SME role models on a global market: How international entrepreneurs can thrive on social responsibility

In this paper we focus on the institutional component of CSR in entrepreneurship by analyzing the role of governance systems in SMEs. We argue that a category of medium-sized companies referred to as 'Hidden Champions' can be regarded as role models of CSR, combining an exceptional economic performance with an excellent contribution to local communities and strong ties with all stakeholders, including employees. Based on this we develop some propositions on CSR in SMEs. For example, our review suggests that local self-assurance and a strong product focus enable a company to develop a strong CSR track record combined with a strong position on international markets. This could imply that globalization does not have to lead to a race to the bottom. On the contrary, to be successful in the long run, CSR-awareness for international entrepreneurs seems to be critical.