Investigating the Impact of Firm Size on Small Business Social Responsibility: A Critical Review

The impact of smaller firm size on corporate social responsibility (CSR) is ambiguous. Some contend that small businesses are socially responsible by nature, while others argue that a smaller firm size imposes barriers on small firms that constrain their ability to take responsible action. This paper critically analyses recent theoretical and empirical contributions on the size–social responsibility relationship among small businesses. More specifically, it reviews the impact of firm size on four antecedents of business behaviour: issue characteristics, personal characteristics, organizational characteristics and context characteristics. It concludes that the small business context does impose barriers on social responsibility taking, but that the impact of the smaller firm size on social responsibility should be nuanced depending on a number of conditions. From a critical analysis of these conditions, opportunities for small businesses and their constituents to overcome the constraining barriers are suggested.

[1]  N. Dentchev,et al.  A Network Perspective on Stakeholder Management: Facilitating Entrepreneurs in the Discovery of Opportunities , 2005 .

[2]  Charles E. Bamford,et al.  Differences in large and small firm responses to environmental context: strategic implications from a comparative analysis of business formations , 1998 .

[3]  Patricia L. Smith,et al.  A Study of the Ethical Values of Metropolitan and Nonmetropolitan Small Business Owners , 1994 .

[4]  Y. Fassin.  The Reasons Behind Non-Ethical Behaviour in Business and Entrepreneurship , 2005 .

[5]  D. Hambrick,et al.  Speed, Stealth, and Selective Attack: How Small Firms Differ From Large Firms in Competitive Behavior , 1995 .

[6]  H. P. Sims,et al.  Some Determinants of Unethical Decision Behavior: An Experiment , 1978 .

[7]  Paul Serwinek,et al.  Demographic & related differences in ethical views among small businesses , 1992 .

[8]  Barbara Gray,et al.  Testing a Model of Organizational Response to Social and Political Issues , 1994 .

[9]  T. Guay,et al.  Corporate Social Responsibility, Public Policy, and Ngo Activism in Europe and the United States: An Institutional-Stakeholder Perspective , 2006 .

[10]  Frances Bowen,et al.  Organizational Slack and Corporate Greening: Broadening the Debate , 2002 .

[11]  S. Brammer,et al.  Firm size, organizational visibility and corporate philanthropy: An empirical analysis , 2006 .

[12]  Archie B. Carroll,et al.  Moral Reasoning Skills: Are Entrepreneurs Different? , 1999 .

[13]  Laura J. Spence,et al.  Small Business and the Environment in the UK and the Netherlands: Toward Stakeholder Cooperation , 2000, Business Ethics Quarterly.

[14]  Rudy Aernoudt,et al.  Small- and medium-sized Enterprises , 2003 .

[15]  L. Kohlberg.  Stage and sequence: The cognitive-developmental approach to socialization , 1969 .

[16]  Fiona Tilley,et al.  The gap between the environmental attitudes and the environmental behaviour of small firms , 1999 .

[17]  Bart Nooteboom,et al.  Innovation and diffusion in small firms: Theory and evidence , 1994 .

[18]  David B. Audretsch,et al.  Entrepreneurship - A Survey of the Literature - , 2006 .

[19]  Wai-sum Siu,et al.  Ethical Decision-Making in Corporate Entrepreneurial Organizations , 2000 .

[20]  J. J. Quinn.  Personal Ethics and Business Ethics: The Ethical Attitudes of Owner/ Managers of Small Business , 1997 .

[21]  C. W. Moore,et al.  Ethical Attitudes in Small Businesses and Large Corporations: Theory and Empirical Findings from a Tracking Study Spanning Three Decades , 2006 .

[22]  Roy Thurik,et al.  Linking Entrepreneurship and Economic Growth , 1999 .

[23]  Sandra B. Richtermeyer,et al.  Employee job response as a function of ethical context and perceived organization support , 2006 .

[24]  Beatriz Junquera,et al.  A review of the literature on environmental innovation management in SMEs: implications for public policies , 2003 .

[25]  Michaela A. Balzarova,et al.  How can SMEs effectively implement the CSR agenda? A UK case study perspective , 2004 .

[26]  Howard E. Aldrich,et al.  Even Dwarfs Started Small: Liabilities of Age and Size and Their Strategic Implications , 1986 .

[27]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[28]  John K. Masters,et al.  Ethics Through an Entrepreneurial Lens: Theory and Observation , 2002 .

[29]  W. Baumol.  Entrepreneurship: Productive, Unproductive, and Destructive , 1990, Journal of Political Economy.

[30]  Roy Thurik,et al.  SMEs in Europe 2003 , 2004 .

[31]  Tim Rowley.  Moving Beyond Dyadic Ties: A Network Theory of Stakeholder Influences , 1997 .

[32]  B. Clemens,et al.  Economic incentives and small firms: Does it pay to be green? , 2006 .

[33]  R. Baron.  Cognitive mechanisms in entrepreneurship: Why and when enterpreneurs think differently than other people , 1998 .

[34]  Bruna De Marchi,et al.  Environmental Performance, Competitiveness and Management of Small Businesses in Europe , 2005 .

[35]  Jeff Allen,et al.  The Ethical Context of Entrepreneurship: Proposing and Testing a Developmental Framework , 2002 .

[36]  L. Bourgeois.  On the Measurement of Organizational Slack , 1981 .

[37]  Paul R. Murphy,et al.  Executive attitudes, organizational size and ethical issues: Perspectives on a service industry , 1992 .

[38]  Lawrence B. Chonko,et al.  Corporate Ethical Values and Organizational Commitment in Marketing , 1989 .

[39]  Fiona Tilley,et al.  Small firm environmental ethics: how deep do they go? , 2000 .

[40]  N. Nicholson.  Personality and entrepreneurial leadership:: A study of the heads of the UK's most successful independent companies , 1998 .

[41]  Goslin,et al.  Handbook of socialization theory and research , 1969 .

[42]  C. Oliver.  STRATEGIC RESPONSES TO INSTITUTIONAL PROCESSES , 1991 .

[43]  M. Adams,et al.  An Analysis of Corporate Donations: United Kingdom Evidence , 1998 .

[44]  James W. Carland,et al.  Differentiating Entrepreneurs from Small Business Owners: A Conceptualization , 1984 .

[45]  Laura J. Spence,et al.  Communicating about Ethics with Small Firms: Experiences from the U.K. and Spain , 2000 .

[46]  Robert D. Hisrich,et al.  Ethics and entrepreneurs: An international comparative study , 2003 .

[47]  Stuart A. Youngblood,et al.  Bad apples in bad barrels: A causal analysis of ethical decision-making behavior. , 1990 .

[48]  Petra Christmann.  Effects of “Best Practices” of Environmental Management on Cost Advantage: The Role of Complementary Assets , 2000 .

[49]  David Carson.  Marketing and entrepreneurship in SMEs : an innovative approach , 1995 .

[50]  Frances Bowen,et al.  Environmental visibility: A trigger of green organizational response? , 2000 .

[51]  S. Zahra.  Executive values and the ethics of company politics: Some preliminary findings , 1989 .

[52]  H. Simon,et al.  Models of Bounded Rationality: Empirically Grounded Economic Reason , 1997 .

[53]  J. Brown,et al.  Organizational Learning and Communities-of-Practice: Toward a Unified View of Working, Learning, and Innovation , 1991 .

[54]  Ceo,et al.  Strategic Management Journal 4 , 1994 .

[55]  Ha Hoang,et al.  Network-based research in entrepreneurship A critical review , 2003 .

[56]  René Schmidpeter,et al.  Responsibility and social capital : the world of small and medium sized enterprises , 2004 .

[57]  I. Nonaka.  A Dynamic Theory of Organizational Knowledge Creation , 1994 .

[58]  Shailendra Vyakarnam,et al.  Towards an Understanding of Ethical Behaviour in Small Firms , 1997 .

[59]  Andrew C. Inkpen,et al.  Social Capital, Networks, and Knowledge Transfer , 2005 .

[60]  C. Southwell.  Engaging SMEs in Community and Social Issues , 2004 .

[61]  John B. Miner,et al.  Type of Entrepreneur, Type of Firm, and Managerial Motivation: Implications for Organizational Life Cycle Theory , 1983 .

[62]  Andrew Atherton,et al.  The Uncertainty of Knowing: An Analysis of the Nature of Knowledge in a Small Business Context , 2003 .

[63]  R. Gulati.  Is Slack Good or Bad for Innovation ? , 2007 .

[64]  J. Ebben,et al.  Efficiency, flexibility, or both? Evidence linking strategy to performance in small firms , 2005 .

[65]  Laura J. Spence,et al.  Does size matter? The state of the art in small business ethics , 1999 .

[66]  J. Merritt,et al.  EM into SME won't go? Attitudes, awareness and practices in the London Borough of Croydon , 1998 .

[67]  Stuart Dawson,et al.  The Ethical Outlook of Micro Business Operators , 2002 .

[68]  Jeffrey S. Hornsby,et al.  The Ethical Perceptions of Small Business Owners: A Factor Analytic Study , 1994 .

[69]  C. Fombrun,et al.  What's in a Name? Reputation Building and Corporate Strategy , 1990 .

[70]  Martin B. Meznar,et al.  Buffer or Bridge? Environmental and Organizational Determinants of Public Affairs Activities in American Firms , 1995 .

[71]  Michael T. Schaper,et al.  Small Firms and Environmental Management , 2002 .

[72]  Sanjay Sharma.  Managerial Interpretations and Organizational Context as Predictors of Corporate Choice of Environmental Strategy , 2000 .

[73]  Jeanette Jaussaud Arbuthnot.  Identifying Ethical Problems Confronting Small Retail Buyers During the Merchandise Buying Process , 1997 .

[74]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[75]  Kelly G. Shaver,et al.  Person, Process, Choice: The Psychology of New Venture Creation , 1992 .

[76]  M. Hitt,et al.  Corporate Political Strategy Formulation: A Model of Approach, Participation, and Strategy Decisions , 1999 .

[77]  M. Mccuddy,et al.  Selected individual differences and collegians' ethical beliefs , 1996 .

[78]  T. Machan.  Entrepreneurship and ethics , 1999 .

[79]  A. Hillman,et al.  International Variation in the Business-Government Interface: Institutional and Organizational Considerations , 1995 .

[80]  Francis T. Hannafey.  Entrepreneurship and Ethics: A Literature Review , 2003 .

[81]  P. Groenewegen,et al.  A Bibliometric Analysis of 30 Years of Research and Theory on Corporate Social Responsibility and Corporate Social Performance , 2005 .

[82]  D. Turban,et al.  Corporate Social Performance And Organizational Attractiveness To Prospective Employees , 1997 .

[83]  T. Jones.  Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model , 1991 .

[84]  Donald P. Robin,et al.  The Ethical Decision Making Process of Small Business Owner/managers and Their Customers , 1993 .

[85]  S. Vitell,et al.  Ethical Problems, Conflicts and Beliefs of Small Business Professionals , 2000 .

[86]  Robert C. Davis,et al.  The Achieving Society , 1962 .

[87]  Bronwyn H Hall,et al.  Innovation and Diffusion , 2004 .

[88]  Robert J. Harvey,et al.  An Analysis of the Factor Structure of Jones’ Moral Intensity Construct , 2006 .

[89]  Leigh Holland,et al.  SMEs IN THE METAL MANUFACTURING, CONSTRUCTION AND CONTRACTING SERVICE SECTORS: ENVIRONMENTAL AWARENESS AND ACTIONS , 1997 .

[90]  J. Curran,et al.  Researching the small enterprise , 2001 .

[91]  Literature Review: Social Capital and SMEs , 2004 .

[92]  Charles B. Shrader,et al.  Strategic and Operational Planning, Uncertainty, and Performance in Small Firms , 1989 .

[93]  See Liang Foo,et al.  Moderating effects of tolerance for ambiguity and risktaking propensity on the role conflict-perceived performance relationship: Evidence from singaporean entrepreneurs , 1997 .

[94]  Donald A. Schön,et al.  Organizational Learning: A Theory Of Action Perspective , 1978 .

[95]  G. d'Amboise,et al.  Management Theory for Small Business: Attempts and Requirements , 1988 .

[96]  Gulcimen Yurtsever.  Measuring the moral entrepreneurial personality , 2003 .

[97]  M. Lähdesmäki.  When Ethics Matters – Interpreting the Ethical Discourse of Small Nature-Based Entrepreneurs , 2005 .

[98]  M. Meulenberg,et al.  Market Orientation, Innovativeness, Product Innovation, and Performance in Small Firms , 2004 .

[99]  Jane E. Fountain.  Social Capital: A Key Enabler of Innovation , 1998 .

[100]  Judith Petts,et al.  THE CLIMATE AND CULTURE OF ENVIRONMENTAL COMPLIANCE WITHIN SMEs , 1999 .

[101]  J. Deeks.  THE SMALL FIRM — ASSET OR LIABILITY? , 1973 .

[102]  Stefan Schaltegger,et al.  The link between 'green' and economic success: environmental management as the crucial trigger between environmental and economic performance. , 2002, Journal of environmental management.

[103]  Charles H. Schwepker,et al.  Ethical climate's relationship to job satisfaction, organizational commitment, and turnover intention in the salesforce , 2001 .

[104]  T. Besser.  Community Involvement and the Perception of Success among Small Business Operators in Small Towns , 1999 .

[105]  Mark P. Sharfman,et al.  Antecedents of Organizational Slack , 1988 .

[106]  Perry Sadorsky,et al.  The Determinants of an Environmentally Responsive Firm: An Empirical Approach , 1996 .

[107]  G. Noci,et al.  Managing "green" product innovation in small firms , 1999 .

[108]  Larry R. Smeltzer,et al.  Environmental Scanning Practices in Small Business , 1988 .

[109]  C. W. Moore,et al.  Ethics in Small Business , 1989 .