Social responsibility begins in the stakeholder needs and the agenda of the company. For a small company this is important because there typically many different responsibilities to different stakeholders such as employees, investors, and customers. In order to create a system of ethics and social responsibility, these stakeholders must be considered and rules must be established that reinforce the fulfillment of these needs. This is accomplished by creating a strategic plan that is instilled with values which aims the organization towards its goals in a manner that maintains behaviors that protect stakeholders. For example, cutting costs to obtain business is not acceptable if it does not protect the fiduciary needs of the investor. By creating values in this manner, the mission and vision are accomplished in a manner that is beneficial for all stakeholders. When socially responsible planning does not occur in this manner, it can have dire consequences for a small business.
I believe it is easy to act unethically in a small business situation, because the entrepreneur is the person holds the power. The problem of having an ethical organization is that it is a top down problem. Whether a small business owner or a corporate CEO, the ethics standards are started at the top. This means being the example and also making leaders culpable for unethical behavior. While this idea seems simple in theory it is often difficult to implement.
Many small businesses have the issue of owners misusing company funds or being tempted to cheat contractors. This unethical behavior needs to be governed by the owner’s personal ethics which he or she applies to the business. Again, this is a difficult area of management because the owner is self-governed to a very large degree. In this way, the entrepreneur can avoid loss of business and productivity.