Clusters as Entrepreneurial Ecosystems for Corporate Social Responsibility in SMEs

Clusters as Entrepreneurial Ecosystems for Corporate Social Responsibility in SMEs

M. Isabel Sánchez-Hernández (University of Extremadura, Spain)
DOI: 10.4018/978-1-4666-9567-2.ch004
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Abstract

The research question in this chapter is whether clusters are good entrepreneurial ecosystems to enhance social and responsible behavior in SMEs at regional level. We will address institutional efforts in Corporate Social Responsibility carried out in the Autonomous Region of Extremadura in Spain as case study because the regional government, with the aim of promoting business cooperation to enhance competitiveness, decided to develop a clustering policy for SMEs in the region. Additionally, since 2010 the region has developed its own plan for the promotion of responsibility at regional level. To answer the question we have carried out focus groups with representative businesses´ managers belonging to the existing and operative clusters in Extremadura at the moment.
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Introduction

Corporate Social Responsibility (CSR) refers to a company’s voluntary activities that appear to further some social good, beyond the interests of the firm, and that which is required by law (Aminia and Bienstock, 2014). In general terms, the importance of CSR is evident for the economy in general, and for the competitive success of each organization in particular, given the competitive advantages resulting from responsible actions (Gallardo-Vazquez and Sanchez-Hernandez, 2014).

CSR is a source of competitive advantages in two ways, comparative and differential advantages. CSR is able to generate a comparative advantage (Bernard, Redding and Schott, 2007), or cost advantage, if the firm through a responsible behavior becomes able to produce a good or service at a lower cost than its competitors, which gives the firm the ability to sell its goods or services at a lower price than its competitors or to sell more units or to generate a larger margin on sales. But CSR can also create a differential advantage (Flint and Golicic, 2009) because the firm's products or services use to differ from its competitors and are seen as fair and sustainable and much better than competitors' products or services by an increasing number of customers.

Nowadays, and more than never because of the economic crisis, business stakeholders are demanding CSR. In this situation, any business is concern about how to implement social practices creating economic and social value at the same time. The implementation of CSR is justified by the benefits that use to result from the relationships with the key stakeholders. We refer for instance the enhancing of firm reputation (Park, Lee and Kim, 2014), the increase of the number of customers, their satisfaction, loyalty and identification with the company (Servaes and Tamayo, 2013), the motivation of employees in order to get more productivity and sharing company values (Dogl and Holtbrugge, 2014) and, more interested investors in companies which satisfy CSR criteria (Girerd, Jimenez and Louvet, 2014). Building reputation with key stakeholders and corporate branding in the market bring with considerable challenges to firms in terms of transparency, authenticity and accountability, and that is related to firm performance (Surroca, Tribó and Waddock, 2010).

Although the degree of implementation of CSR is still different in companies depending on sectors, the company size seems to be a very important factor (Russo and Tencati, 2009). While large firms use to develop their own sustainability reports having also the possibility to pay for external assurance or verification, small and medium-sized enterprises (SMEs) found still some difficulties to do it. That is really a problem, bearing in mind that SMEs play an important role in the world economy and contribute substantially to income and employment, especially in Europe (Lukács, 2005).

Public policies in developed economies that aim to support clusters of SMEs are now well established tools of regional policy agencies. The research question we posse is whether clusters should be good entrepreneurial ecosystems to enhance social and responsible behavior in SMEs. The chapter is exploratory by nature and the main objective is to approach the reader to the specific role of clusters in transforming enterprises, especially SMEs, into responsible entities in order to compete in the best conditions in the global markets. A specific objective complementing the general one and serving as case-study to illustrate practically the theoretical information provided, is to discover managers´ perceptions about CSR and the role of regional clusters in the region of Extremadura, in Spain.

Key Terms in this Chapter

Triple Bottom-Line: Economic, social and environmental actions of a firm´s policies that’s determine its viability as a sustainable organization.

Competitive advantage: Any advantage that a company has over its competitors, allowing it to generate greater performance than them. In the context of this chapter CSR has been presented as a source of competitive advantages giving a firm an edge over its rivals and an ability to generate greater value for their stakeholders.

Accountability: The moral obligation, and consequently voluntary action, of an organization to account for its activities, to accept responsibility for them and, to disclose the results in a transparent manner following available standards recognized by its stakeholders.

Responsible Entrepreneurship: That kind of entrepreneurship that enhance its positive contribution to society whilst minimizing negative impacts on people and the environment; treating customers and competitors honestly; caring about the well-being of employees and consumers; acting as good citizens in the local community and preserving natural resources and the environment.

Corporate Social Responsibility: A company´s sense of obligation towards the community, the social environment and the ecological environment in which a corporation operates.

Social Enterprise: Companies who use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas because their primary purpose is the common good.

Business Transparency: Full, accurate, and timely disclosure of information to show honesty to stakeholders, collaboration, cooperation, collective decision making and lack of hidden agendas.

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