J Manag Gov

DOI 10.1007/s10997-009-9127-4

Corporate social responsibility and corporate

governance in Italian SMEs: the experience of some
‘‘spirited businesses’’

Mara Del Baldo

Springer Science+Business Media, LLC. 2009

Abstract The study proposes to individuate the relationship between social

engagement, social statements and governance of SMEs. Does an adhesion to the
philosophy and to the practices of CSR, which are reflected in a firm’s mission and
accountability, positively influences its governance? If so, is this influence more or less
significant for SMEs with respect to large-sized firms? This paper winds itself around
these questions and describes the principle findings that have emerged from a quali-
tative investigation focused on a selected group of ‘‘cohesive’’ Italian SMEs, in which
their management complies with both economic and social issues. The empirical study
finds that the diffusion of CSR is tied above all to the entrepreneur’s values and
orientation and to the company embeddedness to the local socio-economic environ-
ment. The concluding reflections trace the features of a territorial model of socially
responsible orientation centered on the best practices of SMEs who are excellent
examples of ‘‘spirited businesses’’ and are part of a network (which includes institu-
tions, trade associations, non-profit organizations, etc.) that contributes to the diffu-
sion of an orientation towards CSR and to sustainability across the territory.

Keywords Business ethics
Corporate governance
Corporate social

responsibility
Small and medium enterprises
Territory

1 Introduction

If it is true that the consideration of ethical principles in a business’ choices and

policies is particularly important for large businesses that are organised and run as
public companies, then it is likewise true that in small and medium-sized businesses

M. Del Baldo (&)

Department of Business Studies, University of Urbino ‘‘Carlo Bo’’,
Via Saffi, 42, 61029 Urbino, Italy
e-mail: mara.delbaldo@uniurb.it

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(SMEs), the dedication to, and articulation of, socially responsible management
philosophies must reverberate directly across a plurality of ‘‘intangible’’ components.
Among these intangibles are the company’s strategic profile (in terms of
integrating practices in a system of initiatives and integrated behaviours with the
overall business strategy), the culture of the enterprise, the processes of account-
ability (improving systems of collecting and diffusing information, of disclosure and
of informational transparency, as well as introducing procedures and forms of
control), and systems of corporate governance (systems of decision-making
processes and of internal control, configuration of assets and related matters). It
is this totality of factors that reflect that specific nature of the SME: the convergence
around the mission and value-set, facilitated by the proximity and by the direct
involvement of the owner and/or the entrepreneurial family in managing the
business; the simplicity of its organizational structure, which allows direct and
frequent rapports between the corporate actors; and its rooting in the surrounding
territory and socio-economic context. This last factor assumes particular importance
in driving the business towards forms of CSR (Corporate Social Responsibility) that
share a common thread—namely, they all possess values that typically express a
particular socio-cultural and economic tradition of the territory in which they are
embedded (Ringov and Zollo 2007).
Where an adhesion to multiple declensions of CSR is present, corporate
governance positions itself at the center of relations between stakeholders, strategic
profile and internal processes, human capital (Gazzola and Mella 2006) and is
experienced as enlarged governance (Sacconi 2008). A necessary condition is the
involvement of top management: the top managers and/or the entrepreneur serve as
the impetus for the reorientation of the firm’s mission, from its maximization of
profits to gaining value that comes from economic performance and finds a source in
the modification of the business direction and the rules that govern it.
In this context, is it possible to affirm that socially oriented businesses are
characterized by the ‘‘best’’ systems of governance? And on which specificities of
SMEs is the evolution of socially-oriented management philosophy based?
To answer these questions, the present study utilizes a dual analytical
perspective: deductive and inductive. The former is based on a review of the
contributions present in the literature concerning business ethics, entrepreneurship
and CSR among SMEs. The latter is developed through a qualitative study focused
on several case studies conducted through a semi-structured questionnaire on a
sample of SMEs in the Marches Region. The empirical analysis forms a part of a
more robust research project based on the qualitative and quantitative study of a
sample of Italian SMEs, started in May 2008.
The explication of the research question can be articulated this way: to individuate
the particular traits of the mission, systems of governance and of accountability that
characterize the SMEs that carry a business culture in which social responsibility is
lived within the governance of the firm. The central proposition is that in the presence
of a solid ethical framework, which is promoted and shared by the entrepreneurs and
managers who guide the business in carrying out socially responsible practices and
towards adopting methods communicating them (such as a charter of values, a code
of ethics, social report, etc.), the arrangement and quality of governance can mitigate

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tensions and dedicate more energy towards the good of the business, of its workers,
and of the society and environment in which it operates.
The empirical analysis of such cases, conducted with reference to the
interpretative framework of Lamont (2002) and Molteni and Lucchini (2004), also
permits one to verify a second proposition: SMEs’ orientation towards CSR and the
coherence between mission-governance-accountability which follows are facilitated
by environmental factors—that is, of an anthropological and socio-cultural nature—
present in the territory from which the entrepreneurs and the SMEs come. This
makes it possible to trace the features of a Marchegian model of socially responsible
orientation centered on the best practices of SMEs who are excellent examples of
‘‘spirited businesses’’.
The work is articulated in three principle parts. The first section traces the
theoretical framework and synthesizes the existent contributions in the literature and
of the researches conducted on the theme of CSR and business ethics, attempting a
comparative reading with respect to large firms. The second part describes and
interprets the principle findings that have emerged from the qualitative investigation
focused on a selected group of ‘‘cohesive’’ SMEs, in which the nexus between
mission, corporate governance and socially responsible management practices were
examined. The last section closes the paper with concluding reflections.

2 Corporate social responsibility, ethics and corporate governance:

an analysis of the conceptual framework

The recognition of an ethical and social dimension of business activity is founded on

a vast corpus of theory. The earliest contributions (Bowen 1953) have been
progressively enriched in the last 20 years, producing a vast and complex frame of
normative references that has fed lively and rich1 debates involving academics form
diverse disciplines: business-economics, management, sociology, anthropology,
philosophy.
Four groups of theories form the core of this literature; they likewise correspond
to four different approaches (Garriga and Melé 2004). The first (instrumental
theories) has Friedman (1962) as its most notable exponent, and is founded on the
principle of the instrumentality of the business with respect to the creation of
wealth, a goal that is synthesized as the firm’s only responsibility (maximization of
shareholder value; reaching the competitive advantage).
The second (political theories), which can be divided into three principle
theoretical strands (corporate constitutionalism; integrative social contract, corpo-
rate citizenship), is focused on the role of business and of the rights/needs which

1
‘‘Corporate social responsibility means something, but not always the same thing, to everybody’’
(Votaw 1972, p. 25). Moreover corporate social responsibility has been described as ‘‘…an eclectic field
with loose boundaries, multiple memberships, and differing training/perspectives; broadly rather than
focused, multidisciplinary; wide breadth; brings in a wider range of literature; and interdisciplinary’’
(Carrol 1994, p. 14).

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connect them, and on the responsible use of power in political and social arenas
(Davis 1960, 1973; Donaldson and Dunfee 1994, 1999).
The third body of studies (integrative theories), in which the approaches of issues
management, public responsibility, stakeholder management and corporate social
performance coexist, maintains that ‘‘social demands are generally considered to be
the way in which society interacts with business and gives it a certain legitimacy
and prestige. As a consequence, corporate management should take into account
social demands, and integrate them in such a way that the business operates in
accordance with social values’’ (Garriga and Melé 2004, p. 57).
The last represents a collection of ethical theories which, focused ‘‘on the right
thing to achieve a good society’’ (ibidem, p. 64), includes the approach of
stakeholder normative theory (Freeman and Reed 1983; Freeman 1984; Evan and
Freeman 1993; Donaldson and Preston 1995; Phillips et al. 2003) which is based on
the premise of universal rights (UN Global Compact 1999), of sustainable
development (World Commission on Environment and Development, Brundtland
Report, 1987). It also includes the approach of the common good of society, in
which space is made for theories concerning the ‘‘common good’’ (Maritain 1966;
Melé 2002; Alford and Naugthon 2002; Alford 2006; Sacconi 2004; Catturi 2006)
and the Civil Economy (Zamagni 1995, 2006; Bruni and Zamagni 2004).
The nexus between corporate governance and the management’s and/or the
entrepreneur/business owner’s responsibility is a theme which, in recent decades,
has moved to the forefront and has fully merged into the ethics of responsibility
theory: the duty of management is to actualize a balance of interests among all
stakeholders, and social responsibility can (and must) be redirected towards the
emersion of moral preferences and their connection with particular types of
businesses (civil and social businesses) or, in lucrative firms, towards particular
mechanisms of governance in which a relational perspective prevails (Zamagni
2003).
According to such notions, CSR is an instrument of governance that facilitates
the compliance of a possible ‘‘encounter’’ among actors inside/outside the firm, and
governance become simplified when trust in the management and/or the entrepre-
neur increases and even more so when the same trust is repaid by the right results,
equitable and gratifiable for all (Jones and Thomas 1995).
Such a perspective signals the passage from a governance centered on managerial
and entrepreneurial aims to a multi-polar or holistic model (Sciarelli 2007) which
considers all who ‘‘matters’’ to the company and provided the foundation to a
responsibility composed of economic, social and environmental demands, which
provokes new problems.
The problems of business government2 touch on both the firm’s structural profile
as well as its processual profile. In the latter decades the two-part question ‘‘who
effectively governs’’ and ‘‘for whom’’ was enriched with the addition of a third
2
Specifically, the aspects that lead corporate governance are: proprietary asset and the composition of
the firm’s organs of government, relations and interactions among these organs (ownership, board of
directors and management), the distribution of power and responsibility to the highest levels of the
organization, the modalities of selecting and remuneration of the upper and middle management,
transparency of the acts of government and internal control, the economic and financial information

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question: ‘‘which interests should be favored’’ rendering insufficient, from a

normative point of view, the responses that come from the agency theory
(Williamson 1975; Jensen and Meckling 1976). This theory recognizes the
subsistence of a fiduciary mandate conferred by shareholders to the managers for
the management of the firm. The manager’s duty to act in the interests of the
ownership derives from this, as does his exclusive responsibility towards proprietary
investors. Because the aim of investment is to maximize its economic return, the
manager is therefore mandated to assume all of the decisions that can drive the firm
towards this outcome.3 Agency theory simplifies the description of the business’
government because it presupposes the existence of only one type of fiduciary
relationship, characterized by divergent interests between principal and agent,
which can be brought together through structures of control and through economic
incentive plans. The two principle critiques of this theory regard the concentration
of management’s attention on the rights of shareholders and on the recognition at
the highest level of an exclusively economic motivation. Such conceptual
limitations were in part overcome by the stakeholder theory4 which adheres more
closely to the role of companies in the socio-economic context. The critical junction
of governance no longer becomes the only one to ensure that the interests of the
agent and principal coincide, but rather that the management can take place with
respect to the interests of the more diversified stakeholders, as well as with those
subjects connected to the enterprise itself.5 This requires compatibility between the
maximization of economic returns of investments for shareholders and the
satisfaction of aspirations—economic and non—of all the participants in the life
of the company.
The problems of ‘‘ethical cores’’ and of the ethical foundations of stakeholder
theory have been addressed by diverse Authors. Stakeholder theory has become one
of he most important developments in the field of business ethics. This concept has
evolved and gained prominence as a method of integrating ethics into the basic
purposes and strategic objectives of the firm. ‘‘Work on corporate social
responsiveness and corporate social responsibility helped to expand the horizons

Footnote 2 continued
system, the modes and the instruments with which the decision-making processes and behaviours con-
form to the principles that inspire the functioning of the business. See Molteni 2004.
3
For a literature review on agency theory, see Mitnick (1995), beginning on page 76.
4
The cardinal rule of stakeholder theory is that ‘‘he who governs the firm must consider the rights, the
interests and the expectations of all those who may be influenced by managerial decisions and who,
conversely, may exercise their influence on the results of such decisions’’ (Freeman 1984, p. 46).
5
Regarding this citation, Jensen (2002), whose contribution is associated with instrumental theories,
reaffirms the validity of agency theory; based on over twenty years of observations and reflections on
corporate governance. At the same time, he critiques the inoperative nature of stakeholder theory which
does not offer any criteria in deciding which objectives the manager must pursue. The multiplicity of
objectives from which he can choose (in caring for all of the stakeholders), in fact, does not provide any
guide as to how to arrive at this result. In his opinion, therefore, enlightened stakeholder theory seems
more realistic, for it is a theory that seems to better take into account the importance of the stakeholders
for the survival of the firm, and is able to reconcile shareholders’ interests with those of the interlocutors
in the long-term. This theory is likewise critiqued and considered ethically inadequate with its sense of
treating people as means of making wealth rather than as ends in and of themselves (Alford 2006, p. 3).

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of our moral imagination and articulate the relationship between corporations and
ethics’’ (Wicks et al. 1994).
Stakeholder theory is considered both an ethical theory of organization as well as
a theory of strategic management (Phillips et al. 2003). In the context of stakeholder
management,6 the distinction between normative stakeholders (towards whom the
organization has a moral obligation to treat equitably) and derivative stakeholders,
towards whom there is no obligation to treat equitably, is done based on the
fundamental principle of equity, according to whom in a cooperative environment,
each participant should receive benefits equal to the sacrifices they make (Phillips
2003).
One can consider a company as a sort of ‘‘independent stakeholder-subject
system’’; all stakeholders tend to pursue a dynamic equilibrium between themselves
based on ‘‘minimum mutual acknowledgement’’ (MMA); each stakeholder ‘‘draws
up’’ his own specific ‘‘map of the stakeholders’’ and, while respecting the MMA,
tries in any case to negotiate in order to achieve a situation of strategic equilibrium
which is most favourable to their interests. These principles of general stakeholder
theory consider the business as one element within a broader network and confirm
the importance of relationships and trust between diverse interlocutors (Rusconi
2006).
In this sense, stakeholder theory, which introduced the concept of equity
(fairness) and of the just treatment of diverse interlocutors, ‘‘also becomes an ethical
theory, in which values and principles of moral nature are recalled’’ (Sciarelli 2007,
p. 13). The concept of fairness recalls principles and values of a moral nature, which
are necessary to supplement or integrate scarcity in a form of governance that is not
effectively disciplined towards a juridical orientation and towards prominent market
forces, so as to balance the conflicting interests of diverse participants. These last
factors have and ‘‘have to do’’ with altruism, moral gratification, the ‘‘logic of
happiness’’ (Baldarelli 2005), satisfaction, gratuity and gifts (Gui and Sugden 2005;
Bruni 2005) and the honor of such behaviours (Brennan 1994).
Ethics among strong and weak interests, inasmuch the doctrine and practice is
oriented towards the decision between right and wrong, represents an effective and
necessary response to real demands of present and future corporate governance.
This approach opens the way towards an application of ethical values in
corporate choices. This is translated into the model of CSR-social-responsiveness-
issues management7 in which the principles of solidarity and trustworthiness are
reconciled and enmesh themselves in diverse levels of commitment correlated with
the typologies of relations with stakeholders.
Nevertheless, such a framework rests on the disassociation between ownership
and government of the company, which is typical in the United States but rare in
other contexts—especially in Italy.

6
Stakeholder management is built around individuation, in both the classification and in the management
of relationships with diverse interlocutors; that is, in the application of stakeholder theory to the business’
government.
7
Issues management as an instrument for improving the capacity of the firm by discovering the emergent
social problems and responding to them with specific programs of activity (Carrol 1993).

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Therefore, other important contributions that help to explain the relationship

between CSR and governance and offer an interpretative key regarding SMEs come
form the stewardship theory. ‘‘Founded on psychological and sociological
traditions, stewardship theory represents an alternative model of motivations and
managerial behaviours’’ (Davis et al. 1997, p. 43), based on a concept of Man that is
diverse from the theory of rational choice. Here, Man is moved by a complex of
motivations that are at once economic (extrinsic and tangible), social, and emotive
(intrinsic and more difficult to quantify). The Authors comparatively analyze
agency theory and stewardship theory to demonstrate the necessity of clarifying the
two approaches’ behavioural and situational premises. The link, the degree of
commitment and of identification with the firm and the way of exercising power in
the organization (in agency theory power is institutional and derives from a covert
role; in stewardship theory power is personal because it is founded on the authority
assumed by the steward) constitutes the two subjective factors that distinguish the
manager from the steward. Under the objective aspect, the difference is one between
a directional philosophy founded on control and one founded on involvement, such
as between an individualistic culture and a cooperative (collectivist) culture, and a
greater level of democracy (distribution of power inside the firm). Thus, the
Authors’ principle contribution is that of developing the theme of motivation and of
having substituted deterministic conclusions (absolute validity of one theory or the
other) with situations that vary according to the choices made by the owners and the
mangers. Such a situational and contingent approach can be adapted to SMEs in
which the contingent variable linked to the entrepreneur influences the nature of the
relationship of government inside and outside the firm, and on the governance of the
company itself. Stewardship theory is based on an orientation of cooperative and
non-conflictual government, founded on trust and oriented towards the long-term.
Attention shifts, in fact, to motivational and relational aspects which is well adapted
to the vision at the core of a firm’s mission and of the system of government typical
for small businesses that are socially oriented. In this context, the vision of the
problems of corporate governance is strongly linked to human nature or, rather, to
how he who governs reads the values of the human beings who are committed to the
business. ‘‘To evaluate the conditions on which the firm can cultivate an ethical and
collective conscience, one must start from the motivations that inspire entrepre-
neurial or managerial behaviour’’ (Sciarelli 2007, p. 110). It therefore becomes
essential to pay attention to the goals of the entrepreneurial subject and the
distinctions between the diverse characterizations of the motivations of those who
govern large companies and SMEs.

3 Ethics, governance and accountability in large companies

and in small and medium-sized businesses

Although the ethics corporate culture is not born in the environment of small firms,
which have been given less attention in ethics literature (Spence 1999; Tilley 2000;
Spence and Schmidpeter 2003), it finds its own matrix in the very specificity of the
motives and the values that guide the policies and the actions of the small-scale

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entrepreneur. There are three essential motives: the influence of the subjective
sphere, which in the small firm is maximized, the importance of relating to the
internal and the external, proclaimed by its limited dimension, and the social rooting
of the small business and of its creator (Del Baldo 2006a).
With respect to the manager, the entrepreneur is rarely motivated by purely
economic factors. More often, he experiences more ample stimuli under the social
profile, is characterized by a strong identification with the organization (organiza-
tional commitment) and is given personal power linked to authority, as is typical in
stewardship relationships. Subjective variables lie at the core of entrepreneurship,
which serve to explain behaviours, returns to personal characteristics and
motivations of a psychological and sociological nature (Marchini 2000).
In the sphere of typology matrix studies on entrepreneurship numerous
classifications of entrepreneurs have been drawn, based on the types of objectives
and personal characteristics they possess and strategic models (Julien 1994) have
been proposed which place the objectives of the entrepreneur among the key
variables that influence strategy next to organizational factors, the environment
(intended as global society and as sectors of activity) and production activities.
Values8 and attitudes towards the social context are central factors in the strategic
system; they are expressed by the vision and the ‘‘entrepreneurial formula’’ (Coda
1985).
‘‘Values nourish the organisation and enhance the spirit of entrepreneurialism’’
(Lamont 2002). They are like roots, which inspire the strategic orientation of
responsibility and constitute the most important source of identification inside the
firm and the primary basis of external legitimization (Cerana 2004). Competitive
positioning of the company springs not only from adapting to the binomial trade/
mission but also ‘‘from the business’ capacity to open itself up to ethical values
dominant in society, to the resulting roles and responsibilities and thus to the
necessity of a legitimacy in which factors of valorization of its image’’ (Marchini
1995, p. 114). Entrepreneurial motivations and aims are placed at the base of the
theory of social success of the entrepreneur (Sciarelli 2007).9 Success is measured
by not only the results achieved by the enterprise, but more so by the achievement of
respect gained from the surrounding community. Social leadership represents an
endpoint of entrepreneurial activity and social power finds its counterbalance in
social responsibility attributed to, and embraced by, the entrepreneur. His
understanding that the solidity of the firm’s success and the consequent relapse in

8
‘‘Values are abstract ideals of those that are considered ‘‘good’’, desirable, preferable; they don’t have a
specific object or situation and construct models that guide and determine action, scope, attitudes,
ideology or representation of itself in terms of others. Even the attitudes are beliefs possessed by people,
but are less stable and always refer to a specific object or situation. Values and attitudes influence
individual and collective behavior in many ways in the field of strategic management; those possessed by
the entrepreneur or by the management are considered among the principle factors that determine the
strategic decisions of the enterprises’’ (Marchini 2000, p. 92).
9
‘‘It is legitimate to hypothesize that the entrepreneur transfers a large part of himself into the firm, and
that his fundamental objective is to produce a strong firm, one that is able to develop and to ensure the
respect and admiration in competitive circles around which it operates, as well as in the larger socio-
economic context in which the business plays a part’’ (Sciarelli 2007, p. 117).

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terms of social power is also founded on respect for both economic balances and on
moral values (Quinn 1997).
Large corporations usually separate ownership and control, and dissociate
between the figure of the business owner and the entrepreneur, replaced by a
delegated manager.10 The different interests of the owner and the management elicit
problems of practice and of control of the same proxy, inside of which the system of
shared values becomes central and the opportunity to balance/reconcile the interests
and powers of the diverse protagonists in the life of the firm. The search for the
values that provide the foundation to the proxy manager and to how his decisions
are put into practice has recently tended to view ethics as the key factor. The
majority of top men in large firms consider it a factor of success and demonstrate
that they are sensible towards social responsibility and business integrity
(Longenecker 1989; Longenecker et al. 2006), which is no longer an option but
an indispensable element for the creation and maintenance of positive relationships.
Even if the CSR has yet to factor into the value structure of the entire management,
it nevertheless increases its orientation towards an ‘‘exchange of abilities.’’ This
model, imported from the Anglo-Saxon world, increases the space of dialogue on
the terrain of governance and of competences and capabilities between the
enterprise in the for-profit sector and non-profit organizations. Fronts of collabo-
ration on projects and communal interventions are increased, there is a greater
generation of multi-tasking managers—who are carriers of supportive values—as
well as the number of top-level executives that move to the third sector.
In large companies, due to the diverse grade of identification between the
enterprise and the manager, and the non-persistence of the rapport with the
enterprise, success fulfills an intermediate or instrumental aim. The proxy finds it
difficult to define the subjects he is to promote, in fact, the entrepreneurial aims.
Trust is cemented in the achievement of durable economic results for the
shareholders, often negating the ‘‘luxury’’ of ethical principles and objectives in
the company’s management. Short-termism (Hosmer 1995) is privileged over the
construction of long-term values, and is connected with the firm’s image and with
the improvement of relationships among all of the stakeholders.
Regarding ethical principles, the manager may not have much discretion or may
encounter limits. Even SMEs experience ‘‘pathological’’ situations (subordination
of personal interests and/or family to that of the company, limited moral and ethical
depth of the firm’s manager). Nevertheless, for the entrepreneur, the pervasiveness
of ethical values in the company’s decisions is maximized. ‘‘In SMEs the owner-
manager is both the driver and implementer of values. Managers exhibit their
personal values through the exercise of managerial discretion and SMEs’ owner-
managers has the autonomy to exercise such discretion.’’ (Hemingway and
Maclagan 2004). For the owner-manager, the link between the company’s success
and his own is personal and more closely visible with respect to that which is
10
‘‘It is possible to refer to different sides under the profile of the rapport between ownership and
government of the enterprise, separating the context of the ‘‘public company,’’ prevalently North
American, from that of the ‘‘family business’’ that is very diffuse in Europe. One can easily imagine that
in these two cases, different levels of difficulty are assumed with respect to social responsibility and the
introduction of ethical principles in corporate management’’ (Sciarelli 2007, p. VIII).

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realized in the contexts of proxy entrepreneurship and of public ownership. This

aspect, together with other factors typical of SMEs (independence, polyvalence, and
prevalence of personal and informal relationships) render the path from the ethics in
the firm to the ethics of the firm more arduous for large-sized companies. This also
stems from the fact that examples of top managers capable of arousing emulative
behaviours and of transmitting to the whole organizational body values coherent
with social and ethical profiles are less visible. And while there is a lack of will at
the top of the enterprise, typical instead of small-sized firms is to measure the long-
term benefits (Zamagni 2007).
In small businesses, the transmission of values is simplified by the flexibility and
thinness of the organizational structure. The ethical principles are diffused through
decisions of people who are influenced by strong moral values (trust, loyalty,
equity), and who often have an innate attitude to perceive the ethical dilemmas
inherent in such decisions and to evaluate the sustainability of their ethical choices
for maintaining the firm’s equilibrium—attitudes further reinforced by the adhesion
to the practices and the instruments formalized by the CSR (codes of conduct,
ethical codes, social/environmental/sustainability reports, etc.).
Ethicalness towards the stakeholders on the part of the top management/
entrepreneur also implies accountability and transparency as an essential
prerequisite for the correct working of the economic systems (Rusconi 2006).11
The Author placed direct accountability documents12 within the context of
stakeholder theory highlighting the business. Accountability documents serve to
orient the plurality of stakeholders towards betterment in their decisions:
• illustrating the vision that the firm has about itself, about the world in which it
operates and exists (for example, across codes of conduct and regulation);
• explaining the characteristics of its own governance and on its measurements, so
as to reduce or mitigate conflicts of interest between shareholders and managers
who are co-present in the strategic management (for example, providing
information on the remuneration of top management, on the presence of
effective independent administrators, on the organs and instruments of internal
audit, and on the movements of stocks owned by administrators);
• providing information about the processes of coordination with the stakeholders
and their economic successes (production and distribution of added value
statement), on private social costs, on the social costs assumed, on the
internalized social proceeds and on the externalized private ones), as well as
trying to explain this information in economic terms to make the costs that the
firm is supporting understood, so as to effect the assumption of a specific line of
social responsibility;
11
In the context of historical studies about social accounting in Italy one can cite Terzani (1984),
Matacena (1984). For an ample review of the different contributions, see Baldarelli (2005, pp. 19–59).
12
Direct accountability is found in documents which are published specifically and exclusively to ‘‘give
an account for’’ at the end of the year on the fulfilling of its own responsibilities, typically that which
takes place in teh financial statement and the social accounting. Indirect accountability in documents
which, like ethical codes, inform the stakeholders of what the company plans to do (above all in terms of
behavioural rules), has to respect its duties in check on the conformity with the codes resulting indirectly
from the social accounting. See Rusconi (2006).

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• valorizing and monitoring intangible resources (relational, human and organi-

zational capital).
In this context, accountability—if it is conceptualized as an informative system
that facilitate dialogue and coordination among the management/entrepreneur and
the principle internal/external interlocutors—produce reports that are applied as
relational and strategic instruments (among the organization and interlocutors,
which enable forms of listening and feedback) and as vehicles for reciprocity. They
are able to be utilized to ‘‘give accounts and request accounts’’ of the mission, to
converse and to ‘‘plan’’ with all those who contribute resources in their varied
forms, to produce information on economic externalities and not those generated
and assumed by the firm. Their strength and their ability to become real tools to
govern relationships depend, however, on the spirit with which they are realized,
how they are morally sustained, and how they are codified. While the social
orientation of the firm and its reflection on accountability (Gray et al. 1996) is
simplified in small and medium-sized firms, in large businesses these instruments,
together with the institution of specific figures (ethics committees, sustainability
controllers, ethics officers, CSR officers) often represent the only means of creating
consent around the correct delegation of powers, to develop an ethical means of
training employees, to create a space of dialogue and of comparison and to establish
emulative processes, overcoming bureaucratic obstacles and the logic of the budget.

4 CSR, governance and SMEs: the empirical framework

The increased attention towards CSR and SMEs is attributed to a more generalized
interest in sustainability that promulgates socially responsible management at the
global level. On the one hand, this interest was heightened at the European level
after the Council of Lisbon in 2000, which specifically addressed SMEs.
Comparative analyses confirm the superior diffusion of CSR compared to large
firms. At the same time one can underscore the fact that SMEs’ predominantly
informal approach (‘‘sunken or silent CSR’’) does not have to lead to considering
CSR a prerogative of the former (Russo and Tencati 2006; Perrini et al. 2006); the
proactive orientation of SMEs is thus relevant (Luetkenhorst 2004), even if it is not
explicit (Matten and Moon 2004; Spence and Rutherfoord 2003; Longo et al. 2005;
Mandl 2006) and attests to a sustained socio-competitive creativity.
On both the national and international levels, there emerges the need to deepen
the understanding of the motivations of the small firms’ commitment to CSR
(Morsing 2006) and to provide guidelines and instruments to aid SMEs adopt and
communicate socially oriented policies (Castka et al. 2004). At the same time, the
need to adopt a diverse perspective with respect to conventional theories is
confirmed and the necessity to bring to light specifics of SMEs (Jenkins 2004).
Among these one finds a central ethical orientation and the entrepreneur’s values.
One relevant aspect that emerges from the researches conducted on the diffusion
of CSR in SMEs (MORI 2000; Joseph 2000; European Commission 2001, 2002a, b;
European Union 2004; Molteni et al. 2006) is, on the one hand, that the process of

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orientation towards CSR normally is promoted by the top members of corporate

government and, in particular, by the owner-entrepreneur and depends on his ethical
orientation and values (Vyakarnam et al. 1997; Jenkins 2006a). On the other hand is
the importance of peculiar approaches to CSR, centered on a logic of SMEs’
involvement in networks or based on membership in specific districts (Molteni et al.
2006; Battaglia et al. 2006; Ørskov 2006; Kromminga and Dresewski 2006; Baldarelli
2007). The participation of the SME in networks characterized by the presence of a
plurality of interests, both public (local organizations, chambers of commerce,
universities and research centers) and private (trade associations, non-profit organi-
zations, credit institutions, professional orders), facilitate the implementation of
actions and programs of socially oriented development of SMEs and of the local
environment in which they are inserted (Fugazza et al. 2006; Lepoutre 2006).
Some particular aspects emerge from the research conducted in this regard. The
first concerns the importance of an entrepreneur’s sense of belonging and
membership in the community, which behaves like a launch pad for the
experimentation of policies imprinted by CSR; the second concerns the importance
of support by institutions, local authorities and trade associations to create a
platform for the sustainable development of the local community. A third one
concerns the contribution of CSR in terms of increasing the social capital of the
SMEs (Spence et al. 2003), of participating in the construction of the common good
(Spence and Schmidpeter 2003), of contributing to the sustainability of specific
territories (Del Baldo 2006b, 2008).
Another element of interest is the influence of the practices of CSR on the strategic
profile, which is manifested overall in terms of the development of a culture of
responsibility. Direct involvement in such problematics helps to elaborate or to rethink
the mission, to formulate new strategies towards certain categories of stakeholders, to
stimulate the introduction or the revision of the ethical code, to increase the attention
paid by the board of directors towards the themes of CSR, to promote modifications to
the internal audit system or to introduce new organs of control.
A third trait is the capacity of the instruments of CSR to act as a driver for
sharpening certain aspects of the system of corporate governance, for responding to
the demand for accountability, and for developing a strategic information system.
Regarding the performance indicators expressed through international and
national standards (GBS 2001; GRI 2002, 2006, 2008) concerning the effects of
CSR on corporate governance, positive signs emerge, especially in terms of the
space given to the representation of minority shareholders and to independent
directors, frequency of meetings of board of directors, renewal of organs of
government, exceeding the level of compliance and protection of the petitions of
stakeholders. These traits make the divide between the large and small businesses’
involvement in CSR less profound and significant. At the same time, it underscores
the successful trend that the typical culture of patronage based on the centralization
of responsibility and the traditional closed nature of family-owned SMEs is moving
towards incorporating the participation of external subjects.
Although the path towards an emersion in best practices must be intensified, most
small firms already ‘‘do the right thing’’ or, at least, ‘‘do many good things’’,
adopting mild instruments and instituting simple rules that establish the beliefs of

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the firm, predispose rapports on best practices or articulate a code of responsibility

and principles of governance. And where the communication of CSR is more
structured, as in the actual experiences of the firms analyzed below, they help to
overcome the limits of financial and economic information of balance and the
fragility of traditional accounting and informative systems, and open new paths of
growth.

5 Excellent stakeholders relationship and social engagement profiles

in Italian SMEs

5.1 Research objectives

The study of the field first attempted to identify the central value present in the
companies interviewed, its translation into a mission and, consequently, the impact
on relationships with stakeholders, its reflections on the structure of government,
and the presence of instruments of accountability.

5.2 The propositions posited at the base of this study are the following:

Proposition one CSR reinforces and facilitates the convergence between mission,
governance, and accountability; the orientation towards CSR is therefore reflected
positively on the governance of SMEs.
Proposition two Among SMEs, the orientation towards CSR begins with the
entrepreneur and is a manifestation of both the values tied to personal goals as well as
the values tied to cultural and social variables in the territory from which he comes.
First, this requires attention to be focused on the elements of the trinomial
mission-corporate governance-accountability and on their reciprocal relations,
departing from the assumption that ‘‘in every enterprise there exists an explicit and
coherent coordination between mission, governance and accountability’’ (Matacena
2005, 2008). Mission is used here to mean an explication and a synthesis of the
company aims; corporate governance as the command structure and of the
government present in the company; accountability as the informative responsibility
of the company. Matacena’s model is herein utilized to analyze the relations and the
coordination between the aforementioned elements and is preferred over both the
stakeholder approach and the stewardship view because the Author extended its
contextual applicability to diverse typologies of businesses, including small and
medium-sized firms, which are the objects of this study. He distinguishes ideal types
of businesses in terms of one-to-one relationships between mission and corporate
governance.13 Such relationships define the level and content of accountability of
13
The Author distinguishes, on the one hand, between lucrative businesses (for profit companies, in
which the assumption of specific forms of social responsibility is tied to the maintaining conditions of
legitimacy and of consent in their actions), co-operative and mutual businesses (in which responsibility is
connected to principles of solidarity), social businesses (non profit enterprises, in which the same ends are
followed), and small and medium ‘‘territorial’’ businesses. For the first type, social responsibility is

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every specific ideal type of business. Among the Italian experts who research social
responsibility, the Author, who defines the business as a socio-economic system,
provides interpretive cues on how to maintain equilibrium between productive
systems and human systems, which are particularly brought close together in small
and medium-sized firms. He equally maintains that economic responsibility weighs
on all of the firms present in the market. What is diverse, however, is their social
responsibility, because the businesses that make up the market are diverse in both
their mission and their governance. Therefore, specific missions, with their relative
corporate governance, determine both the business’ level and type of accountability.
Second, this implies that one must identify those aspects of the system of
governance in SMEs which draw on the positive actions that orient the models of
behaviour of the firms who are capable of realizing socio-competitive synthesis
(Molteni 2004). Socio-competitive synthesis is itself derived from a stable and
structured approach to CSR, incorporated in its own strategic orientation, in its
underlying mode of governance and its system of internal and external reporting.
The typology elaborated by Molteni and Lucchini (2004) was utilized to place the
behaviours of the firms in the sphere of a grid of codified readings. Lamont’s (2002)
theoretical diagram was employed to individuate the most relevant aspects of a
‘‘spirited business’’.

5.3 Methodology

The following study was developed according to a qualitative approach and a

methodology based on field case studies.
The fieldwork approach, as suggested in the literature (Adams 2002) facilitates
the involvement of the researchers of business economics in the actual activities of
the companies to study the processes and the organizational practices of social
accounting. This methodology consists of individuating the internal factors
(organizational structures, internal micro-processes, attitudes, points of view,
perceptions) that, together with the corporate characteristics (size, sector, age of the
business, etc.) and the general contextual factors (economic, political, cultural, etc.),
explain the complexity of the social statement and that, other than influencing the
nature and the extent of the corporate social reporting and of the social engagement
profile, impact the system of governance.
In general terms, the case method14 has the double aim of detailing the principle
characteristics of the phenomena, and to both understand and analyze the dynamics
of a given process. Under the methodological profile, the development of a case
study represents a ‘‘strategy of research that is concentrated on the comprehension
of the dynamics that characterize specific contexts’’ (Eisenhardt 1989, p. 532). The

Footnote 13 continued
considered a specific quality for entrepreneurial activities. In the second and third, the mission is prev-
alently concerned with social solidarity. The third type is characterized by territorial vocation, that is, by
the fact that their relationship with their surrounding environment and the coordination with all actors in
the market is a condition of their own economic development.
14
On an analysis of cases see Yin (1994, 2003); on specificities of research on small businesses see
Silvestrelli (1986), Ferraris Franceschi (1993).

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qualitative approaches and the forms of research in action (Fayolle 2004) allow for
one to describe, explain and understand the entrepreneurial situations in their own
dynamics and in their own evolution.
Specifically, the case method constitutes a precious instrument for ‘‘capturing’’
the diverse manifestations of socially responsible government as well as of
stakeholders relationship and to utilize the results both with a cognitive aim as well
as with normative merit; such ‘‘cases for CSR or normative cases’’ can indicate best
practices and to suggest criteria for further action (Craig 2003).
Indeed, it is the opinion of those who write that the utility of the cases also reside
in the possibility of valorizing the experiences of entrepreneurs who are ‘‘champions
for corporate social responsibility’’ (Jenkins 2006a, b)15 and of recognizing the
merit of people and businesses who teach them, while not undervaluing
the possibility of a path towards CSR that starts ‘‘at the base’’ and is concreted in
the territory, favoring the imitation of best practices and raising awareness of the
operators that converge inside small businesses.
Specifically, the study was centered on the analysis of seven Marchegian SMEs16
(multiple/collective cases study approach) that belong to mature and emergent
sectors, characterized by different social and environmental contexts, and represent
the entrepreneurial and economic fabric of the region.
Two clarifications are necessary regarding the firms selected, with specific
reference to their size and geographic area in which they are found.
First, the businesses considered are predominantly medium-sized (in both
the number of workers and quantity of sales). Nevertheless, as one will see in the
following section, the excellence of their behaviours can be found in even the
smallest firm in this study (BoxMarche, 50 employees). Such businesses are not
cited and are completely or predominantly family-owned (six out of seven); they are
typical of the ‘‘family businesses’’ found throughout Italy. They do present,
however, managerial assets and evolved organizational structures and perform
competitively.
Secondly, the businesses come from a particular region in Italy, the Marches,
which is characterized by a thick fabric of diffuse entrepreneurship, a typical
example of the development of local systems and districts. They constitute a classic
example of the ‘‘Third Italy’’ model in which the development of SMEs is
established in small centers, without upsetting the pre-existent agricultural and
artisan vocations, and preserving socio-economic fabric of relationships anchored in
the territory. This region hosts numerous cases of entrepreneurial excellence tied to
a specific ‘‘genius loci’’ and it is on this basis that it is possible to trace a model of
‘‘territorial CSR’’.

15
‘‘(…) This also led many to be external champions of CSR, promoting the agenda because the truly
believed in it (…) It has a dedicated change-agent or ‘‘champion’’ in its owner-manager whose own
values have influenced the direction and strategy of the company’’ (Jenkins 2006a, p. 8, 13).
16
In the definition of an SME, along with the attributes defined by the Recommendation of the
Commission of the European Community on 6 May 2003; 2003/361/CE, the qualitative parameters were
considered (independence of the economic subject, connection between ownership and control),
following a setting diffusely adopted in the studies and in the research on small-sized businesses.

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Table 1 The empirical study: phases and choices

Phases Object of the choices Motivations of the choices

Specifics of industrial Wood-furniture-interior decoration; Traditional and mature sectors, and

sectors referenced paper industry; engineering, machine emerging sectors, characterized by
tools-components, metallurgy different social and environmental
industry; electrical and electronics impacts, representative of the
equipments, automatic equipment entrepreneurial fabric of the Marches
and plants-design-robots (high Region (Italy)
technology); financial and banking
services
Choice of the Small and medium firms Cohesive/multi-certified firms
enterprises
Selection of areas and Top level of the company Entrepreneurial/managerial team
organs on which (entrepreneur—founder/successor— directly involved in corporate
attention was focused managing director, general manager) governance
Structuration of the Administration of a semi-structured Qualitative/quantitative analysis and
research instruments questionnaire (paper and pencil triangulation of methods
interview method), prepared
interviews, note-taking, tabulation,
transcription, validation and
correction, telephone conversations
and contact by e-mail

Thus, because of these attributes of the specific group of companies and of their
specific socio-economic context, the findings are valuable in this perspective.
The analysis was based on the collection of information acquired in May 2008
from diverse depth semi-structured interviews with the top entrepreneurs/managers,
on direct observation during the visits to the selected enterprises, and on the analysis
of available documentary sources (content analysis). The research was conducted at
the micro-level, i.e., it was grounded in the perspective of owner-manager/managing
directors, whose personal values influence the strategic direction a company takes
(Burns 2001), and shows how CSR is balanced with the daily activities of the
company.
The phases across which the empirical study was implemented and the decisions
formulated are represented in Table 1.

5.4 The results

5.4.1 SMEs Marchegian ‘‘champions’’ of CSR

As indicated above, the businesses were selected for their excellence relative to
sensibility and to their dedication to CSR. Specifically, the selected enterprises are
characterized by the following attributes:
• presence of a framework of ethically connoted values, and values shared by the
leaders of the firm (entrepreneurial proprietor/family, managing director) and
diffuse throughout the organization;
• adoption of strategies of social responsibility with an adhesion to CSR codes;

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• adoption of processes of social and environmental certification;

• regular publication of social and environmental reports;
• fulfilment of ample and significant initiatives of social responsibility both on the
local, national and international level;
• recognitions/awards received for their robust activities of social responsibility.
• sensibility to the diffusion of best practices of CSR in the local and extra-local
context in which they are found.
In short, these aspects refer to the following declinations of CSR:
• presence of a philosophy of governance and of socially oriented management,
which is reflected in its mission and its governance;
• production of initiatives and strategies of CSR;
• communication of CSR and development of systems of accountability.
The principle attributes of the seven enterprises are synthesized in the table
below (Table 2).

5.4.2 The forms of social engagement

A first level of analysis was focused on the identification of common lines (Table 3)
relative to the core values and to the behaviours of the entrepreneurs and top-level
managers, to the reflections on their mission, to the presence of instruments of
accountability and reporting of CSR, to structural characteristics and dynamics of
governance.
All of these businesses exemplify a strategic and structured approach to CSR and
align business values, purpose and strategy with the social and economic needs of
stakeholders, while embedding responsible and ethical business policies and
practices throughout the company. CSR is experienced as a ‘‘way of doing
business’’; is about operating and managing the business in a way that is sensitive to
the external and internal environment. Everyone in the company is aware of the
company’s commitment to CSR. The companies have an internal change-agent, a
‘‘champion’’ in their owner-manager, whose own values influence the strategy. In
all of the companies interviewed the owner-manager was directly responsible for
directing the CSR principles and activities of the company and moulding the
company culture in his personal values and beliefs. All interviewed felt that their
values were essential and a powerful driver of ethics and standard in the company.
The entrepreneurs are also strongly involved in the well-being of the local
community where they lives and where the company is placed.
A second level of analysis is relative to the definition of the positioning of the
firm with respect to the map of orientations towards CSR. The firms considered
(Table 4) possess characteristics of ‘‘cohesive’’ firms and of ‘‘multi-certified’’
firms.17

17
Molteni and Lucchini (2004) identify a typology of orientations among Italian firms, based on two
coordinates (intensity of the phenomenon—that is, the socially responsible behaviour—and qualitative
aspects linked to the practice and to corporate behaviour): cohesive firms, multi-certified, aware, able to
be mobilized, skeptical.

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Table 2 Firms characteristics

Company title—Registered office—Year of Instruments of implementing and communicating
constitution—Sector—Corporate purpose— CSR, year introduced
Employees—Total sales (2007)—Economic subject

BoxMarche Spa, Corinaldo (AN); 1969 ISO 9001, year 2001; OHSAS 18000-SA 8000, year
Paper industry: design and production of packaging 2003; Social report, year 2003; Global report,
in food and houseware sectors year 2006b
50 employees; 11.000.000 euro; open family-
owned businessa
Banca di Credito Cooperativo di Gradara, List of company values (‘‘charter of values’’), year
Gradara (PU); 1911 2002; Social report and mission statement, year
Banking services 2002; Code of ethics, year 2004
94 employees; 16.200.000 euro; co-operative
society
Gruppo FAAM Spa, Monterubbiano (AP); 1974 Quality certification ISO 9000 and Vision 2000,
Engineering, metallurgy industry year 1997; Code of ethics, year 1999;
Environmental certification EMAS/ISO 14001,
230 employees; 60.000.000 euro; diffuse year 1999 (first in its sector in Europe); Social
shareholding (not cited) report, year 1999; Environmental report, year
2001
Gruppo Fbl Spa - Della Rovere Spa, Certification ISO 14001, year 2001; Social report,
Pesaro (PU); 1976 year 2005
Wood-furniture-interior decoration
137 employees; 38.000.000 euro; open family-
owned business
Gruppo Loccioni, Angeli di Rosora (AN); 1969 List of company values (‘‘charter of values’’), year
Electrical and electronics equipments, automatic 1969; Code of ethics, year 1996; Social report,
equipments and plants-design-robots (high year 1997; Intangibles impact, year 1997; Cause
technology) Related Marketing, year 1999
290 employees; 45.000.000 euro; open family-
owned business
PRB Srl, Fermignano (PU); 1972 Environmental certification EMAS/ISO 14001, year
Metallurgy industry (metal galvanizing) 2001
160 employees; 20.000.000 euro; closed family-
owned business (first and second generation)
TVS Spa, Fermignano (PU); 1968 Quality certification ISO 9000 and Vision 2000,
Metallurgy and mechanics industry year 1999; Social Accountability Standard-
SA8000:2001, year 2004
276 employees; 57.000.000 euro; closed family-
owned business (first and second generation)
a
The open family-owned economic subject can be defined as the economic subject characterized by the
presence of a social team that is not formed exclusively by members of the entrepreneurial family (closed
family-owned economic subject), but also extends to external subjects not tied to kinship bonds
b
The Global Report contains asset and liability statement, social and environmental report, and an
analysis of intellectual capital

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Table 3 At the ‘‘core’’ of social commitment & engagement

Key characteristics Links

Strong system of values Diligence, laboriousness, equity, trust, honesty,

Presence of a cohesive economic subject around simplicity, integrity, parsimony, sense of family,
base values team spirit, enthusiasm, energy, responsibility,
communicative nature
Leadership fully believes in and lives those values
and purposes
Orientation towards CSR strongly desired by the The top-level entrepreneurial/management
entrepreneur, visible and integrated in the commitment & engagement represented in ‘‘the
enterprise, tendency to social success first best practice’’
Purpose, vision and values are constantly reinforced Organization aligns and articulates explicitly its
through culture and processes and continuously purpose, vision and values consistent with
communicated throughout the organization and responsible business practice
beyond Effective stakeholder engagement processes
Affiliation in geographical zones historically Rooted and engaged in spreading well-being in the
characterized by a solid rural tradition, typical local community in which the firm is located
expression of Marchegian culture
Decision-making process based on collaboration, Organizational strength: participation. Climate is
sharing and transparency. Relational approach social and organizationally spread. Values,
centered on trust value mission, objectives constantly reinforced across
the culture and processes, articulated in a flexible
and organic structure
Instruments of accountability and communication Values and mission explicated and communicated
of the socially oriented commitment that ensure consistency in decision-making and
avoid value-gaps
Cohesion to stakeholders as a source of mobilizing Growth of intangible capital
resources with far-reaching consequences
Affiliation in local, national, international networks Desire to testify to and understand best practices
of CSR adhering to multiple occasions of exchange and
comparison (workshops, forums, meetings,
testimonies, etc.)

Table 4 Patterns of orientations

BoxMarche Spa Cohesive firm
of the firms
BCC Gradara Cohesive firm
Gruppo FAAM Spa Cohesive firm
Gruppo Loccioni Cohesive firm
Gruppo FBL-Della Rovere Cohesive firm
PRB Srl Multi-certified/naturally cohesive
TVS Spa Multi-certified/naturally cohesive

In the first group of companies CSR is translated into business principles. CSR is
the practical implementation of a company’s ethos.
The fronts of engagement and the forms of communication of CSR are
systematic and creative and manifest themselves in a variety of forms:

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 M. Del Baldo

• involvement, valorization and formation of employees;

• transparency in processes and in the modes of governance, presence of formal
and informal instruments and procedures for internal and external informative
disclosure;
• manufacture of products of social and environmental merit;
• vast range of operations with the local community (donations, sponsorships,
promotion and production directed to projects of social, cultural, environmental,
etc. merit);
• relationships with non-profit organizations and associations;
• stable and durable collaboration with clients, providers, and financial partners;
• attention to the global environment, across the activation of procedures and
programs of environmental protection and of quality of life (recycling trash,
reduction of emissions, saving energy, etc.).
On the whole, such behaviours increase the level of reputation and of consensus,
and augment quali-quantitative development which, at the same time, ‘‘depends on’’
and ‘‘returns to’’ the territorial context in which the businesses are found. The
understanding of benefits extracted counter-distinguish the Corporate Social
Opportunity mentality (Grayson and Hodges 2004) which characterizes these
businesses. Eventual forms of incentives are not important: these firms ‘‘run by
themselves,’’ they follow a path, understood the fact that things can be seen with
different eyes to obtain great outcomes.
The firms that fall into the second group are located among the ‘‘multi-certified’’.
The typical forms are found in their client offerings and in their requests to their
own suppliers for ethical, social and environmental guarantees (green purchasing—
ISO and Vision certification, quality of products, etc.). Although the orientation is
more focused on procedural forms, diverse dynamics appear: they are multiplying
the fronts of engagement towards CSR; they research more structured forms of
communication (projects to implement their social and environmental reports); they
implement modifications to their system of government (familial succession; new
top figures—outside of the family—general manager, managing director). The
providing of measures of support (fiscal incentives, ratings for the participation in
public competitions and bands for favorable financing, personalized consultancy,
adhesion to moments of exchange of good experiences) can accelerate their
development.

5.4.3 CSR and governance

The third area of reflection more closely concerns the aspects connected to
governance, which are presented below.
• Where there exists a family-based economic subject, even the non ‘‘director’’
share moments of reflection around values, strategic orientation of the firm and
the rapport among members of the family-based government and stakeholders.
• In nearly all of the cases there was a strategic committee, in whose meetings
those with distinctive competences who are responsible for the firm’s
functioning participated.

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• Managers outside of the family were present (even in the position of

shareholders): the figure of an authorized and ‘‘illuminated’’ general manager/
managing director performed with efficacy the role of the entrepreneur’s alter
ego and participated in the definition of strategic plans in which CSR was a
substantial element.
• Even in the absence of a supervising organ on the governance (audit committee)
there were forms of ‘‘social control’’.
• In some enterprises (BoxMarche, Gruppo FAAM) the understanding of the
necessity of separating house organs of governance and ownership was
maturing, which contributes to the structure’s managerial evolution.
• In diverse cases (FBL, TVS, PRB) the cohabitation and the generational passage
were facilitated by a sharing of personal and familial values, as well as values of
the firm, that found their synthesis in practice and in the instruments of social
responsible management.
• The frequency of meetings of board of directors is directed towards minimizing
clashes and put to weekly meetings.
• The board of directors looks inside to independent councilors and minority
shareholders (including women) and is extended to representatives of
dependents.
• Tax breaks and services for partners and shareholders (specific initiatives,
promotions, dedicated services and products; one can point out, for example,
projects of formation on themes such as generational passage, tutoring
activities—i.e. FAAM’s business school—or facilitations and benefits institu-
tionally provided to co-operative credit bank clients).
• Forms of participation in capital on the part of dependents are favored; spin-off
processes such as the Gruppo Loccioni’s way of growth, in which the birth of
new enterprises often comes through co-opting talented business collaborators,
and supporting them in assuming entrepreneurial roles.
• Multifarious are their initiatives, of which one can report the most relevant.
They are financed to make the function of the government house organs more
transparent, beyond the aforementioned adoption of the cited instruments of
CSR: sharing all of the management data with associations/shareholders/
financial partners (BoxMarche presents an ‘‘enrichment’’ of the Global Report,
addressed to the banks containing the prospective triennial economic plan);
occasions of yearly open-house meetings during the year aimed at specific
categories of stakeholders (Gruppo FBL); regional and local meetings (TVS);
holding stakeholders forums in which the results achieved in the past financial
year are presented and objectives for the future are discussed.
• Value orientations and ethical principles that guide strategic decisions constitute
the principle facets of the process of social accountability and reinforce the
organizational culture. Even in the absence of specific centers of responsibility
(CSR committees), limited to a few figures or operative ‘‘nodes’’ of social
management (i.e. TVS’ working group Social Lab), the flexibility and cohesion
of the structure, together with the direct involvement of the entrepreneur—the
first ‘‘managerial agent’’—makes the process of corporate social reporting and
the development of specific skills easier.

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• Retribution and the compensation of business administrators, such as the

distribution of profits, are illustrated in detail in the production statement and in
the allocation of value added.
• The instruments of accountability facilitate the transition from a state of
listening to a proactive state (entrepreneur/management guided by stakeholders).

5.4.4 Mission-governance-accountability in ‘‘spirited businesses’’

That which follows (Table 5), corresponding to the most significant elements
pertaining to the relationship between values, mission, social engagement and
commitment, and qualification of governance, some testimony—in the words of the
corporate protagonists interviewed—is offered.
The centrality of CSR with respect to the development of these firms allows one
to connote them as ‘‘spirited business’’ (Lamont 2002) or as ‘‘CSR enterprise’’
(Kvåle and Olsen 2006).18 They are high-performing companies where competitive
success grows out of their commitment to values and to the human spirit. ‘‘Spirited
businesses’’, in other words, are ‘‘company with a soul’’ (Catturi 2006). They are
passionately committed to people and wisdom. A ‘‘spirited business’’ company
focuses on vision and values, communication, top-level management commitment,
effective tools and mechanisms of stakeholder engagement. Important principles of
a ‘‘spirited business’’ include trust, vision, courage, community, creativity, patience,
humanity integrity, diligence, enthusiasm and openness (Lamont 2002). All
companies espoused such principles when entrepreneurs/managers discussed what
CSR meant and everything that they did was marked against those touch-stones.
To offer a concrete example of such forms of stakeholders engagement, the
following provides a brief synthesis of several projects produced by one of the firms
considered (the smallest one!), BoxMarche Spa and a list of some of the awards
obtained by this company for its excellence in CSR (Table 6).
BoxMarche’s first project carried the title, ‘‘The passion for improving activities
for a responsible business model.’’ With this project, the firm participated in the
third edition of the ‘‘Sodalitas Social Award’’19 and in 2005 came in first place in
the SME category. The second concrete example pertains to the Italian Prize for the
Social Responsibility of Businesses given to 24 companies in 2005, and awarded to
BoxMarche for being ‘‘a solid reality that donates 15% of its earnings in corporate
giving, and pays close attention to the environment, research and development, and
society’’.

18
Based on empirical research conducted between 2005/2006 on a sample of 51 SMEs from diverse
European countries the Authors distinguished three categories of businesses: ‘‘the business strategy
enterprises’’, which are making a conscious effort to implement CSR and have adopted CSR as a part of
their business strategy; ‘‘the intuitive enterprises’’, which are ‘‘doing’’ CSR without having made a
conscious decision to do so. Their normal business practices coincide with CSR indicators; ‘‘the raison
d’être enterprises’’, which are ‘‘doing’’ CSR because it coincides with their business concept, i.e. the
actual business concept is philanthropic’’ (Kvåle and Olsen 2006, p. 7).
19
The Sodalitas Social Award honors businesses that operate in Italy who are distinguished for the
production of projects with high value and social content.

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Corporate social responsibility and corporate governance
Table 5 ‘‘Spirited businesses’’: attributes and case study examples
Play factors
Mission connoted by strong values
(ethical, moral, social, as well as
economic)
Values guide the decision-making Gruppo Loccioni
process in adherence to the
socially oriented vision and create generate a type of development that respects humans and the
an entrepreneurial vocation that
makes all the difference
The attention to people’s lives
creates a supportive environment
and renders possible the
maximization of creativity
Case study examples
BoxMarche Spa
‘‘Perhaps it’s a little presumptuous, but we love to define ourselves
as the agents of civilization. The small entrepreneur is a builder
(of systems, of men, of wealth); he relates himself to the world, to
his clients, to his community; he lives his passions, hopes,
dreams, plans. The enterprise is a narrative identity, it tells a
story, it constructs its own self. For this reason, it has a soul and
it has those intangible assets linked to the spirit and to the dignity
of the person.’’ (Tonino Dominici, Managing director and
shareholder BoxMarche, Nomination 2005 Sodalitas Social
Award, multi-stakeholder counterpart for the Italian CSR Forum)
‘‘Values sustain actions; actions that are positive and responsible
environment. (…) Large business ‘‘look to the quarterly reports’’
and are not disposed to sow the seed for the long term, to live on
trust.’’ (Enrico Loccioni, entrepreneur of the year 2007, Ernst &
Young Award for Quality of life)
The FAAM’s dream
‘‘The challenge of the market can be won on one’s values. FAAM
operates at all levels so as to reinforce that criteria of social,
environmental and regional respect that characterizes its
activity. The recipe of FAAM on the path to development has
Man as its endpoint. Our reality expresses the passions, valorizes
relationships, and communicates quickly to a territory attentive
to traditions, towards which it nurtures a sentimental bond.’’
(Federico Vitali, President Gruppo FAAM, President
Confindustria Marche)
BoxMarche Spa
‘‘Our Global Report is not only a report of numbers, but also of
values. It permits our stakeholders to have a dependable idea of
how the business fulfills that sort of delegation that civil society
has conferred to produce a better world for all goods, services
and human relationships. (…) First CSR, which is a fact of
‘‘faitht’’, then good governance, which is its outcome.’’
(T. Dominici, BoxMarche, Italian Oscar di Bilancio 2007)
Gruppo Loccioni
‘‘Ours is a mode of being an open enterprise from the very
beginning, born to welcome interlocutors as carriers of value;
formation, collaboration, team work are our practices. (...) From
a strong shared culture and from driven human resources can
raise the commitment for the Common Good and the strength to
face the market.’’ (E. Loccioni)
Gruppo FBL-Della Rovere
‘‘We are a company made up of people. Strong human
relationships unite the network, that throughout the years has
been consolidated, transmitting experiences and visions that are
at the foundation of our success. Our activity is the carrier of
change both in the lives of our clients and around our team.’’
(Roberto Forni, General Manager Della Rovere)
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Table 5 continued

Play factors Case study examples

Inserting everyone into the center of BoxMarche Spa

the company and rendering it a
protagonist of CSR
Holistic approach to CSR
Development of intangible
resources
The generation of profit is necessary Gruppo FBL-Della Rovere
to the success of CSR, but its
maximization is not the raison
d’eˆtre of the business
The entrepreneur-proprietor is
responsible for the principles and ‘‘He who has the economic power must be the one most
the actions of CSR
‘‘From the very beginning I have felt welcome, like a part of the
family, and I’ve been given the trust necessary to grow. I’ve
done, and I continued to do, my best to personally embrace those
same values and to experience the company like a communal
good, recognizing the entrepreneurial spirit that I’ve had the
good fortune to know.’’ (T. Dominici)
PRB Srl
‘‘The company acts as an interpreter of social and environmental
concerns, making good of its own job, generating profit in a
responsible way with respect to its economic partners, its
community and its environment.’’ (Paolini Fiorella, entrepreneur,
President Gruppo Giovani Confindustria Pesaro-Urbino)
Gruppo Loccioni
‘‘Our intangible values: imagination (to know how to create),
energy (to achieve our dreams), responsibility (for the air we
breathe, the land we walk on, the resources that we utilize, the
trust that we gain.’’ (E. Loccioni)
‘‘There are three ways of being a leader: through price, through
technology, through intimacy. This is our way. My greatest
satisfaction is when I see others happy.’’ (R. Forni)
BCC Gradara
‘‘Our bank is leveraged on one attitude: proximity, which is
physical, relational, family-oriented, oriented to our associates,
to the personalization of products and services. That means
identifying oneself with the local economy, starting from the
region and having the capacity to render it a protagonist. The
components of board of directors are exponents in the areas in
which BCC operates and it has committed itself on its own honor
to create social values for its associates and for the community.’’
(Luigi D’Annibale, General Manager BCC Gradara)
TVS Spa
responsible. We are certain that CSR grows stakeholder value,
social consensus, economic value, originating more trust and
understanding and the best transparency to governance. In this
sense, what’s central is the example top management sets.’’
(Giorgio Arvizzigno, Director of Product Development, Quality
Control and Social Responsibility TVS)

Source: our adoption of Lamont (2002)

The third relates to the Balance Oscar 2007 (Milan, Piazza Affari), in which
BoxMarche won the first prize for the category of Medium and Small Enterprises,
thanks to the 2006 Global Report, centered on the innovation of the ‘‘3Ps’’:
Products, Processes and People.

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Table 6 A long history recognitions: milestones of BoxMarche Spa

1985 Award, course of managerial education
1989 Adoption of ‘‘Quality Please’’ project (Assindustria Ancona)
1992 Club quality (Assindustria Ancona)
1995 International study exchange in the United States; meeting with JURAN (seminar,
‘‘Making Quality Happen’’)
1996 ISO certification of quality 9002
1999 Participation in the quality awards Italy
2001 ISO certification of quality 9001
2001 Honorable mention, regional quality awards Italy
2001 Quality Award San Marino
2001 Certification of the production site according to ISO norm 14000—environmental
certification of the production site
2002 ISO Certification 9001: Vision 2000
2003 Special Mention, environmentally-friendly planning—Ecopremio
2003 Quality Award Italy for SME
2003/2004 OHSAS Certification 18000—management system of health and security in the
workplace
Certification SA8000:2001—management system for socially responsible management
2004 Publication of the social balance award, 2003
2004 Riciclo Aperto award—Comieco
2005 Winner, Sodalitas social award for the category ‘‘SMEs’’
2005 CSR in pole positiona
2005 National award for social responsibility in business
2005 Recognition of benevolence, Città di Corinaldo
2006 Official Selection at the II European marketplace on CSRb
2006 Compilation of the first global report
2006 Nomination, Oscar di Bilancio 2006 (FERPI)
2006 Registration according to regulation CE 761/01 (EMAS)
2006 Adoption of the European roadmap on CSR
2006 Confindustria awards for excellence, ‘‘Business champion of the valorization of the
territory’’ section
2006 Multi-stakeholder panel
2006 Forum ‘‘Intangible Capital’’: a strategic factor for innovative businesses
2007 Winner, Oscar di Bilancio 2007 in the category of small and medium-size firms (FERPI)
2007 International Award ECMA, Pro Carton award, confectionery category
2007 Valore Lavoro prize for the Marches Region

Source: Our elaboration from BoxMarche’s Global Report 2007

a
Boxmarche is among 30 Italian firms selected by the Italian Ministry of Work and Social Policies, and
by Confindustria to be honored for best practices of social responsibility-CSR
b
BoxMarche was placed in the category, ‘‘Skills and Competence Building’’; it won the title of best
practice: ‘‘People Care-Skills Passport Project’’

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The fourth is the Confindustria Award for Excellence, given to BoxMarche in 2006,
for being a ‘‘business champion for the valorization of the territory.’’ This initiative
was promoted by Confindustria with the objective of identifying and recognizing the
capacity of businesses to be important actors in their territories, not only in the
economic-productive reality, but also as subjects attentive to social, environmental
and cultural needs of institutions, to the needs of its workers and to the ecosystem in
which they play a part. Thus, in 2007, the business obtained the Prize ‘‘Valore Lavoro’’
(‘‘Work Value’’) for the Marches Region, assigned to the 10 best Marchegian firms,
distinguished for their contribution to best practices in the quality of work.

5.4.5 The ‘‘convivial enterprises’’: the embeddedness to the local context

There are essentially three strong points of Marchegian SMEs: a rootedness in the
territory, familial synergies and tenacity. Among these the first, which finds
expression in the adhesion to and in the social consensus of the territory, construct
an emblematic aspect that makes the Marches a territory of genius loci.
The cases considered present evident profiles of that genius loci marked by work
ethics, by a strong sense of feeling like active members of one community in which
each person rediscovers the taste and the utility to work with trust. This mode of
operating and being characterizes the many enterprises who were born under
intensely local conditions but who serve as carriers of Italian creativity and talent
into the world at large. They plunge their roots into a territorial model based on
‘‘holy agriculture’’ (Fuà and Zacchia 1983) that has characterized the Marches
Region from the first half of the 1800s to the post-WWII era. These ‘‘champions’’ of
CSR, inserted into a territory rich in testimonies of socially responsible behaviours,
many of whom must yet emerge, are also due to their ability to communicate their
own engagement and to their ability to manage relationships with multiple
stakeholders. They demonstrate themselves capable of influencing and of molding
the socio-economic terrain from which they come. And this comes from the richness
and the appeal of their own virtuous testimony, called to ‘‘imitate the virtues’’.
The thoughts of one entrepreneur interviewed articulates this best: ‘‘We have an
emotional tie with the territory. We want to use our abilities to sustain the local
economy. Absolute priority is given to values, to human relations. Our activities are
not only business choices. Our ability, though we are a small firm compared to other
companies, is to card threads (through the determination to follow the ‘‘dream’’ of
an enterprise and of the environment in which it is inserted), is to pull thread
(through cohesion and collaboration inside and outside of the firm) and to stretch
thread (through the motivation that feeds creativity, understanding, sensibility, the
capacity to listen) of a network. A network made, in primis, by Men’’.
The profiles of ‘‘convivial enterprises’’ (Balloni and Trupia 2005) that emerge do
not correspond to a codified managerial model, but to a business ‘‘way of being’’ in
which conviviality is not merely a sentiment, but is an operative practice for
organization and governance. In such contexts the capacity of individual initiatives, in
absence of rigid forms of hierarchical coordination, remains vibrant. It is spurred on by
the sense of belonging (the status of the collaborators prevails in the organizational
arrangement) and on diffuse empowerment. That which is given achieves superior

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goals with respect to the forms of government that privilege the achievement of
objectives in the logic of ‘‘executiveness’’ based on a system of checks and balances.
‘‘Enlarged’’ governance and control is a sort of ‘‘effect’’ of a socially oriented
philosophy and of the relative instruments of accountability, which institutionalize
and give representation and transparency to the qualities of the firm. These last
elements signal the passage from one model of informal responsibility, still prevalent
in the universe of small-sized firms, towards a new, proactive model ‘‘from the concept
of enlightened entrepreneur to CSR policy.’’ Regarding the stakeholders, it is all about
sociality and ‘‘is strongly inspired by a sentiment of collaboration, of ‘conviviality’’’.
This is a manifestation of an attitude of learning by interacting, which translates into
planning, innovation and more generally, the capacity to improve relationships and the
territory itself, by tying multiple interlocutors together in a network that sees a good
part of its actors coming from the same territory. For example, client relationships are
characterized by an attention that goes beyond customer care; those with dependents
go beyond ‘paternalism’: the Marchegian entrepreneurs who have been able to create a
community of people who work passionately, are also loved by those who have the
fortune to work with them. Also in relationships with local and political organizations,
the search for collaboration feeds a dialectical comparison.
The second of these aspects refers to the active involvement of the enterprise in
local development, because the business’ success comes from the same steps as that
of the territory. This translates into the creation of functional networks among
businesses, Chambers of Commerce, trade associations, banks, non-profit and local
organizations—which all become nodes of a cooperative network whose end is to
develop the territory.
An examination of the economic realities of the Marchegian territory, formed
predominantly by SMEs, and which attempts to understand the essence of the
people and their history, allows one to more closely view an entrepreneurial system
constructed on solid principles, capable of marrying ethics and business and of
confronting the challenge of globalization using the categories of ‘‘good’’ and
useful. And it allows one to discover evidence of a ‘‘gentile capitalism,’’ which
expresses itself in a development model founded on the synergy between the
recuperation of the past, defense of traditional understandings, of local culture, of
the quality of the landscape and its protection for the future through research by
advanced sectors and care for the environment. It also allows one to discover an
indirect but important protagonist: the territory of the Marches.
Alongside the desire to invent new products and to make a profit, one of the
principle motivations of Marchegian entrepreneurs is the desire to do something useful
for its own community (Balloni and Trupia 2005). This is because the histories of their
businesses have always been founded on ‘‘passion’’ rather than merely on calculations.
Enterprises are considered spaces to consolidate and nurture a passion for quality, for
understanding, for a form of development that engages and respects the surrounding
environment. The socially oriented entrepreneur is moved by the reciprocity of the
exchange, enriching the territory in the form of jobs, business opportunities for other
subjects, cultural initiatives, promotion and the development of the place of origin.
Diverse studies have analyzed the processes of industrialization diffuse in the
Central-North-East Italy within which lie the Marches. Some have identified factors

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such as the culture, history, institutions, beliefs and communal convictions, like a
sort of humus of the intangible assets of the context, difficult to define and to
quantify (Cipolla 1990). The intangibles or social capabilities thus correspond to a
genius loci, connected to a particular place. It is revealed in the way of living and
being a community and therefore even of the business and that from which it comes.
The socio-economic texture, defined in terms of ‘‘social capital,’’ social
capabilities or civic-ness, is enriched by values, cultures and traditions tied to a
specific community-space. It is therefore important to also look at those intangible
factors that favor the development of CSR and to the sustainability of the SME.

5.4.6 Towards a territorial social responsibility

Another development in the CSR debate canconsider the following question: ‘‘Do
best practices of CSR increase social capital of the territory?’’ If yes, then what role
do SMEs play in constructing the structural components of the territory?
Social Responsibility of the Territory is a concept that has thus far not been
adequately studied. From the concept of social responsibility of the business, the
perspective shifts to a vision of the collective. No longer is responsibility solely the
realm of the individual firm, which is called to put itself in relation to the collective, but
rather it is the whole community, the territory, which comes to be conceptualized as an
unicum. The application of social responsibility of a business to the territory finds force
in the objective of improving the community’s quality of life and of marrying
economic events with social and environmental attention through the lens of
sustainable development. Social responsibility of the territory is founded, therefore, on
the rediscovery of shared values that the territory’s economic, social and institutional
actors know how to reinforce, thanks to solid networks of relationships.
Today, the Marches—along with other Italian territories such as Tuscany and the
Veneto—offers an interesting laboratory to study not only the extent of CSR, but
also Social Responsibility of the Territory.
The initiatives of the Marches Region (i.e. the SIRM project—System of
Responsible Business for the Marches Region—created between 2005–2006
constitutes a primary ‘‘ethical territorial network’’) and of the state legislative
bodies, in particular, have advocated both for paying close attention to civil society
through corporate responsibility and for favoring the adoption of best practices on
the part of individual firms.
The best practices of socially oriented Marchegian SMEs contribute to a model of
territorial development that progresses in the particular socio-economic context of the
Region. This possible way of experimenting with CSR in the territory points above all
to the value of participation, respect, and the recognition of roles, starting with the
SME and the socially oriented entrepreneur. The model’s protagonist, therefore, is an
‘‘enlightened’’ entrepreneur, who—other than generating opportunities for work and
creating high-quality products—fosters the sustainability of a collectiveness in the
territory in which it lies. Marchegian SMEs that create distinctive features of CSR in
their own mission, governance and accountability release energies and are orientated
towards sustainable development. They represent actors who enter into relations with

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all of the realities that participate in the construction of welfare and to the production of
wealth, dominated by a paradigm of CRS focused on its more ample diffusion.
Recognizing the cultural dimension of CSR, its connection with anthropological
and environmental factors present in the given territory (such as the Marches),
therefore widens the field to a dimension that is not only operative, but strategic
when the relationships between actors in the territory’s network are oriented
towards affecting responsible, equal and sustainable development, which involves
and benefits all of the subjects who operate in a territory (and not only them).
The territory thus becomes the place in which avenues of sustainable
development can be concretely constructed. Together with the enterprises, network
actors, the first of whom were active promoters, play a propulsive role. In all of
these cases emerges the value of the producer of tangible effects at the local level, in
terms of quality of life of the people and of functions of local welfare: work, home,
help, social services, health, services for workers and training.
In this context one well understands the dimensions of freedom, solidarity and
shared responsibilities put into motion a mechanism that mobilizes the intelligences
and creativity, and which goes beyond economic data and provisional balances of
the firm. Too often the preoccupations of the manager focus on satisfying the
majority shareholder. CSR of the ‘‘territory’s SMEs’’ is intended to better articulate
the participatory dimension: not only the shareholders are to be satisfied, but the
citizens and the territory in which the business demands, as well.
The territory therefore becomes a terrain on which reciprocal approaches can be
forged. It becomes a subject and a protagonist. And the network that developed
activates new mechanisms of participation and planning, and allows for the
recuperation of its territory’s identity. Territorial networks can become a true
laboratory of CSR where mechanisms of plurilateral plans can be experimented
whose protagonists do not work against national and supra-national sustainable
development programs, but integrate (or sometimes even substitute) them. Finally,
the ample size of CSR also involves a spatial dimension. This latter also has a local
aspect, which can synthesize itself with the theme of the territory which, in a robust
sense, serves as both the main judge and, at the same time, the main beneficiary of
the socially responsible components.
Socially oriented ‘‘country governance’’ or ‘‘local governance’’ (Balloni and
Trupia 2005) is made possible by an integrated representation of social, economic
and institutional communal feeling, not sectorial like for the districts, but like that of
a territory. Throughout the years, in diverse districts, the deterioration of the socio-
cultural (and not only industrial) atmosphere has made the relationship between
economy and society, and between the firm and the environment, more difficult.
When small and medium centers search for rapid and extensive development, they
have mutated their own nature, and, at the same time, lost part of their social ties
and their local identity, because of a decline in social consensus with regards to
industry and industrialization. Only in those territories, like in the Marches,
developing networks between economic actors and actors coming from civil society
and from local politics, territorial closeness will concretize in terms of reciprocity of
exchange, of tradition, trust, identity, and will create a heritage of understanding,
relationships, of images and values that are rare ‘‘goods’’ in an era of globalization,

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to be stewarded and grown, able to stop injustice and insecurity in moments of

difficulty like today.

6 Concluding remarks

The benefits of CSR are not always easily quantifiable. For that reason, one can say
that the adhesion to a philosophy of socially oriented management is above all an
‘‘act of faith’’ (Jenkins 2006a)20 but these benefits closely touch on governance and,
especially in small firms, the link among philosophy centered on sharing CSR,
strategy, governance and accountability is even more significant.
First, because the process is desired by the entrepreneur and reverberates across
his style of government, each expresses the will of the firm and translates it into the
operations of the business. And this often becomes an occasion to reinforce the
mission and, often, to create that necessary convergence around personal, family
and firm values, which facility the succession process in many family businesses.
Second, because the influx on the strategic profile is manifested above all in
terms of development of the culture of CSR. It is a process that seems to be the fruit
of the entrepreneur’s intense and sincere involvement in the multiple manifestations
of socially responsible actions. Thirdly, this is because the accountability and the
communication of the firms’ CSR engagement creates effects on the organizational
structure: it influences the micro-processes of the firm and produces effects induced
by the governance, in terms of transparency of the decision-making process, the
sharing of corporate policies, the diffusion of the instrument of delegation, greater
team participation by the top of the decision-makers in the firm, and the
multiplication of formal and informal occasions for reflection and for comparison.
From the cases considered here, a model characterized by forms of stakeholders
relationships based on instruments that provide for transparency and representation
of those qualities of the firm and its principle actors arises. Through this way, one
can view the co-penetration of the two drivers of socially oriented governance:
discipline and commitment. The first is formalized and codified, the second is
informal, emergent and value-based.21
In the SMEs where CSR is a characteristic trait of the corporate culture, the
consensus of the owner-entrepreneur/top management and the focus on referents at
the base of decisions characterize systems of corporate governance that are more
transparent and ‘‘harmonized’’, reinforce the organizational cohesion, the business
climate, and the trust factor (commitment).
The social strategy of the enterprises observed is based on an effective
government of systems of relations within the firm whose principle actor is the

20
‘‘CSR is the practical implementation of a company’s ‘ethos’’’ (…) philosophy and vision are based on
five key principles—integrity, humanity, diligence, enthusiasm and openness’’ (Jenkins 2006a, p. 6).
21
‘‘While the first one is a formal, codified, explicit approach aiming at fostering ethical and social
behavior through a set of rules and tools, the second one is often a more emergent, value-based, ‘‘strategy
driver’’ approach, that leads employees to a strong CSR commitment through a high level of identification
in their company’s strategy, deeply embedded in a set of values and based on a non-hierarchical set of
both economic and social goals’’ (Minoja and Romano 2006, p. 3).

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owner-entrepreneur/manager. The successful entrepreneur always appears to be the

one who helps to rediscover values, and who is capable of creating solid rapports
and ‘‘true’’ relationships with interlocutors. The focus is on his moral level and on
his capacity to realistically create an ethical corporate culture, a unified cultural
environment, a common language and, in other words, a socially oriented
governance.
Equally emergent is the value of trust and of true relationships with respect to
governance, nurtured by the desire of the top level in deciding and in acting in
coherence with a given platform of values. They mould the rich fabric of values of
all who operate in the enterprise—from those with management responsibility to
those who work at various levels in the company—and are innately linked to
morality. Beyond the formal application of formal methodologies those businesses
are able to taking on efficacious forms of engagement and stakeholders relation-
ships, so that they are capable of ‘‘grasping their essence,’’ pinpointing their
expectations, responding to and offering solutions, and creating cohesion around
projects and values of ample breadth. These are testimonies of entrepreneurial
passion; they are given organizational strength and intangible riches.
The Marchegian model of sustainable development that appeals to the territory’s
businesses is premised on a challenge: the capacity of the whole productive,
associative, unionized, entrepreneurial and institutional world to act and to be made
to act in socially responsible ways, and thus capable to be territorially characterized
in a unified sense.
In the face of large-scale corporations’ power and impact, however, one cannot
but mention the possible new and important role of small and medium-sized
businesses in providing examples of, and ‘‘driving,’’ real means of good
governance—many of which truly spring from that family-based world of
capitalism, often criticized—which hosts precious testimonies of integrity strategies
(Paine 1994), capable of generating trust towards the firm and the entrepreneurial
conduct. This permits us to conclude by affirming that between CSR and corporate
governance there exists a successful nexus. SMEs are especially revelatory, because
it is not essential that the extraordinary or eclectic actions are prominent, but rather
that those exemplary ones stand out, they bear small things with great intentions…
Because CSR needs passion and hope.

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Author Biography

Mara Del Baldo is Assistant Professor at the Department of Business Studies (University of Urbino
‘‘Carlo Bo’’, Italy). She teaches Small Business Management, and Accounting. Her main research
interests are in small business economics and management with particular focus on Corporate Social
Responsibility and small entrepreneurs/SMEs’s business ethics. She is currently involved in diverse
research and seminar projects on those topics. She published in Italian and international journals (Piccola
Impresa/Small Business, Sinergie, Economia Aziendale Online) as well as in national and international
conferences’ proceedings.

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