Corporate social responsibility （CSR） and small medium enterprise （SME）

Feifei Ma

Stakeholder theory is mainly used in large enterprises. According to Friedman （2001）， the company's stakeholders include individuals or groups that may influence or be influenced by an organization， they may have certain demands or expectations from them. Therefore， the motivation to actively participate in corporate social responsibility is to solve the problems of stakeholders. SME stakeholders may have similarities with large companies， but they also have different places. Next， the theories about social capital and symbolic capital were used to analyze the CSR of SMEs.

Social capital refers to the reciprocity and trust generated by human relations （Putnam，1993）. Spence and Schmidpeter （2003） state that social capital "is an important source of business performance improvement" and that this is a product of cooperation between agencies， networks and business partners.

There are several reasons why SMEs invest to social capital. Firstly， SMEs could gain the trust of local residents through social capital. This allowed them to stabilize their mutual expectations and achieve their group actions. At the same time， it's also an insurance which saves money and boosts their reputation. Secondly， relevant information is gained by SMEs effectively. At the structure of social capital， it can also provide important information， such as the trustworthiness of employees or the development of new laws or technologies. Thirdly， Perrini （2006） states that social capital provides market access to SMEs， so， they could save cost， productivity and innovation for SMEs， such as educational and regional development.

According these reasons， SMEs could adopt useful methods to obtain and maintain their social capital. At the beginning， SMEs should establish a strong social network both internal and external areas. The purpose of SMEs is to share and gain survival information and development opportunities. SMEs need to view social networks from a different perspective， compared with large enterprises， to promote social capital. Therefore， social capital for CSR should be accompanied by stakeholder perceptions of SMEs. On the other hand， SMEs are smaller than multinational enterprises， so， they have more contacts with local residents. Therefore， in order to develop social capital， SMEs should strengthen communicate with local residents and develop mutual relations in society. Spence and Schmidpeter （2003） clearly distinguish the importance of social capital to business ethics and the link between transparency and honesty.

Other social theory is symbolic capital which is simply viewed as how one is valued by another. In detail， a form of cultural capital that refers to the resources available to people is based on honour or prestige that elevates their status and provides them with a privileged position. （Castree， Kitchin & Rogers， 2013）. It is ambulation with long time， ‘anything physical， economic， cultural or social.

In detail， there are three clear reasons why SMEs to keep their symbolic capitals. Firstly， it will improve SMEs economic performance by up their symbolic capital. Fuller and Tian （2006） insist that if the social capital or symbolic capital could enhance and associate with economic benefits， there will be an increased value or worth of the business， while the value of the SMEs is closely related with owner managers and associated with stakeholder. Secondly， SMEs will obtain powerful positions on the society when they have a number of symbolic capital. Fuller and Tian （2006） explain that SMEs win a better position around the market when they observe expectations of stakeholder. Thirdly， mutual beneficial model between SMEs and stakeholders will help SMEs to obtain good reputations on the society. In addition， an enhancement of responsible behaviour increases the power of SMEs in both social and symbolic capital. On the other hand， stakeholder value and worthiness also has increased.

Therefore， SMEs is necessary to enrich their symbolic capital by undertake much more social responsibilities. Firstly， SMEs need to keep a high quality of ethical behavior. All evidences prove that SMEs social relationships rely on high quality ethical behavior. The development of social capital could gain competitive advantages via good social responsibilities. Fuller and Lewis （2003） said that in the words of small business owners – relationships mean everything. Secondly， SMEs need to increase communication with local citizens and border the disclosure boundaries. The most significant action is that SMEs have to add their disclosure to citizens. The content of disclosure should clear and useful， because they need to show this information to transfer high symbolic capital by stakeholders-it means to increase the leverage of symbolic capital. Therefore， the boundaries of social capital need to extend and， at least， border the on-line communicate disclosure. In summary， Fuller and Tian （2006） consider that not only the capital has a connection with social responsibilities， but also is it has a link with symbolic capital.

References

Castree， N.， Kitchin， R.， & Rogers， A. （2013）. A Dictionary of Human Geography. doi： 10.1093/acref/9780199599868.001.0001

Fuller， T.， and Tian， Y. （2006）. Social and Symbolic Capital and Responsible Entrepreneurship： An Empirical Investigation of SME narratives， Journal of Business Ethics， Vol. 67， pp. 287-304.

Putnam， R. （1993）. Making Democracy Work： Civic Traditions in Modern Italy. Princeton： Princeton University.

Spence， L. J.， and Schmidpeter， R. （2003）. ‘SMEs， Social Capital and the Common Good， Journal of Business Ethics， Vol. 45， pp. 93-108