Sustainability Beyond Profits: Assessing the Impact of Corporate Social Responsibility on Strategic Business Performance in Hospitality Small and Medium Enterprises

Abstract

In today’s business world, small and medium enterprises (SMEs) are increasingly dedicated to social responsibility and environmental sustainability, gaining recognition from communities, investors, and customers who view them as socially and environmentally conscious. Thus, this research examines how Corporate Social Responsibility (CSR) orientation, commitment, and participation affect strategic business performance (SBP) of SMEs in hospitality sectors, along with the potential mediation function of CSR engagements. To investigate the proposed model, this study employed a cross-sectional dataset of 163 hospitality SMEs, incorporating 482 valid responses. The representative sample was analyzed using structural equation modeling (SEM), regression analysis, and bootstrapping techniques to test direct and indirect effects. Findings indicate that CSR orientation, commitment, and participation play vital roles as antecedents of SBP. In hospitality SMEs, adopting CSR practices is imperative for increasing SBP. This study bridges a crucial research gap, particularly in understanding how hospitality SMEs engage in CSR and its impact on business success, offering valuable insights for SME management, practitioners, and stakeholders.