Corporate social responsibility practices among small and medium enterprises in Sri Lanka

Abstract

Introduction

Over the decades, the concept Corporate Social Responsibility (CSR) has continued to grow in importance and significance and representing an important topic for research (Young and Thyil, 2009). Unfortunately, CSR initiatives, so far, have tended to focus mainly on large and multinational companies. Traditional CSR has been perceived as a “luxury good” that only large companies could allow in (Spence et. al., 2003). As a result, businesses have underestimated the impact of Small and Medium Enterprises (SMEs) on society.

However, more recent studies challenge traditional CSR concepts and define how such activities may not be a business threat and cost burden for SMEs, rather an opportunity to gain competitive advantage (Tilley et. al., 2003). SMEs form the vast majority of businesses in most countries and are crucial for the following reasons: the dynamic and stability of the economy, the size/composition and quality of employment, the quality of life in general, and the socio-political structure of an economy (Nooteboom, 1988).

Small and medium-sized businesses play a vital role in the Sri Lankan economy. SMEs are makeup large part of Sri Lankan economy. These are found in all sectors of the economy, primary, secondary and tertiary and provide employment for persons of different skills, skilled, semi-skilled, and unskilled (Central Bank Report, 2013).

A study on CSR and effectiveness of SMEs in Nigeria research recognize the overriding fact that there is growing concern for corporate social responsibility activities in the SMEs. It is clearly revealed that many SMEs engage in some kind of silent social responsibility, hose that attract the attention of participating firms are business ethics, customer and urban affairs. However, majority of the responding firms reported their least involvement in the environmental affairs (Lawal and Sulaimon, 2007). Memdani (2008) studied that corporate social responsibility is not just the responsibility of big giants but also of small and medium enterprises too. Large number of SMEs has started moving ahead towards achievement of this goal and they are benefited also Due to relatively little attention being given to CSR in relation to SMEs until recent years, particularly in Sri Lanka, investigates CSR practices from the perspective of SMEs in Sri Lanka. Major reason to undertake this research is to fill the gap of findings among Sri Lankan small and medium enterprises. The researcher is interested in understanding CSR practices in Sri Lankan SMEs which is not researched adequately. Therefore the research question in this study is what are the CSR practices among SMEs in Sri Lanka?