A corporate social responsibility model to achieve sustainable business performance of SMEs in the South African construction industry

Abstract

Although studies related to redirecting the unsustainable trajectory of SMEs in the South African construction industry have been extensively conducted, current statistics illustrate that 70%-80% of construction SMEs in the South African construction industry fail within their first five years, raising concerns regarding their sustainability. This study attempts to address this negative trajectory by exploring the concept of corporate social responsibility (CSR) and developing a CSR model to guide SMEs towards the achievement of sustainable business performance. A conceptual model was developed through an extensive review of literature across the following areas (research constructs): the perception of SMEs pertaining to the relationship between the integration of CSR and sustainable business performance; CSR drivers influencing CSR practices of SMEs; CSR implementation challenges that SMEs experience; and CSR activities that must be considered by SMEs to achieve sustainable business performance. Theories linked to CSR – including instrumental theory, legitimacy theory, stakeholder theory and perception theory – were also reviewed, with stakeholder theory and perception theory being justified to underpin the conceptual model. A mixed method approach through an explanatory sequential design was adopted, with both descriptive and inferential statistical techniques utilised for data analysis. Quantitative data was collected via a web-based questionnaire that was emailed nationally to general building (GB) and civil engineering (CE) contractors registered on the cidb register of contractors between Grades 1 and 6. The findings obtained during the quantitative phase were used to develop an interview guide for the qualitative phase that involved four structured face-to-face interviews, conducted with four contractors who participated in the initial quantitative phase. The significant findings emanating from the two data collection phases were integrated for the purpose of developing a CSR model utilising Partial Least Square Structural Equation Modelling (PLS-SEM). Findings revealed that several constructs – the perception of SMEs pertaining to the relationship between the integration of CSR and sustainable business performance; the CSR drivers influencing the CSR practices of SMEs; and the CSR implementation challenges that SMEs experience – have substantial predictive capabilities to influence CSR activities that need to be considered by SMEs to achieve sustainable business performance, thus providing SMEs in the South African construction industry with specific pioneering CSR indicators for the achievement of sustainable business performance.