AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
RELATIONSHIP OF CORPORATE SOCIAL RESPONSIBILITY AND INNOVATION IN SMES:
CASE STUDY IN SELECTED CEE COUNTRIES
a
GÁBOROVÁ, IVANA
Pan-European University, Faculty of Economics and
Entrepreneurship, Tematínska 10, 851 05, Bratislava, Slovakia
email:
a
ivanagaborova3@gmail.com
Abstract: CSR has grown in importance since the economic crisis of 2008. Businesses
attempted to search for solutions of economic issues by trying to explore new ways of
conducting their business, thus, the perception and efforts to exploit the potential of
CSR concept changed dramatically. It might also be a way out of the upcoming crisis
for many SMEs. Implementation of CSR via innovation or innovating via CSR might
bring them more resilience in the upcoming unprecedented times. As shown by
statistical analysis (structural equation modelling) of the empirical data from CEE
region - Austria, Czech Republic and Slovakia (n=607), innovative SMEs don`t need
to explicitly concentrate on CSR – its specific activities or reporting. The answer for
SMEs lies in business strategy, innovation and sustainable business model.
Keywords: Corporate Social Responsibility, innovation, sustainability, business
strategy, SMEs
1 Introduction
Corporate Social Responsibility (CSR) has become over the
recent years, especially after the crisis in 2008, while seeking for
solutions of ever increasing economic, social and environmental
issues a stabile concept in business. Topic has drawn a lot of
attention of researchers during the last two decades
(Baumgartner, Ebner, 2010; Boucquet, et al. 2017; Christensen,
et al., 2014; Gelbmann, 2010; Nidumolu et al., 2009; Porter,
Kramer, 2011; Ramesh et al., 2019; Visser, 2010; Voegtlin,
Greenwood, 2016). However, the importance of socially
responsible way of doing business was already a topic of
researchers much earlier in the 20th century (Arlow, Gannon,
1982; Barnard, 1958; Carroll, 1999; Davis, Blomstrom, 1975;
Elkington, 1994). Thus, it can be stated that the notion itself is
not new but the actual perception and application of CSR
concept in business practice is different.
Nowadays, modern companies realize more and more the
importance of the actual way they perform their business
activities. The result is not the only thing that is important. The
way how it was achieved has the same level of significance.
Sensitivity of customers and stakeholders to these issues is
increasing (Coombs, Holladay, 2015; Dawkins, Lewis, 2003;
Guenster et al., 2011; El Ghoul et. al, 2017; Kim, Krishna,
Danesh, 2019) and in addition, due to the exponential growth of
technologies, they have much easier and instant access to
relevant information about business practices. CSR is not only
a value added to distinguish the business entity from its
competition but a necessity for survival. Several studies in the
past already proved positive relationship of CSR on financial
performance (Anser et al. 2017; Lenz et al., 2017; Lev et al.,
2010; Margolis, Walsh, 2003; Price, Sun, 2017; Ruggiero,
Cupertino, 2018). CSR plays a key role in keeping the business
sustainable, maintaining the competitiveness and general
advancement of companies (Guenster et al., 2011; Lu et. al.
2019). Doing business responsibly and considering its impact is
the way how to develop the business and keep it sustainable also
from the long term perspective. In the contemporary
management practice, the role of sustainable development comes
more into focus and CSR is one of the ways how business can
approach it proactively (Lu, et al., 2019).
Companies are gaining the ability to see CSR not only as
unnecessary expense with no real impact but as a chance to bring
their business to the next level. Perception of CSR as only a cost
item that doesn`t bring any sustainable effect and persisting fear
of it (Baumgartner, Ebner, 2010; Hwang, Kandampully, 2015)
is not valid anymore. On the contrary, it can bring many
financial benefits, become crucial element in company strategy,
contribute to risk management and be a valuable addition in
building business relationships (Heal, 2005). In order to be able
to fully exploit the benefits of CSR concept, it is crucial to
understand CSR as a business opportunity (Rexhepi et al. 2013)
and make it an integral part of performed activities since the
inital stage. It should be inseparable part of all business
processes. Corporate social responsibility must be a way of
doing business and not a partial goal. Proactive approach and
being part of the business strategy is inevitable. Only reacting to
already emerged situation and mitigating the negative
consequenses of performed business activities - reactive
approach to CSR, is not the ideal way of the implementation of
this concept. This way, it has a lower chance of exploiting its full
potential.
In the past, majority of research regarding CSR has been targeted
at large companies. However, small to medium enterprises can
have even higher impact due to their number and significance in
the economy (employment or share on GDP). Their sustainable
and ethical practices are less visible but their impact is equally
relevant and meaningful. For this reason, empirical research of
this study was targeted at SMEs. In addition, CSR is still
considered to be a domain of large companies (Jenkins, 2004)
and in addition, there is still lack of empirical data on CSR in
SMEs (Perrini, et al., 2007) – especially in the CEE region that
has been explicitly chosen for this study.
Results of empirical research (Gáborová, 2020) imply that
innovative SMEs can have very strong CSR awareness including
proactive approach towards its implementation into its business
operations while still not concentrating on performing CSR
activities as such. These relationships between innovativeness
and CSR came out of the statistical analysis of the empirical data
collected via questionnaire survey. Chi-square test confirmed the
existence of the association and its strength was further
confirmed by means of Cramer`s coefficient (n=607, selected
CEE countries Austria, Czech Republic, Slovakia). This
contribution aims to further investigate these relationships and
confirm stated hypotheses by further statistical analysis through
structural equation modelling (SEM).
This article is a contribution to scientific literature at both,
theoretical and practical levels. Firstly, it looks at the issue of
CSR from a different point of view and sees the solution of
effective CSR implementation for SMEs in innovation and not in
application of various models and structured approach in
general. Secondly, article provides empirical data for currently
less researched CEE region – specifically for Austria (AT),
Czech Republic (CZ) and Slovakia (SK).
The rest of this article is organized into four chapters. In the
second chapter, theoretical framework is explained and research
questions and hypotheses are stated. Third chapter explains the
methodology of research and in the fourth chapter, results of the
statistical analysis of the empirical data were provided and
discussed. In the last, fifth chapter of this contribution, main
findings and conclusions are summarized.
2 Theoretical framework and hypotheses
CSR has become an important business agenda over the years
and is continuously developing into a business trend of the
current era with high potential to prevail also for the future. The
question is in which form this will happen. Defensive or reactive
CSR approach is slowly being replaced by more proactive
compliance and managerial CSR in the direction of core strategic
CSR (Middtun, 2009; Zadek, 2004). CSR has to become natural
part of the business strategy and a core competency of top
management. It cannot be ‘just tolerated’ because the company
needs to have socially responsible public image.
2.1 Literature review
CSR concepts itself is very hard to define and measure. Results
of the studies attempting to prove the relationships between CSR
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