Social and Environmental Performance at SMEs: Considering Motivations, Capabilities, and Instrumentalism

Our analysis of recent survey data of US small- and medium-sized enterprises explores the question of how these entrepreneurial ventures can do well by doing good-i.e., how they can build a competitive advantage with their social and environmental practices. We focus on several firm characteristics and choices involving motivations and capabilities. We use hierarchical OLS to analyze the survey data to find that an orientation to, commitments to, and dynamic flexibility in, the firm's CSR and green policies are significant factors in a firm's CSR- and green-based competitive advantages. So, while some tradeoffs are likely between activities aimed at financial performance and those also aimed at improving social/environmental performance, opportunities do exist for small-and medium-sized enterprises to do both well and good. We consider several implications for theory and practice that continue in this instrumentalist perspective.