Msme
RESPONSIBLE BUSINESS PRACTICES IN SME 'S IN INDIA: AN OVERVIEW
Introduction: The contribution of the Small and medium enterprises (SME’s) to the economic growth of a nation is well recognized. In developing countries, as some authors argue (Leutkenhorst, 2004) the contribution of SME’s towards employment generation is significant because they • tend to use more labour intensive production processes than large enterprises, boosting employment and leading to more equitable income distribution • Provide livelihood opportunities through simple, value adding processing activities in agriculturally based economies; • Nurture entrepreneurship; and • Support the building up of systemic productive capacities and the creation of resilient economic systems, through linkages between small and large enterprises While their significant economic contribution is well understood, their responsible business practices have not been extensively studied for any meaningful interpretation to be drawn. While individually each of these SME’s may not be a significant influence like the large corporations, their cumulative social and environmental impacts could be significant. This is already being witnessed in the textile belts and the chemical belts in India. There is an urgent need therefore to understand the responsible business practices adopted by the SME’s. Responsible business practices can be conceptualized as consisting of two dimensions ---- the ethical behaviours of the corporation and the Corporate Social Responsibility (CSR) practices that it adopts. This conceptualization allows us to capture the phenomena at two levels – at the level of individual managers and their institutions and at the level of the organization and the sector. A review of the literature indicates that a few studies have examined the value orientations and ethical stances of Indian managers in large corporations (Monga, 2004; Fisher, Shirole & Bhupatkar, 2001). One study empirically examines the
Introduction: The contribution of the Small and medium enterprises (SME’s) to the economic growth of a nation is well recognized. In developing countries, as some authors argue (Leutkenhorst, 2004) the contribution of SME’s towards employment generation is significant because they • tend to use more labour intensive production processes than large enterprises, boosting employment and leading to more equitable income distribution • Provide livelihood opportunities through simple, value adding processing activities in agriculturally based economies; • Nurture entrepreneurship; and • Support the building up of systemic productive capacities and the creation of resilient economic systems, through linkages between small and large enterprises While their significant economic contribution is well understood, their responsible business practices have not been extensively studied for any meaningful interpretation to be drawn. While individually each of these SME’s may not be a significant influence like the large corporations, their cumulative social and environmental impacts could be significant. This is already being witnessed in the textile belts and the chemical belts in India. There is an urgent need therefore to understand the responsible business practices adopted by the SME’s. Responsible business practices can be conceptualized as consisting of two dimensions ---- the ethical behaviours of the corporation and the Corporate Social Responsibility (CSR) practices that it adopts. This conceptualization allows us to capture the phenomena at two levels – at the level of individual managers and their institutions and at the level of the organization and the sector. A review of the literature indicates that a few studies have examined the value orientations and ethical stances of Indian managers in large corporations (Monga, 2004; Fisher, Shirole & Bhupatkar, 2001). One study empirically examines the
References: British Council, , United Nations Development Programme (UNDP), Confederation of Indian Industry (CII) & Pricewaterhouse Coopers (2002) Corporate Social Responsibility Survey -2002. British Council, UNDP, CII & PwC, New Delhi Bombay Chamber of Commerce and Industry (2007) Socially Responsible business: from an SME Model to a Model SME using the Corporate Responsibity framework Mumbai Fisher C M, Shirole R & Bhupatkar A P (2001) Ethical stances in Indian Management Culture. Personnel Review; 2001; 30, 5/6 Kumar R, Murphy D F & Balsari V (2001) Altered images: The 2001 State of Corporate Responsibility in India Poll. Tata Energy Research Institute . New Delhi Leutkenhorst (2004) ‘Corporate Social Responsibility and the Development Agenda: The case for actively involving small and medium enterprises’, Intereconomics, May/June. Mitra M (2007) It’s only Business: India’s corporate social responsiveness in a globalized world Oxford University Press New Delhi Manjit Monga (2005) Value orientations: a case study of north Indian manufacturing managers . The Journal of Management Development; 2005; 24, 7/8 Pandey A P (2007) Indian SME’s and their uniqueness in the country. MPRA Paper No. 6086 (http://mpra.ub.uni-muenchen.de/6086/) Revenkar. A V (2004) Corporate Social Responsibiilty in Small and Medium scale industries. Business Community Foundation Publication. New Delhi Russo (1999) Strengthening Indian SME clusters: UNIDO’s experience. Tarun Kumar (2004) CSR in Industrial areas/SME’s: Activities, policies and strategies in Delhi India. Business community Foundation publication, New Delhi