Corporate Social Responsibility in SMEs: The Role of Non-Audit Services

Background

SMEs are believed to be of significantly different from the larger business organisations. The characteristic or cultural aspect of the SMEs are not the same as the large companies (Lepoutre & Heene, 2006). Apart from that, the findings from larger companies do not really reflect the SMEs’ environment (Jenkins, 2004; Spence, 2007). For instance, SMEs are usually having fewer resources, governs through informal organisational structures, emphasis on survival (Parker, et al., 2009) and less likely to engaged in CSR activities (Spence, 2007), as compared to larger companies.

However, it is perceived that SMEs are in a better position and comparatively well equipped to design appropriate CSR strategies to address the needs of the local communities as they operate “on the ground”, they are more aware of the local environmental risks and emerging social issues than their larger counterparts (Sweeney, 2007). Generally, SMEs have a greater understanding of the local cultural and political contexts, more partnering and links to local civil society and greater commitment to operating in a specific area (Baden, et al., 2011). Nowadays, CSR has been assumed to encompass philanthropic activities such as donation for individual or sponsorship for events. CSR has emerged into a border perspective, which include ethics and compliance, stakeholders’ elements (such as employees, environment, community, customer, shareholder, and supplier) and so on (Carroll, 1999; Crowther & Aras, 2008; Carroll & Shabana, 2010). This highlights the importance and timeliness of CSR practices research among SMEs to be undertaken.