Corporate Social Responsibility and Corporate
Governance in Italian SMEs: The experience of
some “spirited businesses”
Mara Del Baldo1
Abstract: The study proposes to individuate the relationship between
social engagement, social statements and governance of SMEs. Does
an adhesion to the philosophy and to the practices of CSR, which are
reflected in a firm’s mission and accountability, positively influences
its governance? If so, is this influence more or less significant for
SMEs with respect to large-sized firms? This paper winds itself around
these questions and describes the principle findings that have emerged
from a qualitative investigation focused on a selected group of
“cohesive” Italian SMEs, in which their management complies with
both economic and social issues. The empirical study finds that the
diffusion of CSR is tied above all to the entrepreneur’s values and
orientation and to the company embeddedness to the local socioeconomic environment. The concluding reflections trace the features
of a territorial model of socially responsible orientation cantered on
the best practices of SMEs who are excellent examples of “spirited
businesses” and are part of a network (which includes institutions,
trade associations, non-profit organisations, etc.) that contributes to the
diffusion of an orientation towards CSR and to sustainability across
the territory.
Keywords: Business ethics, Corporate governance, Corporate social
responsibility, Small and medium enterprises, Territory.
1 Introduction
If it is true that the consideration of ethical principles in a business’
choices and policies is particularly important for large businesses that
are organised and run as public companies, then it is likewise true that
in small and medium-sized businesses (SMEs), the dedication to, and
1
M. Del Baldo
Management Studies Institute, University of Urbino “Carlo Bo”, Italy
e-mail: mara.delbaldo@uniurb.it
articulation of, socially responsible management philosophies must
reverberate directly across a plurality of “intangible” components.
Among these intangibles are the company’s strategic profile (in
terms of integrating practices in a system of initiatives and integrated
behaviours with the overall business strategy), the culture of the
enterprise, the processes of accountability (improving systems of
collecting and diffusing information, of disclosure and of
informational transparency, as well as introducing procedures and
forms of control), and systems of corporate governance (systems of
decision-making processes and of internal control, configuration of
assets and related matters). It is this totality of factors that reflect that
specific nature of the SME: the convergence around the mission and
value-set, facilitated by the proximity and by the direct involvement of
the owner and/or the entrepreneurial family in managing the business;
the simplicity of its organisational structure, which allows direct and
frequent rapports between the corporate actors; and its rooting in the
surrounding territory and socio-economic context. This last factor
assumes particular importance in driving the business towards forms
of CSR (Corporate Social Responsibility) that share a common thread
– namely, they all possess values that typically express a particular
socio-cultural and economic tradition of the territory in which they are
embedded (Ringov and Zollo, 2007).
Where an adhesion to multiple declensions of CSR is present,
corporate governance positions itself at the centre of relations between
stakeholders, strategic profile and internal processes, human capital
(Gazzola and Mella, 2006) and is experienced as enlarged governance
(Sacconi, 2008). A necessary condition is the involvement of top
management: the top managers and/or the entrepreneur serve as the
impetus for the reorientation of the firm’s mission, from its
maximization of profits to gaining value that comes from economic
performance and finds a source in the modification of the business
direction and the rules that govern it.
In this context, is it possible to affirm that socially oriented
businesses are characterized by the “best” systems of governance?
And on which specificities of SMEs is the evolution of sociallyoriented management philosophy based?
To answer these questions, the present study utilizes a dual
analytical perspective: deductive and inductive. The former is based
on a review of the contributions present in the literature concerning
business ethics, entrepreneurship and CSR among SMEs. The latter is
developed through a qualitative study focused on several case studies
conducted through a semi-structured questionnaire on a sample of
SMEs in the Marches Region. The empirical analysis forms a part of a
more robust research project based on the qualitative and quantitative
study of a sample of Italian SMEs, started in May 2008.
The explication of the research question can be articulated this
way: to individuate the particular traits of the mission, systems of
governance and of accountability that characterize the SMEs that
carry a business culture in which social responsibility is lived within
the governance of the firm. The central hypothesis is that in the
presence of a solid ethical framework, which is promoted and shared
by the entrepreneurs and managers who guide the business in carrying
out socially responsible practices and towards adopting methods
communicating them (such as a charter of values, a code of ethics,
social report, etc.), the arrangement and quality of governance can
mitigate tensions and dedicate more energy towards the good of the
business, of its workers, and of the society and environment in which
it operates.
The empirical analysis of such cases, conducted with reference to
the interpretative framework of Lamont (2002) and Molteni and
Lucchini (2004), also permits one to verify a second hypothesis:
SMEs’ orientation towards CSR and the coherence between missiongovernance-accountability which follows are facilitated by
environmental factors - that is, of an anthropological and sociocultural nature - present in the territory from which the entrepreneurs
and the SMEs come. This makes it possible to trace the features of a
Marchegian model of socially responsible orientation cantered on the
best practices of SMEs who are excellent examples of “spirited
businesses”.
The work is articulated in three principle parts. The first section
traces the theoretical framework and synthesizes the existent
contributions in the literature and of the researches conducted on the
theme of CSR and business ethics, attempting a comparative reading
with respect to large firms. The second part describes and interprets
the principle findings that have emerged from the qualitative
investigation focused on a selected group of “cohesive” SMEs, in
which the nexus between mission, corporate governance and socially
responsible management practices were examined. The last section
closes the paper with concluding reflections.
2
Corporate social responsibility, ethics
and corporate
governance: an analysis of the conceptual framework
The recognition of an ethical and social dimension of business activity
is founded on a vast corpus of theory. The earliest contributions
(Bowen, 1953) have been progressively enriched in the last twenty
years, producing a vast and complex frame of normative references
that has fed lively and rich2 debates involving academics form diverse
disciplines:
business-economics,
management,
sociology,
anthropology, philosophy.
Four groups of theories form the core of this literature; they
likewise correspond to four different approaches (Garriga and Melé,
2004). The first (instrumental theories) has Friedman (1962) as its
most notable exponent, and is founded on the principle of the
instrumentality of the business with respect to the creation of wealth, a
goal that is synthesized as the firm’s only responsibility
(maximization of shareholder value; reaching the competitive
advantage).
The second (political theories), which can be divided into three
principle theoretical strands (corporate constitutionalism; integrative
social contract, corporate citizenship), is focused on the role of
business and of the rights/needs which connect them, and on the
responsible use of power in political and social arenas (Davis, 1960,
1973; Donaldson and Dunfee, 1994, 1999).
The third body of studies (integrative theories), in which the
approaches of issues management, public responsibility, stakeholder
management and corporate social performance coexist, maintains that
“social demands are generally considered to be the way in which
society interacts with business and gives it a certain legitimacy and
prestige. As a consequence, corporate management should take into
account social demands, and integrate them in such a way that the
business operates in accordance with social values” (Garriga and
Melé, 2004, p. 57).
The last represents a collection of ethical theories which, focused
“on the right thing to achieve a good society” (ibidem, p. 64), includes
the approach of stakeholder normative theory (Freeman and Reed,
1983; Freeman, 1984; Evan and Freeman, 1993; Donaldson and
Preston, 1995; Phillips et al., 2003) which is based on the premise of
universal rights (UN Global Compact, 1999), of sustainable
development (World Commission on Environment and Development,
Brundtland Report, 1987). It also includes the approach of the
common good of society, in which space is made for theories
“Corporate social responsibility means something, but not always the same
thing, to everybody” (Votaw, 1972, p. 25). Moreover corporate social
responsibility has been described as “…an eclectic field with loose
boundaries, multiple memberships, and differing training/perspectives;
broadly rather than focused, multidisciplinary; wide breadth; brings in a
wider range of literature; and interdisciplinary” (Carroll, 1994, p. 14).
2
concerning the “common good” (Maritain, 1966; Melé, 2002; Alford
and Naughton, 2002; Alford, 2006; Sacconi, 2004; Catturi, 2006) and
the Civil Economy (Zamagni, 1995, 2006; Bruni and Zamagni, 2004).
The nexus between corporate governance and the management’s
and/or the entrepreneur/business owner’s responsibility is a theme
which, in recent decades, has moved to the forefront and has fully
merged into the ethics of responsibility theory: the duty of
management is to actualize a balance of interests among all
stakeholders, and social responsibility can (and must) be redirected
towards the emersion of moral preferences and their connection with
particular types of businesses (civil and social businesses) or, in
lucrative firms, towards particular mechanisms of governance in
which a relational perspective prevails (Zamagni, 2003).
According to such notions, CSR is an instrument of governance
that facilitates the compliance of a possible “encounter” among actors
inside/outside the firm, and governance become simplified when trust
in the management and/or the entrepreneur increases and even more
so when the same trust is repaid by the right results, equitable and
gratifiable for all (Jones and Thomas, 1995).
Such a perspective signals the passage from a governance cantered
on managerial and entrepreneurial aims to a multi-polar or holistic
model (Sciarelli, 2007) which considers all who “matter” to the
company and provided the foundation to a responsibility composed of
economic, social and environmental demands, which provoke new
problems.
The problems of business government3 touch on both the firm’s
structural profile as well as its processual profile. In the latter decades
the two-part question “who effectively governs” and “for whom” was
enriched with the addition of a third question: “which interests should
be favoured” rendering insufficient, from a normative point of view,
the responses that come from the agency theory (Williamson, 1975;
Jensen and Meckling, 1976). This theory recognizes the subsistence of
a fiduciary mandate conferred by shareholders to the managers for the
3
Specifically, the aspects that lead corporate governance are: proprietary
asset and the composition of the firm’s organs of government, relations and
interactions among these organs (ownership, board of directors and
management), the distribution of power and responsibility to the highest
levels of the organization, the modalities of selecting and remuneration of the
upper and middle management, transparency of the acts of government and
internal control, the economic and financial information system, the modes
and the instruments with which the decision-making processes and
behaviours conform to the principles that inspire the functioning of the
business. See Molteni, 2004.
operation of the firm. The manager’s duty to act in the interests of the
ownership derives from this, as does his exclusive responsibility
towards proprietary investors. Because the aim of investment is to
maximize its economic return, the manager is therefore mandated to
assume all of the decisions that can drive the firm towards this
outcome4. Agency theory simplifies the description of the business’
government because it presupposes the existence of only one type of
fiduciary relationship, characterized by divergent interests between
principal and agent, which can be brought together through structures
of control and through economic incentive plans. The two principle
critiques of this theory regard the concentration of management’s
attention on the rights of shareholders and on the recognition at the
highest level of an exclusively economic motivation. Such conceptual
limitations were in part overcome by the stakeholder theory5 which
adheres more closely to the role of companies in the socio-economic
context. The critical junction of governance no longer becomes the
only one to ensure that the interests of the agent and principal
coincide, but rather that the management can take place with respect
to the interests of the more diversified stakeholders, as well as with
those subjects connected to the enterprise itself.6 This requires
compatibility between the maximization of economic returns of
4
For a literature review on agency theory, see Mitnick, 1995, beginning on
page 76.
5
The cardinal rule of stakeholder theory is that “he who governs the firm
must consider the rights, the interests and the expectations of all those who
may be influenced by managerial decisions and who, conversely, may
exercise their influence on the results of such decisions” (Freeman, 1984, p.
46).
6
Regarding this citation, Jensen (2002), whose contribution is associated
with instrumental theories, reaffirms the validity of agency theory; his
conclusions are based on over twenty years of observations and reflections on
the phenomenon of corporate governance. At the same time, he critiques the
inoperative nature of stakeholder theory which, in his opinion, does not offer
any criteria in deciding which objectives the manager must persue. The
multiplicity of objectives from which he can choose (in caring for all of the
stakeholders), in fact, does not provide any guide as to how to arrive at this
result. In his opinion, therefore, enlightened stakeholder theory seems more
realistic, for it is a theory that seems to better take into account the
importance of the stakeholders for the survival of the firm seems more
realistic, and is able to reconcile shareholders’ interests with those of the
interlocutors in the long-term. This theory is likewise critiqued and
considered ethically inadequate with its sense of treating people as means of
making wealth rather than as ends in and of themselves (Alford, 2006, p. 3).
investments for shareholders and the satisfaction of aspirations –
economic and non – of all the participants in the life of the company.
The problems of “ethical cores” and of the ethical foundations of
stakeholder theory have been addressed by diverse authors.
Stakeholder theory has become one of he most important
developments in the field of business ethics. This concept has evolved
and gained prominence as a method of integrating ethics into the basic
purposes and strategic objectives of the firm. “Work on corporate
social responsiveness and corporate social responsibility helped to
expand the horizons of our moral imagination and articulate the
relationship between corporations and ethics” (Wicks, Gilbert and
Freeman, 1994).
Stakeholder theory is considered both an ethical theory of
organisation as well as a theory of strategic management (Phillips et
al., 2003). In the context of stakeholder management7, the distinction
between normative stakeholders (towards whom the organization has
a moral obligation to treat equitably) and derivative stakeholders,
towards whom there is no obligation to treat equitably, is done based
on the fundamental principle of equity, according to whom in a
cooperative environment, each participant should receive benefits
equal to the sacrifices they make (Phillips, 2003).
One can consider a company as a sort of “independent stakeholdersubject system”; all stakeholders tend to pursue a dynamic equilibrium
between themselves based on “minimum mutual acknowledgement”
(MMA); each stakeholder “draws up” his own specific “map of the
stakeholders” and, while respecting the MMA, tries in any case to
negotiate in order to achieve a situation of strategic equilibrium which
is most favourable to their interests. These principles of general
stakeholder theory (Rusconi, 2006) consider the business as one
element within a broader network and confirm the importance of
relationships and trust between diverse interlocutors (Rusconi, 2006).
In this sense, stakeholder theory, which introduced the concept of
equity (fairness) and of the just treatment of diverse interlocutors,
“also becomes an ethical theory, in which values and principles of
moral nature are recalled” (Sciarelli, 2007, p. 13). The concept of
fairness recalls principles and values of a moral nature, which are
necessary to supplement or integrate scarcity in a form of governance
that is not effectively disciplined towards a juridical orientation and
7
Stakeholder management is built around individuation, in both the
classification and in the management of relationships with diverse
interlocutors; that is, in the application of stakeholder theory to the business’
government.
towards prominent market forces, so as to balance the conflicting
interests of diverse participants. These last factors have and “have to
do” with altruism, moral gratification, the “logic of happiness”
(Baldarelli, 2005), satisfaction, gratuity and gifts (Gui and Sugden,
2005; Bruni, 2005) and the honour of such behaviours (Brennan,
1994).
Ethics among strong and weak interests, inasmuch the doctrine and
practice is oriented towards the decision between right and wrong,
represents an effective and necessary response to real demands of
present and future corporate governance.
This approach opens the way towards an application of ethical
values in corporate choices. This is translated into the model of CSRsocial-responsiveness-issues management8 in which the principles of
solidarity and trustworthiness are reconciled and enmesh themselves
in diverse levels of commitment correlated with the typologies of
relations with stakeholders.
Nevertheless, such a framework rests on the disassociation
between ownership and government of the company, which is typical
in the United States but rare in other contexts – especially in Italy.
Therefore, other important contributions that help to explain the
relationship between CSR and governance and offer an interpretative
key regarding SMEs come form the stewardship theory. “Founded on
psychological and sociological traditions, stewardship theory
represents an alternative model of motivations and managerial
behaviours” (Davis, Schoorman and Donaldson, 1997, p. 43), based
on a concept of Man that is diverse from the theory of rational choice.
Here, Man is moved by a complex of motivations that are at once
economic (extrinsic and tangible), social, and emotive (intrinsic and
more difficult to quantify). In their monograph, the authors
comparatively analyze agency theory and stewardship theory to
demonstrate the necessity of clarifying the two approaches’
behavioural and situational premises. If Man is motivated only by
economic stimuli, is scarcely linked to the organization and uses
institutional power, he typically enjoys relationships in the field of
agency theory, and must be disciplined through incentives and
assessments. If he is pushed by more robust social motivations, he has
a strong organizational commitment and is given a personal power
linked to authority, his is more in line with the relationships outlined
in stewardship theory. The link, the degree of commitment and of
8
Issues management as an instrument for improving the capacity of the firm
by discovering the emergent social problems and responding to them with
specific programs of activity (Carrol, 1993).
identification with the firm and the way of exercising power in the
organisation (in agency theory power is institutional and derives from
a covert role; in stewardship theory power is personal because it is
founded on the authority assumed by the steward) constitutes the two
subjective factors that distinguish the manager from the steward.
Under the objective aspect, the difference is one between a directional
philosophy founded on control and one founded on involvement, such
as between an individualistic culture and a cooperative (collectivist)
culture, and a greater level of democracy (distribution of power inside
the agency). Thus, the authors’ principle contribution is that of
developing the theme of motivation and of having substituted
deterministic conclusions (absolute validity of one theory or the other)
with situations that vary according to the choices made by the owners
and the ownership. Such a situational and contingent approach can be
adapted to SMEs in which the contingent variable linked to the
entrepreneur influences the nature of the relationship of government
inside and outside the firm, and on the governance of the firm itself.
This theory is based on an orientation of cooperative and nonconflictual government, founded on trust and oriented towards the
long-term. Attention shifts, in fact, to motivational and relational
aspects which is well adapted to the vision at the core of a firm’s
mission and of the system of government typical for small businesses
that are socially oriented. In this context, the vision of the problems of
corporate governance is strongly linked to human nature or, rather, to
how he who governs reads the values of the human beings who are
committed to the business. “To evaluate the conditions on which the
firm can cultivate an ethical and collective conscience, one must start
from the motivations that inspire entrepreneurial or managerial
behavior” (Sciarelli, 2007, p. 110). It therefore becomes essential to
pay attention to the goals of the entrepreneurial subject and the
distinctions between the diverse characterizations of the motivations
of those who govern large companies and SMEs.
3 Ethics, governance and accountability in large companies and
in small and medium-sized businesses
Although the ethics corporate culture is not born in the environment
of small firms, which have been given less attention in ethics
literature (Spence, 1999; Tilley, 2000; Spence and Schmidpeter,
2003), it finds its own matrix in the very specificity of the motives
and the values that guide the policies and the actions of the smallscale entrepreneur. There are three essential motives: the influence of
the subjective sphere, which in the small firm is maximized, the
importance of relating to the internal and the external, proclaimed by
its limited dimension, and the social rooting of the small business
and of its creator (Del Baldo, 2006a).
With respect to the manager, the entrepreneur is rarely motivated by
purely economic factors. More often, he experiences more ample
stimuli under the social profile, is characterized by a strong
identification with the organisation (organisational commitment) and
is given personal power linked to authority, as is typical in
stewardship relationships. Subjective variables lie at the core of
entrepreneurship, which serve to explain behaviours, returns to
personal characteristics and motivations of a psychological and
sociological nature (Marchini, 2000).
In the sphere of typology matrix studies on entrepreneurship
numerous classifications of entrepreneurs have been drawn, based on
the types of objectives and personal characteristics they possess and
strategic models (Julien, Grepme, 1994) have been proposed which
place the objectives of the entrepreneur among the key variables that
influence strategy next to organisational factors, the environment
(intended as global society and as sectors of activity) and production
activities. Values9 and attitudes towards the social context are central
factors in the strategic system; they are expressed by the vision and
the “entrepreneurial formula” (Coda, 1985).
“Values nourish the organisation and enhance the spirit of
entrepreneurialism” (Lamont, 2002). They are like roots, which
inspire the strategic orientation of responsibility and constitute the
most important source of identification inside the firm and the primary
basis of external legitimization (Cerana, 2004). Competitive
positioning of the company springs not only from adapting to the
binomial trade/mission but also “from the business’ capacity to open
itself up to ethical values dominant in society, to the resulting roles
and responsibilities and thus to the necessity of a legitimacy in which
factors of valorisation of its image” (Marchini, 1995, p. 114).
Entrepreneurial motivations and aims are placed at the base of the
“Values are abstract ideals of those that are considered “good”, desirable,
preferable; they don’t have a specific object or situation and construct
models that guide and determine action, scope, attitudes, ideology or
representation of itself in terms of others. Even the attitudes are beliefs
possessed by people, but are less stable and always refer to a specific object
or situation. Values and attitudes influence individual and collective
behaviour in many ways in the field of strategic management; those
possessed by the entrepreneur or by the management are considered among
the principle factors that determine the strategic decisions of the
enterprises.” (Marchini, 2000, p. 92).
9
theory of social success of the entrepreneur (Sciarelli, 2007)10.
Success is measured by not only the results achieved by the enterprise,
but more so by the achievement of respect gained from the
surrounding community. Social leadership represents an endpoint of
entrepreneurial activity and social power finds its counterbalance in
social responsibility attributed to, and embraced by, the entrepreneur.
His understanding that the solidity of the firm’s success and the
consequent relapse in terms of social power is also founded on respect
for both economic balances and on moral values (Quinn, 1997).
Large corporations usually separate ownership and control, and
dissociate between the figure of the business owner and the
entrepreneur, replaced by a delegated manager11. The different
interests of the owner and the management elicit problems of
practice and of control of the same proxy, inside of which the system
of shared values becomes central and the opportunity to
balance/reconcile the interests and powers of the diverse protagonists
in the life of the firm. The search for the values that provide the
foundation to the proxy manager and to how his decisions are put
into practice has recently tended to view ethics as the key factor. The
majority of top men in large firms consider it a factor of success and
demonstrate that they are sensible towards social responsibility and
business integrity (Longenecker, 1989; Longenecker et al., 2006),
which is no longer an option but an indispensable element for the
creation and maintenance of positive relationships. Even if the CSR
has yet to factor into the value structure of the entire management, it
nevertheless increases its orientation towards an “exchange of
abilities.” This model, imported from the Anglo-Saxon world,
increases the space of dialogue on the terrain of governance and of
competences and capabilities between the enterprise in the for-profit
sector and non-profit organizations. Fronts of collaboration on
projects and communal interventions are increased, there is a greater
“It is legitimate to hypothesize that the entrepreneur transfers a large part
of himself into the firm, and that his fundamental objective is to produce a
strong firm, one that is able to develop and to ensure the respect and
admiration in competitive circles around which it operates, as well as in the
larger socio-economic context in which the business plays a part” (Sciarelli,
2007, p. 117).
11
“It is possible to refer to different sides under the profile of the rapport
between ownership and government of the enterprise, separating the context
of the “public company,” prevalently North American, from that of the
“family business” that is very diffuse in Europe. One can easily imagine that
in these two cases, different levels of difficulty are assumed with respect to
social responsibility and the introduction of ethical principles in corporate
management” (Sciarelli, 2007, p. VIII).
10
generation of multi-tasking managers – who are carriers of
supportive values – as well as the number of top-level executives that
move to the third sector.
In large companies, due to the diverse grade of identification
between the enterprise and the manager, and the non-persistence of
the rapport with the enterprise, success fulfils an intermediate or
instrumental aim. The proxy finds it difficult to define the subjects
he is to promote, in fact, the entrepreneurial aims. Trust is cemented
in the achievement of durable economic results for the shareholders,
often negating the “luxury” of ethical principles and objectives in the
company’s management. Short-termism (Hosmer, 2001) is
privileged over the construction of long-term values, and is
connected with the firm’s image and with the improvement of
relationships among all of the stakeholders.
Regarding ethical principles, the manager may not have much
discretion or may encounter limits. Even SMEs experience
“pathological” situations (subordination of personal interests and / or
family to that of the company, limited moral and ethical depth of the
firm’s manager). Nevertheless, for the entrepreneur, the
pervasiveness of ethical values in the company’s decisions is
maximized. “In SMEs the owner-manager is both the driver and
implementer of values. Managers exhibit their personal values
through the exercise of managerial discretion and SMEs’ ownermanagers has the autonomy to exercise such discretion.”
(Hemingway and Maclagan, 2004). For the owner-manager, the link
between the company’s success and his own is personal and more
closely visible with respect to that which is realized in the contexts
of proxy entrepreneurship and of public ownership. This aspect,
together with other factors typical of SMEs (independence,
polyvalence, and prevalence of personal and informal relationships)
render the path from the ethics in the firm to the ethics of the firm
more arduous for large-sized companies. This also stems from the
fact that examples of top managers capable of arousing emulative
behaviours and of transmitting to the whole organisational body
values coherent with social and ethical profiles are less visible. And
while there is a lack of will at the top of the enterprise, typical
instead of small-sized firms is to measure the long-term benefits
(Zamagni, 2007).
In small businesses, the transmission of values is simplified by
the flexibility and thinness of the organisational structure. The
ethical principles are diffused through decisions of people who are
influenced by strong moral values (trust, loyalty, equity), and who
often have an innate attitude to perceive the ethical dilemmas
inherent in such decisions and to evaluate the sustainability of their
ethical choices for maintaining the firm’s equilibrium - attitudes
further reinforced by the adhesion to the practices and the
instruments formalized by the CSR (codes of conduct, ethical codes,
social/environmental/sustainability reports, etc.).
Ethicalness towards the stakeholders on the part of the top
management/entrepreneur
also
implies
accountability
and
transparency as an essential prerequisite for the correct working of the
economic systems (Rusconi, 2006)12. The Author placed direct
accountability documents13 within the context of stakeholder theory
highlighting the business. Accountability documents serve to orient
the plurality of stakeholders towards betterment in their decisions:
- illustrating the vision that the firm has about itself, about the world
in which it operates and exists (for example, across codes of conduct
and regulation);
- explaining the characteristics of its own governance and on its
measurements, so as to reduce or mitigate conflicts of interest between
shareholders and managers who are co-present in the strategic
management (for example, providing information on the remuneration
of top management, on the presence of effective independent
administrators, on the organs and instruments of internal audit, and on
the movements of stocks owned by administrators);
- providing information about the processes of coordination with the
stakeholders and their economic successes (production and
distribution of added value statement), on private social costs, on the
social costs assumed, on the internalized social proceeds and on the
externalized private ones), as well as trying to explain this information
in economic terms to make the costs that the firm is supporting
understood, so as to effect the assumption of a specific line of social
responsibility.
- evaluating and monitoring intangible resources (relational, human
and organisational capital).
12
In the context of historical studies about social accounting in Italy one can
cite Terzani, 1984; Matacena, 1984. For an ample review of the different
contributions, see Baldarelli, 2005, pp. 19- 59.
13
Direct accountability is found in documents which are published
specifically and exclusively to “give an account for” at the end of the year on
the fulfilling of its own responsibilities, typically that which takes place in
the financial statement and the social accounting. Indirect accountability in
documents which, like ethical codes, inform the stakeholders of what the
company plans to do (above all in terms of behavioural rules), has to respect
its duties in check on the conformity with the codes resulting indirectly from
the social accounting. See Rusconi, 2006.
In this context, accountability – if it is conceptualized as an
informative system that facilitate dialogue and coordination among
the management/entrepreneur and the principle internal/external
interlocutors – produce reports that are applied as relational and
strategic instruments (among the organisation and interlocutors,
which enable forms of listening and feedback) and as vehicles for
reciprocity. They are able to be utilized to “give accounts and
request accounts” of the mission, to converse and to “plan” with all
those who contribute resources in their varied forms, to produce
information on economic externalities and not those generated and
assumed by the firm. Their strength and their ability to become real
tools to govern relationships depend, however, on the spirit with
which they are realized, how they are morally sustained, and how
they are codified. While the social orientation of the firm and its
reflection on accountability (Gray, Adams and Owen, 1996) is
simplified in small and medium-sized firms, in large businesses these
instruments, together with the institution of specific figures (ethics
committees, sustainability controllers, ethics officers, CSR officers)
often represent the only means of creating consent around the correct
delegation of powers, to develop an ethical means of training
employees, to create a space of dialogue and of comparison and to
establish emulative processes, overcoming bureaucratic obstacles
and the logic of the budget.
4 CSR, governance and SMEs: the empirical framework
The increased attention towards CSR and SMEs is attributed to a more
generalized interest in sustainability that promulgates socially
responsible management at the global level. On the one hand, this
interest was heightened at the European level after the Council of
Lisbon in 2000, which specifically addressed SMEs.
Comparative analyses confirm the superior diffusion of CSR
compared to large firms. At the same time one can underscore the fact
that SMEs’ predominantly informal approach (“sunken or silent
CSR”) does not have to lead to considering CSR a prerogative of the
former (Russo and Tencati, 2006; Perrini, Pogutz and Tencati, 2006);
the proactive orientation of SMEs is thus relevant (Luetkenhorst,
2004), even if it is not explicit (Matten and Moon, 2004; Spence and
Rutherford, 2003; Longo, Mura and Bonoli, 2005; Mandl, 2006) and
attests to a sustained socio-competitive creativity.
On both the national and international levels, there emerges the
need to deepen the understanding of the motivations of the small
firms’ commitment to CSR (Morsing, 2006) and to provide guidelines
and instruments to aid SMEs adopt and communicate socially oriented
policies (Castka et al., 2004). At the same time, the need to adopt a
diverse perspective with respect to conventional theories is confirmed
and the necessity to bring to light specifics of SMEs (Jenkins, 2004).
Among these one finds a central ethical orientation and the
entrepreneur’s values.
One relevant aspect that emerges from the researches conducted on
the diffusion of CSR in SMEs (MORI, 2000; Joseph, 2000; European
Commission, 2001, 2002a, 2002b; European Union, 2004; Molteni et
al., 2006) is, on the one hand, that the process of orientation towards
CSR normally is promoted by the top members of corporate
government and, in particular, by the owner-entrepreneur and depends
on his ethical orientation and values (Vyakarnam et al., 1997; Jenkins,
2006a). On the other hand is the importance of peculiar approaches to
CSR, cantered on a logic of SMEs’ involvement in networks or based
on membership in specific districts (Molteni, Antoldi and Todisco,
2006; Battaglia, et al., 2006; Ørskov, 2006; Kromminga and
Dresewski, 2006; Baldarelli, 2007). The participation of the SME in
networks characterized by the presence of a plurality of interests, both
public (local organisations, chambers of commerce, universities and
research centres) and private (trade associations, non-profit
organisations, credit institutions, professional orders), facilitate the
implementation of actions and programs of socially oriented
development of SMEs and of the local environment in which they are
inserted (Fugazza et al., 2006; Lepoutre, 2006).
Some particular aspects emerge from the research conducted in this
regard. The first concerns the importance of an entrepreneur’s sense of
belonging and membership in the community, which behaves like a
launch pad for the experimentation of policies imprinted by CSR; the
second concerns the importance of support by institutions, local
authorities and trade associations to create a platform for the
sustainable development of the local community. A third one concerns
the contribution of CSR in terms of increasing the social capital of the
SMEs (Spence, Schmidpeter and Habisch, 2003), of participating in
the construction of the common good (Spence and Schmidpeter,
2003), of contributing to the sustainability of specific territories (Del
Baldo, 2006b; 2008).
Another element of interest is the influence of the practices of CSR
on the strategic profile, which is manifested overall in terms of the
development of a culture of responsibility. Direct involvement in such
problematics helps to elaborate or to rethink the mission, to formulate
new strategies towards certain categories of stakeholders, to stimulate
the introduction or the revision of the ethical code, to increase the
attention paid by the board of directors towards the themes of CSR, to
promote modifications to the internal audit system or to introduce new
organs of control.
A third trait is the capacity of the instruments of CSR to act as a
driver for sharpening certain aspects of the system of corporate
governance, for responding to the demand for accountability, and for
developing a strategic information system.
Regarding the performance indicators expressed through
international and national standards (GBS, 2001; GRI, 2002; GRI,
2006; GRI, 2008) concerning the effects of CSR on corporate
governance, positive signs emerge, especially in terms of the space
given to the representation of minority shareholders and to
independent directors, frequency of meetings of board of directors,
renewal of organs of government, exceeding the level of compliance
and protection of the petitions of stakeholders. These traits make the
divide between the large and small businesses’ involvement in CSR
less profound and significant. At the same time, it underscores the
successful trend that the typical culture of patronage based on the
centralization of responsibility and the traditional closed nature of
family-owned SMEs is moving towards incorporating the
participation of external subjects.
Although the path towards an emersion in best practices must be
intensified, most small firms already “do the right thing” or, at least,
“do many good things”, adopting mild instruments and instituting
simple rules that establish the beliefs of the firm, predispose rapports
on best practices or articulate a code of responsibility and principles of
governance. And where the communication of CSR is more
structured, as in the actual experiences of the firms analyzed below,
they help to overcome the limits of financial and economic
information of balance and the fragility of traditional accounting and
informative systems, and open new paths of growth.
5 Some experiences of excellent stakeholders relationship and
social engagement profiles in Italian SMEs
5.1 Research objectives
The study of the field first attempted to identify the central value
present in the companies interviewed, its translation into a mission
and, consequently, the impact on relationships with stakeholders, its
reflections on the structure of government, and the presence of
instruments of accountability.
The hypotheses posited at the base of this study are the following:
Hypothesis one:
CSR reinforces and facilitates the convergence between mission,
governance, and accountability; the orientation towards CSR is
therefore reflected positively on the governance of SMEs.
Hypothesis two:
Among SMEs, the orientation towards CSR begins with the
entrepreneur and is a manifestation of both the values tied to personal
goals as well as the values tied to cultural and social variables in the
territory from which he comes.
First, this requires attention to be focused on the elements of the
trinomial mission-corporate governance-accountability and on their
reciprocal relations, departing from the assumption that “in every
enterprise there exists an explicit and coherent coordination between
mission, governance and accountability” (Matacena 2005; 2008).
Mission is used here to mean an explication and a synthesis of the
company aims; corporate governance as the command structure and of
the government present in the company; accountability as the
informative responsibility of the company. Matacena’s model is
herein utilized to analyze the relations and the coordination between
the aforementioned elements and is preferred over both the
stakeholder approach and the stewardship view because the author
extended its contextual applicability to diverse typologies of
businesses, including small and medium-sized firms, which are the
objects of this study. He distinguishes ideal types of businesses in oneto-one relationships between mission e corporate governance14. Such
relationships define the level and content of accountability of every
specific ideal type of business. Among the Italian experts who
research social responsibility, the author, who defines the business as
a socio-economic system, provides interpretive cues on how to
maintain equilibrium between productive groups and human groups,
which are particularly brought close together in small and mediumsized firms. The author equally maintains that economic responsibility
14
The author distinguishes, on the one hand, between lucrative businesses (in
which the asumption of specific forms of social responsibility is tied to the
maintaining conditions of legitimacy and of concensus in their actions),
cooperative and mutualistic businesses (in which responsibility is connected
to principles of solidarity), social businesses (in which the same ends are
followed), and small and medium “territorial” businesses. For the first type,
social responsibility is considered a specific quality for entrepreneurial
activities. In the second and third, the mission is predominently concerned
with social solidarity. The third type is characterized by territorial vocation,
that is, by the fact that their relationship with their surrounding environment
and the coordination with all actors in the marked is a condition of their own
economic development.
weighs on all of the firms present in the market. What is diverse,
however, is their social responsibility, because the businesses that
make up the market are diverse in both their mission and their
governance. Therefore, specific missions, with their relative corporate
governance, indicate both the business’ level and type of
accountability.
Second, this implies that one must identify those aspects of the
system of governance in SMEs which draw on the positive actions
that orient the models of behavior of the firms who are capable of
realizing socio-competitive synthesis (Molteni, 2004). Sociocompetitive synthesis is itself derived from a stable and structured
approach to CSR, incorporated in its own strategic orientation, in its
underlying mode of governance and its system of internal and external
reporting. The typology elaborated by Molteni and Lucchini (2004)
was utilized to place the behaviours of the firms in the sphere of a grid
of codified readings. Lamont’s (2002) theoretical diagram was
employed to individuate the most relevant aspects of a “spirited
business”.
5.2 Methodology
The following study was developed according to a qualitative
approach and a methodology based on field case studies.
The fieldwork approach, as suggested in the literature (Adams,
2002) facilitates the involvement of the researchers of business
economics in the actual activities of the companies to study the
processes and the organisational practices of social accounting. This
methodology consists of individuating the internal factors
(organisational structures, internal micro-processes, attitudes, points
of view, perceptions) that, together with the corporate characteristics
(size, sector, age of the business, etc.) and the general contextual
factors (economic, political, cultural, etc.), explain the complexity of
the social statement and that, other than influencing the nature and the
extent of the corporate social reporting and of the social engagement
profile, impact the system of governance.
In general terms, the case method15 has the double aim of detailing
the principle characteristics of the phenomena, and to both understand
and analyze the dynamics of a given process. Under the
methodological profile, the development of a case study represents a
“strategy of research that is concentrated on the comprehension of the
15
On an analysis of cases see Yin (1994, 2003); on specificities of research
on small businesses see Silvestrelli (1986), Ferraris Franceschi (1993).
dynamics that characterize specific contexts” (Eisenhardt, 1989, p.
532). The qualitative approaches and the forms of research in action
(Fayolle, 2004) allow for one to describe, explain and understand the
entrepreneurial situations in their own dynamics and in their own
evolution.
Specifically, the case method constitutes a precious instrument for
“capturing” the diverse manifestations of socially responsible
government as well as of stakeholders relationship and to utilize the
results both with a cognitive aim as well as with normative merit; such
“cases for CSR or normative cases” can indicate best practices and to
suggest criteria for further action (Craig, 2003).
Indeed, it is the opinion of those who write that the utility of the
cases also reside in the possibility of valorising the experiences of
entrepreneurs who are “champions for corporate social responsibility”
(Jenkins, 2006b; 2006a)16 and of recognizing the merit of people and
businesses who teach them, while not undervaluing the possibility of a
path towards CSR that starts “at the base” and is concreted in the
territory, favouring the imitation of best practices and raising
awareness of the operators that converge inside small businesses.
Specifically, the study was centred on the analysis of seven
Marchegian SMEs17 (multiple/collective cases study approach) that
belong to mature and emergent sectors, characterized by different
social and environmental contexts, and represent the entrepreneurial
and economic fabric of the region.
Two clarifications are necessary regarding the firms selected, with
specific reference to their size and geographic area in which they are
found.
First, the businesses considered are predominantly medium-sized
(in both the number of workers and quantity of sales). Nevertheless, as
one will see in the following section, the excellence of their
behaviours can be found in even the smallest firm in this study
(BoxMarche, 50 employees). Such businesses are not cited and are
completely or predominantly family-owned (six out of seven); they
“(…) This also led many to be external champions of CSR, promoting the
agenda because the truly believed in it (…) It has a dedicated change-agent
or “champion” in its owner-manager whose own values have influenced the
direction and strategy of the company” (Jenkins, 2006a, p. 8; p. 13).
17
In the definition of an SME, along with the attributes defined by the
Recommendation of the Commission of the European Community on 6 May
2003; 2003/361/CE, the qualitative parameters were considered
(independence of the economic subject, connection between ownership and
control), following a setting diffusely adopted in the studies and in the
research on small-sized businesses.
16
are typical of the “family businesses” found throughout Italy. They do
present, however, managerial assets and evolved organisational
structures and perform competitively.
Secondly, the businesses come from a particular region in Italy, the
Marches, which is characterized by a thick fabric of diffuse
entrepreneurship, a typical example of the development of local
systems and districts. They constitute a classic example of the “Third
Italy” model in which the development of SMEs is established in
small centres, without upsetting the pre-existent agricultural and
artisan vocations, and preserving socio-economic fabric of
relationships anchored in the territory. This region hosts numerous
cases of entrepreneurial excellence tied to a specific “genius loci” and
it is on this basis that it is possible to trace a model of “territorial
CSR”.
Thus, because of these attributes of the specific group of
companies and of their specific socio-economic context, the findings
are valuable in this perspective.
The analysis was based on the collection of information acquired in
May 2008 from diverse depth semi-structured interviews with the top
entrepreneurs/managers, on direct observation during the visits to the
selected enterprises, and on the analysis of available documentary
sources (content analysis). The research was conducted at the microlevel, i.e., it was grounded in the perspective of ownermanager/managing directors, whose personal values influence the
strategic direction a company takes (Burns, 2001), and shows how
CSR is balanced with the daily activities of the company.
The phases across which the empirical study was implemented
and the decisions formulated are represented in the table below (Table
1).
Tab. 1- The phases and the choices of the empirical study
Phases
Specifics
of
industrial sectors
referenced
Choice of the
enterprises
Selection of areas
and organs on
which
attention
was focused
Object of the Choices
Wood-furniture-interior decoration;
paper
industry;
engineering,
machine
tools-components,
metallurgist industry; electrical and
electronics equipments, automatic
equipment and plants-design-robots
(high technology); financial and
banking services
Small and medium firms
Motivations of the Choices
Traditional and mature sectors, and
emerging sectors, characterized by
different social and environmental
impacts, representative of the
entrepreneurial fabric of the
Marches Region (Italy).
Top level of the company
(entrepreneur -founder/successor -,
managing
director,
general
manager)
Entrepreneurial/managerial
team
directly involved in corporate
governance
Cohesive/multi-certified firms
Structuration of
the
research
instruments
Administration of a semi-structured
questionnaire (paper and pencil
interview
method),
prepared
interviews, note-taking, tabulation,
transcription,
validation
and
correction, telephone conversations
and contact by e-mail
Qualitative/quantitative
analysis
and triangulation of methods
5.3 The results
5.3.1 SMEs Marchegian “champions” of CSR
As indicated above, the businesses were selected for their excellence
relative to sensibility and to their dedication to CSR. Specifically, the
selected enterprises are characterized by the following attributes:
 presence of a framework of ethically connoted values, and values
shared by the leaders of the firm (entrepreneurial proprietor/family,
managing director) and diffuse throughout the organisation;
 adoption of strategies of social responsibility with an adhesion to
CSR codes;
 adoption of processes of social and environmental certification;
 regular publication of social and environmental reports;
 fulfilment of ample and significant initiatives of social
responsibility both on the local, national and international level;
 recognitions/awards received for their robust activities of social
responsibility.
 sensibility to the diffusion of best practices of CSR in the local and
extra-local context in which they are found.
In short, these aspects refer to the following declination of CSR:
 presence of a philosophy of governance and of socially oriented
management, which is reflected in its mission and its governance;
 production of initiatives and strategies of CSR;
 communication of CSR and development of systems of
accountability.
The principle attributes of the seven enterprises are synthesized in the
table below (Table 2).
Tab. 2 – Characteristics of the firms
Company title - Registered office - Year of
constitution - Sector - Corporate purpose Employees – Total Sales (2007) - Economic
subject
Instruments of implementing and
communicating CSR, Year Introduced
BoxMarche Spa, Corinaldo (AN); 1969
Paper industry: design and production of
packaging in food and houseware sectors
50 employees; 11.000.000 euro; open familyowned business18
Banca di Credito Cooperativo di Gradara,
Gradara (PU); 1911
Banking services
94 employees; 16.200.000 euro; co-operative
society
Gruppo FAAM Spa, Monterubbiano (AP); 1974
Engineering, metallurgist industry
230 employees; 60.000.000 euro; diffuse
shareholding (not cited)
Gruppo Fbl Spa - Della Rovere Spa, Pesaro
(PU); 1976
Wood-furniture-interior decoration
137 employees; 38.000.000 euro; open familyowned business
Gruppo Loccioni, Angeli di Rosora (AN); 1969
Electrical and electronics equipments, automatic
equipment and plants-design-robots (high
technology)
290 employees; 45.000.000 euro; open familyowned business
PRB Srl, Fermignano (PU); 1972
Metallurgist industry (metal galvanizing)
160 employees; 20.000.000 euro; closed familyowned business (first and second generation)
TVS Spa, Fermignano (PU); 1968
Metallurgist and mechanics industry
276 employees; 57.000.000 euro; closed familyowned business (first and second generation)
5.3.2
ISO 9001, year 2001; OHSAS 18000-SA
8000, year 2003; Social report, year 2003;
Global report19, year 2006
List of company values (“charter of values”),
year 2002; Social report and mission
statement, year 2002; Code of ethics, year
2004
Quality certification ISO 9000 and Vision
2000, year 1997; Code of ethics, year 1999;
Environmental certification EMAS/ISO
14001, year 1999 (first in its sector in
Europe); Social report, year 1999;
Environmental report, year 2001
Certification ISO 14001, year 2001; Social
report, year 2005
List of company values (“charter of values”),
year 1969; Code of ethics, year 1996; Social
report, year 1997; Intangibles impact, year
1997; Cause Related Marketing, year 1999
Environmental certification
14001, year 2001
EMAS/ISO
Quality certification ISO 9000 and Vision
2000, year 1999; Social Accountability
Standard- SA8000:2001, year 2004
The forms of social engagement
A first level of analysis was focused on the identification of common
lines (Table 3) relative to the core values and to the behaviours of the
entrepreneurs and top-level managers, to the reflections on their
mission, to the presence of instruments of accountability and reporting
of CSR, to structural characteristics and dynamics of governance.
Tab. 3 – Key attributes of social commitment & engagement
18
The open family-owned economic subject can be defined as the economic
subject characterized by the presence of a social team that is not formed
exclusively by members of the entrepreneurial family (closed family-owned
economic subject), but also extends to external subjects not tied to kinship
bonds.
19
The Global Report contains asset and liability statement, social and
environmental report, and an analysis of intellectual capital.
Key characteristics
Strong system of values
Presence of a cohesive
economic subject around
base values.
Links
“Values nourish the organisation” (Lamont,
2002): diligence, labour, equity, trust, honesty,
simplicity, integrity, parsimony, sense of
family, team spirit, enthusiasm, energy,
responsibility, communicative nature.
Leadership fully believes in and lives those
values and purposes.
Orientation towards CSR
strongly desired by the
entrepreneur, visible and
integrated in the enterprise,
tendency to social success.
Purpose, vision and values
are constantly reinforced
through
culture
and
processes and continuously
communicated throughout
the organization and beyond
Affiliation in geographical
zones
historically
characterized by a solid
rural
tradition,
typical
expression of Marchegian
culture.
Decision-making process
based on collaboration,
sharing and transparency.
Relational
approach
cantered on trust value.
Instruments
of
accountability
and
communication
of
the
socially
oriented
commitment.
Cohesion to stakeholders as
a source of mobilizing
resources with far-reaching
consequences.
Affiliation
in
local,
national,
international
networks of CSR.
The top-level entrepreneurial/management
commitment & engagement represented in
“the first best practices”.
Organisation aligns and articulates explicitly
its purpose, vision and values consistent with
responsible business practices.
Effective stakeholder engagement processes.
Rooted and engaged in spreading well-being
in the local community in which the firm is
located.
Organisational strength: participation. Climate
is social and organisationally spread. Values,
mission, objectives constantly reinforced
across the culture and processes, articulated in
a flexible and organic structure.
Values and mission explicated and
communicated that ensure consistency in
decision-making and avoid value-gaps.
Growth of intangible capital.
Desire to testify to and understand best
practices adhering to multiple occasions of
exchange and comparison (workshops,
forums, meetings, testimonies, etc.).
All of these businesses exemplify a strategic and structured
approach to CSR and align business values, purpose and strategy with
the social and economic needs of stakeholders, while embedding
responsible and ethical business policies and practices throughout the
company. CSR is experienced as a “way of doing business”; is about
operating and managing the business in a way that is sensitive to the
external and internal environment. Everyone in the company is aware
of the company’s commitment to CSR. The companies have an
internal change-agent, a “champion” in their owner-manager, whose
own values influence the strategy. In all of the companies interviewed
the owner-manager was directly responsible for directing the CSR
principles and activities of the company and moulding the company
culture in his personal values and beliefs. All interviewed felt that
their values were essential and a powerful driver of ethics and
standard in the company. The entrepreneurs are also strongly involved
in the well-being of the local community where they lives and where
the company is placed.
A second level of analysis is relative to the definition of the
positioning of the firm with respect to the map of orientations towards
CSR. The firms considered (Table 4) possess characteristics of
“cohesive” firms and of “multi-certified” firms20.
Tab. 4 – Types of orientations of the firms
BoxMarche Spa
BCC Gradara
Gruppo FAAM Spa
Gruppo Loccioni
Gruppo FBL-Della Rovere
PRB Srl
TVS Spa
Cohesive firm
Cohesive firm
Cohesive firm
Cohesive firm
Cohesive firm
Multi-certified/naturally cohesive
Multi-certified/naturally cohesive
In the first group of companies CSR is translated this into business
principles. CSR is the practical implementation of a company’s ethos.
The fronts of engagement and the forms of communication of
CSR are systematic and creative and manifest themselves in a variety
of forms:
 involvement, valorisation and formation of employees;
20
Molteni and Lucchini (2004) identify a typology of orientations among
Italian firms, based on two coordinates (intensity of the phenomenon – that
is, the socially responsible behaviour – and qualitative aspects linked to the
practice and to corporate behaviour): cohesive firms, multi-certified, aware,
able to be mobilized, sceptical.
 transparency in processes and in the modes of governance,
presence of formal and informal instruments and procedures for
internal and external informative disclosure;
 manufacture of products of social and environmental merit;
 vast range of operations with the local community (donations,
sponsorships, promotion and production directed to projects of
social, cultural, environmental, etc. merit);
 relationships with non-profit organisations and associations;
 stable and durable collaboration with clients, providers, and
financial partners;
 attention to the global environment, across the activation of
procedures and programs of environmental protection and of
quality of life (recycling trash, reduction of emissions, saving
energy, etc.).
On the whole, such behaviours increase the level of reputation and of
consensus, and augment quali-quantitative development which, at the
same time, “depends on” and “returns to” the territorial context in
which the businesses are found. The understanding of benefits
extracted counter-distinguish the Corporate Social Opportunity
mentality (Grayson and Hodges, 2004) which characterizes these
businesses. Eventual forms of incentives are not important: these
firms “run by themselves,” they follow a path, understood the fact that
“things can be seen with different eyes to obtain great outcomes” (P.
Picasso).
The firms that fall into the second group are located among the
“multi-certified”. The typical forms are found in their client offerings
and in their requests to their own suppliers for ethical, social and
environmental guarantees (green purchasing – ISO and Vision
certification, quality of products, etc.). Although the orientation is
more focused on procedural forms, diverse dynamics appear: they are
multiplying the fronts of engagement towards CSR; they research
more structured forms of communication (projects to implement their
social and environmental reports); they implement modifications to
their system of government (familial succession; new top figures –
outside of the family – general manager, managing director). The
providing of measures of support (fiscal incentives, ratings for the
participation in public competitions and bands for favourable
financing, personalized consultancy, adhesion to moments of
exchange of good experiences) can accelerate their development.
5.3.3 CSR’s effects on governance
The third area of reflection more closely concerns the aspects
connected to governance, which are presented below.
 Where there exists a family-based economic subject, even the non“directors” share moments of reflection around values, strategic
orientation of the firm and the rapport among members of the
family-based government and stakeholders.
 In nearly all of the cases there was a strategic committee, in whose
meetings those with distinctive competences who are responsible
for the firm’s functioning participated.
 Managers outside of the family were present (even in the position
of shareholders): the figure of an authorized and “illuminated”
general manager/managing director performed with efficacy the
role of the entrepreneur’s alter ego and participated in the
definition of strategic plans in which CSR was a substantial
element.
 Even in the absence of a supervising organ on the governance
(audit committee) there were forms of “social control”.
 In some enterprises (BoxMarche, Gruppo FAAM) the
understanding of the necessity of separating house organs of
governance and ownership was maturing, which contributes to the
structure’s managerial evolution.
 In diverse cases (FBL, TVS, PRB) the cohabitation and the
generational passage were facilitated by a sharing of personal and
familial values, as well as values of the firm, that found their
synthesis in practice and in the instruments of social responsible
management.
 The frequency of meetings of board of directors is directed towards
minimizing clashes and put to weekly meetings.
 The board of directors looks inside to independent councillors and
minority shareholders (including women) and is extended to
representatives of dependents.
 Tax breaks and services for partners and shareholders (specific
initiatives, promotions, dedicated services and products; one can
point out, for example, projects of formation on themes such as
generational passage, tutoring activities – i.e. FAAM’s business
school – or the facilitation institutionally provided of banks of cooperative credit).
 Forms of participation in capital on the part of dependents are
favoured; spin-off processes such as the Gruppo Loccioni’s way of
growth, in which the birth of new enterprises often comes through
co-opting talented business collaborators, and supporting them in
assuming entrepreneurial roles.
 Multifarious are their initiatives, of which one can report the most
relevant. They are financed to make the function of the government
house organs more transparent, beyond the aforementioned
adoption of the cited instruments of CSR: sharing all of the
management data with associations/shareholders/financial partners
(BoxMarche presents an “enrichment” of the Global Report,
addressed to the banks containing the prospective triennial
economic plan); occasions of yearly open-house meetings during
the year aimed at specific categories of stakeholders (Gruppo Fbl);
regional and local meetings (TVS); holding stakeholders forums in
which the results achieved in the past financial year are presented
and objectives for the future are discussed.
 Value orientations and ethical principles that guide strategic
decisions constitute the principle facets of the process of social
accountability and reinforce the organisational culture. Even in the
absence of specific centres of responsibility (CSR committees),
limited to a few figures or operative “nodes” of social management
(i.e. TVS’ working group Social Lab), the flexibility and cohesion
of the structure, together with the direct involvement of the
entrepreneur – the first “managerial agent” – makes the process of
corporate social reporting and the development of specific skills
easier.
 Retribution and the compensation of business administrators, such
as the distribution of profits, are illustrated in detail in the
production statement and in the allocation of value added.
 The instruments of accountability facilitate the transition from a
state of listening to a proactive state (entrepreneur/management
guided by stakeholders).
5.3.4 Mission, governance and accountability in “spirited businesses”
That which follows (Table 5), corresponding to the most significant
elements pertaining to the relationship between values, mission, social
engagement and commitment, and qualification of governance, some
testimony – in the words of the corporate protagonists interviewed – is
offered.
The centrality of CSR with respect to the development of these
firms allows one to connote them as “spirited business” (Lamont,
2002) or as “CSR enterprise” (Kvåle, Olsen, 2006)21. They are high21
Based on empirical research conducted between 2005/2006 on a sample of
51 SMEs from diverse European countries the Authors distinguished three
categories of businesses: “the business strategy enterprises”, which are
making a conscious effort to implement CSR and have adopted CSR as a part
performing companies where competitive success grows out of their
commitment to values and to the human spirit. “Spirited businesses”,
in other words, are “company with a soul” (Catturi, 2006). They are
passionately committed to people and wisdom. A “spirited business”
company focuses on vision and values, communication, top-level
management commitment, effective tools and mechanism of
stakeholder engagement. Important principles of a “spirited business”
include trust, vision, courage, community, creativity, patience,
humanity integrity, diligence, enthusiasm and openness (Lamont,
2002). All companies espoused such principles when
entrepreneurs/managers discussed what CSR meant and everything
that they did was marked against those touch-stones.
Tab. 5 - Attributes of a “spirited business”
Play factors
Mission connoted by
strong values (ethical,
moral, social, as well
as economic).
Values guide the
decision-making
process in adherence
to
the
socially
oriented vision and
create
an
entrepreneurial
vocation that makes
all the difference.
Case study examples
BoxMarche Spa
“Perhaps it’s a little presumptuous, but we love to define ourselves as
the agents of civilization. The small entrepreneur is a builder (of
systems, of men, of wealth); he relates himself to the world, to his
clients, to his community; he lives his passions, hopes, dreams, plans.
The enterprise has a narrative identity, it tells a story, it constructs its
own self. For this reason, it has a soul and it has those intangible
assets linked to the spirit and to the dignity of the person.” (Tonino
Dominici, Managing director and shareholder BoxMarche,
Nomination 2005 Sodalitas Social Award, multi-stakeholder
counterpart for the Italian CSR Forum)
Gruppo Loccioni
“Values sustain actions; actions that are positive and responsible
generate a type of development that respects humans and the
environment. (...) Large business “look to the quarterly reports” and
are not disposed to sow the seed for the long term, to live on trust.”
(Enrico Loccioni, entrepreneur of the year 2007, Ernst & Young
Award for Quality of life)
The FAAM dream
“The challenge of the market can be won on one’s values. FAAM
operates at all levels so as to reinforce that criteria of social,
environmental and regional respect that characterizes its activity. The
recipe of FAAM on the path to development has Man as its endpoint.
Our reality expresses the passions, valorises relationships, and
communicates quickly to a territory attentive to traditions, towards
which it nurtures a sentimental bond.” (Federico Vitali, President
Gruppo FAAM, President Confindustria Marche)
BoxMarche Spa
“Our Global Report is not only a report of numbers, but also of
values. It permits our stakeholders to have a dependable idea of how
of their business strategy; “the intuitive enterprises”, which are “doing”
CSR without having made a conscious decision to do so. Their normal
business practices coincide with CSR indicators; “the raison d’être
enterprises”, which are “doing” CSR because it coincides with their
business concept, i.e. the actual business concept is philanthropic” (Kvåle,
Olsen, 2006, p. 7).
The
attention
to
people’s lives creates
a
supportive
environment
and
renders possible the
maximization
of
creativity.
Inserting
everyone
into the centre of the
company
and
rendering
it
a
protagonist of CSR.
Holistic approach to
CSR.
Development
of
intangible resources.
The generation of
profit is necessary to
the success of CSR,
but its maximization
is not the raison
d’être of the business.
the business fulfils that sort of delegation that civil society has
conferred to produce a better world for all goods, services and human
relationships. (...) First CSR, which is a fact of “faith”, then good
governance, which is its outcome.” (T. Dominici, BoxMarche, Italian
Oscar di Bilancio 2007)
Gruppo Loccioni
“Ours is a mode of being an open enterprise from the very beginning,
born to welcome interlocutors as carriers of value; formation,
collaboration, team work are our practices. (...) From a strong shared
culture and from driven human resources can raise the commitment
for the Common Good and the strength to face the market.” (E.
Loccioni)
BoxMarche Spa
“The technology we are most proud about is the one that comes home
in the evening.” (T. Dominici)
Gruppo FBL-Della Rovere
“We are a company made up of people. Strong human relationships
unite the network, which throughout the years has been consolidated,
transmitting experiences and visions that are at the foundation of our
success. Our activity is the carrier of change both in the lives of our
clients and around our team.” (Roberto Forni, General Manager Della
Rovere)
BoxMarche Spa
“From the very beginning I have felt welcome, like a part of the
family, and I’ve been given the trust necessary to grow. I’ve done, and
I continued to do, my best to personally embrace those same values
and to experience the company like a communal good, recognizing the
entrepreneurial spirit that I’ve had the good fortune to know” (T.
Dominici)
PRB Srl
“The company acts as an interpreter of social and environmental
concerns, making good of its own job, generating profit in a
responsible way with respect to its economic partners, its community
and its environment.” (Paolini Fiorella, entrepreneur, President
Gruppo Giovani Confindustria Pesaro-Urbino)
Gruppo Loccioni
“Our intangible values: imagination (to know how to create), energy
(to achieve our dreams), responsibility (for the air we breathe, the
land we walk on, the resources that we utilize, the trust that we gain.”
(E. Loccioni)
Gruppo FBL-Della Rovere
“There are three ways of being a leader: through price, through
technology, through intimacy. This is our way. My greatest
satisfaction is when I see others happy.” (R. Forni)
BCC Gradara
“Our bank is leveraged on one attitude: proximity, which is
physical, relational, family-oriented, oriented to our associates, to
the personalization of products and services. That means
identifying oneself with the local economy, starting from the
region and having the capacity to render it a protagonist. The
components of board of directors are exponents in the areas in
which BCC operates and it has committed itself on its own honour
to create social values for its associates and for the community.”
(Luigi D’annibale, General Manager BCC Gradara)
The
entrepreneurproprietor
is
responsible for the
principles and the
actions of CSR.
TVS Spa
“He who has the economic power must be the one most
responsible. We are certain that CSR grows stakeholder value,
social consensus, economic value, originating more trust and
understanding and the best transparency to governance. In this
sense, what’s central is the example top management sets.”
(Giorgio Arvizzigno, Director of Product Development, Quality
Control and Social Responsibility TVS)
Source: our adoption of Lamont, 2002.
To offer a concrete example of such forms of stakeholder
engagement, the following provides a brief synthesis of several
projects produced by one of the firms considered (the smallest one!),
BoxMarche Spa and a list of some of the awards obtained by this
company for its excellence in CSR (Table 6).
BoxMarche’s first project carried the title, “The passion for
improving activities for a responsible business model.” With this
project, the firm participated in the third edition of the “Sodalitas
Social Award”22 and in 2005 came in first place in the SME category.
The second concrete example pertains to the Italian Prize for the
Social Responsibility of Businesses given to 24 companies in 2005,
and awarded to BoxMarche for being “a solid reality that donates 15%
of its earnings in corporate giving, and pays close attention to the
environment, research and development, and society.”
The third relates to the Balance Oscar 2007 (Milan, Piazza Affari),
in which BoxMarche won first prize for the category of Medium and
Small Enterprises, thanks to the 2006 Global Report, cantered on the
innovation of the “3Ps”: Products, Processes and People.
The fourth is the Confindustria Award for Excellence, given to
BoxMarche in 2006, for being a “business champion for the
valorisation of the territory.” This initiative was promoted by
Confindustria with the objective of identifying and recognizing the
capacity of businesses to be important actors in their territories, not
only in the economic-productive reality, but also as subjects attentive
to social, environmental and cultural needs of institutions, to the needs
of its workers and to the ecosystem in which they play a part. Thus, in
2007, the business obtained the Prize “Valore Lavoro” for the
Marches Region, assigned to the 10 best Marchegian firms,
distinguished for their contribution to best practices in the quality of
work.
Tab. 6 - A long history of events, awards and recognitions: Milestones
of BoxMarche Spa
22
The Sodalitas Social Award honors businesses that operate in Italy who are
distinguished for the production of projects with high value and social
content.
1985
1989
1992
1995
1996
1999
2001
2001
2001
2001
2002
2003
2003
2003/2004
2004
2004
2005
2005
2005
2005
2006
2006
2006
2006
2006
2006
2006
2006
2007
2007
2007
Award, Course of Managerial Education
Adoption of “Quality Please” project (Assindustria Ancona)
Club Quality (Assindustria Ancona)
International Study Exchange in the United States; meeting with JURAN
(seminar, “Making Quality Happen”)
ISO Certification of Quality 9002
Participation in the Quality Awards Italy
ISO Certification of Quality 9001
Honourable mention, regional Quality Awards Italy
Quality Award San Marino
Certification of the Production Site according to ISO norm 14000 –
environmental certification of the production site
ISO Certification 9001: Vision 2000
Special Mention, environmentally-friendly planning –Ecopremio
Quality Award Italy for SME
OHSAS Certification 18000 – management system of health and security in the
workplace
Certification SA8000:2001 – management system for socially responsible
management
Publication of the Social Balance award, 2003
Riciclo Aperto Award – Comieco
Winner, Sodalitas Social Award for the category “SMEs”
CSR in Pole Position23
National Award for Social Responsibility in Business
Recognition of benevolence, Città di Corinaldo
Official Selection at the II° European MarketPlace on CSR24
Compilation of the first Global Report
Nomination, Oscar di Bilancio 2006 (FERPI)
Registration according to Regulation CE 761/01 (EMAS)
Adoption of the European Roadmap on CSR
Confindustria Awards for Excellence, “Business champion of the valorisation of
the territory” section.
Multi-stakeholder Panel
Forum “Intangible Capital”: a strategic factor for innovative businesses
Winner, Oscar di Bilancio 2007 in the category of Small and Medium-size firms
(FERPI)
International Award ECMA, Pro Carton Award, Confectionery category
Valore Lavoro Prize for the Marches Region
Fonte: Our elaboration from BoxMarche’s Global report 2007.
5.3.5. The “convivial enterprises”: taking root in the local context
23
Boxmarche is among 30 Italian firms selected by the Italian Ministry of
Work and Social Policies, and by Confindustria to be honored for best
practices of social responsibility-CSR.
24
BoxMarche was placed in the category, “Skills and Competence Building”;
it won the title of best practice: “People Care-Skills Passport Project”.
There are essentially three strong points of Marchegian SMEs: a
rootedness in the territory, familial synergies and tenacity. Among
these the first, which finds expression in the adhesion to and in the
social consensus of the territory, construct an emblematic aspect that
makes the Marches a territory of genius loci.
The cases considered present evident profiles of that genius loci
marked by work ethic, by a strong sense of feeling like active
members of one community in which each person rediscovers the taste
and the utility to work with trust. This mode of operating and being
characterizes the many enterprises who were born under intensely
local conditions but who serve as carriers of Italian creativity and
talent into the world at large. They plunge their roots into a territorial
model based on “holy agriculture” (Fuà and Zacchia, 1983) that has
characterized the Marches Region from the first half of the 1800s to
the post-WWII era. These “champions” of CSR, inserted into a
territory rich in testimonies of socially responsible behaviours, many
of whom must yet emerge, are also due to their ability to communicate
their own engagement and to their ability to manage relationships with
multiple stakeholders. They demonstrate themselves capable of
influencing and of moulding the socio-economic terrain from which
they come. And this comes from the richness and the appeal of their
own virtuous testimony, called to “imitate the virtues.”
Indeed, the thoughts of one entrepreneur interviewed articulates
this best: “We have an emotional tie with the territory. We want to use
our abilities to sustain the local economy. Absolute priority is given to
values, to human relations. Our activities are not only business
choices. Our ability, though we are a small firm compared to other
companies, is to card threads (through the determination to follow the
“dream” of an enterprise and of the environment in which it is
inserted), is to pull thread (through cohesion and collaboration inside
and outside of the firm) and to stretch thread (through the motivation
that feeds creativity, understanding, sensibility, the capacity to listen)
of a network. A network made, in primis, by Men.”
The profiles of “convivial enterprises” (Balloni and Trupia, 2005)
that emerge do not correspond to a codified managerial model, but to
a business “way of being” in which conviviality is not merely a
sentiment, but is an operative practice for organisation and
governance. In such contexts the capacity of individual initiatives, in
absence of rigid forms of hierarchical coordination, remains vibrant. It
is spurred on by the sense of belonging (the status of the collaborators
prevails in the organizational arrangement) and on diffuse
empowerment. That which is given achieves superior goals with
respect to the forms of government that privilege the achievement of
objectives in the logic of “executiveness” based on a system of checks
and balances. “Enlarged” governance and control is a sort of “effect”
of a socially oriented philosophy and of the relative instruments of
accountability, which institutionalize and give representation and
transparency to the qualities of the firm. These last elements signal the
passage from one model of informal responsibility, still prevalent in
the universe of small-sized firms, towards a new, proactive model
“from the concept of enlightened entrepreneur to CSR policy.”
Regarding the stakeholders, it is all about sociality and “is strongly
inspired by a sentiment of collaboration, of ‘conviviality’”. This is a
manifestation of an attitude of learning by interacting, which translates
into planning, innovation and more generally, the capacity to improve
relationships and the territory itself, by tying multiple interlocutors
together in a network that sees a good part of its actors coming from
the same territory. For example, client relationships are characterized
by an attention that goes beyond customer care; those with dependents
go beyond ‘paternalism’: the Marchegian entrepreneurs who have
been able to create a community of people who work passionately, are
also loved by those who have the fortune to work with them. Also in
relationships with local and political organisations, the search for
collaboration feeds a dialectical comparison.
The second of these aspects refers to the active involvement of the
enterprise in local development, because the business’ success comes
from the same steps as that of the territory. This translates into the
creation of functional networks among businesses, Chambers of
Commerce, trade associations, banks, non-profit and local
organisations - which all become nodes of a cooperative network
whose end is to develop the territory.
An examination of the economic realities of the Marchegian
territory, formed predominantly by SMEs, and which attempts to
understand the essence of the people and their history, allows one to
more closely view an entrepreneurial system constructed on solid
principles, capable of marrying ethics and business and of confronting
the challenge of globalization using the categories of “good” and
useful. And it allows one to discover evidence of a “gentile
capitalism,” which expresses itself in a development model founded
on the synergy between the recuperation of the past, defence of
traditional understandings, of local culture, of the quality of the
landscape and its protection for the future through research by
advanced sectors and care for the environment. It also allows one to
discover an indirect but important protagonist: the territory of the
Marches.
Alongside the desire to invent new products and to make a profit,
one of the principle motivations of Marchegian entrepreneurs is the
desire to do something useful for its own community (Balloni and
Trupia, 2005). This is because the histories of their businesses have
always been founded on “passion” rather than merely on calculations.
Enterprises are considered spaces to consolidate and nurture a passion
for quality, for understanding, for a form of development that engages
and respects the surrounding environment. The socially oriented
entrepreneur is moved by the reciprocity of the exchange, enriching
the territory in the form of jobs, business opportunities for other
subjects, cultural initiatives, promotion and the development of the
place of origin.
Diverse studies have analyzed the processes of industrialization
diffuse in the Central-North-East Italy within which lie the Marches.
Some have identified factors such as the culture, history, institutions,
beliefs and communal convictions, like a sort of humus of the
intangible assets of the context, difficult to define and to quantify
(Cipolla, 1990). The intangibles or social capabilities thus correspond
to a genius loci, connected to a particular place. It is revealed in the
way of living and being a community and therefore even of the
business and that from which it comes.
The socio-economic texture, defined in terms of “social capital,”
social capabilities or civic-ness, is enriched by values, cultures and
traditions tied to a specific community-space. It is therefore important
to also look at those intangible factors that favour the development of
CSR and to the sustainability of the SME.
5.3.6 From CSR to TSR –Territorial Social Responsibility
Another development in the CSR debate can consider the following
question: “Do best practices of CSR increase social capital of the
territory?” If yes, then what role do SMEs play in constructing the
structural components of the territory?
Social Responsibility of the Territory is a concept that has thus far
not been adequately studied. From the concept of social responsibility
of the business, the perspective shifts to a vision of the collective. No
longer is responsibility solely the realm of the individual firm, which
is called to put itself in relation to the collective, but rather it is the
whole community, the territory, which comes to be conceptualized as
an unicum. The application of social responsibility of a business to the
territory finds force in the objective of improving the community’s
quality of life and of marrying economic events with social and
environmental attention through the lens of sustainable development.
Social responsibility of the territory is founded, therefore, on the
rediscovery of shared values that the territory’s economic, social and
institutional actors know how to reinforce, thanks to solid networks of
relationships.
Today, the Marches - along with other Italian territories such as
Tuscany and the Veneto - offers an interesting laboratory to study not
only the extent of CSR, but also Social Responsibility of the Territory.
The initiatives of the Marches Region (i.e. the SIRM project System of Responsible Business for the Marches Region - created
between 2005-2006 constitutes a primary “ethical territorial network”)
and of the state legislative bodies, in particular, have advocated both
for paying close attention to civil society through corporate
responsibility and for favouring the adoption of best practices on the
part of individual firms.
The best practices of socially oriented Marchegian SMEs
contribute to a model of territorial development that progresses in the
particular socio-economic context of the Region. This possible way of
experimenting with CSR in the territory points above all to the value
of participation, respect, and the recognition of roles, starting with the
SME and the socially oriented entrepreneur. The model’s protagonist,
therefore, is an “enlightened” entrepreneur, who - other than
generating opportunities for work and creating high-quality products fosters the sustainability of a collectiveness in the territory in which it
lies. Marchegian SMEs that create distinctive features of CSR in their
own mission, governance and accountability release energies and are
orientated towards sustainable development. They represent actors
who enter into relations with all of the realities that participate in the
construction of welfare and to the production of wealth, dominated by
a paradigm of CRS focused on its more ample diffusion.
Recognizing the cultural dimension of CSR, its connection with
anthropological and environmental factors present in the given
territory (such as the Marches), therefore widens the field to a
dimension that is not only operative, but strategic when the
relationships between actors in the territory’s network are oriented
towards affecting responsible, equal and sustainable development,
which involves and benefits all of the subjects who operate in a
territory (and not only them).
The territory thus becomes the place in which avenues of
sustainable development can be concretely constructed. Together with
the enterprises, network actors, the first of whom were active
promoters, play a propulsive role. In all of these cases emerges the
value of the producer of tangible effects at the local level, in terms of
quality of life of the people and of functions of local welfare: work,
home, help, social services, health, services for workers and training.
In this context one well understands the dimensions of freedom,
solidarity and shared responsibilities put into motion a mechanism that
mobilizes the intelligences and creativity, and which goes beyond
economic data and provisional balances of the firm. Too often the
preoccupations of the manager focus on satisfying the majority
shareholder. CSR of the “territory’s SMEs” is intended to better
articulate the participatory dimension: not only the shareholders are to
be satisfied, but the citizens and the territory in which the business
demands, as well.
The territory therefore becomes a terrain on which reciprocal
approaches can be forged. It becomes a subject and a protagonist. And
the network that developed activates new mechanisms of participation
and planning, and allows for the recuperation of its territory’s identity.
Territorial networks can become a true laboratory of CSR where
mechanisms of plurilateral plans can be experimented whose
protagonists do not work against national and supra-national
sustainable development programs, but integrate (or sometimes even
substitute) them. Finally, the ample size of CSR also involves a spatial
dimension. This latter also has a local aspect, which can synthesize
itself with the theme of the territory which, in a robust sense, serves as
both the main judge and, at the same time, the main beneficiary of the
socially responsible components.
Socially oriented “country governance” or “local governance”
(Balloni and Trupia, 2005) is made possible by an integrated
representation of social, economic and institutional communal feeling,
not sectorial like for the districts, but like that of a territory.
Throughout the years, in diverse districts, the deterioration of the
socio-cultural (and not only industrial) atmosphere has made the
relationship between economy and society, and between the firm and
the environment, more difficult. When small and medium centres
search for rapid and extensive development, they have mutated their
own nature, and, at the same time, lost part of their social ties and
their local identity, because of a decline in social consensus with
regards to industry and industrialization. Only in those territories, like
in the Marches, developing networks between economic actors and
actors coming from civil society and from local politics, territorial
closeness will concretize in terms of reciprocity of exchange, of
tradition, trust, identity, and will create a heritage of understanding,
relationships, of images and values that are rare “goods” in an era of
globalization, to be stewarded and grown, able to stop injustice and
insecurity in moments of difficulty like today.
6 Concluding remarks
The benefits of CSR are not always easily quantifiable. For that
reason, one can say that the adhesion to a philosophy of socially
oriented management is above all an “act of faith” (Jenkins, 2006a)25
but these benefits closely touch on governance and, especially in small
firms, the link among philosophy cantered on sharing CSR, strategy,
governance and accountability is even more significant.
First, because the process is desired by the entrepreneur and
reverberates across his style of government, each expresses the will of
the firm and translates it into the operations of the business. And this
often becomes an occasion to reinforce the mission and, often, to
create that necessary convergence around personal, family and firm
values, which facility the succession process in many family
businesses.
Second, because the influx on the strategic profile is manifested
above all in terms of development of the culture of CSR, it is a
process that seems to be the fruit of the entrepreneur’s intense and
sincere involvement in the multiple manifestations of socially
responsible actions. Thirdly, this is because the accountability and the
communication of the firms’ CSR engagement creates effects on the
organisational structure: it influences the micro-processes of the firm
and produces effects induced by the governance, in terms of
transparency of the decision-making process, the sharing of corporate
policies, the diffusion of the instrument of delegation, greater team
participation by the top of the decision-makers in the firm, and the
multiplication of formal and informal occasions for reflection and for
comparison.
From the cases considered here, a model characterized by forms of
stakeholders relationships based on instruments that provide for
transparency and representation of those qualities of the firm and its
principle actors arises. Through this way, one can view the copenetration of the two drivers of socially oriented governance:
discipline and commitment. The first is formalized and codified, the
second is informal, emergent and value-based26.
“CSR is the practical implementation of a company’s ‘ethos’” (…)
philosophy and vision are based on five key principles – integrity, humanity,
diligence, enthusiasm and openness” (Jenkins, 2006a, p. 6).
26
“While the first one is a formal, codified, explicit approach aiming at
fostering ethical and social behaviour through a set of rules and tools, the
second one is often a more emergent, value-based, “strategy driver”
approach, that leads employees to a strong CSR commitment through a high
level of identification in their company’s strategy, deeply embedded in a set
25
In the SMEs where CSR is a characteristic trait of the corporate
culture, the consensus of the owner-entrepreneur/top management and
the focus on referents at the base of decisions characterize systems of
corporate governance that are more transparent and “harmonized”,
reinforce the organizational cohesion, the business climate, and the
trust factor (commitment).
The social strategy of the enterprises observed is based on an
effective government of systems of relations within the firm whose
principle actor is the owner-entrepreneur/manager. The successful
entrepreneur always appears to be the one who helps to rediscover
values, and who is capable of creating solid rapports and “true”
relationships with interlocutors. The focus is on his moral level and on
his capacity to realistically create an ethical corporate culture, a
unified cultural environment, a common language and, in other words,
for a socially oriented governance.
Equally emergent is the value of trust and of true relationships with
respect to governance, nurtured by the desire of the top level in
deciding and in acting in coherence with a given platform of values.
They mould the rich fabric of values of all who operate in the
enterprise – from those with management responsibility to those who
work at various levels in the company – and are innately linked to
morality. Beyond the formal application of formal methodologies
those businesses are able to taking on efficacious forms of
engagement and stakeholders relationships, so that they are capable of
“grasping their essence,” pinpointing their expectations, responding to
and offering solutions, and creating cohesion around projects and
values of ample breadth. These are testimonies of entrepreneurial
passion; they are given organisational strength and intangible riches.
The Marchegian model of sustainable development that appeals to
the territory’s businesses is premised on a challenge: the capacity of
the whole productive, associative, unionized, entrepreneurial and
institutional world to act and to be made to act in socially responsible
ways, and thus capable to be territorially characterized in a unified
sense.
In the face of large-scale corporations’ power and impact,
however, one cannot but mention the possible new and important role
of small and medium-sized businesses in providing examples of, and
“driving,” real means of good governance – many of which truly
spring from that family-based world of capitalism, often criticized –,
which hosts precious testimonies of integrity strategies (Paine, 1994),
capable of generating trust towards the firm and the entrepreneurial
of values and based on a non-hierarchical set of both economic and social
goals” (Minoja and Romano, 2006, p. 3).
conduct. This permits us to conclude by affirming that between CSR
and corporate governance there exists a successful nexus. SMEs are
especially revelatory, because it is not essential that the extraordinary
or eclectic actions are prominent, but rather that those exemplary ones
stand out, they bear small things with great intentions… Because CSR
needs passion and hope.
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Author Biography
Mara Del Baldo is a researcher at the Management Studies Institute of the
Faculty of Economics at the “Carlo Bo” University of Urbino in Italy. She
teaches the course in Economics and Small Business Management and
collaborates on diverse seminar projects on the topic of Economics and Small
Business Management.
Her main research interests are related to economics and small business
management and, in particular, are focused on the following subjects:
logistics management in the context of SMEs as well in small-sized logistic
firms; ICT for management control purposes in SMES; Basel agreement’s
effects for the development of SMEs; corporate social responsibility, and
small entrepreneur/SMEs business ethics.
Concerning the aforesaid topics Mara Del Baldo has produced various
research papers published - above all - in Italian journals (Piccola
Impresa/Small Business, Sinergie, Economia Aziendale Online), besides
presenting them at national and international conferences.