The Strength of external ties: The role of external networks in relation to corporate social responsibility and small and medium sized enterprises

Adeel Ismail Naseem

Student thesis: Master thesis

Abstract

Rising energy prices, carbon emissions, environmental concerns, transparency in economic matters and growing concerns for human rights violation are some of the universal sustainability issues that has led to an increased focus on the relationship between corporate social responsibility (CSR) and Small and Medium-sized Enterprises (SME), in recent years. This relationship has caught the attention from both the research society and politicians that encourage more SMEs to take social responsibility. SMEs account for 99% percent of all business in Europe and employ almost 70% of the European workforce. The underlying assumption behind the increased focus is therefore that a greater social impact can be made collectively with both large companies and SMEs, instead of large companies alone. This thesis is based on a qualitative approach and dedicated to analyzing external networks that are based on environmental and social responsibility. These kinds of networks are an undiscovered aspect of the relationship between CSR and SMEs and are therefore analyzed and examined. This research concludes that the case network can provide the three SMEs, which were interviewed, knowledge specifically related to their industry and field. Therefore, the SMEs point to knowledge as a main factor to join/stay in an external CSR network. Traditional frameworks such as Schwartz and Carrolls “Three Domain Approach Model”(TD Model) have up until today only considered economic, legal, ethical and (to a certain degree), philanthropic motives. The presentation of a new model that elaborates on the TD Model, by considering knowledge as a basic incentive to work with CSR(especially among SMEs), is one of the main findings of this thesis. Furthermore, this paper place great importance on the role that external CSR networks play in their organizational field. The findings of this research show that social movements and external CSR networks influence societal issues in similar ways, namely by challenging the status quo of their organizational field and polarizing it. This has led to insights that reveal that the case network of this thesis is indirectly able to erode or create the economic value of a firm. The finding is developing the notion of the Resource-Based View by considering the culture and social issues of the firms’ organizational field as an important input to the firm strategy. This is the second and last main finding of this thesis. These results provide an interesting starting point for future research on the role of external networks in relation to CSR and SMEs.

EducationsMSc in Strategy, Organization and Leadership, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2015
Number of pages83