The impact of corporate social responsibility on the performance of selected small, medium and micro-sized enterprises in the Butterworth area

Abstract

Small, medium and micro-sized enterprises (SMMEs) face challenging difficulties in competing with large enterprises all over the world. They try many strategies to keep up and fight for their market competitiveness, with one of these strategies being corporate social responsibility (CSR). Although CSR is a well-established term in the business world, there is a need to investigate how CSR can impact the performance of SMMEs given their size and their financial status. Most of the literature on CSR has focused on large corporations with few studies focusing on SMMEs, particularly in rural areas of South Africa.

This study has investigated and examined the impact of CSR on the performance of SMMEs in Butterworth. This study’s main objectives were to explore the different types of CSR activities that SMMEs are engaged in, to explore the different drivers of CSR for SMMEs as well as the assessment of the perceptions of SMMEs about CSR and performance. Predominantly, this study has focused on determining the impact of CSR on SMME performance. The sample studied was 163 SMMEs in various sectors around Butterworth. A quantitative research method was applied in order to achieve the objectives of this study, however a non-probability sampling technique was used because of the assumptions that since the targeted population consisted of busy entrepreneurs there would be incidents of non-response.

The study found that even though CSR has been associated with large corporations, SMMEs in Butterworth know about the existence of the relationship between CSR and performance and understand that a business that has higher levels of CSR is more likely to perform better as compared to those that do not practice CSR. The results of the study revealed that most of these SMMEs are not only compelled by the law to act socially responsible but are driven by the profits that are linked with the involvement in these activities. It is also recommended that for SMMEs to enjoy the benefits that CSR imposes in business, they should start considering incorporating CSR into their business activities.