Impact of Corporate Social Responsibility on SMEs in India

Abstract

Corporate social responsibility (CSR) is not a new concept; companies have always to some extent tried to acknowledge their responsibility towards the community. CSR today is seen as something more far-reaching, engaging at a much wider level with business operations and relations with communities. It is essentially about business’ contribution to sustainable development and how best to maximise that contribution. In order to study the growing impact of CSR in business organisations, the present study has been undertaken on 100 SME manufacturing units operating in the state of Punjab. The data has been analysed using descriptive statistics, Friedman’s two-way ANOVA, Kruskal–Wallis test and factor analytic approach. The study revealed that very few SMEs are consciously engaged in implementing CSR initiatives. The reason can be attributed to lack of financial resources, no support from the side of government (like incentives and schemes), no important impact on the image of the company and lack of awareness in the society. Further, ‘good relations with stakeholders’ emerged as the most important factor underlying the perception of respondent SMEs towards the impact of implementing CSR practices. The results also revealed that there is no relation between CSR activities and performance of the organisation.

Keywords

CSR SMEs Friedman ANOVA factor analysis Kruskal–Wallis test

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