Rationalizing manifold CSR dimensions-and-aspects towards sustainable business performance of small and medium-sized enterprises: Findings from pre-hoc and post-hoc analysis

Abstract

Despite increasing global focus on sustainability, small and medium-sized enterprises (SMEs) in developing countries remain understated in corporate social responsibility (CSR) research. Existing studies mainly emphasize large corporations, leaving a gap in understanding CSR’s role in SME sustainability. This study explores the strategic role of CSR in driving sustainable business performance (SBP) among SMEs in Bangladesh. While CSR is often treated as compliance, this research positions it as a proactive strategy for long-term sustainability. Using stakeholder theory (ST), the study combines pre-hoc and post-hoc analyses to examine CSR’s impact. A quantitative research design integrates Partial Least Squares Structural Equation Modeling (PLS-SEM) with Importance-Performance Map Analysis (IPMA). Data were collected through structured interviews with 350 SME stakeholders in the manufacturing sector. Results show a strong positive relationship between CSR dimensions and SBP. IPMA findings highlight the significance of multi-stakeholder communication in shaping CSR priorities. This study offers practical insights for managers, policymakers, and practitioners seeking to embed CSR in SME strategies. It calls for structured policies, financial support, and regulatory incentives to promote CSR adoption. The findings extend existing theory by linking CSR with sustainability through a stakeholder lens in resource-constrained settings. Methodologically, the study contributes by applying PLS-SEM and IPMA to assess CSR’s strategic influence. Moreover, the study findings offer novel insights into CSR’s strategic role in SME sustainability within developing economies.