Effects of Entrepreneurial and Environmental Sustainability Orientations on Firm Performance: A Study of Small Businesses in the Philippines

Why do small businesses in developing countries embrace sustainable business practices and what are the effects on their performance? We address these questions by drawing on the natural‐resource based view of the firm to argue that the environmental sustainability orientation of small businesses can be explained by their entrepreneurial orientation. Our study of 197 small businesses in the Philippines shows that an entrepreneurial strategic orientation enables them to develop a more proactive stance toward environmental sustainability practices which lead to superior firm performance. The implications of the findings for future research and for public policy for small businesses are also discussed.     

Responsible Entrepreneurship in Developing Countries: Understanding the Realities and Complexities

Developing countries have recently experienced a burgeoning of small-scale individual entrepreneurs (SIEs) – who range from petty traders to personal service workers like small street vendors, barbers and owners of small shops – as a result of market-based reforms, rapid urbanisation, unemployment, landlessness and poverty. While SIEs form a major part of the informal workforce in developing countries and contribute significantly to economic growth, their potential is being undermined when they engage in irresponsible and deceptive business practices such as overpricing, sale of underweight or substandard products, or attempts to hoard goods, to name a few. Despite the growing interest in corporate social responsibility (CSR) initiatives of small businesses in developing countries, the SIEs have received almost no attention. To address this void in the literature, we explore the reasons for the less than optimal level of social responsibility demonstrated by some SIEs in developing countries. We do so by drawing upon the existing literature to develop a comprehensive framework of social responsibility of SIEs highlighting their unique characteristics and the different contextual factors that they encounter in developing countries. Based on this framework, we then present a set of propositions specifying the influence of these contextual factors such as business environment, cultural traditions, socio-economic conditions, and both international and domestic pressures on the business practices of SIEs. The framework offers an explanation for the lack of responsible entrepreneurship of SIEs and has important implications for promoting sustainable business practices in developing countries where businesses are striving hard to survive and compete.     

To what extent can management practices be transferred between countries?: The case of human resource management in Vietnam

Several countries are on their way towards a market-oriented economy but in conditions where most local companies have a dearth of management expertise. To meet the growing pressure of globalization and integration, many local enterprises are keen to apply foreign know-how and practices, especially human resource management (HRM), to enhance competitiveness. Likewise, foreign invested companies face the fundamental question of the transferability of HRM practices, whose success depends on country specifics, into local settings. This paper examines the possibility of applying four management practices (pay for performance, multi-source feedback, involvement and empowerment, self-managed work teams) in the context of Vietnam, with illustrative comparisons with China. It suggests varying degrees of transferability and potential hindering factors, along with practical suggestions for managers and businesses considering management transfers more generally and elsewhere. Importantly, our approach and findings are relevant and applicable to a range of different country managers and businesses, especially those which have been subject to less research and enquiry.     

‘Where everybody knows your name’: Lessons from small business about preventing workplace violence

Recently, we have seen a number of high profile examples of workplace violence. Large organizations are armed with many of the programs that have been developed to minimize the occurrence of workplace violence. In contrast, smaller organizations—which constitute the majority of businesses in the United States—possess neither the resources nor the manpower to implement the aforementioned programs. Additionally, due to a number of individual, social, and situational factors, small businesses appear to be more vulnerable to workplace violence than large businesses. Despite these disadvantages, however, it seems that small businesses do not experience higher levels of workplace violence than their more sizeable counterparts. In this article, we uncover a number of small business practices that may counteract the threat of workplace violence, and proffer these as lessons for all managers who wish to work toward that goal.     

Social responsibility in micro businesses in an African context: Towards a theoretical understanding

Small businesses often engage in social responsibility (SR) without knowing it or without referring to their actions as SR. This is particularly the case in developing countries where the idea of SR is seen as synonymous with philanthropy. While the literature on small business social responsibility is growing, our understanding of the context-specific determinants of responsible practices in microbusinesses (those that employ less than 10 employees) that dominate the business landscape in many developing countries is still limited. In this paper, we address this gap and offer a theoretical understanding of how microbusiness owner-managers understand and approach SR by drawing on rich qualitative data collected from Nigeria—Africa's largest economy. We utilise Social Representations Theory to understand (1) how and why microbusiness owner-managers limit their understanding of SR to philanthropic activities and (2) the wide range of practices, including philanthropic activities, that account for their overall Responsible Business Practices (RBPs)—those practices that enable them to act responsibly towards their stakeholders and/or operating environments. We find that owner-managers' representations of SR are anchored primarily on an idiosyncratic ethical tendency and inclination towards the creation of social/communal harmony by ‘giving back to society’ and objectified via actions deriving from three ‘giving back’ orientations, namely Core Philanthropism, Social Problem Solving, and Empowering. We model microbusiness owner-managers' RBPs, highlighting the intersectional interplay of the voluntary (SR as philanthropy) and non-voluntary (self-regulatory and legal) dimensions of RBPs. Finally, we discuss the key findings in relation to the extant literature and to policymakers and managers.     

Web 2.0 and opportunities for small businesses

The burst of the dot-com balloon closed the era of Web 1.0. In the process, we observed the creation and disappearance of many small businesses globally. The dynamic and linked web pages provided new pathways to online businesses. However, most of the new online business models still followed the traditional practices of the industrial era which could be characterized by closeness, uniformity, and one-way communication. A new set of new technologies, called Web 2.0, offers new opportunities, blurs the boundaries between online and offline activities, opening a new era with flagships of openness, collaboration, and participation. In this study, by reviewing the properties of Web 2.0, we investigate opportunities for small businesses in the Web 2.0 era. The findings of this study can provide helpful guidelines for small businesses to begin using and leveraging Web 2.0.     

Family governance practices and teambuilding: paradox of the enterprising family

This paper explores the relationship between family governance practices and financial performance of the business and family assets of business-owning families. A business-owning family that shares a focus on preserving and growing wealth as a family is defined as the enterprising family. Results of the study are consistent with predictions about the functioning of the enterprising family derived from research using social capital theory and group dynamics, especially with respect to teams. Family governance practices (family constitution, family code of conduct, clear selection and accountability criteria, family council, formal family communication mechanisms and family reunions) are hypothesized to build a strong and unified business-owning family functioning as a team. Results show that these practices are positively associated with financial performance. This relationship is mediated by a focus on preserving and growing business wealth as a family. Analyses are conducted on a sample of 64 family businesses from 18 countries.     

Personal Selling and Sales Management in the Internet Environment: Lessons Learned

Researchers have suggested that businesses are undergoing a paradigm shift due to the emergence of Internet; a ubiquitous information platform. There is no doubt that its emergence has had and will continue to have considerable impact on business processes and practices. In this special issue of the JMM we address Internet's impact upon the personal selling and sales management processes and practices of contemporary firms. As co-editors of this special issue, we have had a chance to only publish a small set of papers. Therefore, in this editorial we attempt to explicate the lessons learned from the development of the Internet and associated information platforms, with the aim to address the broader issues that have emerged in this area. We specifically divide our discussion into Business to Consumer (B2C), Peer to Peer (P2P), and Business to Business (B2B) lesson. We first review learning from existing practices in the B2C, P2P, and B2B domains. This is followed by a discussion on the impact of the Internet on personal selling and sales management practices. At the end of this editorial, papers in this special issue are discussed with respect to their learning and positioning.     

Linking owner–managers' personal sustainability behaviors and corporate practices in SMEs: The moderating roles of perceived advantages and environmental hostility

Drawing on managerial discretion and conflicting institutional logics literature, this study investigates the relation between the personal sustainability behaviors (PSB) of owner–managers and the corporate sustainability practices (CS practices) of SMEs. The research proposes a contingency model that assesses the moderating effects of perceived economic advantages and environmental hostility on this relationship. Based on linear hierarchical multiple regression analyses of a cross‐sectoral sample of French SMEs, the results suggest a positive influence of the manager's PSB on the SME's CS practices that appears to be differently moderated depending on the type of practice considered. The influence on environmental practices is fostered through the perception of economic advantages. The influence on workplace practices is only effective when the business environment is deemed benign and the influence on community practices is dampened by the perception of environmental hostility. Highlighting the trade‐off between the manager's personal values and the SME's economic constraints, these findings contribute to a better understanding of the critical antecedents of sustainability in small businesses.     

Engaging values in international business practice

Managerial decisions and behaviors in the international business arena have ethical implications across cultures and countries. The need for ethics and core values in business practice has been heightened by continued business scandals and ethical managerial lapses that have violated public trust. Global businesses can offer practical guidance and set ethical examples for others to follow by establishing corporate values beyond written business codes. Four key work values (Honesty, Fairness, Concern of Others, and Achievement) known to be present in businesses across cultures, are put forth as a baseline start for multinational corporation leaders. Offered is a process for making the core values unique to an organization, and for adopting and training managers in the use of core values. Presented is evidence of managerial implementation of the core work values, and managers’ alignment of work values with organizational strategies. By addressing the values and principles of their workplaces, international businesses can achieve cross-cultural ethical practices, managerial alignment, and global social responsibility.     

End Matter

This paper presents findings from a qualitative research investigation into tourism firms and the environment. It focuses on the factors preventing a sample of small environmentally accredited businesses from undertaking further action. Attitudinal, financial and operational factors are identified. It argues that in order to encourage businesses to undertake environmentally responsible practices the conditions in which they operate must be favourable; these include adequate support and infrastructure. Crucial, however, is addressing widespread scepticism towards environmental alternatives in both the public and operators, so as to make ‘going green’ commercially viable.     

Small Business vulnerability to floods and the effects of disaster loans

In this paper, we examine the impacts of floods on businesses and the efficacy of small business administration (SBA) disaster loans on mitigating disaster aftereffects. We find lack of business adaptation to extreme events in the short term, indicating their extreme vulnerability to flood disasters. Our results further indicate that subsidized disaster loans are important for businesses, with statistically significant effects estimated for businesses employing fewer than 50 people. At the margin, for every additional dollar spent on disaster loans per establishment in a county, four small businesses survive. Gloomy projections about increasing frequency and severity of disasters imply there will be significant loss in local economic activities because of increased vulnerability of small businesses to these incidents. Moreover, these effects will have implications nationwide, given the vital role small businesses play in creating jobs.     

Going green: the evolution of micro‐business environmental practices

This paper examines the process through which micro‐businesses ‘go green’. It builds upon previous studies that have identified the different drivers of this greening process. However, rather than a static focus on specific drivers, the study articulates the evolution of environmental practices over time. The paper uses comparative case studies of six micro‐businesses to build a composite sequence analysis that plots the greening process from its roots through to large‐scale and ambitious ecological projects. The study identifies three distinct stages that businesses pass through during this greening process. This has important implications for policy‐makers and advisors as it was found that the support needed by the businesses changed as they passed through these different stages. In particular, it was found that appropriate support is currently lacking at certain key points of the businesses' greening development. The paper therefore adds to current understanding of small business ecological responsibility by showing how activities and drivers change with the level of engagement. Pointers are provided as to how support can be improved.     

Determinants of Small Business EDI Adoption: An Empirical Investigation

Given the importance of widespread adoption for the success of electronic data interchange (EDI) and the "much-slower-than-anticipated" growth of EDI adoption in small businesses, in this study we aimed to identify the key determinants of small business EDI adoption. Based on prior research on IT/EDI adoption in large/small organizations, a model that incorporates 7 factors that are hypothesized to have influence on the EDI adoption decision was developed and empirically tested against data collected from 627 small businesses, with 38% of them having already adopted the technology. The findings suggest that in the eyes of small businesses, EDI still is not considered as something that enables a business to gain major strategic benefits or competitive advantages. Although perceived costs are found to be major impediments to adoption, small businesses tend to have an "unbalanced" treatment between direct and indirect benefits, focusing more on those that are immediate and direct rather than on long-term, indirect benefits. Furthermore, prior EDI experience and perceived level of support from the vendor are also important determinants of EDI adoption in small businesses. Implications to Internet-based EDI systems are also discussed.     

Corporate citizenship in Germany and the United States – differing perceptions and practices in transatlantic comparison

Because of the declining fiscal capabilities of the German welfare state and the resulting reductions in social services provided by the government, increasing attention has been given to the voluntary social engagement of businesses, often referred to as corporate citizenship. In that context, scholars and politicians alike have pointed to the United States as a country with a strong corporate citizenship culture and advocated a transatlantic transfer of the respective practices. Against this background, it is the first aim of this paper to examine the socio‐economic environment for corporate citizenship in both countries. Second, it will be investigated if corporate citizenship is really practiced more widely in the United States than in Germany and what forms of corporate citizenship are used by businesses. For that purpose, the corporate citizenship activities of the 100 largest companies in the United States and Germany each will be analyzed. Results show that more US than German companies undertake corporate citizenship activities and apply a wider variety of different forms. The possibilities for a transatlantic transfer are limited because of the differences in the cultural and political systems of both countries.     

Customer Relationship Management: A Comparative Analysis of Family and Nonfamily Business Practices*

It has been reported that family businesses perceive excellent customer service as critical to the future of their businesses. However, little research into the customer relationship management (CRM) practices of family businesses has been performed. In this study, we examine CRM implementation among 82 family and 370 nonfamily firms. Family and nonfamily businesses report similar attitudes toward the importance of CRM, their knowledge of CRM, and their success when they do implement it. However, using a logit regression model, we find that the actual implementation strategies of family businesses are significantly different from those of nonfamily businesses. These results remain constant when controlling for size and industry sector.     

Code and Conduct: Predictors of Irsih Managers' Ethical Reasoning

We analyse Irish managers' perceptions about the degree of wrongness of ten types of unethical conduct. In-person interviews with 348 managing directors of Irish-owned businesses who report their perceptions of the degree of wrongness of ten business ethics problems (the dependent variables) yield the data for our study. Predictors of managers' ratings include the existence of a business code of ethics, perceived frequency of occurrence of the given acts, company size and sector, union membership, Irish business ownership and independence (the independent variables). Results indicate that approximately 75% of those sampled are independent Irish owned businesses but few (only 22% of this sample) have a formal business code. Regression analyses reveal that small firms with a code of ethics predict higher wrongness ratings for managers in regard to the practices of unfair pricing and delayed payments (unethical behavior involving firms) but managers also consider such acts the least wrong overall. Wrongness ratings on the eight remaining unethical acts are explained by the manufacturing sector. However, manufacturing firms in Ireland also have a high percentage of unionised workers indicating that unions influence managerial thinking about social and employee ethics (e.g., discrimination, insider trading). The traditional adversarial Industrial Relations model is useful in noting that unions are important in setting ethical standards for indigenous Irish-owned businesses. Given this reality, management in small, manufacturing firms should work with unions to create a more formal ethics code in order to guard against corruption and to remain competitive in the international marketplace. Those without strong unions might articulate their own organisational values.     

Exploring the relationship between the human resource management practices and growth in small service firms

This paper seeks to evaluate the relationship between the growth and the human resource management (HRM) practices of small service firms in catering to professional services and the retailing sectors in the UK. The paper reports and analyses the findings of 196 face-to-face structured interviews with small service business owners. Findings suggest that employee empowerment contributes to the sales growth of small firms in the different sectors of the service industry. The study also shows that employee training and recruitment through formal channels contribute to the sales growth of firms operating in the catering sector. This paper argues that contextual variables – the extent of the competition and the availability of the workforce – have a bearing on the HRM practices employed by small service businesses.     

Social Responsibility and Performance: Does Strategic Orientation Matter for Small Businesses?

This paper examines whether strategic orientation toward corporate social responsibility (CSR) is instrumental in shaping small firms’ social responsibility practices leading to their enhanced financial performance and reputation. Data were collected from 182 small businesses operating in Malaysia based on random sampling technique and analyzed using Partial Least Squares Structural Equation Modeling. Analysis of the findings confirm that small firms’ long‐term strategic approach toward CSR is critical in driving their responsible practices toward environment, customer, community, employees, and suppliers which in turn impact small firms’ financial performance and better reputation building. These findings suggest that customers' and employees’ interests are strategic imperatives that small firms should address in enhancing their financial performance and building better reputation in the community. These findings have important implications for small firms’ strategic policy posture which are highlighted in the paper. The paper also identifies the possible limits of the research and suggests avenues for future studies.