Source:Technological Forecasting and Social Change, Volume 114
Author(s): Francis Heylighen
One of the key debates in the literature on small and medium enterprises (SMEs) and corporate social responsibility (CSR) in developing countries has to do with the role that local industrial districts, or so-called industrial clusters, play in the promotion of CSR in those countries. While there is now an embryonic literature on this subject, we lack systematic, integrated analytical frameworks that can improve our understanding of the role that governance of clusters play in addressing CSR concerns in SMEs in developing countries. This article develops such a conceptual framework drawing on the literatures on cluster governance, CSR, SMEs, and environmental management (EM) as they relate to the developing countries. The authors argue that environmental improvements in SME clusters can be achieved through three basic types of cluster governance: legal enforcement, supply chain pressure, and voluntary engagement in CSR. The proposed framework is an attempt to show how each type of cluster governance is likely to induce different responses in cluster-based SMEs. These responses are related to stages of CSR in which SMEs engage, the barriers to EM they face, the types of EM practices they use, the climate change strategy types they use, and the kinds of benefits that accrue to SMEs from engagement in CSR. The authors put foward a framework that can be useful for both academics and practitioners as they seek to reflect on the interconnectedness of these themes from a research, policy, and practice perspective.
This article is the guest editors’ introduction to the special issue in Business & Society on "SMEs and CSR in Developing Countries." The special issue includes four original research articles by Hamann, Smith, Tashman, and Marshall; Allet; Egels-Zandén; and Puppim de Oliveira and Jabbour on various aspects of the relationship of small and medium enterprises (SMEs) to corporate social responsibility (CSR) in developing countries.
Recently, international funding agencies and practitioners in the area of corporate social responsibility (CSR) and small and medium enterprises (SMEs) have argued that microfinance institutions (MFIs) could promote the adoption of environmentally friendly business practices in microenterprises in developing countries. This article explores the potential and limitations of MFIs in promoting the spread of environmental risk management techniques and practices in microenterprises using a case study of an MFI-sponsored pilot program in this area in El Salvador. The author argues that caution should be exercised about the role that MFIs can play in relation to inducing change to the environmentally harmful practices of micro-entrepreneurs. In fact, this study reveals that the MFI had some difficulties in building internal skills and reconciling its environmental and performance objectives, limiting its ability to assist microenterprises in the area of environmental management. Furthermore, the pilot program, as it was designed, did not sufficiently take into account the psychological and financial barriers that constrain micro-entrepreneurs’ capacity to engage in any meaningful environmental behavior change. Finally, factors such as the lack of an adequate legal framework and local infrastructure also countered the effort of the MFI and limited the potential of microenterprises for effectively engaging in environmental risk management practices. The article concludes by outlining the implications of this analysis for future research, policy, and practice in this area.