THE SMALL TO MEDIUM-SIZED ENTERPRISE

The “place business should occupy in society”10 is a particularly challenging
issue for the small to medium-sized enterprise (SME).11 Each SME is unique,
often taking on the character of its owners and managers. There is surpris-
ingly little research into the social responsibility of the SME.12 Moreover, it
is difficult, at best, to generalize the SME experience from country to country
or even between regions within a particular country.13
SMEs in emerging markets 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. However,
SMEs often lack the capital, staff, or time of large, complex enterprises (LCEs)
to address many business issues. For example, tracking and complying with
changing laws and regulations are relatively more costly for SMEs. SMEs seldom
have the close relationships with government that LCEs have, especially
those recently privatized. They are often unable to defend themselves against
unreasonable decrees, laws, or regulations or to advocate for changes that
would facilitate the transition to a market economy.
Though many of the best practices developed over the past two decades
reflect the experiences of LCEs, there are a number of reasons why an SME
might profit by adapting what the LCEs have learned:
• 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 the 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 to work with others to
find solutions.
• Especially in a business environment that some perceive as high risk,
first impressions count. Developing a business ethics program will help
owners and managers present a core set of beliefs and standards more
clearly, thus demonstrating to investors and customers their enterprise’s
commitment to being an RBE in the global marketplace.
• If an SME’s people are conversant in the language of emerging global
standards and best practices, they will be better able to speak the language
of the global markets—and the opportunities to be found there.
Whereas the process of developing standards, procedures, and expectations
is the same for all enterprises, the answers for each enterprise will
depend on 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.
10 Business Ethics
The CEO statement in Box 1.2, for example, is a part of the report to stakeholders
of a 100-person New Zealand food-processing firm.14
Moreover, SMEs will find that they need not act alone in adopting the
world-class standards, procedures, infrastructure, practices, and expectations
described in these materials. Chambers of commerce, business associations,
colleges and universities, NGOs, and other professional advisers can use the
guide to help SMEs find their way.