Socially Responsible and Small: A Quantitative Study of Corporate Social Responsibility in Small and Medium Organizations in the United States

Corporate social responsibility (CSR) has become a global imperative supported by governments, industry, and citizens alike. In 2000, the United Nations launched the Global Compact to encourage businesses to adopt socially responsible policies. In tandem, businesses became increasingly attentive to their social practices with the vast majority of executives declaring CSR important to their organization’s success. Despite this increase in attention – which occurred among businesses of all sizes – the academic literature on CSR has focused almost exclusively on large, public companies. Ironically, the majority of businesses in the United States are small, private businesses suggesting the existing CSR field has overlooked a significant segment of business. To address this knowledge problem, this study analyzed pre-existing survey data from 3,005 small and medium enterprises (SME) located in the United States. This research first addressed the various types and levels of CSR by using factor analytic techniques to identify 22 organizational activities that corresponded to five areas of internal CSR and two areas of external CSR. Correlation coefficients and regression analysis were then used to determine the extent to which variation in these CSR activities could be explained by the 22 organizational characteristics identified in the data. The study results indicated that more than 99% of SMEs participated in some form of CSR, although participation rates varied from a low of 5% to a high of 92% for specific CSR activities. Organization size, as measured by number of employees, proved to be the most significant variable with a positive relationship to CSR activity. In addition, leadership characteristics such as longer tenure, a higher percentage of women executives, and more frequent executive-employee meetings were also found to have a positive relationship with CSR activity. Other characteristics including industry type and geographic region showed both positive and negative relationships with CSR. Overall, organization characteristics, including size, explained only 17% of the variation in CSR activity suggesting SMEs of all sizes can and do participate in CSR. It is hoped this study will provide practical data to further encourage SMEs in the United States to pursue CSR for the mutual benefit of business and society