Circular economy to enhance sustainability of small and medium‐sized enterprises

The circular economy (CE) represents a major paradigm shift of moving from the concepts of linear to circular supply chains across multiple industries. Although some aspects of CE adoption within industrial supply chains have been researched extensively (particularly addressing challenges of design, implementation, and operations), the research that relates CE practices with sustainability performance to reveal the current state of CE practices within small and medium‐sized enterprises (SMEs) is scant. The aim of this research was to facilitate SMEs to achieve greater sustainability through CE implementation. This research addresses three research questions—How are CE fields of action related to sustainability performance? What are the issues, challenges, and opportunities of adopting CE in SMEs? And what key strategies, resources, and competences facilitate effective implementation of CE in SMEs? This study adopts a mixed method approach (qualitative and quantitative) using survey research, focus group, and case studies; 130 randomly selected SMEs within the Midlands of the United Kingdom have been surveyed, and the responses are analysed using statistical tools along with findings from focus groups and case studies. The study reveals that all CE fields of action (take, make, distribute, use, and recover) of SMEs are correlated to economic performance, but only make and use are related to environmental and social performance. The study further derives strategies, resources, and competences for achieving sustainability across all the CE field of actions. Additionally, this research reveals the issues and challenges, strategies, resources, and competences required for implementing CE in SMEs.     

Commitment to Sustainability in Small and Medium‐Sized Enterprises: The Influence of Strategic Orientations and Management Values

Ecosystem degradation and social sustainability have become important issues in the corporate sphere during the last few decades. However, research discussing corporate social responsibility and related concepts has often focused on larger companies, sometimes neglecting the specifics of small and medium‐sized enterprises (SMEs). The main purpose of this study is to examine the relationships between two common strategic orientations, market orientation (MO) and entrepreneurial orientation (EO), in relation to sustainability commitment, sustainability practices and management values in SMEs. Questionnaire responses from 450 Swedish SMEs were analyzed, confirming the influence of MO, EO and sustainability practices on commitment to sustainability, implying that firms committed to sustainability see both market and entrepreneurial advantages of sustainability. The results also show that different parts of MO and EO differ in importance for commitment to sustainability among SMEs. Implications concern the importance for firms and policymakers to work with sustainability issues using both internal and external perspectives. © 2015 The Authors. Business Strategy and the Environment published by ERP Environment and John Wiley & Sons Ltd     

Responsible Innovation Toward Sustainable Development in Small and Medium‐Sized Enterprises: a Resource Perspective

What resources do small enterprises need to develop responsible innovations that enhance sustainable development? Does lack of resources prevent innovation toward sustainability in small and medium‐sized enterprises (SMEs) or can innovations be created with scarce resources? This study investigates environmentally and socially responsible innovations of SMEs from a resource perspective, based on empirical data from 13 Nordic SMEs. The findings indicate that SMEs can create responsible innovations with very different resource combinations. The most common resource combination comprises equity, research and development cooperation, networks, industry knowledge and reputation. Except for financial capital in the form of equity, which appears a necessary condition for responsible innovation from SMEs, resource needs vary between technological and business model innovations. Creating business model innovations appears to be possible with scarce resources, at the very least with equity and social capital. Environmental technology innovations call for more abundant resource combinations. In particular industry knowledge appears to be a key resource for such innovations. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Could lean practices and process innovation enhance supply chain sustainability of small and medium‐sized enterprises?

Small and medium‐sized enterprises (SMEs) adopt lean practices (LP) to reduce waste across their organisational value chain, which helps achieve sustainability. Process innovation (PI) has also been applied through cleaner production, environmental management system, ecodesign, and so on to address both customers' needs and legislations by policymakers. Although prior studies reveal the effect of sustainable practices, LP, and PI on sustainable performance separately, less is known on the integrated effect of them on sustainability performance. Moreover, studies on mediating effect of LP and PI on sustainability performance are scant. This is significant as LP and PI are considered to be the enablers for achieving sustainability performance. This research addresses this knowledge gap. The research first theorises a model integrating these four major constructs (sustainability practices, LP, PI, and sustainability performance) through hypotheses development. Subsequently, using structural equation modelling, it is tested whether each of sustainability practices, LP, and PI effect sustainability performances. Additionally, mediating effect of LP and PI between sustainability practices and performances is derived. The study uses data from 119 SMEs within manufacturing industries in the Midlands, United Kingdom. Further, a few case studies have been undertaken to validate the findings from quantitative analysis. The overall results show that although sustainability practices, LP, and PI help achieve sustainability performance of SMEs supply chain through efficiency and responsiveness respectively, the mediating effect LP is more compared with PI. Moreover, SMEs adopt LP when they are economy focused and implement PI when they are pressurised by customers and/or policymakers.     

Implementation of Sustainability Management and Company Size: A Knowledge‐Based View

Implementing corporate sustainability strategies requires knowledge and application of sustainability management tools. While much progress has been made in developing such tools in both small and medium‐sized enterprises (SMEs) and large companies, the literature claims company size positively affects application. However, the role of knowledge as a mediating factor has not yet been investigated. Using the knowledge‐based view as a theoretical underpinning, this paper draws on empirical survey data from SMEs and large companies in Germany. It analyzes how company size affects the degree of knowledge and application of sustainability management tools. Even though the results reaffirm that SMEs know and apply significantly less tools, company size does not influence the share of tools applied once they are known. Thus, knowledge is identified as a key difference between SMEs and large companies as well as an important mediator to promote sustainability management. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Small business responsibility in developing countries: a threat or an opportunity?

Many developing country small and medium sized enterprises (SMEs) that are exporters see themselves facing a dilemma. They do not know how to respond to the rising social and environmental requirements of global buyers and supply chains and fear that were they to do so they would lose their competitive edge. However, they are aware that if they do not meet these requirements, they will not be able to access new foreign markets and may lose the contracts they already have. To investigate whether practical methods exist for resolving this dilemma, the United Nations Industrial Development Organization (UNIDO) carried out a one year project with 22 SMEs in four Asian countries. The results suggest that well targeted, enterprise‐specific efforts to meet corporate social responsibility (CSR) requirements can make a positive contribution to both short‐term profitability and longer‐term competitiveness. The ‘business case’ for CSR appears strongest in the environmental area, but measures in that area can act as a ‘starter motor’ for tackling more systemic ‘social’ problems. Furthermore, tackling social issues at the workplace can feed back positively to improve the sustainability of the environmental improvement measures. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Sustainability and financial performance of small and medium sized enterprises: A bibliometric and systematic literature review

Based on a 20‐year dataset collected from the Web of Science database, this study aims to present a comprehensive knowledge map of the intellectual structure of the field of study of sustainability and financial performances in small and medium sized enterprises (SMEs). A bibliometric analysis and a systematic literature review method were employed by analyzing articles published between 1999 and 2018, using the VOSViewer software. The study provides an overview of articles, authors, the most influential journals, and themes of research. The results reveal the existence of three themes in research: the role of innovation and entrepreneurship and their impact on sustainability in SMEs (cluster 1), corporate social responsibility in the context of SMEs (cluster 2), and green management and environmental issues for SMEs (cluster 3). In sum, this paper discusses prominent insights from the research analyses and recommends future research directions for the field.     

Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium-sized enterprises

The aim of this paper is to identify and gain insights into small and medium-sized enterprises' (SMEs) rationales (why) for engaging in sustainable social and environmental practices (SEPs) that influence social and environmental policy and sustainability changes. Specifically, we depart from the predominately quantitative-orientated SEPs literature by conducting in-depth interviews and analysis of owners and managers of SMEs in the United Kingdom within a legitimacy theoretical framework. Our findings from a comprehensive number of interviewees show that SMEs employ a complex mix of both symbolic and substantive SEPs with the aim of enhancing the legitimacy and sustainability of their operations. The results emphasise the strengths of social engagement, reputation and image, environmental embeddedness, industry differentiation and education facilitators. In particular, the paper shows that legitimating strategies can have a dual purpose of being symbolic in nature but also inferring a substantive legitimacy claim. Evidence of SMEs maintaining their legitimacy position stretches further via either a moral and/or a pragmatic standpoint.     

Sustainable environmental practices and financial performance: Evidence from listed small and medium‐sized enterprise in the United Kingdom

In this article, we investigate the financial implication of sustainable environmental practices on UK small and medium‐sized enterprises (SMEs)–traded firms. Existing literature indicates that there is a direct relationship between sustainable environmental practices and financial performance. However, studies looking at this relationship have focused mainly on large firms with little attention paid to SMEs. Further, those looking at environmental and financial performance relationships have often used a single measure of performance in their studies. This study bridges these research gaps by focusing on listed SMEs in the United Kingdom using multiple measures of sustainable environmental policy indices on a panel of 201 SMEs on the Alternative Investment Market from 2011 to 2016. Evidence from our panel data analysis suggests significant and a nonlinear (concave) relationship between sustainable environmental practices and firms' financial performance. Specifically, energy efficiency practices, greenhouse gases, material, and resource efficiency revealed an inverted U‐shaped relationship with financial performance. The results will offer guidance to management in terms of allocating resources to sustainable environmental practices investment.     

Exploring the potential of SMEs to build individual,organizational, and community resilience through sustainability-oriented business practices

Small- and medium-sized enterprises (SMEs) can have significant resources, capacities, and influence in their communities, suggesting they have the potential to be agents for transformative sustainability. However, SMEs will need to move beyond firm-centered sustainable business practices towards strategic approaches that encompass and contribute to resilience-building processes. Amid the unfolding COVID-19 pandemic, we explored what types of sustainable business practices of SMEs can contribute to individual, organizational, and community resilience. We identified six clusters of practice that are important in this regard. The clusters are not solely technical or “environmental” but rather illustrative of deeper sustainable values shaped by organizational structure, culture, and behavior. This paper suggests that SMEs can pursue transformative approaches to sustainability that are more environmentally, socially, and economically sustainable and better able to withstand shocks like the COVID-19 pandemic and can be significant contributors to community resilience. We conclude with a series of future research priorities critical to examine a largely unexplored nexus in the private sector, the linkages and dynamics between sustainability practice, resilience building, and broader community pathways.     

Sustainability performance analysis of small and medium sized enterprises: Criteria,methods and framework

Small and medium sized enterprises (SMEs) play an important role in any economy as they contribute to GDP and employment. However, sustainability (right combination of economic, environmental and social) of SMEs is a major concern as they prioritize economic performance over environmental and social to remain competitive. Majority of prior researches on SMEs' sustainability either look at the impact of a few limited enablers (e.g. lean, green, innovation etc.) on sustainability performance or the effect of pressures and barriers on the sustainability performance. There is a clear gap of a holistic and robust framework for sustainability performance analysis in order to measure and improve sustainability performance. This research bridges this knowledge gap by addressing two research questions – what practice and performance criteria are being considered for sustainability performance analysis in a broad environmental, economic and social context, how are they related, and what methods are being used to derive the relationship between sustainability practices and performance. These research questions are addressed through a systematic literature review of 58 papers, published between 2005 and 2018 in leading journals. First, an objective content analysis is undertaken in order to identify sustainability practices and performance criteria along with their frequency of usage in prior research. Second, the correlation among the variables is studied. Third, the methods for analyzing the relationships of the criteria are identified. Finally, a framework for analysing correlation of SMEs’ sustainability practices and performance in order to measure and improve performance using statistical modeling approach is proposed.     

An Evaluation of the Impact and Effectiveness of Environmental Legislation in Small and Medium‐Sized Enterprises: Experiences from the UK

With small‐ and medium‐sized enterprises (SMEs) accounting for 99.7% of the 4.7 million UK businesses, they can have a huge collective impact on the environment, which in turn is being increasingly regulated. This study investigated the impact and effectiveness of environmental legislation on UK SMEs as well as determining if ‘compliance’ results in improved environmental protection. Interviews were conducted with SME management, site staff, regulators, policy officials and support organisations. Forty‐four SMEs from the north‐west of England participated in the study, and overall a total of 99 individuals were interviewed. The study clearly indicates that the impact of environmental legislation on SMEs is overstated and impact increased commensurate with effort to comply and enforcement action. Only one of the SMEs studied had been prosecuted and only two had been inspected. Compliance issues identified in those SMEs subject to direct regulation did not correlate with previous compliance audits conducted. In general, SMEs had poor awareness of compliance issues; non‐compliance was only really recognised and acknowledged if identified by a regulator and only regarded as serious if prosecuted. Regulation of the environment is clearly only effective if complied with; understanding compliance levels can help measure the link between legislation and environmental protection. The effectiveness of environmental legislation can only be understood if SMEs are subject to regular regulatory contact. Recommendations to improve SME compliance control systems are provided. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

Sustainable tourism in Greek islands: the integration of activity‐based environmental management with a destination environmental scorecard based on the adaptive resource management paradigm

Tourism is a major industry that can lead to economic gains as well as to degraded environment and social infrastructure. Tourism has the potential to destroy the available common environmental resources through overuse and poor management practices, as limited information disclosure and poor monitoring of actions encourage the perpetuation and extension of environmental problems. Based on the adaptive resource management paradigm for addressing problems related to the use of the commons, this paper suggests a methodology for the development of a management tool that can provide island hotels with a continuous flow of timely, relevant, accurate and objective information on the environmental impact of critical corporate activities. The tool, named the destination environmental scorecard (DES), draws on activity‐based management concepts and can help local hotel SMEs measure and compare their performance against certain standards and thus conduct operations in a responsible and measurable way to the benefit of both business financial performance and regional sustainability. The paper presents the DES operational characteristics and the potential benefits from its implementation. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.     

Neighbourhood Effects as Indirect Effects: Evidence from a Dutch Case Study on the Significance of Neighbourhood for Employment Trajectories

One of the key challenges in the study of neighbourhood effects on work is to understand the pathways through which disadvantaged neighbourhoods impact the employment opportunities of residents. Endogenous explanations for neighbourhood effects focus on social life in these neighbourhoods, identifying mechanisms of social isolation, deviant work ethics and neighbourhood disorder. This article studies these mechanisms in a low‐income neighbourhood in the Netherlands. The case study shows that unfavourable socioeconomic outcomes can be indirect and unintended consequences of actions and choices in everyday life that are not directly concerned with work. Nevertheless, these individual actions and choices reflect local social practices that are influenced by the marginalized context in which residents lead their lives.     

A quarter‐century review of HRM in small and medium‐sized enterprises: Capturing what we know,exploring where we need to go

Despite the proliferation of HRM research, only a small fraction explores the context of small and medium‐sized enterprises (SMEs). Where HRM in SMEs has received attention, the literature base remains fragmented and variable, comprising a plurality of definitions, explanations, and methods. To advance understanding, this paper uses a quarter‐century systematic review drawing on an evidence base of 137 peer‐reviewed articles. A cumulative framework is presented capturing key developments and synthesizing existing areas of research focus. Analysis of limitations and knowledge‐gaps finds a failure to differentiate across various types of SMEs, limited appreciation of SME characteristics and contextual conditions, and a dominance of managerial perspectives. An agenda for future research on HRM in SMEs is outlined with respect to definitional parameters, HR practices, HRM–performance, key determinants, and presenting issues. The paper concludes that SMEs offer a unique, fruitful, and timely context for investigations of HRM.     

An analysis of environmental sustainability in small & medium‐sized enterprises: Patterns and trends

One of the greatest challenges facing the world today is climate change. The need to consistently advance with environmentally sustainable practices in today's businesses is crucial, and businesses are demanded to be more environmentally sustainable every day. This study conducts an analysis of the literature on small and medium‐sized enterprises' (SMEs) environmental sustainability by carefully examining 122 studies from 58 journals published from 2013 to 2019. We investigate the trends in drivers and barriers of sustainability adoption to inform both SMEs managers and policymakers. Our results also classify the reviewed studies on the basis of their methodologies and show the distribution of studies across industry sectors and locations in order to set directions for future research on sustainability practices of SMEs.     

Why SMEs invest in environmental measures: sustainability evidence from small and medium‐sized printing firms

Why do SMEs invest in environmental measures? From the literature we know that most SMEs are rather slow in adopting these sustainable measures, but then the following question arises: why are other SMEs fast in this respect? From our research, it becomes clear that improving the working conditions is the most important reason why these fast‐going SMEs invest in environmental measures, as this probably improves their employees' motivation and performance. This explanation connects ‘planet’ and ‘people’ with each other, and does not exclude ‘profit’, which completes the traditional sustainability circle. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

How do small businesses pursue sustainability? The role of collective agency for integrating planned and emergent strategy making

Research on sustainability strategy in large corporations has shown that carefully planned strategies can address environmental and social concerns. However, we still lack clarity on how small businesses form sustainability strategies. Assuming that small businesses can—or should—carefully plan strategies is inappropriate considering that such organizations often lack the needed resources, foresight, and formalized decision-making structures. Building on the study of two craft breweries in Canada and Germany, we detail how a combination of planned and emergent actions enables owners, employees, and external stakeholders to jointly form strategic sustainability orientation. Developing these findings into an integrated activity-based model, we show the need to move beyond the dichotomy between planned and emergent strategizing. We contribute a human-centered perspective to the sustainability strategy literature and suggest that research should take the role of people in small businesses more seriously as here interpersonal relationships and collective agency are central in forming strategic sustainability orientation.     

Environmental Strategy and Competitive Advantage: The Role of Small‐ and Medium‐Sized enterprises' Dynamic Capabilities

Drawing on the resource‐based theory and institutional theory, we develop a framework to explain the processes by which the environmental strategy of small‐ and medium‐sized enterprises (SMEs) contributes to their competitive advantage. We test our assumption using data collected from 214 UK‐based SMEs in the technology sector. We find that the effects of environmental strategy can lead to development of their marketing competence, as well as research and development (R&D) competence, which ultimately contributes to superior financial performance. We also find that a reciprocal causal relationship exists between SMEs' marketing and R&D competences. Combined, we reveal the presence of a serial multiple mediation relationship between SMEs' environmental strategy and financial performance through marketing competence and then R&D competence, or vice versa. Our study offers important academic and managerial implications, and also points out future research directions. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Sustainability report in small enterprises: case studies in Italian furniture companies

The recent evolution of the economic and social context has led enterprises to consider and assess corporate environmental and social impacts integrated with the traditionally measured economic and operating performances. From this point of view, the international debate on the advantages given by the firms' adoption of socially responsible behaviour has been developed; the increasing consciousness of the social character in enterprises' activities has enlarged the interest in communication. For this reason, several different standards have been developed in order to transmit, to the stakeholders, data, information and approaches about environmental, social and sustainability topics related to the firm's activities. In this dynamic context, the features of SMEs require specific guidelines, which address the contents of an SME‐oriented sustainability report. In this perspective the aim is to design guidelines able to meet with these SMEs' requirements; seven case studies, on Italian furniture small enterprises, complete the study. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.