EPIC Online| Guide to Responsible Business Conduct

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Small to Medium Enterprises

Responsible Business Conduct and the Small to Medium Enterprise

The "place business should occupy in society" is a particularly challenging issue for the small to medium enterprise ("SME"). Each SME is unique, often taking on the character of its owners and managers. There is surprisingly little research into the social responsibility of the SME. Moreover, it is difficult, at best, to generalize the SME experience from country to country or even between regions within a particular country.

SMEs in emerging market economies are pioneers; they are plowing new ground as they contribute to developing a market economy. In most economies, they provide the bulk of jobs, especially new jobs, and contribute significantly to the welfare of their communities because they are so closely connected. On the other hand, SMEs often lack the capital, staff, or time of large, complex enterprises ("LCEs") to address many business issues. For example, tracking and meeting changing laws and regulations are relatively more costly for the SME; they seldom have the close relationships with government that LCEs have, especially those recently privatized; and they are often unable to defend themselves against unreasonable decrees, laws, or regulations or advocate for changes that would facilitate the change to a market economy.

Though many of the best practices developed over the last two decades reflect the experiences of LCEs, there are a number of reasons why a SME might profit by adapting what they learned to address the responsible business conduct issues before it:

The SME of today is more apt to become the LCE of tomorrow by adopting emerging global standards and adapting the best practices of successful LCEs.
· By adopting global standards and adapting best practices where they make sense, owners and managers are able to distinguish their SME from its competition.
By understanding the basic principles and practices of the emerging global marketplace, owners and managers will be better able to recognize responsible business conduct issues earlier and work with others more easily to find solutions.
First impressions count, and the process of developing a Business Ethics Program described in this Manual will help owners and managers present their core beliefs and standards more clearly and distinguish themselves from lingering perceptions of their business environment as being "high-risk."
By being conversant in the language of emerging global standards and best practices, the SME will be better able to speak the language of the global markets-and the opportunities to be found there.

While the process of developing standards, procedures, and expectations is the same for all enterprises, the answers for each enterprise will depend upon the size and complexity of the enterprise itself. The goal for the SME is not to duplicate the standards, procedures, infrastructure, practices, and expectations of LCEs, but to learn from them-and to improve them. Corporate Responsibility SME Conversion table.

Moreover, SMEs will find that they need not act alone in adapting the world-class standards, procedures, infrastructure, practices, and expectations described in these materials. Chambers of commerce, business associations, colleges and universities, other nongovernmental organizations ("NGOs"), and other trusted professional advisors can use the Manual to help a SME find its way. Such advisors can amortize the time required to master these materials over service to a number of SMEs.

Special opportunities for the SME

SMEs have an additional incentive to adopt the discipline of responsible business conduct: to create a wider commercial network. Where owners and managers embrace the global language of responsible business through a Business Ethics Program, a network of business enterprises and supportive NGOs based on shared values is possible. Such a network allows the individual SME to develop some of the synergies and economies of scale that only larger enterprises can afford.

Special Considerations for the Small to Medium Enterprise

Unlike large, complex enterprises ("LCEs"), the average small to medium ("SME") is closely identified with its owners and managers, so they must be particularly alert to designing a well-balanced Business Ethics Program. Often, they will be tempted to work out the program on their own and simply present it to employees and other stakeholders because of limited resources and staff, and because, after all, it is their enterprise. Though in many cultures workers expect to be told what to do, even what to think, a program is more apt to succeed where workers are involved enough in its design to feel committed to it and willing to use individual judgment to apply its standards to the issues they face.

Owners and managers should resist this temptation and engage their employees and other stakeholders as much as possible, adapting the processes described in this Manual, as appropriate. For example, owners and managers can use the program design worksheets described in the balance of this Manual to guide their thinking in designing the program and stimulate dialogue with their employees and other stakeholders.