THE RELATION BETWEEN CSR ENGAGEMENT AND SUCCESS IN STARTUPS
Summary
Larger corporations have recognised the advantages Corporate Social Responsibility (CSR) can bring, leading to benefits like talent retention and improved financial performance. Although there is extensive research on the relationship between CSR and business performance in large enterprises, there is a gap regarding startups. With limited resources, startups must balance core operations against broader societal concerns. This research aims to study the relationship between CSR and startup success and gain a better understanding of effective CSR strategies that can help increase the success of startups. Therefore, the following research question is proposed: How is CSR engagement related to success in startups? Different theoretical lenses are applied to put the results in context. These lenses are Stakeholder Theory, Institutional Theory and the Resource-Based-View (RBV). This research employs a mixed-methods approach, integrating statistical analysis of quantitative data with qualitative insights gained through interviews with five founders. The ISO 26000 guideline operationalises CSR, which identifies seven core subjects. To research success, a literature review has identified five financial and four non-financial startup success measures. The distributed survey yielded 36 usable responses. The results show that CSR motivations vary, with some focusing on the moral aspect and others on the strategic benefits. The study reveals no significant difference in CSR engagement among various industries, possibly due to the low sample size within each sector. It can also suggest that institutional pressures and stakeholder expectations for CSR have become prevalent across different industries, indicating a level of isomorphism, a concept associated with Institutional Theory. Additionally, the interviews showed that startup success is a complex and diverse endeavour, necessitating a clear definition. Aligning success metrics with the startup's mission is crucial. A tailored approach is needed to capture diverse startup objectives and trajectories. Finally, this study explores the correlation between CSR engagement and startup success, finding a positive but nonsignificant correlation. When examined in more detail, it can be concluded that CSR has a positive but nonsignificant relationship with financial success. However, non-financial success correlates positively and significantly with CSR, with innovation and human capital showing strong relationships. This aligns with the RBV's belief that CSR can contribute to intangible resources, such as unique capabilities and expertise. The study's focus on operational startups may skew results towards successful ventures. However, mitigating survival bias was challenging due to time constraints and data collection limitations. This leaves the exact influence of CSR on success unclear.