Abstract:
The major notion that was tested in this study was to determine if CSR activities have
any impact on SMEs' financial performance during a crisis period. The learnings from
stakeholder theory provided the base for what to look for, to assure that the maximum
possible rewards are extracted from these CSR activities as SMEs’ resources are
generally limited during crisis periods. The study focused on CSR activities, attending
to different stakeholders to determine which would provide financial benefits, as well
as the owner-managers’ focus on stakeholders during crisis periods. The claims that
long-term relationships with stakeholders and satisfying the most salient stakeholders
would produce the biggest rewards, were also tested. This explanatory quantitative
study involved 161 owner-managers and tested the claims made in stakeholder theory,
to find the sought-after link to financial performance. Electronic surveys were used to
collect data, targeting owner-managers of SMEs. A combination of descriptive
statistics and linear regressions was used to analyse the data. Descriptive statistics
provided results that indicated that SMEs were indeed involved in CSR activities during
the COVID-19 crisis period, but attention to different stakeholders differed depending
on of the longevity of the relationship. Linear regression could not produce evidence
of a relationship between SMEs’ CSR activities and their financial performance, neither
could a moderating effect of the salience of stakeholders on the relationship between
CSR and financial performance be confirmed. Therefore, even though CSR activities
were undertaken, the associated benefits seem of an informal nature, and more geared
towards satisfying the owner-manager.
