 "Dynamic Capital")
Corporate social responsibility (CSR) refers to a company’s business practices to be accountable to themselves, their stakeholders and the public in general. This involves making decisions that do not adversely affect these three groups economically, environmentally or socially and implementing programs that will enhance society and the environment. Often, these types of expectations to do good and be ethical are placed on large corporations due to their widespread impact and assumed resources. However, according to the U.S. Small Business Administration’s Office of Advocacy 2018 report, small businesses (operating with fewer than 500 employees) account for 99.9% of the United States businesses, employing more than 58 million private sector employees.
Small business owners are in a unique position to implement socially responsible policies that directly affect the communities in which they operate. Since the bulk of their business is done locally, giving back to the community and actively participating in civic activities can help boost the company’s image. Here are some ways in which a small business owner can implement socially responsible strategies in their business practices:
- Give Back: Even if you are not in a place financially to donate bucket loads of money, you can help support a cause by giving freely of your time, talent or treasures. Think of what causes might be important to you, your employees and your customers (women, children, the homeless, animals, veterans, etc.).
- Time: volunteer at the organization to help serve meals, box care packages, visit the elderly, etc. You can also allow your employees time away from work to support these causes.
- Talent: Non-profits are often short-staffed with a few individuals wearing many hats. Is your expertise in grant writing, marketing, fundraising, website development, accounting, logistics, etc.? There is an organization that is sorely in need of your talents to supplement their day to day operations.
- Treasures: Excess inventory, office supplies, and furniture can also be used by local charities either in their offices or as goods to be sold during fundraising events. Many shelters are always in need of clothes and personal hygiene products.
- Support the Environment: Organic, locally and ethically sourced, non-GMO. These aren’t just buzzwords for green marketing that we hear in commercials. Reducing our carbon footprint should be a goal for all businesses. Using energy efficient equipment in the office to reduce energy bills, sourcing materials through other small businesses that are green, and recycling and upcycling are all ways that you can help the environment.
- Honesty is the Best Policy: While most CSR initiatives tend to center on the environment, we must not forget that how we do business is also important. Are you being fair to your employees, your supplier and your customers? Are your marketing messages honest and accurate? Are your sales and return practices clear, consistent and fair?
When businesses think about implementing socially responsible policies and practices, it should not feel like a burden. As business owners, we should want to do good just for the sake of doing good. But if that is not enough for you, many studies have shown a correlation between a business with socially responsible practices and success. For example, according to a study published in the Journal of Consumer Research by Alexander Chernev and Sean Blair, Doing Well by Doing Good: The Benevolent Halo of Corporate Social Responsibility, the impact of corporate social responsibility can extend beyond public relations and customer goodwill to influence the way consumers evaluate a company’s products:
- Decreases consumers’ price sensitivity
- Increases customers’ brand loyalty
- Increases sales by motivating consumers to reward the company for its prosocial behavior
- Gives consumers the option to attain moral satisfaction from the “warm glow of giving”
As you can see, aside from being its own reward, being socially responsible can prove to be a source of competitive advantage for a small business. So let’s strive to be better community partners, leaders, and employers.