SME News

Corporate social responsibility in Kenyan SMEs

Corporate Social Responsibility or CSR pertains to integrity where a registered structured establishment governs itself, fulfills its mission, lives by its values, engages with its clientele & stakeholders, measures its impact and reports on its activities. Although most people appreciate the recent advancement of corporate social responsibility in Kenya, some argue that corporations are still not doing enough or are only acting in self-interest. While enterprises need to have good CSR policies in order to build and maintain their reputation, they are also expected to maximize and break even on profit margins. Therefore, businesses (large, medium or small) need to put in a sufficient amount of time and resources to achieve what they have promised in their policies as advantages of corporate social responsibility.

SMEs in Globalization

Globalization has opened new avenues and is making great inroads for non-skilled, semi-skilled and professionals in the societal placing to partake in driving the economic and development agenda in Kenya and by extension, the region. One offshoot of this is the practice of outsourcing and accessing funds from banks and other lending platforms for enterprises. The government of Kenya and the corporate sector individually as well as jointly support this industry (SMEs) trend as it realigns the focus from formal employment to self- employment as well as creating a paradigm on education for sustainable growth, qualitative and quantitative development.

In high-income countries like the United States, millions of workers earn minimum wage at full-time jobs and still cannot afford basic necessities. When people work for low wages, personal and institutional gratification is highly compromised at the expense of the institutional mandate as this is occasioned by the workers need to increase their incomes alternatively. Another source of this phenomenon is the need for creation of sustainable livelihoods, which has become an important factor in the present day Kenya, more so among disadvantaged populations. Sustaining the progress calls for an explicit consideration of future generations vis-a-vis the status quo. Youth will inherit many of the environmental, economic and social problems created over the past by lack of formal employment. Establishing a conducive environment for operationalization, sensitization, full support and funding of SMEs and incorporation of Kenyans opinions and concerns into government policies that support SMEs at all levels is critical for progress.

SMEs role in corporate social responsibility

With SMEs focusing on generating profits, sustainability has not been a popular concern amongst all enterprises up until recently. In a globalist trended era, small and medium enterprises and big corporations alike should be guided by the CSR obligation to ensure that they do not conduct destructive and unethical practices, such as polluting the environment, thereby attracting negative feedback from the general public.

With increased media attention on CSR by enterprises, there is surging demand from the citizenry to conduct sustainable business practices. In addition, in order to attract and retain a significant clientele base, enterprises need to realize the importance of being ethical while running their daily operations. The corporate response has often meant an adoption of ‘a new consciousness’, and this leads to the concept of corporate social responsibility.

SMEs are expected to perform well in non-financial areas such as human rights, business ethics, environmental policies, corporate contributions, community development and corporate governance. The problem is that many companies that claim to be socially responsible often do not live up to such a standard. As CSR should be commonplace among SMEs, there are concerns that some promote an importance of corporate social responsibility whether or not they have a true strategy in place and the results to show for. Accountability and transparency are key to conducting business in a socially responsible manner.

Entrepreneurial Learning

Corporate social responsibility (CRS) plays an important role in decision making for your business. The momentous change in the trends of global competitiveness has spread the importance of CRS an impressive strategy to strengthen the role of SMEs in financial as well as non-financial areas. While a number of corporations have been displaying an ambivalent practice of Corporate Social Responsibility (CSR) standards, due to the SMEs greater and more direct impact on non-financial areas than the corporations, the challenge is for them to validate the image of CSR by adopting responsible measures.

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