CSR in SMEs: an analysis of donor-financed management tools

Purpose – This paper aims to analyze the potential and limitations of donor-financed management tools that seek to promote corporate social responsibility (CSR) in small and medium-sized enterprises (SMEs) in developing countries. Drawing on key insights from three streams of literature relating to institutional theory, critical perspectives on CSR in developing countries and the literature on CSR and SMEs in the developing world, the potential and limits of donor-financed management tools aimed at promoting CSR in developing country SMEs are analyzed. Design/methodology/approach – Using official UN and Organization of Economic Cooperation and Development lists of all multilateral and bilateral donor agencies, 38 donors that might have produced such CSR tools were identified. The authors contacted them via e-mail and/or telephone, and conducted an extensive Internet search with the aim of identifying whether they had developed management tools aimed at promoting CSR in SMEs in developing countries. The authors then scrutinized the contents of the 11 tools identified and examined the extent to which these tools accord attention to contextual differences and specific peculiarities of institutional environments in developing countries; the extent to which these tools account for the silent or sunken aspects of CSR which have been prominently highlighted in the SME – CSR literature; and the extent to which these tools accord attention to the paramount concern for poverty alleviation in developing countries. Findings – Overall, the analysis testifies to the continued predominant orientation of these tools to the context of larger firms in developed countries, with insufficient tailoring or customization to the specific realities of SMEs in the South. Research limitations/implications – In-depth interviews with aid agency personnel, SMEs, workers or community members were not conducted. Hence, this study should be seen as an initial, exploratory desk study of the potential and limits of management tools aimed at promoting CSR in SMEs in the developing world. Practical implications – It is suggested that donor agencies could develop such tools in a bottom-up fashion by first mapping the silent CSR practices of SMEs in developing countries and then use this as a basis for strengthening existing CSR activities in SMEs instead of trying to impose new priorities from the outside. This might enhance the local relevance and applicability of these management tools. Originality/value – The study is likely to be the first analysis of the potential and limits of management tools that are developed by donor agencies with the aim of promoting CSR in SMEs in developing countries.