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Top1. Introduction
Companies adopt CSR to make contributions towards making world a sustainable place (Carroll and Shabana, 2010) and demonstrate that they care for a bigger objective than profit. The integration of economies has enhanced the stakeholders’ expectation and social awareness in the last decade (De Clercq and Voronov, 2011) and has pressurized organisations to meet expectations of market participants other than shareholders to meet multiple sustainable objectives. Thus, market participants have been guiding organisations to pursue goals that contribute towards sustainable society than traditional aims of profit maximization.
Previous research suggested that large corporations pursue CSR to enhance their reputation (Bhattacharya and Sen, 2004; Minor and Morgan, 2011), get financial benefits (Kim et. al., 2011), attain sustainability (Málovics et. al., 2008), develop competitive advantage (Porter and Kramer, 2006) and are better resourced at it (McWilliams and Siegel, 2001). However, for SMEs, engagement in CSR is based on reasons, expected benefits such as competitive advantage (Revell et. al., 2010) and regulatory measures (particularly tax and subsidy) (Bonilla-Priego et. al., 2011). The adoptions of CSR activities for SMEs are exposed to barriers such as limited resources (Brammer et. al., 2012) and capabilities possessed by them. It also leads to another concern of identifying and prioritizing stakeholders for designing CSR policy (O’riordan, & Fairbrass, 2008). The solution to these challenges is to focus on enhancing the effectiveness of CSR activities that can derive sustainability benefits for SME (López‐Pérez et al., 2017).
CSR is a tool leveraged by the organizations to fulfil societal expectation, meet regulatory obligations (Goodpaster, 2013; Margolis and Walsh, 2003), vehicle for business improvement, attain competitive advantage (Castka et. al., 2004) and attain corporate sustainability (Teck, 2008). This case is applicable to large corporations, whereas SMEs are still lagging behind (Brammer et. al., 2012; Cassells and Lewis, 2011). SMEs have been central to sustainable development because of lesser environmental impact (Jansson et. al., 2017) and ability to adapt quickly than large companies to requirement of sustainable development (Klewitz and Hansen, 2014).
SMEs are important support of healthy economy as they account for 40 per cent national income (Beck et al., 2008) and closely associated with society due to its informal nature (Jenkins, 2004; Baumann-Pauly et. al., 2013). Yet a limited academic attention has been devoted towards SMEs with respect to CSE in developing nation (Harris et al., 2009; Jamali et. al., 2017). Though Jain et.al, 2016 have made an attempt to explore the relationship between financial performance and CSR in India, yet considerable attention is required to review the CSR status in SMEs. Hence it is also important to affirm a grounded understanding of how CSR practices can be made effective considering institutional and contextual factors along with the pressure of global sustainability. Within this context, this paper aims to investigate the variables of effectiveness of CSR activities leads to corporate sustainability at manufacturing enterprises.