The Relevance of Stakeholder Theory and Social Capital Theory in the Context of CSR in SMEs: An Australian Perspective

Journal of Business Ethics 118 (2):413-427 (2013)

Abstract
The concept of business responsibility, usually termed as corporate social responsibility (CSR), originated in the early 1930s after the Wall Street crash of 1929 exposed corporate irresponsibility in large organisations. The understanding of CSR has evolved since then and its scope has now broadened from mere compliance to corporate laws to active alignment of internal business goals with externally set societal aspirations. Unfortunately, the significance of this multidimensional concept within the small and medium enterprise (SME) sector has continued to be overshadowed by its application in large and multinational organisations. More importantly, this has led to the practice of judging SMEs, which are experiencing increasing pressure to engage in social activities, as if they are no different from their larger counterparts. This study therefore investigates CSR from the perspective of SMEs in Australia without any theoretical presumptions and then comments on the relevance and applicability of the two theories that have been commonly used to investigate business responsibility, namely, stakeholder theory (ST) and social capital theory (SCT). The research findings indicate that CSR within the SME sector is more aligned to the fundamentals of SCT, mainly owing to the unique resource and survival challenges that they face, and which are, arguably, not so pronounced in large organisations
Keywords Corporate social responsibility  Small and medium enterprises  Social capital theory  Stakeholder theory
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DOI 10.1007/s10551-012-1598-6
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References found in this work BETA

Capitalism and Freedom.Milton Friedman - 1963 - Ethics 74 (1):70-72.
Small Business Champions for Corporate Social Responsibility.Heledd Jenkins - 2006 - Journal of Business Ethics 67 (3):241-256.

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Consumers' Concerns with How They Are Researched Online in Advance.Caroline Moraes - forthcoming - Business and Professional Ethics Journal.

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