Corporate social responsibility of small and medium enterprises in Bosnia and Herzegovina

Abstract

In 21st century, corporate social responsibility is on its crossroads. Many controversies emerged amongst theoreticians and practicioners. The main reason for controversies are bad business practices of companies and poor understanding of definitional context of CSR. The term ??corporate social responsibility?? became a term that is being relativized, misused and criticised by many. The literature on CSR is predominantely of anglo-american origin, focused on large corporations and issues those corporations face in dynamic globalized world. However, there is no specific literature on CSR in SMEs. Since SMEs represent the relevant business actors and makeup over 90 percent of businesses worldwide and account for between 50 and 60 percent of employment, we see them as relevant driver of economic growth especially in transition countries such as Bosnia and Herzegovina (B&H). The main objective of this paper is to identify the problems and shortcomings of business environment of SMEs in Bosnia and Herzegovina in terms of corporate social responsibility and to propose theoretical solution for elimination of identified problems. The analysis in this paper is based on secondary data and information from publications by UNIDO, UNDP, USAID, EU and World Bank. The field research included interviews with managers in SMEs, UNDP staff working on Global Compact Initiative and representatives of UNIDO. The case of SMEs in B&H regarding CSR is very complex due to many obstacles of political and transitional nature. During the analysis of factors that determine CSR activities in SMEs, we identified crucial issues that SMEs in B&H face: a) CSR exists in companies but it is based on ad hoc activities and therefore is not incorporated in long-term strategies and b) consumers do not make their purchase decisions based on CSR activities of companies because they are not familiar with CSR concept.