Corporate social responsibility (CSR) is believed to improve a company’s reputation. However,CSR may also put reputation at risk by making the company a more attractive target for activists’campaigns. We test this effect on a sample of 1355 European small and medium-sized enterprises(SMEs). We find that CSR increases the future probability that an SME’s CSR is monitored by localnon-governmental organizations (NGOs) and that this moderates criticism of the SME’s CSR. Theresults imply that SMEs that only halfheartedly implement CSR are more vulnerable to publiccriticism than SMEs that do not engage in CSR at all. It is advisable that SMEs only positionthemselves as sustainable companies if their environmental policies have proven to contributeto sustainable development. When initiating stakeholder engagement, SMEs should preventdisappointment by tempering stakeholders’ expectations, as NGOs participating in a stakeholderdialogue can use inside information to raise public criticism.
|Number of pages||13|
|Journal||Corporate Social Responsibility and Environmental Management|
|Publication status||Published - Jan 2018|
- environmental policies
- stakeholder engagement