IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 7, Issue 5 Ver. IV (Sep. - Oct. 2016), PP 11-15 www.iosrjournals.org DOI: 10.9790/5933-0705041115 www.iosrjournals.org 11 | Page Models of Social Responsibility Practice in Smes in Kediri Regency Sayekti Indah Kusumawardhany 1 , Dr. Hj. Endang Sri Andayani, S.E., M.Si., Ak 2 , Prof. Dr. Danardana Murwani, M.M 3 123 Universitas Negeri Malang Abstract: This study's purpose is knowing how the social responsibility implementation by the owners of SMEs in keeping the relationship with the society. This research is a qualitative research. The result of the research shows that type and capital of business can influence the amount of social responsibility practiced by the business owners. The characteristics of the business owners do not influence directly towards the implemented social responsibility. The result of the research also finds that SMEs owners in Kediri Regency unconsciously social responsibility practices in accordance with the applicable constitution. Keywords: social responsibility, SMEs I. Introduction The growth of small and medium enterprises (SMEs) has negative impacts on the surrounding environment. Even though the impacts are not as serious as companies have, but it will be better if SMEs also take part in maintaining the environment. Based on article 5 section 1 of Indonesian Law Number 25 of 2007 about Capital Investment, it can be done by any forms of companies, included a legal entity, unincorporated entity, and personal business entity. In article 15 section b, the capital investors have to undertake the corporate social responsibility. Thus, it can be concluded that stakeholders must practice the social responsibility, not only big companies but also small companies, according to their proportions. Based on the explanations, this research is going to find out the social responsibility practices which are done by SMEs in Kediri Regency. The commodity in Kediri Regency takes part in creating the continuously increasing growth of SMEs. Based on Industry and Trade Service in Kediri Regency, the growth of SMEs in 2014 as many as 1303 SMEs were registered. From those such numbers, most of the companies were from micro and small businesses, with the number of 420 and 715, respectively. Most of SMEs were from food and drinks industries. The increasing growth of SMEs in Kediri Regency creates negative impacts due to their operation activities. Even though the impacts are not really serious, if they are unattended then they will negatively affect the society living around the environment. Furthermore, based on East Java Government Regulation Number 4 of 2011 on Corporate Social Responsibility, article 1 section 6 states that social responsibility is practiced by legal entities which produce commercial goods or services. In article 9, the companies are not differentiated by their status as private or state organizations. East Java Government Regulation becomes the supporting materials of the research for further study about SMEs in Kediri Regency and to know how the social responsibility is practiced. The research pre-positions are: a) Manufacturing companies practice social responsibility and participate in reducing negative impacts. The manufacturing companies are more potentially in producing waste that will damage the environment; b) The larger the business capital of SMEs, the more social responsibility activities practice. That is, companies that have the good capital for operating activities would have the ability to practice social responsibility; c) The existence of gender differences affect the owners of SMEs social responsibility activities. The suspected, the male owners of SMEs have differences from the female owners in practicing the social responsibility; d) SMEs owners' age levels influence social responsibility activities. The suspected, the more mature the owners of SMEs, the more aware they have on social responsibility; e) The higher education level of SMEs owners, the more social responsibility activities. The higher education level of SMEs owners increasingly has good knowledge about the types and social responsibility practices that have been done by companies or other institutions. This knowledge is expected to improve the practice of social responsibility in the company. II. Research Methods This study will use a qualitative approach to phenomenological research. According to Creswell (2014: 20), phenomenology is a strategy in which researchers identified a phenomenon based on human experience to a particular event. Type of this research phenomenology is transcendental / psychological, the researchers develop a structural description of the others' experience, with the result that the researchers do not focus on the