Pedersen, E.R

The many and the few: rounding up the SMEsthat manage CSR in the supply chain

Esben Rahbek Pedersen

Department of Operations Management, Copenhagen Business School, Copenhagen, Denmark

AbstractPurpose – The purpose of this paper is to outline the anatomy of small- and medium-sized enterprises (SMEs) that try to manage corporate socialresponsibility (CSR) in the supply chain.Design/methodology/approach – The data used for analysis stem from a large-scale survey of 1,071 Danish SMEs carried out in 2005.Findings – It is concluded that CSR activities directed towards the supply chains still remain the privilege of a small group of SMEs with quite advancedCSR systems.Research limitations/implications – The survey was not specifically designed for this article. Moreover, only Danish SMEs participated in the survey.Whether the evidence from Denmark can be generalised to cover SMEs in other countries is left to determine.Practical implications – The results indicate that there may be a need for more differentiated initiatives to promote CSR that will enable smallerenterprises to address CSR issues in the supply chain. Thus far, CSR has often been associated with large, high-profile multinationals that have beentrying to protect their image and brands from negative press, NGO activism, consumer boycotts and governmental sanctions. Little has been done toexamine how SMEs can improve social and environmental conditions in cooperation with suppliers.Originality/value – This article contributes to the existing body of literature by examining how a number of key SME characteristics affect themanagement of CSR.

Keywords Corporate social responsibility, Small to medium-sized enterprises, Supply chain management, Denmark

Paper type Research paper

Introduction

Much has been said about corporate social responsibility

(CSR) in the last few decades, and there have been numerous

attempts made to identify the business case for CSR

(Pedersen, 2006a; Fox, 2004). More specifically, between

1972 and 2002 no less than 127 empirical studies were

published on the relationship between corporate social

performance (CSP) and corporate financial performance

(CFP) (Margolis and Walsh, 2003). There have also been

efforts to define and redefine the concept of CSR, which has

repeatedly been labelled as being ambiguous (McGee, 1998;

Preston and Post, 1975; McWilliams and Siegel, 2001; Litz,

1996; Blowfield and Frynas, 2005). For instance, in a recent

article, Alexander Dahlsrud (2006) reviews no fewer than 37

definitions of CSR. It is concluded that the concept can be

described along five broad dimensions:1 stakeholders;2 social;3 economic;4 environmental; and5 voluntariness[1].

Less has been said about CSR in supply chains. However, since

inadequate supply chain management was one of the issues that

led to the resurgence of CSR in the early 1990s, this issue has

not gone unnoticed (see, for example, Business for Social

Responsibility, 2001; Welford and Frost, 2006; de Bakker and

Nijhof, 2002; Wycherley, 1999). In particular, Nike’s

questionable use of contractors in Asia stands out as one of

the most widely cited “bad episodes” in contemporary CSR

literature (Sethi, 2003; Pedersen, 2006a). Consequently, both

scholars and practitioners have been occupied with the question

of how to manage CSR in the supply chain, for example by

formulating, implementing and enforcing codes of conduct

(Mamic, 2004, 2005; Jørgensen et al., 2003; Radin, 2004).Little has been said about small- and medium-sized

enterprise (SME) management of CSR in supply chains.

Even though SMEs account for over 90 percent of all

companies and 50-60 percent of all employment, large

multinational corporations (MNCs) still seem to dominate

the CSR agenda (Jenkins, 2004; Perrini et al., 2007; Spence,2007). Indeed, the term “corporate social responsibility” itself

indicates a focus on large companies (Jenkins, 2006;

Williamson et al., 2006). The dominance of MNCs in CSR

research makes it difficult to arrive at overall conclusions

about the business case for CSR, and possibly also implies

that CSR management standards, labelling schemes, and

reporting systems will address the needs and wants of large

companies rather than SMEs.The purpose of this paper is to identify the characteristics of

the SMEs that try to manage CSR in the supply chain. It will

not be possible to design CSR initiatives that explicitly

address the needs and wants of SMEs without prior

knowledge of CSR adoption among this group of

enterprises. Moreover, research on CSR activities in the

supply chain can potentially reveal important information

about implementation factors and help explain why some

SMEs move beyond more narrow, inward-looking CSR

activities. In a broader perspective, such research may also

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14/2 (2009) 109–116

q Emerald Group Publishing Limited [ISSN 1359-8546]

[DOI 10.1108/13598540910941975]

109

give way for a better understanding of how a company’s

characteristics affect the diffusion and use of new

management technologies in inter-organisational networks.The paper is divided into four main sections:

1 Hypothesis development. The first section develops a

number of hypotheses that are subsequently tested using

a dataset of 1,071 Danish SMEs. The hypothesis

development is inspired primarily by the extensive CSR

literature.2 Analysis. The analysis presents the results from the

statistical tests of the hypotheses regarding the

characteristics of the SMEs and the adoption of CSR

activities in the supply chain.3 Discussion. The discussion comprises the implications for

researchers, business practitioners and policy makers

based on the results from the analysis.4 Conclusion. The conclusion summarises the main results

from the analysis and reflects on the research limitations

and needs for future research.

This paper uses data from a large-scale survey of Danish

SMEs carried out in 2005 by TNS Gallup as part of People &

Profit, a project conducted by the Danish Commerce and

Companies Agency and funded by the EU as well as the

Danish Government (TNS Gallup, 2005a)[2]. TNS Gallup

invited 4,178 randomly selected Danish SMEs to take part in

the survey. A total of 2,840 SMEs accepted the invitation and

received an e-mail invitation with a web-link to the survey.

TNS Gallup received 1,071 valid responses (response

rate ¼ 38 percent) (TNS Gallup, 2005a). As can be seen in

Table I, the participating SMEs represent a wide range of

industries and differ significantly in size. The selected

respondents were SME representatives who were aware of

the CSR activities in their company. A total of 808

respondents (75 per cent) reported that their companies had

implemented CSR activities, but only 231 (22 per cent)

indicated that these activities were related to the supply chain.The survey also provides researchers with a unique

opportunity for comparing SMEs that manage CSR in the

supply chain with those that do not. However, it is worth

mentioning that the survey was originally designed to examine

the business case for CSR among Danish SMEs. Since the

survey was designed for other purposes, some issues were

omitted from the survey despite being potentially relevant for

a study of CSR activities in supply chains. For instance, it

would have been advantageous to have detailed information

on the companies’ financial performance, management

systems and position in the supply chain (dependencies/

relationships). It is also important to note that there may be a

discrepancy between the views of the SME representatives

and the actual CSR activities in the SMEs. Some respondents

may not be fully aware of what is going on in the firm,

whereas others may consciously or unconsciously try to place

themselves and their firm in a positive light by expressing

popular opinions regarding CSR and over-reporting socially

responsible behaviour (Randall and Fernandes, 1991).

Hypothesis development: which SMEs manageCSR in the supply chain?

The following sections will describe how a number of SME

characteristics may explain why and how some SMEs try to

manage CSR in the supply chain. More specifically, company

size, sophistication level, CSR approach, CSR organisation

and CSR motives are presented as independent variables that

may explain the spread of supply chain-related CSR activities

among Danish SMEs.

Company size

Size does matter. This seems to be the conclusion of a

number of studies examining the determinants of corporate

social and environmental performance. For instance, Perrini

et al. (2007) concludes that large Italian companies are more

likely to address CSR issues compared to smaller ones

(interestingly, however, with supply chains and community

volunteering as noticeable exceptions). Moreover, Elsayed

(2006) shows a positive relationship between company size

and environmental responsiveness/performance. Stanwick

and Stanwick (1998) concluded that company size has an

impact on CSP. However, the evidence of the company size-

Table I Company information regarding the SMEs participating in thePeople & Profit survey

No. of

respondents Percentage

IndustryManufacturing 332 31.0

Trade and servicing 303 28.3

Real property and business services 255 23.8

Building and construction 91 8.5

Transport 55 5.1

Hotel and catering 32 3.0

Extraction of natural resources 3 0.3

Total 1,071 100

Size (number of employees)10-19 employees 421 39.3

20-49 employees 381 35.6

50-99 employees 170 15.9

100-250 employees 99 9.2

Total 1,071 100

Type of businessPublic limited company 717 66.9

Branch business 100 9.3

Private limited company 148 13.8

Sole trader 33 3.1

Other 73 6.8

Total 1,071 100

CSR activitiesa

Workforce activities 581 54.2

Environmental activities 551 51.4

Charitable and voluntary activities 464 43.3

Stakeholder engagement 322 30.1

Customer activities 295 27.5

Supply chain activities 231 21.6

Other 30 2.8

No activities 202 18.9

Don’t know 61 5.7

Note: aRespondents who indicated that their company had implementedCSR-related activities in the abovementioned areasSources: TNS Gallup (2005a, b)

The many and the few: SMEs that manage CSR in the supply chain



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CSP relationship still remains somewhat mixed (Stanwick and

Stanwick, 1998). For instance, Schaper (2002) rejects the

hypothesis that large companies show a higher level ofenvironmental performance. In conclusion, firm size does not

always determine the magnitude of CSR activities and maydistract attention from other and more influential variables

(Elsayed, 2006; Bowen, 2002).Despite the mixed evidence, it is hypothesised here that

larger SMEs may have more CSR activities compared withtheir smaller colleagues. One reason is that larger companies

are likely to have more human, financial and technologicalresources which can be allocated to CSR activities (Elsayed,

2006). Moreover, there may be some economies of scale

which make social and environmental certification relativelycheaper for large companies. The scale of the operations may

also enable larger SMEs to develop specialised competenceswithin the field of CSR. Last but not least, larger companies

are more visible in the marketplace and may therefore have astronger incentive to adopt CSR as a means of reducing risk.Larger SMEs are also expected to be more likely to have

CSR activities in the supply chain. Even though the evidence

is mixed, results from other studies indicate that large

companies are more likely to set CSR requirements in thesupply chain (PricewaterhouseCoopers and Dansk Indkøbs-

og Logistik Forum, 2004; The Copenhagen Centre,2006)[3]. The reason may simply be a question of power.

Large organisations are expected to hold more bargainingpower in negotiations with their suppliers, which makes it

easier for them to implement and enforce CSR standardsthroughout the chain (Pedersen and Andersen, 2006; Jenkins,

2004). The hypothesis can be summarised as follows:

H1. Larger SMEs are more likely to implement CSRactivities in the supply chain.

Level of sophistication

The social and environmental issues included in the CSR

concept have changed over time (Carroll, 1979). In the

1950s, discussions on CSR focused mainly on basic labourrights, but environmental issues gradually became an

increasingly important issue as the negative impacts of theproduction became more difficult to ignore (Pedersen and

Neergaard, 2004). In the last decades, CSR and relatedconcepts (such as corporate citizenship, sustainable

development and business ethics) have been extended evenfurther to include issues such as human rights, social

inclusion, gender, etc. (Andriof and McIntosh, 2001).

Recently, sustainable supply chain management has alsobecome part of the CSR agenda.In the wake of globalisation, the company’s management

and control function has gradually expanded to include the

inter-organisational relationships with an increasing numberof alliance partners, distributors, agents and subcontractors

throughout the world. The rise of global supply chains hasalso blurred the boundaries of corporate responsibilities,

which implies that companies are being held accountable for

the social and environmental standards throughout the chain(Jenkins, 2005; Roberts, 2003).However, CSR in the supply chain is a relatively new

phenomenon compared with internal environment- and

employee-oriented CSR initiatives. This is, perhaps, alsowhy the survey results indicate that these types of CSR

activities are the most popular among Danish SMEs (see

Table I)[4]. Therefore, it can be expected that onlycompanies with a fairly sophisticated CSR system will dealwith these supply chain issues. Before companies are able tomanage and control CSR internally, they are unlikely toexpand the CSR activities which include the supply chainpartners. In other words, a hypothesis can be formulated asfollows:

H2. SMEs with multifaceted CSR systems are more likelyto implement CSR activities in the supply chain.

CSR approach

Managers often meet new situations with well-establishedsolutions that have previously been successful and are in linewith existing priorities, strategies, ideologies and principles(Miller, 1993; Lumpkin and Dess, 2006). Past experiencescreate the premise for future actions; accordingly, as themanagers’ tenure increases, they will look more narrowly forsolutions to problems and develop stronger opinions aboutwhat works and what does not work in the organisation(Miller, 1993; Hambrick and Mason, 1984). As noted byGilbert (2005, p. 742), “managers often rely on a learnedpattern of response that is structurally and cognitivelyreinforced, instead of employing new search efforts”. Inaddition, certain practices and ways of doing things willbecome institutionalised in the organisation, the industry andthe broader organisational field (DiMaggio and Powell, 1983;Campbell, 2007).That is not to say that change never happens. For instance,

newly perceived threats and important environmental changesmay foster double loop learning which can help companies toovercome inertia (however, sometimes threats are also said toreinforce inertia) (Gilbert, 2005). The point is that undernormal conditions, companies meet new situations withinstitutionalised patterns of behaviour. This can actually bequite an effective approach since the search for andimplementation of new solutions is often costly, timeconsuming and otherwise burdensome (Miller and Friesen,1980). It may thus be economical for thriving organisationsworking in stable environments to meet new situations withknown concepts, systems and frameworks that are unlikely tospark protests and have been proven to be successful in thepast (Miller and Friesen, 1980).It is expected that the logic of simplicity will also influence

the SMEs in this survey, which could expand the use of well-known CSR approaches in the supply chain. For instance,companies that have previously managed CSR with writtenpolicies and value statements may use the same procedurewhen it comes to CSR in the supply chain; companies withexperience in participatory CSR implementation will alsostrive for participation in the supply chain-related CSR work;companies that have adopted CSR management standards(e.g. ISO 14001) and reporting systems (e.g. GRI) internallywill also try to promote these initiatives (sometimes it is evena requirement) and so on. In other words, SMEs thatimplement CSR activities in a certain way will also try toreproduce the same routines, systems and behaviours in thesupply chain. Put simply, it can be expected that there is aclose relationship between the management of CSRinternally and externally, which leads to the followinghypothesis:

H3. SMEs’ general approach to CSR is likely to also coverthe CSR activities in the supply chain.




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CSR organisation

Commitment concerns the willingness to prioritise,communicate, manage and allocate resources to CSR

(Pedersen, 2006b; Simpson et al., 2007). Organisational

commitment, in general, and management commitment, inparticular, is often considered as an important precondition

for successful implementation of CSR activities (Poksinskaet al., 2003; Weaver et al., 1999; Sethi, 2003; Jenkins, 2006;Pedersen, 2006b; Collier and Esteban, 2007). Without a buy-in from the key organisation members, all attempts to

promote CSR are likely to fail. As noted by Waddock et al.(2002, p. 140): “the support of top management can

strengthen responsibility initiatives and [. . .] the lack of

support can cripple any progress on integrating responsibilityissues into corporate practices”.Management commitment to CSR is important at least in

SMEs that are often dominated by a single manager/owner

who determines the allocation of the company’s scarcefinancial, technological and human resources. In other words,

both commercial and non-commercial activities taking placein SMEs tend to reflect the priorities of top management.Commitment can take a variety of forms, i.e. using time on

CSR – at management and board meetings – to invest insocial and environmental improvements and to participate in

tri-sector partnerships with non-governmental organisations(NGOs) and governmental bodies. Management

commitment will be visible in the organisation of the CSRactivities. SMEs that give priority to CSR can also be

expected to organise social and environmental activities at topmanagement levels. Assuming that social and environmental

activities in the supply chain also represent high-level

commitment to CSR, it can be expected that CSR activitiesin the supply chain will affect the CSR organisation. This

leads us to:

H4. SMEs that organise CSR at top management levels are

more likely to implement CSR activities in the supplychain.

Motives for CSR

The underlying motives for CSR are related to commitment.Evidence indicates that, in general, there are a lot of reasons

why companies engage in CSR activities. For instance,Poksinska et al. (2003) conclude that the adoption of ISO

14001 is primarily motivated by instrumental CSR motives(corporate reputation and image). Pedersen (2006c) also

found that concern for both corporate values and image

motivates adoption of the Environmental Management andAudit Scheme (EMAS). Further studies have highlighted the

importance of government and regulation in stimulatingsocial and environmental activities, something that may call

for a discussion on the impacts that can be expected fromvoluntary CSR (Williamson et al., 2006; World Economic

Forum, 2003; Kolk, 2000).In relation to SMEs, however, Jenkins (2006) argues that

most SMEs use moral arguments to explain the commitmentto CSR (even though they may not be blind to the potential

business benefits). This is in line with the overall results from

the survey used in this article; the majority (69 percent) of therespondents thinks that the CSR activities in the SMEs are

motivated by ethical and moral concerns (TNS Gallup,2005b). This hardly comes as a surprise. According to

Murillo and Lozano (2006), there is a close link between the

adoption of CSR in SMEs and the values of the owner/

manager. SMEs simply work in a less formal and a more

personalised way (Jenkins, 2004, 2006). Combined with the

fact that SMEs are less visible in media landscape, it can be

assumed that CSR activities are determined by the values of

the owner/manager, rather than being the result of external

pressure from media, NGOs or local communities (Jenkins,

2004, 2006). Again, if one assumes that social and

environmental activities in the supply chain are at the top of

the CSR food chain (something the SME engages in when it

is able to manage CSR internally), it can be expected that the

value-based reasons for CSR especially permeate these

organisations. This leads to the following hypothesis:

H5. SMEs that give high priority to value-based rationales

for CSR are more likely to implement CSR activities in

the supply chain.

Methodology and findings

Looking at H1, company size can be measured in terms of

assets, sales and number of employees (Elsayed, 2006).

However, the survey allows for an examination of only the last

factor. In other words, the number of employees in the SMEs

is used to test the relationship between the type of CSR

activities and company size. More specifically in the study, the

number of employees was divided into four groups (10-19

employees, 20-49 employees, 50-99 employees and 100-250

employees) and then cross-tabulated with the two groups of

companies:1 the SMEs which had implemented CSR activities in the

supply chain (n ¼ 231); and2 the SMEs which had not implemented CSR activities in

the supply chain (n ¼ 840).

H2 was also tested by looking at the CSR activities in the two

groups of SMEs: those that manage CSR in the supply chain

and those that do not. The former group is considered to be

more sophisticated if they, on average, cover more CSR areas

(see types of CSR activities in Table I). The test of this

hypothesis only includes the SMEs with CSR activities

(n ¼ 808).H3 was tested by examining whether there is a positive

correlation between how the SMEs manage CSR in general

and how they manage CSR in the supply chain. It is assumed

that companies tend to use the same management approach

internally and externally. In practice, three general CSR

implementation categories were cross-tabulated with three

supply chain-specific activities. The general categories were

written values and policies (POLICIES), employee involvement(INVOLVE) and training and workforce development(TRAINING) (TNS Gallup, 2005b, p. 14). The supply

chain categories were formulation of ethical, social orenvironmental requirements for suppliers (GUIDE); dialoguewith and involvement of suppliers (DIALOGUE) and sharingexperiences and upgrading suppliers (UPGRADE) (TNS Gallup,

2005a, p. 46). The number of respondents in this test was

144.H4 was tested by analysing whether the type of CSR

activities (supply chain activities/no supply chain activities) is

correlated with the organisational placement of CSR

(primarily at top management, in other departments/groups/

functions, no formal organisation). This test includes all

SMEs with CSR activities (n ¼ 808).




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H5 was tested by looking at the pattern between the SMEs

that adopt CSR in the supply chain and the respondents’

answers to the question on reasons for CSR. More

specifically, the test focuses only on the first priority reasons

(the alternatives given in the survey were ethical and moral

reasons; preservation or improvement of the enterprise’s reputation;

attraction and retention of qualified employees; positive impact onfinancial result; expectations/requirements from customers and

business associates; others and don’t know). The first alternative

is seen as representing a value-based rationale. Again, all

respondents that indicated CSR activities were included in the

analysis (n ¼ 808).All hypotheses were analysed in SPSS version 15.0 using

the Pearson chi-square test. The results from the analysis can

be seen in Table II. As is evident from Table II, H1 and H2were accepted, whereas H4 and H5 were rejected. The results

from the test of H3 are somewhat mixed. SMEs that manage

CSR by written values/policies are also likely to implement

CSR in the supply chain by formulating ethical guidelines.

However, there is no significant correlation between employee

involvement and training internally and supplier dialogue and

upgrading externally.

Discussion: Where do we go from here?

Today, CSR is increasingly seen as going well beyond the

perimeter of the company (Roberts, 2003; Philips and

Caldwell, 2005). However, despite the growing popularity of

CSR in the supply chain, it is still difficult for companies to

manage social and environmental issues that exist outside

their direct control in different geographical, economic,

political and cultural settings (Neergaard and Pedersen, 2005;

Pedersen and Andersen, 2006).This is especially true for SMEs, which often lack the

power, as well as the human, financial and technical

resources, to control the supply chain. At least, this seems

to be one of the interpretations that can be derived from the

analysis in this paper. More than three out of four SMEs do

not have CSR activities in the supply chain and those that do

are more likely to be large (in terms of employees). Therefore,

it may be relevant to develop new tools and frameworks for

small enterprises that can reduce the transaction costs of

managing and enforcing social and environmental standards

in the buyer-supplier relations. Moreover, the role of company

size in CSR activities may also be an argument for promoting

industry standards, campaigns and initiatives. The rising tide

will lift all boats, and joint efforts may sometimes be a better

and more efficient way to promote CSR compared with

individual SME initiatives.Another interesting finding from the analysis is that CSR

may be seen as an incremental process where SMEs expand

their CSR activities gradually: from managing their employees

and the environment internally to engaging in external

relationships with supply chain partners. The test results

indicate that SMEs with CSR-related supply chain activities,

in general, cover more CSR areas than the rest. CSR may

therefore go through a number of stages depending on the

perceived closeness of the problems, solutions, issues and

stakeholders. The future challenge for policy makers, business

people and academics will be to get a better understanding of

these dynamics and determine how it is possible to stimulate

“leapfrogging” that will bring SMEs to a higher level of social

and environmental performance[5].Not all hypotheses were supported by the survey data. For

instance, organising CSR at the top management level is not

necessarily conducive to the success of CSR activities in the

supply chain. It may therefore be argued that public and

private organisations which advocate CSR need to target the

key functions and departments in the SMEs. Even though

management commitment is probably still a precondition for

CSR success, internal CSR champions who can push the CSR

agenda in the company are not necessarily found at the

executive level. The results from the survey also indicate that

motives do not seem to affect the likelihood of CSR activities

in the supply chain. Apparently, CSR in the supply chain can

be the result of both deeply held values and narrow self-

interest. Realising that the drivers of CSR are manifold, one

may argue that the quest for identifying the business case for

CSR – even if the answer turns out to be in the affirmative –

will have an impact only on the supply chain behaviour of

some SMEs.

Table II The test results of the five hypotheses

Hypothesis n Value

Asymptotic

significance

(two-sided) Decision

H1. Larger SMEs are more likely to implement CSR activities in the supply chain 1,071 8.246 0.041 * * Accept

H2. SMEs with multifaceted CSR systems are more likely to implement CSR activities in the

supply chain 808 328.480 0.000 * * *

Accept

H3. SMEs’ general approach to CSR is also likely to cover the CSR activities in the supply chain

POLICIES/GUIDE 144 16,028 0.000 * * * Accept

INVOLVE/DIALOGUE 0.143 0.706 Reject

TRAINING/UPGRADE 2.398 0.122 Reject

H4. SMEs that organise CSR at top management levels are more likely to implement CSR

activities in the supply chain 808 3.914 0.790

Reject

H5: SMEs that give high priority to value-based rationales for CSR are more likely to

implement CSR activities in the supply chain. 808 6.760 0.344

Reject

Notes: Correlation is significant: *at the 0.10 level; * *at the 0.05 level; * * *at the 0.001 level




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Overall, the analysis calls for a more nuanced debate of

both SMEs and CSR. SMEs are not just SMEs; their needs

and wants regarding CSR in the supply chain depend on their

size and sophistication. Moreover, CSR is not just CSR; most

CSR activities in SMEs still circle around the workforce and

the environment. It may therefore be relevant to target CSR

initiatives to areas where the experience and competencies of

SMEs are rather limited. This includes CSR in the supply

chain.

Conclusion

According to an old pundit, there are two groups of people:

“those who divide everything into two groups and those who

don’t” (Hambrick, 1984, p. 27). By separating the SMEs that

manage CSR in the supply chain from those that do not, the

author of this article falls into the former category. After a

short summary of the main findings from the People & Profit

project, this paper is dedicated to the formulation and testing

of a number of hypotheses that attempt to identify the

characteristics of SMEs that manage social and environmental

issues in the supplier relationships.The first conclusion that can be derived from the analysis is

that CSR in the supply chain still remains the privilege of only

a small group of Danish SMEs. Workforce initiatives and

environmental activities are by far the most common CSR

activities. Even though scholars and practitioners generally

agree that CSR today goes beyond the perimeter of the

company, this view is apparently not shared by the majority of

Danish SMEs. It was concluded that company size is a factor

that helps in explaining why a majority of SMEs do not

engage in CSR activities in the supply chain. The test results

indicate that larger SMEs are more likely to manage CSR in

the chain (H1). One reason may be that these SMEs hold

more bargaining power in the chain and are able to allocate

more resources to CSR.The analysis also shows that CSR activities in the supply

chain seem to be something extra that SMEs engage in when

they are able to control the internal aspects of CSR. At least,

the results indicate that SMEs with CSR activities in the

supply chain were more likely to cover a wide range of CSR

areas (H2). However, even though the SMEs with CSR-

related supply chain activities in general were engaged in more

CSR activities, it was not possible to conclude – based on the

available data – that these organisations gave higher priority

to social and environmental issues in the organisation of CSR

(H4). Nor did they have more value-based motives for

engaging in CSR (H5). Moreover, it was not possible to

conclude that companies apply their general CSR approach to

the management of social and environmental issues in the

supply chain (H3).The results are relevant for a wide range of actors. For

policy makers and industry organisations, the results indicate

that there may be a need for supporting the development of

new toolkits that address the special needs of small enterprises

and enable them to manage CSR in the supply chain. For

industry organisations, labour unions, NGOs, etc., it may also

be worthwhile to consider methods, systems and frameworks

that will enable both small and large companies to address

CSR issues in the supply chain. For SMEs, the results seem to

indicate that it may not be advisable to begin the CSR journey

with the supply chain. At least, most SMEs seem to prefer to

focus on the internal operations before expanding their CSR

activities to the supply chain.Looking at the limitations of the analysis, it is worth

mentioning that the survey data used for this analysis were

collected for a different purpose. This article has advanced the

identification of the characteristics of SMEs that manage CSRin the supply chain, whereas the original objective of the

survey was to understand the how Danish SME

representatives viewed the economic benefits from CSR.Therefore, some questions that could have improved the

analysis were not part of the survey. For instance, size

measured as number of employees should have beensupplemented with financial measures to better examine the

role of available resources in CSR activities. However, the

survey data still made it possible to test a number ofinteresting hypotheses regarding the relationship between

CSR activities in the supply chain and the underlying SME

characteristics.Another limitation concerns the fact that the analysis only

covers Danish SMEs. Whether or not the evidence from

Denmark can be generalised to cover SMEs in other countriesis left undetermined. However, the results may still serve as

inspiration for future research on CSR in the SME field even

though it cannot be concluded that the experiences of DanishSMEs will be the case across the board. Thus, more research

is needed to understand the evolutionary patterns of CSR in

SMEs: how social and environmental activities gradually getembedded in business practices and spread within and

between organisations.

Notes

1 This article adopts the view of Marcel van Marrewijk

(2003, p. 102) who defines CSR as: “company activities –

voluntary by definition – demonstrating the inclusion ofsocial and environmental concerns in business operations

and in interactions with stakeholders”. In the author’s

view, the definition reassembles much of the centralcomponents in contemporary CSR thinking;

multidimensionality (both social and environmental),

voluntariness, and stakeholder relations.2 More information on the project can be found at: www.

virk.dk/VirkPortal/site/VidenOgVaerktoej/Oekonomi/

TemaOverskudOmtanke.aspx3 A noticeable exception is Perrini et al. (2007, p. 296), who

actually conclude that: “SMEs reveal a strongerwillingness in recognizing the importance of having

responsible behaviours along the supply chain”.4 The results from a CEO survey in 2003 also indicated that

environmental impacts and employment equality/diversity

are more frequently managed compared with the

sustainability performance in the supply chain(PricewaterhouseCoopers, 2003).

5 In this paper, the concept of “leapfrogging” is borrowed

from the discussions of stage models ininternationalisation theory (Bell and Young, 1998;

Johanson and Vahlne, 1990). According to the stage

models, internationalisation is seen as a series of smallsteps where companies gradually increase their

international engagement (Johanson and Vahlne, 1990).

However, some companies will be able to “leapfrog” someof the stages and jump directly to more advanced forms of

internationalisation (Welch and Luostarinen, 1988).




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About the author

Esben Rahbek Pedersen is a Postdoc at the Department ofOperations Management, Copenhagen Business School. Heholds a PhD and has written a number of articles on CSR-related issues in journals such as Business and Society Review,Business Strategy and the Environment and Journal of CorporateCitizenship. Esben is also a member of RESPONSE, a largeEU- and company-funded initiative studying perceptions ofCSR, and has experience in the field of entrepreneurship,diversity management, environmental management/labelling,private sector development and NGO capacity building.Esben Rahbek Pedersen can be contacted at: [email protected]




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