Employee engagement in CSR strategy making : Understanding SMEs’ behavior towards stakeholders and CSR

Sammanfattning: SMEs make up a large part of the global economy. Only in Sweden, for example, SMEs account for 61,3% of value added and employment (European Commision, 2016, p. 2). With such impressive presence, these firms exert a large impact on society and the environment. In an increasingly demanding and competitive landscape, organizations do not only have an economic responsibility to shareholders’ wealth, but also bear responsibilities towards society and the environment. With this shift, corporate social responsibility has become of significant importance and reshaped the way firms act and should act. Parallel to that, the evolving CSR paradigm has highlighted the need of stakeholder engagement in strategic decisions, as the growing importance of stakeholders is said to be the single most important element in the age of sustainability. Stakeholders affect and are affected by organizations and corporate decisions should thus take into consideration their needs and expectations. Opposing the “business of business is doing business” line of thought that dominated the business logic in the past decades, firms are now recognizing the significant importance of establishing and maintaining good relationships with stakeholders. With that, stakeholder engagement is argued to be one of the key aspects for an improved decision-making since it allows firms to integrate knowledge, generate mutual collaboration and mitigate risks, which in turn can lead to CSR strategies that are more aligned with stakeholders’ expectations and wishes and support responsible growth. Although CSR and stakeholder theory are two vastly studied academic fields, few studies have explored the reality of CSR among SMEs and stakeholder engagement on an individual group of stakeholders such as employees. While vital for any company’s survival, employees exert an even more unique role in SMEs. Given the identified research gaps, the purpose of this study is to shed light on both CSR and stakeholder engagement focused on employees among SMEs. In order to gain a better understanding of the realities of both topics, we formulated the research question: How do Swedish SMEs engage employees in the CSR strategy-making from a management perspective? With an inductive approach, a qualitative exploratory research study was chosen. From a mix of purposive and snowball sampling, eight semi-structured interviews were conducted among SMEs’ managers and CEO’s from firms in Umeå, Sweden. Our findings indicate that SMEs often have the willingness to engage employees in CSR decisions, but sometimes lack the knowledge and/or resources to promote this engagement. The most widely adopted means to foster employee engagement with CSR strategy-making is through informal discussions and talks during coffee breaks. Some companies also use more developed methods, such as town hall meetings, instant feedback mechanisms, anonymous notes and weekly employee surveys for this purpose. Our study contributes to the growing literature on CSR among smaller firms and broadens the understanding of stakeholder engagement focused on one particular stakeholder group. This research also presents managerial implications into how SMEs’ can promote a more inclusive governance around strategy. We also expect to have contributed by promoting a further debate and reflection around CSR.