Corporate Social Responsibility and Small and Medium Enterprises’ (SMEs) Competitiveness in Lagos, Nigeria.

Abstract

With Lagos State inhabiting the highest number of SMEs in Nigeria, there seems to be little to no study conducted on their competitiveness using corporate social responsibility (CSR) as the predicting variable. Due to this, this study examines the relationship and effect of CSR on the competitiveness of SMEs in the state and further suggests ways through which SMEs in the state can utilise CSR as a tool for sustainability. The study tackled the research problem via the lens of three theoretical frameworks: Stakeholder Theory, Social Contract Theory and Systems Theory. In achieving the research objectives and testing the study’s hypotheses, descriptive statistics and inferential statistics were used. This study is premised upon the positivist research philosophy and hence adopts a quantitative approach in finding answers to the research questions. Moreover, the descriptive cross-sectional research design was also used. Data was collected using structured electronic survey questionnaires (Google Forms) and analysed using frequencies, percentages (descriptive statistics), simple regression and correlation (inferential statistics). This was done with the aid of the statistical Package for Social Sciences (SPSS) version 20.0. Results obtained indicated that CSR has a positive relationship with SMEs’ competitiveness while the legal dimension of CSR has a negative relationship with the competitiveness of SMEs. The study therefore concludes that an increase in the practice of CSR will lead to an increase in SMEs’ competitiveness while an increase in the implementation of the legal dimension of CSR will lead to a decrease in SMEs’ competitiveness. The study recommends that SMEs should utilise CSR a publicity/marketing tool to increase the public awareness of their businesses to generate more sales. Furthermore, CSR should be used by SMEs as a brand loyalty tool where customers become emotionally attached to their products/services. The study also advises the Lagos State government to reduce the tax burdens placed on SMES. Statutory provisions that are detrimental to the competitiveness of SMEs in the state should be repealed and replaced with favourable ones. Also, the government should increase the tax rate on large organisations that produce similar products/services with those of SMEs. Implementing these would greatly increase SMEs’ competitiveness in the state.