Corporate Social Responsibility and the Performance of Small and Medium Scale Enterprises.

Abstract

Corporate Social Responsibility (CSR) has become the rhetoric of every business enterprises, without exceptions to Small and Medium Scale Enterprises (SMEs). This study examines the relationship between Corporate Social Responsibility and Organizational Performance of SMEs in Lagos State, Nigeria. Data were generated by means of questionnaires to 261 operators of SMEs on CSR and Performance variables. Responses from the survey were statistically analyzed using descriptive statistics and Z test. Results shows that socially responsible SMEs out-perform those that are not socially responsible; consistent with recent survey in Europe where research on SMEs found that they tend to be active in CSR. The study also showed that the organizational performance of SMEs is satisfactory with exception of financial strength, profitability and performance stability which was below the minimum threshold, although did not preclude a completely low performance. The importance of this study include the need to encourage SMEs to invest more in CSR, particularly on employee and the community within which they operate.