HBB 2-1

5/05

Abstract

Small Business Owners and Social Responsibility

Prepared by: Glenn Muske

Home-Based and Micro Business Specialist

Oklahoma Cooperative Extension Service

333 HES, Oklahoma State University

Stillwater, OK 74078

(405) 744-9931

glenn.muske@okstate.edu

Chrisman, J. J. & Archer, R. W. (1984). Small business social responsibility: Some perceptions and insights. American Journal of Small Business, 9(2), 46-58.

Implications for Cooperative Extension. Small business owners are in a key position to be seen as leaders in the area of social responsible actions. Many small business owners shoulder that responsibility in their small community even though they may not accept or agree with it. This research suggests that it is to the benefit of the small business owner to do so and also suggest various areas of social responsibility that may be a factor in long term business success. This information can help the Extension educator work with the business owner to see how he or she is a key community leader and what might be items that the small business owner should focus on in the area of social responsibilities.

Overview. Corporate social responsibility has received an extensive amount of attention during the past years. Yet while big business’s role in society has been scrutinized, little attention has been paid to the small business owner and his or her role in development of the greater social good. While small businesses may be perceived as having neither the influence nor the resources necessary to affect significant social change, in the local setting of the small business these businesses, in fact, do have significant potential as change agents. This article looks at whether or not a relationship exists between business success and social responsiveness.

Prior research has found that small business owners have a better understanding of the social issues and are more concerned about those issues. Certainly social responsible actions do play into the long term survival. Small firms are seen as having: (1) greater visibility and thus can suffer more from damaging negative feedback, and (2) less response time but fewer resources from which a response can be generated.

Methods. The survey studied 62 managers and 32 individuals as to the importance of 19 areas of social responsibility. The businesses were categorized as either high performing or low performing based on their competitive ranking as perceived by the business manager. Forty-two percent of businesses considered themselves as high performing.

Results. The results offer evidence that high performing businesses do view the areas of social responsibility differently. High performing businesses were significantly more likely to consider customer relations as important while low performing businesses focused on efficient use of resources and survival. Other areas of difference, although not significant were, for high performers, work environment, training, job satisfaction, and community involvement. For low performers, the other important variables were product choice and ethics.

Small Business Owners and Social Responsibility (continued)

The general population, however, saw things somewhat differently than did the high performing businesses. Individuals were concerned about accurate advertising, improving the environment, and the efficient use of resources. The business owners focused on growth, customer relations, community involvement, and providing jobs.

Summary. Finding that high performing business owners have a different view of their social responsibilities makes a strong case for the awareness of owners to this dimension of their total environment. While the under-performing

businesses may have been struggling so hard for survival that any change in one’s focus may have been the cause for serious problems, certainly that business owner must, at a minimum, be aware of how these outside influences can impact a business irregardless of the owner’s best intentions.

It is important to realize though that this study only provides indirect support for the results. Future testing, over time, is needed to determine how and if social responsible actions directly impact the small business’s bottom line.