The role of negative and positive forms of power in supporting CSR alignment and commitment between large firms and SMEs

Abstract

Do large firms exert power to shape the CSR behavior of their SME partners?” We answer this question by proposing a model built on the stakeholder theory and the shareholder theory, and go on to explain how this impact influences the commitment of the SME towards their large partner. The model highlights the central role that different forms of power exercised by the large firm play in the process. A survey of 291 SMEs confirms the key hypotheses, including the mediating role of reward power. The effects of coercive power are noteworthy and they illustrate the complex and competing forces at play in influencing CSR behavioral change in SMEs. The research makes a novel contribution to practice by highlighting among other things, how power, as a negative force via coercion or positively through expert or reward benefits, support or becomes counterproductive to the change process.