The Case for Corporate Social Responsibility in Small Business

Few companies today can afford to ignore corporate social responsibility. So they do one of two things- either they actually become socially responsible, or they spend money so that they look like they are.

For example, advertising dollars spent on maintaining an environmentally-friendly image far outweigh the amount spent on pollution reduction research at a ratio of 8:1- a statistic that has not changed much since the 70s. In another example, companies that try to showcase concern for social causes might have a less than stellar record when it comes to the way it treats its own workers.

Both situations are very obvious signs that there’s something wrong with the way things are. There are hundreds of other ethical issues as well. But before you can help your business avoid these problems, it helps to know exactly why things have turned out this way.

Customers today are now far more socially aware than they were a generation ago. Today, a company with a persona that projects a callous lack of concern for social causes will turn off or even lose customers. A commitment to corporate social responsibility (CSR) is no longer just an afterthought- it’s something that customers demand.

And that’s the way it should be. But the reason why businesses spend more to look socially responsible than actually being socially responsible is that it gets immediate results. Being truly green, or meticulously checking up and improving on your worker’s conditions takes time and money. The positive results of going down the straight and narrow are also rarely immediate as far as your revenues are concerned.

Left on our own devices, we will tend to go through the path of least resistance. We often choose to go with strategies that merely give the appearance of social consciousness because it’s easier. A lot of the changes in the way we treat labor or handle environmental problems had to be legislated in. We can’t always blame businesses for taking the easy way, as actual CSR rarely fits within the context of either efficiency or profitability.

Another problem lies with us, as consumers. While we are now more socially conscious in our buying habits than we’ve ever been, it can also be argued that consumers actually don’t demand enough from companies- leading businesses to just pay lip service to CSR instead of actively seeking out real solutions. As consumers, it seems what we really want is to get niftier things for as little as possible, with social or environmental impact being secondary concerns.

However, as consumers become more educated and businesses lose their advantage in information asymmetry (thanks, Internet!), just paying lip service to CSR will eventually be completely to your disadvantage. Now, much more than ever, CSR has to play a central role in how you do things. You probably want to be known for your products and not your good deeds, true- but CSR must be given importance, and it must be genuine.

Can small businesses with very limited resources afford to take CSR seriously? This may have been a valid question decades ago, but today the real question should be: can you afford not to? People will find out if you’re putting your money where your mouth is. Maybe not today, but as information becomes more freely available, it’s going to be just a matter of time. And what happens then?

Smaller businesses do have one distinct advantage over bigger companies – agility. Making CSR as a core component of your business is much easier and less complicated to integrate into your company culture when you are just starting out compared to when your business has already grown a considerable size. This means less can be spent comparatively on realigning your priorities and processes or spinning your brand when you’ve already grown. This will mean better growth and a more valuable brand image – without any compromise on ethics.

The reason for a non-commitment to CSR seems to come down to one thing- corporate myopia. A commitment to real corporate social responsibility is always a good move for the long term. It’s not such a bad move for you personally either.