27 April 2010

why CSR is important to SMEs

Last week I said that I will write a post about how small-enterprises can gain by employing principles of CSR and here it is. In a previous post I talked about how CSR plays an important role in current economic times and how companies that employ these principles have an edge over others.

First of all it must be stressed that CSR is not just policy, it is a
principle of doing business. It is not something that is done as an add-on, it is something that is incorporated into your way of doing business. In this scenario, it offers businesses many benefits in terms of better shareholder relationships and also acts as a powerful tool for word-of-mouth advertising.

As mentioned in my last post, it offers SMEs added benefits in terms of strengthening their relationship within the community and acting as an example to make people's lives better. The most important reason why small companies should engage in CSR activities is to improve their export markets. Acting as a part of the supply chain means that export products to a big company needs to meet certain standards all along the chain. This is the single more important competitive benefit that SMEs have by incorporating CSR into their business. It is especially important for small businesses in emerging economies supplying to companies with multiple supply chains.

Secondly, mainstreaming CSR into any business is a challenge. By incorporating the principles of CSR in the early stages of growth, SMEs have another advantage over companies that have already reached a certain size. Forming principles, processes and structures becomes easier along with reporting and policy writing. Developing a culture of sustainability within the organization becomes more streamlined and employees know what it means to be sustainable.

Finally, it makes business sense. This is something that the larger companies are beginning to understand. When the small companies jump on this idea, the limits to green business has no bounds. Infact, the term might just become obsolete along with the term 'business as usual' because every business will be ethical, sustainable and profitable. This is a dream worth working towards...

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