Professional Documents
Culture Documents
expectations for socially responsible business behavior- economic, legal, ethical, and
discretionary- and proposed a three-step corporate performance model based on socially
responsible organizational response.
behavior was first guided by social obligations imposed by the marketplace and legal
constraints. Firm behavior must also be viewed in terms of its congruence with prevailing
social norms, values, and expectations. Sethis model was elaborated by Wartick and
Cochran (1985) and Wood (1991) as a series of social responsibility principles, processes
of corporate responsiveness, and policies or outcomes for social issues management.
In spite of abundant literature regarding large corporations, little is known about
the importance of community level social responsibility (CSR) and its relationship to
small family firms (Curran, Rutherfoord and Blackburn 2000; Thompson and Smith
1991). Existing studies are primarily descriptive, addressing topics such as: academic
experts views of how successful family firms use social responsibility (Gallo 2004),
acceptable ethical practices for small firms (Longenecker, McKinney, and Moore 1989),
perceived CSR priorities and level of performance (Chrisman and Archer 1984; Chrisman
and Fry 1982), differences between large and small firm CSR (Brown and King 1982),
CSR in minority-owned small businesses (Gomolka 1978), and profiling the charitable
contributions of small firms (Thompson, Smith, and Hood 1993). Aronson (1991) and
Casson (1991) suggest a more community-focused approach to small business,
conceptualizing self-employment as a distinct type of labor market behavior.
More
Emergence of global
agriculture supply systems and introduction of new technologies have impacted the
majority of small and rural communities. It is therefore important to view rural regions
of the U.S. as having strong potential for new economic growth. A recent SRI study
suggests rural areas have several strengths including a low cost of doing business, high
quality of life, ongoing improvement of education, growing levels of entrepreneurship
and small business development (Capitalizing on Rural America 2005). The U.S. Small
Business Administrations Office of Advocacy recognizes that thriving small businesses
are the nucleus of sustainable rural communities (Advancing Rural America 2001). With
these potential economic-based challenges or opportunities existing in many small and
rural communities, research connecting perceptions of community social responsibility
with how families conduct business is timely. For example, it is unknown what qualities
or values associated with small town living attract and retain families and contribute to
business performance. Discovering CSRs existence and impact could arm community
development practitioners, policymakers, and residents with strong arguments for
attracting new and returnee businesses.
Various studies have found positive relationships between age and ethical
behavior in small business (Barnett and Karson 1987; Posner and Schmidt 1984;
Serwinek 1992; Smith and Oakley 1994). Work by Dawson, Breen and Satyen (2002)
similarly revealed significant variation in business attitudes for Australian micro business
operators based on age and education. Younger business operators viewed ethical rules
of operation as more important to their business than did those over 50 years of age and
those with a professional degree saw business decisions as closely linked to personal
moral decisions.
Miller and Besser (2000) profiled small rural business operators in Iowa by five
community value clusters: social responsibility, community support, leadership in the
community, community attachment, and collective action. Significant differences were
found among cluster profiles for age, gender, marital status, level of education, years
lived in town, and age of the business. Besser and Miller (2001) reported similar findings
where small business owners were grouped based on variation in community social
responsibility. Cluster analysis revealed significant differences among business operator
groups for community social responsibility (CSR) factors of support, collective action,
commitment, and attachment. Differences were attributed to age, marital status,
educational level, years lived in town, age of business, ownership status, and firm size
(number of employees).
Bessers (1999) study of small town business operators found that older
businesses and those with more employees were more likely to be committed, provide
leadership, and support to the community. Further, education was positively related to
commitment, leadership, and support and older operators provided more community
leadership and support than younger operators.
demonstrate community commitment than managers and those operating older businesses
were more likely to hold leadership roles and demonstrate community support.
In
another study of small town business operators, Besser (1998) found operator education,
business age, and collective action to be significant predictors of community leadership.
Research conducted by the Center for Economic Studies in the Bureau of Census
suggests small business outcomes are positively associated with the owners level of
education (Fairlie and Robb 2005). A recent national study by the Small Business
Administrations Office of Advocacy (2006) also found that education level was a
significant and positive explanatory variable in evaluating the growth of rural small
businesses.
While a void exists in the literature concerning the consequences of CSR for
family firms, several studies suggest that social responsibility may positively influence
subjective or perceived performance and success. Miller and Bessers work (2000)
identified small business operators by community value clusters, finding significant
differences among groups regarding perceived firm success. Firms with a higher sense of
community social values were more likely to report perceived business success than firms
with low values. An analysis of small business operators in 10 Iowa cities (Besser and
Miller 2001) revealed significant differences in perceptions of operators business success
when grouped by CSR level. Operators with higher CSR were significantly more likely
to view community support as an important business performance strategy than those
with lower CSR.
Theoretical Background
One approach to understanding community social responsibility from the
perspective of family business operators is the enlightened self-interest model (Aram
1989; Arlow and Gannon 1982; Mescon and Tilson 1987). This approach suggests that
socially responsible actions by a community-based firm will be reciprocated over time by
support from loyal
prevailing social norms, values, and expectations of community groups (Portes and
Sessenbrenner 1993; Uzzi 1996). Gouldner (1960) defines reciprocity as the give and
take of goodness among group members and a sense of obligation to repay kindness.
Socially responsible behavior and expectations for doing what is right for the collective
good, may be considered prevailing social norms for doing business in small rural
communities. Likewise, family business operators may view social responsibility as a
form of reciprocation or giving back to the community.
Complementary to the enlightened self-interest perspective is the concept of
social capital. Social capital is reflected in the intangible value created by relational ties
between family businesses and the community. It manifests itself at the community level
through the development of trust, commitment, reciprocity, and a sense of shared vision
(Coleman 1990; Tsai and Goshal 1998). Through collective behavior, residents and
business operators help communities generate social capital (Coleman 1988, 1990).
Putnam (1993, 2000) suggests that community social capital is enhanced with increasing
commitment, attachment, and involvement by community residents.
Most family
businesses live, work, and operate within the same community. This may in turn cause
them to have greater attachment and stronger sentiment toward their communities and a
Table 1
Factor Items, Means and Loadings from Principal Component Analysis of
CSR Dimensions for Family Owned Businesses
Factor Items
Commitment to the Community
=.75
The people of this community really care about
the fate of this business.
% Variance
Explained
Factor
Loading
.59
3.58
3.16
.61
3.56
.69
3.66
.78
3.45
.67
3.71
.75
3.95
.45
2.79
2.92
.62
2.23
.75
3.22
.80
3.49
3.68
.72
3.29
Community Support
=.62
Your business keeps in close contact with local
economic development organizations.
Sense of Community
=.74
Community leaders need to consider family
needs more carefully when they undertake
community planning projects.
This used to be a better community in which to
live. (R)
24.72
Mean
Score
10.31
8.20
Std.
Dev.
Variance
3.88
15.00
2.95
8.68
1.30
1.69
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