Social responsibility is the balance of profit objectives in a business with ethical and responsible business activities. Dilemmas come up when companies must choose between saving money and operating responsibly with regard to stakeholder interests and the environment. Small businesses have some advantages and some challenges relative to larger organizations in handling responsibilities.
Small businesses can typically find information and consider alternatives to dealing with responsibility concerns and issues. This is because of the more limited scope and geographic area they serve and interact with relative to larger organizations. Additionally, decision-making processes in response to dilemmas is usually more efficient since fewer people and fewer levels of management are involved in the process. Often, a single owner or company manager makes judgment on courses of action.
The localization of business activities and responsibility standards helps small companies as well. In a smaller community, it is easier for managers to interact with community leaders and customers to get a sense of expectations and objectives. Additionally, communities often offer support systems and resources for use in fulfilling social responsibilities. A company looking to address environmental concerns may, for instance, connect with local environmental recycling programs and get information on other ways to use resources efficiently.
A major drawback for small businesses are the costs involved in improving social and environmental responsibility. Investment in equipment that uses resources more efficiently may be needed, for instance. Hiring service providers to dispose of waste in a more green-friendly way is another. Additionally, companies may need to add new building space and invest in employee education and training to ramp up care for customers and the environment.
Fair treatment of customers and promotion of fair working practices are part of social responsibility. Companies that operate in less diverse communities may struggle to meet expectations that they have a diverse workforce in terms of age, gender, ethnicity and socioeconomic background. Additionally, individual customers or small groups in a local market can more easily hamper small business success with public criticism than they can large companies spread across many regions.
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