A Comparison of Factors Driving MNCs and SMEs towards Corporate Social Responsibility : A Malaysian SME Perspective
Lau, Cin Yee (2006) A Comparison of Factors Driving MNCs and SMEs towards Corporate Social Responsibility : A Malaysian SME Perspective. [Dissertation (University of Nottingham only)] (Unpublished)
The focus of CSR has been mainly on multinational companies (MNC). Small and medium enterprises (SME) have not received much attention. MNCs are in a greater limelight compared to their smaller counterparts. However, collectively the presence of SMEs are significant. This paper attempts to understand the similarities and differences in the approach of CSR between MNCs and SMEs. From the analysis, MNCs adopt an instrumental approach towards CSR. CSR is used as a tool to protect build reputation, goodwill and trust. These are seen as some form of insurance or risk mitigation. This is also to create publicity in the eyes of the stakeholders. MNCs have a need to invest in CSR as they are more vulnerable to shareholders. This is because MNCs are subject to a wider range of shareholders and have more to loose. From the perspective of the SMEs, the approach taken is both ethical and instrumental. In SMEs, there is no separation of ownership and management. As such, CEOs have full discretion to manage the company and as a result, CSR is reflective of their personal values. Most of the entrepreneurs which established the company claims that profits must be made ethically and by adopting good practices. However, when implemented CSR becomes instrumental. CSR is then utilized as a good management tool to instill the right values. However, given the very nature of MNCs with a wide range of divergent stakeholders and the size of the firm, the practice of CSR is somewhat limited.
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