Developing CSR Strategy for SMEs in Thailand: A Study

This project delves into the development of Corporate Social Responsibility (CSR) strategies tailored for Small and Medium Enterprises (SMEs) operating in Thailand. The research begins with an introduction to CSR, its importance, and the research background, problem, aims, and objectives, followed by a dissertation structure. A comprehensive literature review explores CSR concepts, definitions of SMEs in Thailand, and their characteristics. The methodology section details the research philosophy, approach, design, data collection methods (surveys and interviews), sampling techniques, data analysis, ethical considerations, and limitations. The data analysis and discussion chapter presents thematic analysis of employee and customer survey results, interview analysis, and a discussion of findings in relation to the literature. Finally, the conclusion and recommendation chapter summarizes key findings and suggests actionable recommendations for SMEs in Thailand to enhance their CSR practices. The project aims to evaluate CSR concepts in an emerging economy, examine the relationship between CSR and SME performance, and identify key factors for CSR success in Thailand. The study emphasizes the importance of CSR for sustainable business practices and stakeholder engagement.

Developing CSR strategy for SMEs in
Thailand

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1.1. Research Background.......................................................................................................1
1.2. Research Problem.............................................................................................................2
1.3. Research Aims and Objectives.........................................................................................3
1.4. Dissertation Structure........................................................................................................3
CHAPTER 2: LITERATURE REVIEW.........................................................................................5
2...................................................................................................................................................5
2.1. Corporate Social Responsibility........................................................................................5
2.2. Definition of SME in Thailand and its characteristic.......................................................7
2.3................................................................................................................................................8
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................9
3.1 Introduction............................................................................................................................9
3.2 Research philosophy..............................................................................................................9
3.3 Research approach...............................................................................................................10
3.4 Research design...................................................................................................................10
3.5 Data collection:....................................................................................................................11
3.6. Sampling.............................................................................................................................12
3.7 Data analysis........................................................................................................................12
3.8 Ethical consideration...........................................................................................................13
3.9 Research limitation..............................................................................................................13
CHAPTER 4: DATA ANALYSIS AND DISCUSSION..............................................................14
4.1 Introduction..........................................................................................................................14
4.2 Thematic analysis................................................................................................................14
4.2.1 Analysis of employee’s survey results.............................................................................15
4.2.2 Analysis of customers’ survey results..............................................................................23
4.3 Interview analysis................................................................................................................31
4.4 Discussion of the findings in relation to literature review...................................................34
CHAPTER 5: CONCLUSION AND RECOMMENDATION.....................................................36
5.1 Conclusion...........................................................................................................................36
5.2 Recommendations................................................................................................................38
References......................................................................................................................................40
Appendix........................................................................................................................................42
Questionnaire for employees.....................................................................................................42
Questionnaire for customers......................................................................................................44
Interview........................................................................................................................................47

INTRODUCTION
1.1. Research Background
In general, many firms participated in corporate social responsibility (CSR), initiatives
that drive economics as well as social or environmental agendas, as a key strategy for creating
value that benefit themselves while also rewarding society and environment in return. As a
consequence of this, the number of companies that operate their business in CSR increase
significantly. Many firms try to engage with the activity that can assist business and environment
to be better. Thus, CSR has become an essential concept in many organisations include both
large or small, domestic or international, to take it into account by improving their social and
environmental practice. Clearly, evidences of its applications have been expanding across the
world (Carroll, 2016). Especially multinational enterprises (MNEs) operating in emerging
countries, the key players to widen the concept, aim to distribute their business in resource-rich
developing countries and being good corporate citizens (Jamali and Mirshak, 2007; Perrini,
2006). However, small and medium-sized enterprises (SMEs) also play a significant role to
motivate business in each country, both developed and developing. Hence, many organisations
are expected to operate their business in the right way displaying moral behaviour and
management to be virtuous as good citizens in society. Additionally, CSR is a crucial part of
many organisations, it attempts to be beneficial for all group of stakeholders and can support
companies to achieve in their business by increasing sales, attracting talent staff and improving
the company’s recognition. In present, the stakeholders such as customers, investors and
community concern about firm’s activities in form of charity, the ethics of advertising and
environmentally friendly products. In other words, there are different expectations from different
stakeholder based on what they are interesting from the company. Most organisations understand
that the stakeholders demand the action relate the field of CSR and to satisfy stakeholders they
have to follow or even lead the ever-growing field of CSR.
The concept of CSR means that organizations have four basic elements include
economic, legal, ethical, and philanthropic responsibilities assembling to their responsibilities to
add value on their products or services in which a fair return for investors and comply with the
regulations. In other words, organisations required to adopt a broader perspective of its
responsibilities in order to an effective response to the stakeholders that involve not only
shareholders, but also many other stakeholders, including customers, employees, suppliers,
community, governments and other related groups. Nevertheless, CSR in the dimension of SMEs
aims to pursue responsible business practices without the need for budgets or money. The
consideration of CSR in this dimension involves a cultivation on everyone in every department,
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sector and part of the organisation to have knowledge, understanding and participation in CSR
activities in terms of work environment, strengthening morality, ethics, generosity, regards and
work in their full capacity as well as the environmental protection and maintenance (Thaipat,
2012). In 2008, the Securities and Exchange Commission Thailand (SEC) published “Corporate
Social Responsibility Guidelines” for using as a guideline to the implementation of CSR by
which CSR can be classified into 8 categories including organizational governance, fair
operating practices, human rights and labour practices, consumer issues, community involvement
and development, the environment, innovation and its disclosure on CSR, and sustainability
reporting. Subsequently,
Although CSR has traditionally become an integrated part of the corporate sector, an
increase in the number of initiatives intended to engage SMEs in the CSR agenda has
demonstrated the recognition of the growing importance in CSR that led to a focus on the social
and environmental impact of SMEs. The CSR that addresses large companies has been well
researched, but in SMEs context has a limited number of research on the relationship among
SMEs and CSR. In order to develop a new concept of CSR, it should be more relevant to SMEs
context that based on SMEs aspect rather than large companies (Jenkins, 2004). According to
Thaipat (2018), CSR in perspective from Thai’s SME entrepreneurship is the concept that might
have impact on their business, it can provide benefits to the firm but not prioritise CSR as the
main strategy.
1.2. Research Problem
In spite of the fact that corporate social responsibility (CSR) is not a new concept, many
research are still far away from determining a generally accepted and reliable theoretical
framework in order to interpret issues related to a wide range of firms’ activity. While most of
the research in this area has focused attention on large organisations (Carroll, 1979; Bowen,
1953; Kreps, 1940; Clark, 1939), there is a limited number of research examining on the CSR
practices of SMEs in general and Thai SMEs in particular. In addition, many research discuss
about the concept of CSR in developed countries might be inappropriate for the emerging
economies due to the complexity of the business environment, the challenges for SMEs, and
transitional nature of the economy. Moreover, most of SMEs still misunderstanding in the
concept of CSR from the owner or the management down to employees. They do not realise the
importance of activities related to CSR or what are the benefits of CSR. Most of them perceive
CSR is an activity that enterprises create to reward community, society and environment in form
of charity or donation in return to society so when the business is not profitable, there is no
intention to do CSR and believe that CSR activities are a responsibility of large enterprises
which have high profit (Thaipat, 2012).
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1.3. Research Aims and Objectives
This paper aims to discuss on how importance of adapting the concept of CSR to an SME
context and understand the stakeholders’ perspective towards CSR strategy for SMEs in
Thailand.
The objectives are:
 To evaluate the concepts of CSR in the context of an emerging economy
 To examine to what extent CSR is related to SMEs performance
 To identify what are the key factors for SMEs in Thailand
1.4. Dissertation Structure
While undertaking a research topic, the researcher is required to follow a sequential
pattern by adhering to a well defined and appropriate structure. This structure can be
demonstrated by following a series of chapters that can be undertaken as a part of the research
study. The following are the various chapters:
 Chapter 1: Introduction – It is the first chapter that lead to provide a clear framework of
the selected topic of investigation. It will consist of an overview in which topic of the
study is well-defined. Following this aims and objectives will be framed with research
problem. In the end of the introduction chapter potential significance of the selected topic
will be provided.
 Chapter 2: Literature Review – In second chapter a detailed outline of the concepts of
CSR in the context of an emerging economy will be provided. further to what extent CSR
is related to SMEs performance will be examined. Therefore this, section will lay
emphasis on covering aims and objective of the investigation. Further it will be done
through undertaking an assessment of the various area of research. All the published
articles and journal of authors will be considered.
 Chapter 3: Research Methodology – In this section a description of the different methods
will be provided which can be used by the scholar to carry out dissertation in a right
direction. Along with this validation of selecting a particular technique will be provided.
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At the last of this chapter limitation and ethical consideration of the research will be
described.
 Chapter 4: Data Analysis and Findings – All the information which is collected from
primary and secondary sources will be analysed.
 Chapter 5: Conclusion and Recommendations – It is the last chapter that will be provide
conclusion based on secondary research. After that recommendation will be provided
based on findings for improvement.
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CHAPTER 2: LITERATURE REVIEW
2.1. Corporate Social Responsibility
To begin with, enterprises conduct business to gain profit and return it to the shareholders
but the concept of CSR contradict that the firms have responsibilities for providing services to
others, particularly social and environment. There are several implications of CSR, depending on
the nature of the company used to define CSR. It can be a behaviour of an organisation that
influence on society, economic and environmental (The European Commission, 2017). In
addition, McWiliams and Siegel (2001) said that CSR is activities in which the company provide
some benefit to a society above the business interests of the company and need to comply with or
exceed the requirement of the legislation. These in line with Balabanis, Phillips and Lyall (1998)
that CSR consists of various activities in different dimensions such as environmental protection,
charities and participation in social causes.
The concept of CSR developed from two aspects which include CSR as business ethics
and CSR as part of sustainable development programs contributed by the United Nation but
merged as a business norm (United Nations, 1992). The idea of CSR that the goal of the
company should be in a broader perspective than focus on growing shareholder value was argued
through discussions on business ethics since the 1950s (Carroll, 1999). This argument based on
an assumption that emphasises appropriate methods profitability so that the enterprise gains
legitimacy for existence in society (Wood, 1991). Collier and Esteban (2007) claimed that Adam
Smith explains morality in the Wealth of Nations but when the introduction of mathematical
tools was applied to examine economic theories, most economists were convinced into a world
of measuring. Therefore, ethics became less prioritised due to it cannot be measured certainly.
An enterprise required to adopt a broader perspective of its responsibilities rather than achieving
economic goals in order to gain effective response to the stakeholders that involve not only
shareholders, but also many other stakeholders, including customers, employees, suppliers,
community, governments and other related groups (Thaipat, 2012; Hogan, 2009).
The most well-known theory of CSR is Carroll’s pyramid of CSR. Carroll (1991; 1979)
demonstrated the set of four basic responsibilities which are economic, legal, ethical and
philanthropic can shape the basis framework for CSR as a pyramid. Firstly, the foundation of the
pyramid is the economic responsibility, he mentioned that the basic requirement of business from
society is the organisation should be strong to sustain the business, maintain profitability to
induce the investment from shareholders. In social perspective, “the business organisations are
institutions that will produce and sell the goods and services to meet their needs”. Organisations
can make profits by adding value on their products or services to provide benefit to the
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stakeholders. Secondly, legal responsibility, the companies should obey the laws and comply
with the regulations. Thirdly, ethic responsibility, the expectation from society that companies
must do to minimise risk. The concept of legal and ethical seem to be related, however, ethical
comprises “activities, standards, policies and practices” that do not present in legal codification.
Finally, philanthropic responsibility, society desires the business organisation to provide
something back to the society and “to be good corporate citizens just as individuals are” (Carroll,
2016, p.1). On the other hand, there are several rationales for companies to participate in CSR
such as “moral obligation, sustainability, license to operate and reputation” (Porter and Kramer,
2006, p.78). For moral obligation, companies must operate their business in the right way
performing like good citizens in society and sustainability focuses on environmental problems
and regards society. License to operate is a condition that companies need to follow and also an
approval from communities, stakeholders and governments to conduct their business. Indeed, the
significant reason for companies to engage in CSR is to improve the brand image and reputation
as well as increase stock value (Porter and Kramer, 2006).
Figure 1: Carroll’s pyramid of CSR (1979)
Consequently, the key factor that can be used to investigate the profitability of the
company from CSR activities is the effect of CSR on a variety of stakeholders which are primary
stakeholders include customers, employees, suppliers, investors and community (Lech, 2013).
The research from Fiedler and Kirchgeorg (2007) is similar to Hillenbrand and Money (2007),
they argued that different stakeholders expected the CSR of the company from different
perspectives depend on what they are interesting from the company. To begin with, CSR towards
customers by which the firm should emphasise on the ethics of advertisement, customer health
and safety and transparency policies. These seem to enlarge the brand image, firm reputation and
customer loyalty so the firm can earn more sales and profits. (Waddock and Graves, 1997).
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Generally, the managers worried about operating CSR activities might have an effect on
increasing product cost to customers and the sales may be decreased. However, customers do not
decide to buy product from the lowest price only but they empathise with many aspects of the
product (Mohr and Webb, 2005). On similar lines Auger, et al. (2003) claimed that customers
willing to pay more for products which are made by ethical company. Schuler and Cording
(2006) pointed out that consumers play an important role as “the dominating stakeholders” to
connect the relationship between CSR and financial performance of the company because their
buyer power significantly influenced the financial performance of the company. In addition,
Lech (2013) focused on CSR towards employees that allow employees to have participated in a
decision making within the company and also provide an appropriate compensation to
employees. The potential delivery of CSR initiatives can be driven by employee responsiveness
which are inspiration and intention. Scholars investigated that the company should impulse to
employees with ambition and expertise for implement CSR initiatives (Singh, 2014). Berman, et
al. (1999) is consistent with Lech (2013) that the financial performance of the company might
improve when employees were satisfied with what they need in reasonable level, so they can
operate works in good condition and full potential. The organisational commitment in CSR has
more opportunity to attract job applicants and can have good effect on employees’ attitude that
prevent the firm from the staff turnover (Greening and Turban, 2000; Turban and Greening,
1997). According to Lech (2013), the financial performance of companies might be improved if
the suppliers stress with the CSR standards, so companies can expand their reputation more
widely into global market. In line with Lech (2013), Mishra and Suar (2010) demonstrated that
issues related to suppliers include “health and safety of suppliers' products, environmental impact
of suppliers and ethical procurement of raw materials by suppliers”. Furthermore, Lech (2013,
p.49) stated that “companies adopting CSR principles toward investors are more transparent and
have less risk of bribery and corruption”. The company protects and supplements for the
shareholders’ right and also provides disclosure in both financial and non-financial as transparent
as possible. Therefore, financial performance of the company can be increasing by the
development of corporate governance (Mishra and Suar, 2010). In particular, CSR towards the
community examines companies’ actions with respect to issues, for example, charitable
donations, the partnerships between public and private sector, and relationships with community.
Many companies can use these actions for increasing their reputation and improving their brand
image that have an influence on financial performance (Wang and Qian, 2011).
2.2. Definition of SME in Thailand and its characteristic
The Ministry of Industry of Thailand defines SME as below issued by Ministerial
regulation in 2002.
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Industry Small Enterprise Medium Enterprise
Manufacturing
Industry
Enterprise which corresponds to any
of the following
- With the number of employees of up
to 50
- With the amount of assets of up to 50
million bahts.
Enterprise which corresponds to any
of the following
- with 51 to 200 employees
- with assets of no less than 50 million
bahts and up to 200 million bahts.
Wholesale
Industry
Enterprise which corresponds to any
of the following
- with the number of employees of up to
25
- with the amount of assets of up to 50
million bahts.
Enterprise which corresponds to any
of the following
- with 26 to 200 employees
- with assets of no less than 50 million
bahts and up to 100 million bahts.
Retailing
Industry
Enterprise which corresponds to any
of the following
- with the number of employees of up to
15
- with the amount of assets of up to 30
million bahts.
Enterprise which corresponds to any
of the following
- with 16－150 employees
- with assets of no less than 30 million
bahts and up to 60 million bahts.
Service
Industry
Enterprise which corresponds to any
of the following
- with the number of employees of up to
50
- with the amount of assets of up to 50
million bahts.
Enterprise which corresponds to any
of the following
- with 51 - 200 employees
- with assets of no less than 50 million
bahts and up to 200 million bahts.
2.3
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CHAPTER 3: RESEARCH METHODOLOGY
3.1 Introduction
It is one of the important chapters in the research which provides an appropriate method
or technique that is effective enough to carry out research in an efficient manner. This chapter
play important role to develop understanding related to corporate social responsibility. This
chapter consist of data analysis, research strategy, data collection etc. In addition to this, chapter
enables on focusing on the research aims and objectives which is formed by the research in an
effective manner. Step by step the investigation will be able to present the information which is
collected and evaluated from different sources to conduct research and gain valid outcome. In
this context below are provided research methods:
3.2 Research philosophy
It is known as belief of the scholar in relation to which information can collected,
analyzed, evaluating and gathering of data and information (Bailly and Comino, 2017). Along
with this, it makes easier to analysis the sources that enable to develop the nature of the study. At
the time when scholar make proper use of research philosophy then it can easily gain proper
conclusion of the selected topic (Toye, Williamson and Lamb, 2016). Therefore, these
considered the actual phenomenon which aims to focus on aims and objectives of the research. It
is basically of two types that are interpretivism and positivism
Positivism lead to focus on objectives part of the study. Along with this it also eliminates
all the false facts which are involved within the study. It is carried out in a structural way which
enable to combine a logical aspect of the study (Wright, Wahoush and Jack, 2016). On the other
side, interpretivism emphasized on subjective part of the study. It leads to make uses of theories
and models which are related with the selected topic. The present research is based on
importance of adapting the concept of CSR to an SME context and understand the stakeholders’
perspective towards CSR strategy for SMEs in Thailand, therefore interpretivism philosophy is
used by the scholar. It is effective enough in order to develop deep understanding related to the
selected topic. Along with this scholar can easily gain valid outcome.
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3.3 Research approach
This is another essential element in research methodologies. Research approach refers to
the hypothesis of research. It helps in using theory that is used in designing the research. On this
basis, the overall research is conducted along with aim and objectives are developed. It is
selected on the basis of nature and topic of research (Tight, 2016). Usually, inductive and
deductive are two types of research approach that is applied by researcher.
Inductive approach is used to generate theories and new ideas from research that can be
applied in other areas. It is beneficial as it helps researcher to gain knowledge of his or her area
or field. On the other hand, deductive is used to generate valid outcomes from research. This
helps in finding the outcomes or results and achieving aims and objectives. For present research,
inductive approach is used by researcher for the importance of adapting the concept of CSR to an
SME context and understand the stakeholders’ perspective towards CSR strategy for SMEs in
Thailand. It will help him or her to find relevant outcomes by analysing data. It will help in
collecting and analysing the data in an effective manner. Also, it will help in following every
step so that research can be conducted in smooth way.
3.4 Research design
Research design is known as the technique that support scholar to involve various
elements of the study in a logical manner. Along with this, it enable scholar to address the
research issues in an effective manner (Kerr, Eckert and Wandwabwa, 2016). It is also
considered as blueprint for gathering and measuring the data. It assists in generating important
and factual information on the selected topic. There are three different type of research design
which can be used by scholar that are experimental, exploratory, and explanatory. All these
designs can be used for describing complex research issues in an effective manner. Descriptive
research designs effective as it helps in describing the population which is covered in the study.
For the present research scholar has adopted descriptive design. Descriptive research design
aimed to cast lights on current issues and problem through help of data collection process which
enable to describe characteristics of sample population. Reason for considering this method is
that it consumes less time and provide appropriate results.
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