Social responsibility, profit maximisation and the small firm owner‐manager

Abstract

In this paper, a new analysis is presented of the social and ethical orientation of small firm owner‐managers. Using exploratory qualitative empirical evidence, it is proposed that there are four “frames” of perceiving the social perspective of the small business. These are profit‐maximisation priority, subsistence priority, enlightened self‐interest and social priority. If policy makers wish to influence the ethics of small firms, they need to be aware of this diversity of viewpoints and move beyond the notion of the profit‐maximising, rational economic entrepreneur as the standard image of the small business owner‐manager.

Practice and politics: Ethics and social responsibility in SMEs in the European Union

“…Jenkins, 2006;Tilley, 2000). Nevertheless, the CSR of SMEs has received relatively little attention (for exceptions see Grayson, 2004;Moore & Spence, 2006;Morsing & Perrini, 2009;Perrini, 2006;Perrini et al, 2007;Russo & Tencati, 2008;Spence, 1999;Spence & Lozano, 2000;Spence & Rutherfoord, 2001;Thompson & Smith, 1991;Vyakarnam et al, 1997). This is not only a challenge in the study of social responsibility, but is endemic in management research more generally, where small businesses are often considered a minority activity, contrary to the evidence.…”

“…Spence and Rutherfoord (2001) found that rather than the primary motivator for small businesses being the profit motive, they commonly balance social goals and profit 'satisficing' activities. Though limited, research on social issues and ethics in the flourishing ethnic minority business group (Janjuha-Jivraj, 2003; Worthington et al, 2006), and in social enterprises, has also begun to develop in the UK (Cornelius et al, 2007).…”

“…Drawing together much of the previous work on SMEs in this field in Europe, the following aspects can be identified as important (adapted from Spence, 2007): l a lack of codification of social responsibility in small businesses (Jenkins, 2004;Spence, 1999); l personal motivations for taking socially responsible initiatives are more important than marketing, strategic, or public relations approaches (Jenkins, 2004;Spence, 2000b); l owner-manager acts as both principal and agent of the firm (Quinn, 1997;Spence & Rutherfoord, 2001); l small businesses are often embedded in their local communities (Perrini, 2006;Tencati et al 2004); l flexibility, personal service and reputation are important competitive factors for SMEs (Spence, 1999;2000b;; l employees are the key stakeholders (Janjuha-Jivraj, 2003;Jenkins, 2004;Spence, 2000b); and l sector context is particularly important (Curran & Blackburn, 2001;.…”

Socially Responsible Management as a Basis for Sound Business in the Family Firm

“…Focussing particularly on the small business sector, Spence and Rutherfoord (2001) proposed that there are four frames or lenses through which one may perceive the social perspective of the small business, linked to four differing priorities. The four priorities are profit-maximisation, subsistence, enlightened self-interest and a social view.…”

Vol. 2, No. 4, October 2009. All in one file.

“…One such study conducted by Vyakarnam et al (1997) found that ethical issues experienced by smaller firms in the UK revolved around the issues of conflict of interest among the stakeholders, protection of knowledge and information, legal and moral obligation, and personal versus business decisions. Also using a dilemma-based approach, Spence and Rutherfoord (2001) identified that there are four major dilemmas facing small business owners including profit maximisation, subsistence priority, enlightened self-interest, and social priority.…”