STAKEHOLDER THEORY v/s SHAREHOLDER THEORY
Since many years ago, from the age of globalization, the Great Depression, amongst other memorable historical events till today, the purpose and role of business has been subject of debate. (Post et al, 2002). Much of the debate has focused around two hierarchal positions; namely, The Shareholder Theory and The Stakeholder Theory. (Rugimbana et al, 2008). The Shareholder theory is regarded as the classical approach to business, that is, an organization’s responsibility is merely concerned about its shareholders. (Cochran, 1994). On the other hand, The Stakeholder theory stresses on the fact that an organization should not only have a sense of responsibility towards its shareholders but should cater …show more content…
There is no denial of the fact that small firms lack resources that can act as a barrier preventing them from implementing CSR. The various barriers that hamper SMEs’ efforts in implementing CSR into their operation are as follows:
• Lack of financial resources for investment in CSR.
• Due to financial shortcoming, SMEs cannot employ top professionals who could bring valuable know-how in the field of CSR.
• SMEs are often intensively burdened with state bureaucracy and changes in legislation, therefore, are left with no spare time and resources for engagement in CSR.
• SMEs do not have proper information and consultancy services, unlike large organizations. It is often claimed that CSR is not an issue that smaller firms should be involved in and as such, the main barrier may simply be a perception that there is no need for them to be concerned with CSR.
However, a lot of SMEs in Mauritius do not experience such kind of barriers, except for the fact of being unable to raise enough finance to be able to participate actively in CSR activities. Some may argue that the characteristics of SMEs are among the most probable cause for not being able to pursue CSR activities but small firms have in fact, embraced their weakness. Uniqueness of SMEs in their approach to CSR is what facilitate their CSR implementation. Some strengths of SMEs can be identified …show more content…
• There have lower costs on management of the business, lower level of internal bureaucracy, thus, more can be spent on CSR activities.
• Small firms are also very flexible and can respond quickly to stakeholders’ demands and implement stakeholder policies.
• Usually SMEs are less anonymous to their community and quite frequently have personal, sometimes emotional, relationship to the community they live and operate. These factors can positive influence the implementation of CSR in the business and attitude of community towards the respective business.
Undoubtedly, CSR in Mauritius is gaining significant importance within the SMEs. More and more SMEs are willing to make a valuable contribution to the society and therefore, strive to implement CSR, even though, it is a huge challenge. Some examples of Foundations which are not so popular but are making a huge difference are Antoine Tsia Lip Ken Foundation, Fondation Pierre Ah Sue and Soodursan Bhunjun Foundation Ltd among
Since many years ago, from the age of globalization, the Great Depression, amongst other memorable historical events till today, the purpose and role of business has been subject of debate. (Post et al, 2002). Much of the debate has focused around two hierarchal positions; namely, The Shareholder Theory and The Stakeholder Theory. (Rugimbana et al, 2008). The Shareholder theory is regarded as the classical approach to business, that is, an organization’s responsibility is merely concerned about its shareholders. (Cochran, 1994). On the other hand, The Stakeholder theory stresses on the fact that an organization should not only have a sense of responsibility towards its shareholders but should cater …show more content…
There is no denial of the fact that small firms lack resources that can act as a barrier preventing them from implementing CSR. The various barriers that hamper SMEs’ efforts in implementing CSR into their operation are as follows:
• Lack of financial resources for investment in CSR.
• Due to financial shortcoming, SMEs cannot employ top professionals who could bring valuable know-how in the field of CSR.
• SMEs are often intensively burdened with state bureaucracy and changes in legislation, therefore, are left with no spare time and resources for engagement in CSR.
• SMEs do not have proper information and consultancy services, unlike large organizations. It is often claimed that CSR is not an issue that smaller firms should be involved in and as such, the main barrier may simply be a perception that there is no need for them to be concerned with CSR.
However, a lot of SMEs in Mauritius do not experience such kind of barriers, except for the fact of being unable to raise enough finance to be able to participate actively in CSR activities. Some may argue that the characteristics of SMEs are among the most probable cause for not being able to pursue CSR activities but small firms have in fact, embraced their weakness. Uniqueness of SMEs in their approach to CSR is what facilitate their CSR implementation. Some strengths of SMEs can be identified …show more content…
• There have lower costs on management of the business, lower level of internal bureaucracy, thus, more can be spent on CSR activities.
• Small firms are also very flexible and can respond quickly to stakeholders’ demands and implement stakeholder policies.
• Usually SMEs are less anonymous to their community and quite frequently have personal, sometimes emotional, relationship to the community they live and operate. These factors can positive influence the implementation of CSR in the business and attitude of community towards the respective business.
Undoubtedly, CSR in Mauritius is gaining significant importance within the SMEs. More and more SMEs are willing to make a valuable contribution to the society and therefore, strive to implement CSR, even though, it is a huge challenge. Some examples of Foundations which are not so popular but are making a huge difference are Antoine Tsia Lip Ken Foundation, Fondation Pierre Ah Sue and Soodursan Bhunjun Foundation Ltd among