Evaluating the influence of social responsibility practices on the performance of small and medium automotive manufacturers in the eThekwini Metropolitan Municipality

Abstract

Small and medium enterprises (SMEs) are an important business sector in South Africa, while also contributing to new job opportunities and development all over the world. It is assumed the implementation of a strategic philosophy such as Corporate Social Responsibility (CSR) can enhance performance of SMEs, as it involves organisations acting responsibly and ethically towards society, the environment and other stakeholders to maximise positive impact, not merely increase profit. CSR has received much attention in the business world, nevertheless, several SMEs in the manufacturing sector do not recognise how their practice closely affects employees, society, and the environment. Studies show manufacturers deposit their waste into some of the country’s main rivers, which affects individuals in the surroundings, demonstrating the lack of business manufacturers involvement in CSR practices. Hence, the purpose of this study is to evaluate the extent to which CSR practices influence SME performance in the automotive manufacturing sector of the eThekwini Metropolitan Municipality. The study objective is thus to evaluate the influence of environmental CSR practices, ethical CSR labour practices, and the public good of CSR, on SME performance. Being quantitative in nature, structured questionnaires were employed to gather data from the targeted population of 120 SME owners in the automotive manufacturing sector, with the sampling size of 110 SME owners and 10 SME owners for pilot study. The study reveals the demographic variables that have a relationship with CSR practices, as well as variables that do not. This includes environmental, ethical labour and public good CSR practices and their relationship with demographic variables. Ethical CSR labour practices showed no relationship with any demographic variable when using ANOVA technique. All statistical results are achieved with Statistical Package for Social Sciences (SPSS) techniques, including descriptive statistics, chisquare, Pearson correlation co-efficient and ANOVA techniques. The study is limited to automotive manufacturing SMEs and CSR practices.