Date of Award

8-29-2014

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PHD)

First Advisor

Alison Rampersad

Second Advisor

Jose Lopez

Third Advisor

Farideh Farazmand

Abstract

Small and medium size enterprises (SMEs) have become increasingly more important in the United States, Europe, and globally, due to their growing numbers and economic impact (Jenkins, 2004). Currently small businesses create two-thirds of the net new jobs annually, comprise over 23 million firms, account for over half of all U.S. sales, employ more than half of the private-sector workforce, and generate nearly 50 percent of annual U.S. GDP (Small Business Administration, Introduction Section, para. 1).

Corporate Social Responsibility (CSR) has been an evolving construct since the latter half of the 2oth century and has often been cited as a source of competitive advantage and firm sustainability. Although studies have shown a connection between strategic CSR and long-term economic benefit, researchers have struggled to show a direct link between strategic CSR and firm financial performance. Burke and Logsdon (1996) developed a model linking strategic CSR to firm economic value creation. Though this model has been empirically tested on multi-national enterprises (MNEs) and SMEs, there are few studies of US.-based SMEs.

The purpose of this quantitative, explanatory, correlational and non-experimental research study was to examine the relationship between five business strategy components central to an effective CSR strategy (centrality, specificity, proactivity, visibility, and voluntarism) and SME economic value creation (profit and value creation). Senior management from small and medium size enterprises throughout the U.S. were invited to participate in this study. There were over 100 respondents to the online survey, the majority of who were concentrated in the Southeastern United States.

Results from this study showed that each of the five CSR strategies had a significant effect on both profit and value creation, with the exception of visibility which did not have a significant effect on profit. This suggests that SME managers did not see a direct link between visibility in the news media and profit. When all five strategies were integrated, results indicated that visibility and voluntarism had a significant effect on value creation and specificity had a significant effect on profit.

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