CSR is playing an inevitable part and becoming more and more important in practice. It has an enormous potential to deliver better results while adding to business practices and knowledge. Corporate social responsibility plays a vital role in small and medium enterprises as more than 90 percent of enterprises in Asian Productivity Organization are members of SMEs. Gross domestic product consists of 75 percent of these enterprises (Hassan et. al, 2007).
Small and medium enterprises (SMEs) stand for the companies whose turnover lies in certain limits. However, Malaysian SMEs are categorized as per the size, turnover and activity. In broad terms, Malaysian SMEs are defined in two major categories (Saleh et. al, 2006):
The 2000 census conducted by the Department of Statistics in Malaysia shows that there were about 20,455 active firms in the manufacturing segment when talking about the total numbers of SMEs. This figure was out of about 44,185 manufacturing firms registered with the Companies Commission of Malaysia (CCM). Textiles and apparel segment contributes the largest segment of about 17 per cent of the total enterprises. Where as, the food and beverages contributes about 14 per cent, metals and metals products contributes 14.3 per cent and wood and wood products contributes 13.6 per cent (Saleh et. al, 2006).
The relevant stakeholders who deal with SMEs in Malaysia in any form follows and adopt these standard definitions. The list comprises of various Ministries and Agencies at Federal and State levels of Malaysian Government along with the Statutory Bodies, authorities and financial institutions. They maintain data based on annual sales turnover as well as number of full-time employees in companies