«PROACTIVE ENVIRONMENTAL STRATEGIES IN SMALL BUSINESSES: RESOURCES, INSTITUTIONS AND DYNAMIC CAPABILITIES Jan Lepoutre Promotor: Prof. Dr. Aimé Heene ...»
Finally, due to a lack of (slack) financial resources, small businesses will experience more difficulty than larger firms to engage in SBSR actions that have no immediate return, require systemic changes or are boundary spanning. Likewise, due to a lack of power, small businesses will depend more on the social responsibility behaviour of their constituents than larger firms. However, those firms that are able to integrate SBSR in their strategic management, focus on win-win situations that result in returns, and increase their organizational visibility, will partly be able to overcome such constraints.
In summary, we conclude that small businesses, in general, will experience more difficulties than their larger counterparts when engaging in socially responsible action.
Barriers will be especially experienced with regard to those issues involving external stakeholders or the natural environment. Such a conclusion is important, because it implies that small businesses will only partly be able to undertake their social responsibility in isolation. There are two ways of interpreting this conclusion. One way would be to conclude that we should not bother small businesses with CSR issues, because they are just not made up for the challenge. We should then reformulate our normative propositions on the social responsibility of the smaller firm and bring the locus of their responsibility to a different level, for example at the level of the government. Small businesses in the UK seem to be in favour of this approach, indicating that they consider it to be “the Government’s responsibility to communicate environmental values, to establish a code of environmental conduct and to provide a benchmark of acceptable environmental standards for the business sector. The Government was expected to take a leadership role concerning the environment.” (Tilley, 2000: 37) A second interpretation would be that if small businesses have difficulty taking social responsibility by themselves, individual SBSR should be complemented with a culture of shared responsibility. Despite the clear responsibility this puts in the hands of industry organizations and government, shared responsibility thus still involves an individual business responsibility. The locus of responsibility is not only at the level of the government or industrial organizations, but remains at the level of the individual small business as well. In order to overcome the difficulties that a small business experiences in taking responsibility by itself, the owner-manager should become active on a level higher than the individual firm.
Thus, in addition to creating jobs, economic growth and picking the ‘low hanging fruit of SBSR’, small business owner-managers can become more effective in SBSR action by actively seeking partners in the market, government, society or the entire supply chain and by developing the capabilities that will take away the barriers they experience for SBSR action.
As an implication for small business owner-managers, our analysis offers the opportunity to reconsider both descriptive and normative assessments of SBSR. As engaging effectively in social and environmental practices is difficult from the perspective of the small business and involves a collective effort from a wide range of stakeholders, small business are advised to seek cooperation or network contacts with stakeholders and peers to overcome these difficulties. A normative extension of SBSR theory could therefore be that, as in some situations a small business cannot take its responsibility by itself, it should take action on a collective level. More specifically, it relates to the question whether we accept or not that a small business uses its lack of resources as an excuse for its limited socially responsible action.
The results of our research provide direction for future study. Where the current research has primarily focused on the explanatory factors for small business social behaviour in a static way, there is a growing need to investigate the dynamics of SBSR. Particularly the factors internal and external to the small business that influence change processes towards more SBSR behaviour need further development. A priority in this regard is to research how managerial capabilities that increase networking, collaboration and responsibility delegation aid in the development of organizational slack and SBSR action. Also, those capabilities that allow small businesses to effectively address resources across the boundaries of their organization need further development. In addition, increasing the knowledge on the critical success factors of governmental or industrial organizational initiatives aimed at creating shared responsibilities would be beneficial to small business owner-managers, policy makers and academics. With regard to the latter, the findings of such research may also be useful to the wider CSR theory development. In summary, there are a number of interesting avenues for future research. We believe that our review can provide the basis on which such further research can build.
Methodological and Contextual Introduction to the Empirical Studies3 While the research design and the data collection are the result of my own work, I collaborated with Dr.
Michael Valente (University of Victoria, Canada) in the data analysis of the empirical study. In the text, Dr.
Michael Valente is referred to as the “co-author”.
5. Methodological and Contextual Introduction to the Empirical Studies
5.1. Introduction The literature reviewed in chapter 4 suggested that small business models on proactive environmental strategies could benefit from a closer look at the dynamics involved in small businesses dealing with constraining internal and external factors. As such, it further
emphasized the need to address the research questions defined in chapter 3:
RQ2: What are the resources and capabilities associated with successful PES execution in small businesses?
RQ3: How can small businesses be successful in PES when the (institutional conditions) are set against having one?
Given the dearth of empirical material and theoretical development to address these two research questions, I set up a research that was designed to provide answers through a qualitative multi-case study research. Whereas the findings of this research will be presented in the next two chapters, the current chapter serves two purposes. First, it explains and justifies the methodological approach that was used in designing and executing the research.
It will therefore first discuss the research design, and then report the sources used in collecting the data and how they were analyzed. Secondly, the chapter provides the reader with a contextual introduction to the research setting: the Belgian ornamental horticulture industry. It will do so by first presenting a description of ornamental horticulture in general and how it is related to the natural environment. I then zoom in into the specific Belgian context, by first presenting an environmental organization with particular importance for this dissertation, VMS, and then describe the sector in general demographic and socio-economic terms, the general business environment and the external institutional environment.
5.2.1. Research design This dissertation uses a multiple case design with the purpose of elaborating existing theory (Lee, Mitchell, & Sablynski, 1999). The particular nature of our research questions directed us to multiple case studies for two reasons. First, case studies are best for gathering rich descriptions of complex and multilevel social phenomena (Gephart, 2004; Weick, 2007) about which not much is known (Eisenhardt, 1989a). The specific purpose is to build theory
rather than to test it (Strauss & Corbin, 1998; Siggelkow, 2007) by using the cases as a series of experiments in which the emergent theory is replicated, extended and contrasted (Yin, 2003; Eisenhardt & Graebner, 2007). Given the inconsistent theoretical explanations on small business proactive environmental strategy (Hillary, 2000a; Lepoutre & Heene, 2006; AragonCorrea et al., 2008), such an approach is not only appropriate, but also necessary. Second, small businesstegies are rarely explicit or consciously formalized in strategic documents or updated business plans, which precludes the access to large sources of secondary data (Curran & Blackburn, 2001). The lack of formalization of small business strategies is the result of the often tacit, implicit and even unconscious conceptions of organizational direction embedded in the mind of the owner-manager (Gibb & Scott, 1985; Johannisson, 1987). Probing small businesses for their strategies therefore requires uncovering the underlying intentions and patterns of actions that make up these strategies through in-depth inquiry and rich descriptions (Curran & Blackburn, 2001).
As the empirical setting for this multi-case study research, I chose the ornamental horticulture sector in Belgium. This setting was appropriate for the research questions in this dissertation for a number of reasons. First, the focus on a confined geographical area (Belgium) and sector allows minimizing variation in the environmental factors that a firm may be facing in terms of socio-cultural and political contexts, business climate and professional association representation, and focus on the focal variation of interest (Eisenhardt, 1989a), in this case small business PES. Second, the ornamental horticulture industry consists almost exclusively of small ventures, which are in the interest of this dissertation. Third, as we will further show, strong conservative forces in the sector were in place that discouraged the adoption of proactive environmental strategies. Fourth, and most importantly, the industry has a small member organization in place that allowed me to identify and select organizations that revealed a particular attention to the natural environment. This organization, VMS (Vlaams Milieuplan Sierteelt), has as its purpose “to position itself as a center for sustainable entrepreneurship that guides ornamental horticulture firms, by means of a phased plan, to more future oriented and socially responsible practices” (www.vmsvzw.com). Members voluntarily self-report data that allow VMS to calculate a firm-specific score that reflects the environmental performance of the firm. According to the performance score (points on 100), firms are subsequently assigned an A- (70-100), B- (55-70), C- (15-55) or D- (15) label. Abuse of VMS is prevented through a series of independent audits. A more detailed description of VMS is provided below.