Corporate Social Responsibility in a Family-Owned SME: A Community Perspective

Thesis Abstract

This study investigates how corporate social responsibility (CSR) manifestations within a family-owned small- to medium-sized enterprise (SME) influence community well-being and stakeholder trust, addressing the gap in CSR scholarship that concentrates on large firms or non-family ownership structures. The problem centers on whether traditional CSR expectations align with the values, resource limitations, and governance dynamics characteristic of family-owned SMEs, and how these dynamics shape community perceptions and tangible social outcomes. The aim is to elucidate the mechanisms through which CSR activities contribute to local development and firm legitimacy, and to identify best practices for integrating CSR into strategic decision-making in family enterprises. The specific objectives are (1) to map CSR activities undertaken by the case SME and classify them according to environmental, social, and governance (ESG) dimensions; (2) to examine community stakeholders’ perceptions of CSR relevance and credibility; (3) to assess the relationship between CSR investment and community well-being indicators such as local employment, skill development, and social cohesion; (4) to analyze governance processes that enable or constrain CSR in a family-owned context; and (5) to develop a context-sensitive framework linking CSR commitments to sustainable competitive advantage for family SMEs. The study adopts a qualitative-quantitative mixed-methods design underpinned by relational or stakeholder theory and resource-based view insights to capture both social legitimacy and resource constraints. The population comprises all employees, local community leaders, and customers of the case SME in a mid-sized regional economy. A purposive sample of 60 employees (including family and non-family members) and 40 community stakeholders will be interviewed, complemented by survey data from 150 customers and 10 annual community impact reports spanning five years. Data collection instruments include semi-structured interviews, a structured CSR perception questionnaire, company archival data on CSR expenditures and community outcomes, and focus groups with local youth and small-business partners. Validity and reliability will be enhanced through triangulation, pilot testing of instruments, member checking, and inter-coder reliability for qualitative coding. The qualitative data will be analyzed thematically using NVivo, with code development driven by the study’s theoretical framework; the quantitative data will be analyzed with SPSS using descriptive statistics, multiple regression to test the relationship between CSR intensity and community well-being indicators, and structural equation modeling to assess the mediating role of perceived legitimacy. A conceptual model will be developed to illustrate the pathways from CSR inputs to community outcomes and firm performance, drawing on stakeholder theory to interpret legitimacy and the resource-based view to explain strategic value. Anticipated findings include (1) a constrained but purposeful CSR portfolio influenced by family governance, resource limitations, and local legitimacy concerns; (2) evidence that CSR activities tied to local employment, skill development, and supplier inclusion yield higher trust and perceived social value among community members; (3) a demonstrable link between CSR legitimacy and customer loyalty and firm reputation; and (4) identification of governance practices—such as formal CSR decision rights and transparent reporting—that enhance CSR effectiveness in family-owned SMEs. The study contributes to knowledge by extending CSR theory to family-owned SMEs in emerging markets, offering a nuanced understanding of how relational governance and resource constraints shape CSR outcomes, and producing a practical framework for aligning CSR with community development and competitive advantage. The conclusions will emphasize the strategic integration of CSR into family governance, the importance of credible local engagement, and scalable CSR practices suitable for resource-constrained SMEs. Recommendations include adopting a formal CSR charter anchored in local collaboration, instituting regular stakeholder dialogues, investing in targeted capacity-building programs, and developing stepwise CSR reporting aligned with international standards while maintaining family-centric governance controls.