Social Entrepreneurship

Obstacles to Corporate Social Responsibility

Written by Charles Mburugu for Gaebler Ventures

Small and Medium Enterprises (SMEs) play a crucial role in the ensuring the overall development of a nation. But when it comes to the issue of Corporate Social Responsibility (CSR), only a handful of small businesses are seen as successful. What are the main factors that hinder CSR in SMEs and how can they be overcome?

Corporate Social Responsibility (CSR) activities are a vital element of any professional organization.

This is the case especially for Small and Medium Enterprises (SMEs). As a result a few of these small businesses are beginning to take their CSR activities seriously. Research has established that there are a number of major obstacles hindering the application of good CSR practices and policies into SMEs. What are some of these obstacles and how can you overcome them?

Lack of awareness

It is a fact that many SMEs have little knowledge of CSR. SME owners and managers often do not fully comprehend the demands from the stakeholders and therefore do not fully realize how much they value CSR. In some cases, SMEs may have a greater understanding of CSR issues but lack understanding on how to begin implementing a CSR program. Finally, there is significant ignorance about the benefits that can be gained from good CSR practices. Your business should invest in programs of creating awareness about the importance of CSR.

Lack of human resources

Many SMEs claim that they lack the human resource that they can assign to CSR practices. In addition, many management systems being used by SMEs are very unproductive, inefficient and wasteful of human resources. In order to develop good CSR policies and practices, your business should focus on recruiting/training staff that will be able to head and develop CSR initiatives.

Competing codes of conduct and multiple requirements

A major concern for many business owners and managers is connected to competing codes of conduct from different customers. Such duplication is expensive and frustrating to suppliers. To avoid this, you business should help customers agree on common standards to be adhered to.

Costs

SMEs constantly face the challenge of tighter budgets brought about by rising costs of material, energy and wages. Therefore, most are unable to spend much money on CSR initiatives. However, CSR activities can be carried out at any level. Even if your business has limited funds, you could create a separate CSR budget so as to ensure unnecessary expenditures are avoided. Selection of appropriate, low cost initiatives will enable you to carry out CSR activities with your limited budget.

Over-emphasis on inspections and cheating

Many SMEs are guilty of not complying with codes of conduct. Many SME owners and managers have the perception that they can not do business and make profits while adhering to codes of conduct and regulation. Your business, however, does not have to 'cut corners' to remain in business. You need to dialogue with key stakeholders and find a balance between making profits and full implementation of CSR codes of conduct.

Charles Mburugu writes for us from his home in Nairobi. He has a graduate degree in Business Management from Kenya Institute of Management. He is interested in writing about branding, CSR and intellectual property.

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