they appear to operate in a flat management and reporting hierarchy. There appears to be little distinction between the roles of management, ownership, and floor-level responsibility, as functions tend to be flexible and multi-disciplinary. Furthermore, activities for the most part are oriented towards resolving day-to-day problems through informal communication and interpersonal relationships.

In such a setting, social responsibility proponents need to better understand the organizational and motivational subcultures of different SMEs to determine how to best advance social responsibility within them. There is also a need to find methodologies that are differentiated from the more formal ones used by multinational companies, which include codes of conduct, corporate sustainability reports, performance indicators, supplier standards, and performance evaluation audits.

This study reveals that these tools – more often appropriate to large, multinational companies – may be inviting mock compliance by SMEs, rather than a deeper appreciation for sustainable development and the value of action at the level of small, individual enterprises.

SOCIAL RESPONSIBILITY IS DRIVEN BY THE VALUES OF THE OWNER-MANAGER
The personal values of the owner-manager are potentially the key driver of social responsibility practices in SMEs. This view was confirmed by all respondents, including the national chambers of commerce. While the perspectives of employees could make a difference in how social responsibility may be played out in day-to-day activities, direction and decisions appear to be made by the owner-manager alone.

SMES DO NOT APPEAR TO INVEST IN SOCIAL CAPITAL
SMEs operate through a web of interpersonal relationships and therefore, at least in theory, they should be amongst the first to realize the value of investing in social capital. This study, however, reveals the reverse. None of the SMEs interviewed had, or planned to provide, opportunities for continued education, re-skilling or up-skilling to their employees. Bonuses, awards, subsidized housing, meals and childcare were amongst the commonly sighted indicators of a socially conscious employer, but skills-building was not a part of this portfolio.

SMES OFTEN MISS THE BIGGER PICTURE
SME do not appear to have a cradle-to-cradle understanding of the social responsibility agenda, i.e. how the different areas of environmental and social responsibility can combine to bring improvements across the triple-bottom-line—economic, social and environmental—performance. All the SMEs consulted appeared to approach each social responsibility issue as a discrete area of activity. And because these practices were carried out through informal processes, and with little or no performance monitoring, it is perhaps not that surprising that these companies had yet to realize the inter-connectivity across the different aspects of performance.

DO SMES VALUE SOCIAL RESPONSIBILITY AS A BUSINESS STRATEGY?
Approximately 45 per cent of the SMEs were of the view that social responsibility was a matter of ethics and intuition, rather than a strategy to improve business. As one SME in the automobile sector in Slovakia commented, “Social responsibility is about doing the right thing; it is not about improving the company.” However, it is worth noting that at the end of the two consultations, which included some discussion on business issues and the local sustainable development context, over 75 per cent of the SMEs agreed that the right mix of social responsibility strategies could bring business benefits in both the near-and medium-terms.

SMES TEND TO SPECIALIZE IN PARTICULAR SOCIAL RESPONSIBILITY ISSUES
SMEs tend to specialize in particular areas of social responsibility. That is, they tended to focus almost exclusively on one of the following: health and safety, energy and waste management, working hours and overtime, community contributions, or social benefits provision.