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Small businesses put people first

5 September 2011

Small businesses put people first

Study of more than 2,170 small businesses reveals “people first, environment last” when it comes to social responsibility

Small busineses in New Zealand believe that “doing good is good for business” – particularly when it comes to supporting their staff and local communities – but they rate helping people far above helping the environment.

National Director of BNI New Zealand, Graham Southwell, says the BNI Givers Gain survey was designed to study the social responsibility attitudes and activities of small businesses in New Zealand.

The study surveyed 2,170 small businesses – from Invercargill to The Bay of Islands – to find out just how socially responsible small businesses are, particularly since social responsibility has traditionally been seen as the preserve of corporate organisations.

65% of participants have less than five staff, while 16% have between 5 and 10 employees and, as the study suggests, it is probable that this survey represents a collection of data from New Zealand SMEs on a scale that has not been previously achieved.

Just over 66% of respondents believe that doing good for their community will contribute to success in their business. The top ranked altruistic activity (74.8%) was making financial donations to worthwhile causes, followed by allowing staff flexible hours (66.3%), training (64.5%) and sponsorship (56.4%).

Concern for the environment and ecological activities was at the bottom of the list for SME’s, who have a distinctly people focus when it comes to social responsibility.

However, three quarters of respondents agreed or strongly agreed that their company needs to be concerned with environmental issues and to take responsibility for protecting the environment.

“The disconnect may be that SMEs have a very localised focus, so big issues like the environment are seen as the preserve of bigger organisations – in effect, it appears that most small business operators don’t really know, see or understand how they can make a difference in that area,” said Mr Southwell.

More than 40% of respondents suggest that they become less engaged in social responsibility activities when times are tough. However, for 20% of those surveyed, social responsibility was not negotiable, whether in good times or bad.

“Again, SMEs are small with limited resources in time and money. When times are tough, the priority becomes seeing to the survival of their business – so it could be that altruism is viewed as a bit of a luxury.”

Small businesses were evenly split when it came to choosing how to demonstrate their social responsibility. Half of the respondents agreed, or strongly agreed, that they would rather donate their time than money.

Activities identified included:

• Mentoring
• Coaching sports teams
• Supporting workplace learning programmes
• Offering their services for free to worthwhile causes

“Half of SMEs were also positive about having their staff participate in voluntary community activities in spite of the pressures on staffing as a resource in a small business environment,” Mr Southwell said.

The designer of the study, Academic Director at Wellington Institute of Technology, Alan Cadwallader, said a re-occurring theme from the study is that while SMEs understand the importance of social responsibility, they lack appreciation of the role small business has to play in making socially significant contributions.

“This may be another reason why it is possible that their participation in environmental and ecological practices is quite low.”

Mr Cadwallader (who conducted the research in his private capacity) believes that on the whole SMEs are quite disconnected in feeling that they have an impact on the environment.

“In many ways the results are similar to studies done in Europe – so New Zealand small businesses are not that different from their international counterparts.

“Like small businesses internationally, the central focus for New Zealanders in terms of social responsibility is their staff and behaving in a way that is socially supportive of their staff.

“This is complimented by an outwardly looking focus where most commonly small business operators will give donations to charities and community projects.

“SMEs represent a significant force in terms of the overall economic, environmental and ecological impact – but this is not necessarily recognised by Government,” he said.

ABOUT THE SURVEY

More than 2,170 small businesses participated in the the BNI Givers Gain Survey, which sought to understand the social responsibility activities and attitudes of New Zealand’s SME community.

65% of participants have less than five staff, while 16% have between 5 and 10 employees.

It is probable that this survey represents a collection of data from NZ SMEs on a scale that has not been previously achieved.

Academic Director at Wellington Institute of Technology, Mr Alan Cadwallader, calls the study a very significant piece of work because it is fundamentally a study of small business operators in NZ – a market that is notoriously difficult to contact as research participants.

The primary goal was to investigate the ethical framework of the small business participants – the activities and behaviours SMEs engage in terms of fulfilling their social responsibilities. And the ways in which they interact with their local communities.

Mr Cadwallader says that findings are still at an early stage and more rigorous academic analysis is likely to reveal more valuable information.

ABOUT BNI

BNI is New Zealand’s largest structured business networking organisation for all small to medium businesses, and is based on the principle of ‘givers gain’ - if you help other businesses get referrals they will help you.

The organisation has 130 chapters countrywide – from Invercargill to Whangarei – and more than 2,600 members who attend weekly breakfast meetings to pass business referrals to each other within a structured programme.

For more information: www.bniblog.co.nz or www.bni.co.nz

ENDS

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