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JOURNAL OF INTERDISCIPLINARY RESEARCH
concept and financial performance are still contradictory. Some
proved positive but some studies also show negative
relationship.
Table 1 Overview of research findings of relationships between
CSR and financial performance
Year
Author
Positive
relationship
Negative
relationship
No relationship
1997
Posnikoff
✓
1997
Wright, Ferris
✓
1999
Teoh, et al.
✓
2003
Margolis, Walsh
✓
2010
Lev, Petrovits,
Radhakishan
✓
2011
Gossling
✓
2015
Meyer
2017
Answer et al.
✓
2017
Lenz et al.
✓
2017
Price, Sun
✓
2017
Varadajan, Kaul
✓
2017
Boucquet
✓
2018
Rugiero, Cupertino
✓
Source: author`s own
As the empirical research on the relationship between CSR and
financial performance of business entity lacks consistency in the
scientific methodologies results also tend to be quite confusing
and not enough conclusive. According to McWilliams and
Siegel (2000) the methodologies used in the vast majority of
published studies are too weak. Measures of CSR are too vague,
inconsistent and not clearly defined (Wang, et al., 2016). This
raises questions and doubts regarding the concept itself which
could negatively contribute to the perception of CSR by
managers. The fear that CSR might even compromise the profits
is still prevalent (Hwang, Kandampully, 2015).
However, there are positive examples seen in the business
practice that imply that it is possible to do business in
responsible way without explicitly concentrating on it and in
addition, also maintain good business results. Companies with
direct proportion between CSR and business results have one
thing in common and that is innovation. It serves as a mediator
or as a driver (Anser, Zhang, Kanwal 2017; Boucquet 2017;
Gáborová, 2020; Marin, Martin, Rubio, 2016; Ruggiero,
Cupertino, 2018, Surocca et al., 2010). This assumption takes the
importance of equation innovation = idea + realization into
consideration (Schrage, 2004). Innovation is not what company
produces but what the customers are willing to buy and use.
Innovation takes a crucial role in this process as any business
idea can only be transformed into innovation if it is successful
on the market. CSR cannot be ommitted in this process as both
customers and business stakeholders are nowadays sensitive to
these issues (Tur-Porcar, 2018; Yoo, Lee, 2018). Actual
necessity of innovation and its role in the successful business
leads to the assumption that companies, especially SMEs can
engage in CSR without having a conscious and structured
approach to it.
Another contribution to currently prevalent unstructured
approach to CSR in SMEs is the absence of the need to disclose
and report on CSR to such an extent as large companies do. The
less disclosure, the less structured approach is needed. Large
companies, due to its high visibility, stricter legal obligations or
need of reporting and disclosure mostly need to apply different
methodology than small to medium enterprises. SMEs can afford
more flexible approach and can find their own way of CSR
concept implementation easier. Large companies are more
legally bound, since 2018, non-financial reporting has become
mandatory for public interest companies with more than 500
employees (European Commission, Non-financial reporting,
2017). This forces them into more structured methodologies and
a necessity to use pre-defined metrics that can be reported or
benchmarked easily.
SMEs, unlike large companies, have more freedom in getting to
the required results but the requirements on them from
customers or stakeholders are very similar. However, SMEs see
their CSR from different angle and have different nature and
content (Dias et al., 2019; Morsing, Perrini, 2009). What works
for large companies, such as various complicated model
applications, is not suitable for small to medium enterprises.
SME is not a “little big company” (Tilley, 2002) and can
implement the practices of large companies only in different
extent (Morsing, Perrini, 2009). SMEs can engage in CSR in
many different ways with meaningful results. What cannot be
overlooked is the fact that CSR legislation is more directed at
large companies than SMEs which means their motivation for
conducting socially responsible business is driven more by
internal motivational factors than external and the need to bring
visible results for the business itself (Arend, 2014; Moneva,
Hernandez-Pajares, 2018; Nejati, Amran 2009; Santos, 2011).
Research presented in this article, supported by statistical
evaluation of the empirical evidence implies that indeed SMEs
don`t necessarily have to engage in structured CSR activities,
use pre-defined metrics or apply specifically targeted policies
and still achieve good results in their CSR.
2.2 Hypotheses
This scientific contribution aims to answer the following
research questions arising from the above mentioned literature
review and assumptions done based on the experience from
business operations of SMEs:
1.
Is there a direct proportion between high CSR engagement
of SMEs and structured approach to it?
2.
Do innovative SMEs that use pre-defined metrics engage
more in CSR?
3.
Does regular conducting of CSR activities influence level of
CSR engagement in innovative SME?
4.
Does implementation of targeted CSR policies significantly
influence level of CSR engagement in innovative SME?
Research was based on the empirical data collected via
questionnaire survey in selected CEE countries, namely Austria,
Czech Republic and Slovakia. This region was selected for
research from few reasons: knowledge of the region and SME
market of the author, lack of empirical data on this topic from
selected countries and recent formation of new geopolitical
cooperation cluster in CEE region called S3 or Slavkov Triangle
(fomed by Austria, Czech Republic and Slovakia in 2015).
Based on the research questions, three hypotheses were formed
in order to validate the necessity of structured approach to CSR
including specifically pre-defined CSR metrics usage, realization
of CSR activities and implementation of targeted CSR policies.
CSR is considered to originate in large companies as they are
more exposed to attention from both general public and from the
media (Dias et al., 2017; Jenkins, 2004). Small to medium
enterprises are crucial contributors to the economy. They are
flexible innovators who can help recover the economy especially
in the times of economic crisis. This flexibility helps them to
integrate CSR into their core processes while still having some
drawbacks in PR or reporting of CSR whereas large companies
often exceed the expectations in reporting and promotion but
face difficulties in implementing CSR into many of their core
business processes (Baumann-Pauly, et al., 2013; Lepoutre,
Heene, 2006). Being less effective in promotion of CSR doesn`t
mean that it is less effective or meaningful for the wellbeing of
the whole society.
H1: Innovative SMEs can be highly socially responsible despite
applying unstructured approach to CSR.
By validating H1, necessity of structured approach to CSR in
SMEs is to be questioned. Results of statistical evaluation of
empirical data of the initial study (Gáborová, 2020) show that
there is a significant relationship between innovation
performance and CSR of SMEs. However, few exceptions were
discovered. Statistical testing via chi-square and Cramer`s
coefficient imply that there is no association between regular
conducting of CSR activities to mitigate social or environmental
impacts of business operations and planning and monitoring of
CSR through pre-defined metrics with innovativeness of SMEs.
Survey was performed in three selected CEE countries (AT, CZ,
SK). Results were collected via questionnaire survey consisting
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