This chapter provides the introduction of the research. The research background demonstrates the needs of SMEs to conduct CSR programs. The research purposes and questions are raised. Furthermore, the significance of the study is explained subsequently.
Research Background
Corporate Social Responsibility (CSR) has become a growing social awareness in this century (De Clercq & Voronov, 2011) and also seems to be a kind of international private business self-regulation. Since the theory of Corporate Social Responsibility had appeared in the 1950s, a wide variety of definitions of CSR have been announced. The reason is that different kinds of organizations have their strategy and operations, therefore, CSR has been represented in different ways. As time passes, currently CSR practice has been considered as an essential part of corporate sustainability (CS). To follow the Triple Bottom Line Model (Elkington, 1998), maximizing the profit at the same time creating a balance between stakeholders and the environment is the responsibility of a business enterprise. Therefore, to improve their company image value and gain the most benefit for their stakeholders, business enterprises tend to conduct their own CSR strategy. Furthermore, the High-CSR firms had shown that they had better performance than the low-CSR firms during the 2008 Financial Crisis (Karl, Servaes & Tamayo, 2017).
In 2015, several social issues including food safety and environmental pollution had appeared in Taiwan. These social issues had been highly concerned by the public, especially food safety. The reason is food safety can influence people’s health. As a result, CSR had become a token to judge whether a company is reliable or not. Besides, the Taiwanese Government had announced a series of regulations to promote the companies to implement their CSR practice.
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Until now, CSR had mostly been implemented only for large enterprises. However, according to “2019 White Paper on Small and Medium Enterprises in Taiwan” published by SMEA (Small and Medium Enterprise Administration, Ministry of Economic Affairs R.O.C., 2019), the number of SMEs' enrollment constituted over 97% of the enterprises that had registered in Taiwan. Also, employees who worked in SME took up over 78% for the workforce in Taiwan, and they provided 30% of GDP in Taiwan. It shows that SMEs had a great contribution to economic development and creating job opportunities in Taiwan. On the other hand, a look at the food industry recently shows that, according to “2020 Status and Trends of Sustainability Report of Food Industry in Taiwan” published by CSRone (2020),about 6,000 companies registered in the food industry, but only 28 of them had published their sustainable report; additionally, only one of them is voluntary instead of being required by the regulation to publish the report. Even though it seems there are many steps for SMEs to go to consider their social responsibility, but there are still many opportunities for SMEs to integrate CSR into their core values and make CSR become a way they do things. Some of the SMEs in Taiwan had already built some contribution to their great CSR practice. This study tries to find the motives that make Taiwanese SMEs in the food industry to start to conduct their CSR practice and to give suggestions to other companies.
Researchers Murillo and Lozano (2006) used multiple case studies to find out the similar result from different companies and found that the promoter of the CSR practices is often the founder of the company. They concluded that it is still far for SMEs to go if they are willing to conduct CSR. Furthermore, Liu (2016) had also researched the CSR in Taiwanese SMEs. These studies served as important reference and inspiration to the present study. This research will focus on Taiwanese SMEs in the food industry and try to find if there is any difference between them.
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Statement of Problem
According to a reference from SMEA (Small and Medium Enterprise Administration, Ministry of Economic Affairs R.O.C., 2019), the Taiwanese government is currently practicing the transformation of SMEs. There are two purposes of this transformation: firstly, to improve the productivity and the competitiveness of SMEs, and secondly, to guide SMEs toward sustainable development. According to Lu and Xia (2009), in 2009, the Taiwan Environmental Information Association (TEIA) conducted a survey to explore the recognition of CSR among SMEs in Taiwan, and 388 SMEs participated in the survey. The result shows, among the participated SMEs, about 70 percent of them considered conducting CSR has positive influence on the company image; however, 50 percent of them did not have related knowledge about the implementation of CSR and would like to have some professional support.
In addition, according to CSRone (2020), for the food companies which published CSR reports, most of them were large enterprises that were required by the regulation, and only one of them published voluntarily. Therefore, there is a need to increase the awareness and knowledge of the CSR practices among small and medium enterprises in the food industry.
This study attempted to address this need by conducting multiple case studies on three SMEs which were recognized for their outstanding CSR programs. Two of the case companies are social enterprises and the other a traditional company. This research reveals what motivation for SMEs to start a CSR program were, and how SMEs in the food industry developed their CSR program.
Research Purposes
The main purpose of this research is figuring out the motivations of Taiwanese SMEs in the food industry to conduct their CSR program. In addition, during the process, what can they do for the implementation. At the same time, to give some suggestions to the SMEs which are willing to start their CSR practice. This research proposes to build a contribution to two groups of people.
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First, for the companies that do not have the common knowledge of CSR, to help them build the common knowledge; furthermore, to enable them to consider the opportunity for their social responsibility. Second, for those companies that would like to conduct CSR practice but do not know how to start it, the research will provide the experiences of other successful companies and the suggestions from the research.
Research Questions
This research attempts to answer the following questions based on the research purpose.
1. What motivates the SMEs to conduct CSR practices?
2. How do they manage the implementation and what are the challenges and the advantages for SMEs to conduct CSR programs?
3. What are the positive outcomes after the implementation of the CSR program?
Significance of the Study
There are several issues that the research attempts to uncover. First, why should the SMEs implement CSR practices and what are the opportunities for them to adapt CSR into their business operation. Second, through the interview with the companies to find out the difficulties they may face in the beginning, also what can they do as the solutions. Third, what are the motivations for making them persist in their process?
To improve the validity of the research, the researcher found three Taiwanese companies and conducted interviews with their stakeholders. Through the in-depth interviews, this research uncovered the details about their opinions on CSR and the practices they have devoted to, also how the results were. This research focuses on the CSR strategy of SMEs in Taiwan, to find the difficulties when they first started, also during the process, and how they continued their passion for the implementation. Additionally, what benefits they had gained after the implementation and also what others can learn from their experience. This study can encourage other SMEs to
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consider their corporate responsibility and make the Taiwanese food industry more reliable by providing the experiences of other successful companies and the suggestions from the research.
Consequently, through CSR, it is hoped that people in Taiwan will no longer need to worry about whether the food they eat is safe or not.
Definition of Terms Corporate Sustainability (CS)
Corporate sustainability (CS) can be defined as fulfilling the demands of a company’s direct and indirect stakeholders including shareholders, employees, clients, pressure groups, communities, as well as without compromising its ability to fulfill the demands of future stakeholders (Dyllick &
Hockerts, 2002).
Corporate Social Responsibility (CSR)
In this study, CSR is how an organization concerns about all of its stakeholders, society, and the environment, and additionally, how they implement the concern of all the above into their culture and day-to-day operation. (Bowen ,1953; Carroll,1979, 1991; Eells & Walton, 1974)
Small and Medium Size Enterprise (SME)
According to the Small and Medium Enterprise Administration (2015), the definition of SME is present as follows. For the manufacturing, construction, mining, and quarry industry, the company has its investment capital less than NTD $80 million or total employees are lower than 200. For other industries, the company’s sales revenues are lower than NTD $100 million from last year and has less than 100 employees.
Social Enterprises
According to United Kingdom government’sDepartment for Business, Energy and Industrial Strategy (2011), a social enterprise is a business with a social object and focus on the social purpose or the community rather than the maximum profit for shareholders.
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