The brand image and performance of small and medium enterprises: How can social responsibility activities help?

Abstract

Orientation: Business social responsibility (BSR) activities may lead to benefits for small and medium enterprises (SMEs).

Research purpose: To investigate how SMEs could use BSR activities to improve their brand image and business performance.

Motivation for the study: In a competitive environment, SMEs face various challenges such as financial constraints, lack of resources or lack of managerial experience. BSR activities pave the way for an SME to make a positive contribution toward the environment in which it operates, as they indicate a level of care for the natural environment and show commitment toward the upliftment of communities. The benefits that accrue to SMEs that engage in BSR activities are yet to be determined and the need for research on SMEs’ BSR activities and results led to this study.

Research design, approach and method: Structured questionnaires were distributed to 320 SMEs in the Eastern Cape, South Africa. A total of 200 usable questionnaires were received, obtaining a response rate of 62.5%, and these were analysed quantitatively.

Main findings: Significant relationships were found between three BSR activities, namely stakeholder relations, community development and environmental awareness, and the SME’s brand image; as well as between the SME’s brand image and business performance.

Practical and managerial implications: Implemented BSR recommendations may lead to improved brand images and business performance; and therefore an increased success rate amongst SMEs in South Africa.

Contribution and value-add: BSR research has predominantly been in the sphere of larger and more established enterprises. The study suggests practical recommendations to SMEs to improve their brand image and business performance by employing BSR strategies relating to stakeholder relations, community development and environmental awareness.