Dear Nageswara,

I believe that sustainability should be for all! Otherwise the sustainability of one means non-sustainability for the other! In this globalisation era, it needs international cooperation and may be an international organisation, that promotes a stable global equilibrium.

Dear Nageswara

Very interesting question: I will say the following:

1. Most people bother for short-term gains, and think narrowly on issues of employees' concerns. They just see what is available in the market, and think it will continue to be so available overtime when they need more. The fact is that competent people may not be available after some time at the price you want to pay. You need to nurture retention and think long term.

2. Define your values, involve people in doing so, and religiously nurture and internalize them in the organizational psyche, and let people know the salience of these values, which should include sustainable solutions than short-termism.

3. Employee care can be a great value in SMEs where paternalism is in vogue; even if the SME follows a low cost strategy, it works to keep the employees in good humour. For example, in Hindi films there is a Ramu kaka--the family servant. He is brought as a child, grows with the family, lays down his life to protect the family if it is attacked, is sometimes consulted in decisions, is cared, spoken to with dignity as kaka; but he is lowly paid, taken for granted and exploited. Still he performs for the family.

4. In SMEs personalized management is usually done. This helps retention. Often in very small organizations, especially in the orient, employees are treated as family members, and helped in times of need, which helps retention.

5. As time is passing by, paternalism and care alone will matter less, and people would like to be paid the price of their contribution to the organization; so employers will have to learn to pay them more fairly including for their engagement with the company. Otherwise, people will look for other options, and organizations may no longer have sustainable competitive advantage.

Dear Nageswara,

I believe that sustainability should be for all! Otherwise the sustainability of one means non-sustainability for the other! In this globalisation era, it needs international cooperation and may be an international organisation, that promotes a stable global equilibrium.

Dear Nageswara, I think that sustainability can not be optional; it must have first priority in building the strategy of any organization in order to keep on going and compete with other suppliers.

The small and/or medium enterprises drive employment and/or growth!

The responsibility of developing the sector is thus huge!

Period!

A significant number of countries engaged in serious evelopment efforts bet on SMEs, the reason being that SMEs have a historical track record of being the strong backbone of modern economies. However, SMEs are only the tip of the iceberg. Creating a high number of SMEs does not always translate into a driving force for economic growth. In fact, the rate of SME creation does not always result in sustainability and economic growth.

The focus on SME creation overrides the sustainability issue in my. Though, the complexity of SME sustainability cannot be downplayed, what seems to be known from "lessons learned" is that, SMEs need the following criteria to be satisfied is they are to be sustanable:

(1) Access to skilled labour

(2) Access to financial resources through the banking system

(3) the ability to respond to market demands

(4) a flexible institutional framework

These criteria lie within the responsabilities of leaders who should make every effort for their provision and sustainability.

This leads us to pose the question of what other factors should enable the sustanability of SMEs as value creation entities?

SMEs are the smallest units of industry and the highest in numbers. They are part of global supply chains of large organizations and therefore transfer the environmental costs of large corporations to themselves. To diffuse environmental sustainability within SMEs, the following are suggested:

1. Increase awareness about the industry-environment relation. The awareness is often limited to waste and pollution. The "green" activities are often limited to manufacturing since they lower costs - saving energy, materials and waste. Greening within the other stages of product life-cycle are overlooked - design for environment, sourcing, distribution and other stages need high awareness which is scarce within SMEs.

2. Customers should demand environmental management systems in much the same way that they want to see quality management systems. This will get the environment into mainstream business. Large corporations can benefit from such environmental stewardship.

3. Government must adopt the 'carrot and stick' approach. Carrot for greening in other stages of product life-cycle and stick for what comes out of the factory. Green financing, subsidizing EMS certifications, lowering insurance costs...are all carrots. Regulation and enforcement is the stick.

4. Control inputs rather than outputs. The REACH, RoHS and other certifications do just that. End of pipe compliance is less effective. For this industry associations must take initiatives. For example automotive manufacturers can offer a certification for electro-plating. Or Leather industry can create one for leather processing chemicals. The individual industries stand to benefit from these certifications, since this will reduce their own liabilities and risks.

5. Share environmental practices within SMEs. In my research, I found that significant portion of SMEs do not know green practices other than the usual energy-material savers. The behaviour of SMEs is constrained by what the owner knows or is aware of. Most of the respondents wanted sharing of green practices, which is quite surprising, considering SMEs do not like to share many things!

6. "Recognition" is a strong motivator, especially among owner driven firms. When short-run costs turn SMEs myopic to long-run environmental impacts, awards can be useful. Regional, sectoral awards can get SMEs into an upward spiral infusing competitiveness into environmental innovation.

7. Create Environmental employability - jobs in environmental restoration and management can stimulate corporate spending, especially CSR. Currently, most CSR (in India) is diverted to education and healthcare. Eco-entrepreneurs at village level can offer services of stream restoration, landscape management, habitat conservation, tree plantations etc.

The list of what can be done is long, but do-able. In the current state of consumption driven growth, many of the actions are 'unviable' since there is no direct business benefit. For this a strong leader - either industry or country - must set the ball rolling.

Thank you Debi. As usual a very detailed and possible methodologies that are useful to apply by SMEs. The misnomer that sustainability is expensive and therefore not important for management of SME should go. There are many small little things that they can do improve sustainability. Use Kaizen teams in their organizations in each of the corners to explore the kind of sustainability that can be brought. Philosophy of sustainability should be ingrained in all employees the way we are trying with lean manufacturing.

Thank you Costas Drossos, Abedallah Rababah and Tobian Ntuli for your contributions. SMEs are the major employers and also are responsible for the distribution of economic activity among a number of regions of the society. That is why they need to be supported and also they have the responsibility to look after the planet.

Dear Abdalla thank you for your response. Some of the suggestions that you have given relate to the administration which generally has many of these in place. But the bureaucracy and corruption often messes things such that they do not reach the intended people in time or in good measure. Many universities now have the entrepreneurship as part of the programs and are also providing incubation centers and industrial parks to help the budding entrepreneurs. But may be their volume and presence should be increased.

Dear Mohamed Benmerikhi thank you for your response. The points you presented are very valuable and need to be taken into account while planning the policies.

Dear Gurudas Nulkar thank you for your detailed response. As you said SMEs because their part in global supply chain are transferring the environmental problems of developed world to the developing world. Customer demanding environmental requirement is rare. A few MNCs such as Apple and Walmart have strong commitment to sustainability but how much of that is percolating the supply chain may be questionable. Similarly government support for SMEs for sustainability is also not that strictly enforced. Part of it due to bureaucracy and corruption at various levels.

Your idea of controlling at the input side and providing proper education such that SME have a long run view of the whole economic view point including the environmental impact would be sound if followed. As you say most of it is doable provided there is will among people and a suitable strong leader.

I believe that the concept of sustainability must not be overlooked. Already a long time so there should be.

However, at times, more important issues of a strategic nature, possibly short term could require flexibility that idea.

Dear @Nageswara, thanks for the feedback and the informative answers.

From my experience and conceptual insight especially SME have to interact and innovate closely with their customers, their revenue stream. Therefore, any sustainability initiative shall start and lead to customer value added e.g. by developing sustainable products and services jointly with some major lead customers. Therefore especially SMEs can bring their full advantage into bearing (speed, innovation, customer adaption) and at the same time secure additionsl revenue streams for such sustainable activities. For an exceptional example in Germany see the company "Frosch" ("frog"), impelenting this even in a FMCG B2C context (https://frosch.de/index.php?id=183).

Thank you Matthias Klumpp. “FROSCH products are produced with a high degree of resource efficiency (raw materials for products, use of electricity and water).” Resource efficiency and waste elimination are the keys to be followed by SMEs. It is really good example of sustainability and should be followed by other SMEs.

Dear Nageswara, I have seen many valuable responses to your thread. There is a part of a paper - chapter "How is situational leadership beneficial to the SME in their sustainability?"

I have downloaded a paper for contributors of this thread, and I find this paper very significant!

Thank you Ljubomir Jacić for the interesting paper. This paper provided evidence in a single case study. “This demonstrated the situational leadership required in different phases of the development of sustainable practice and more importantly how this influenced the creation of CSR (corporate socially responsible) behaviours and actions. These initial exploratory findings support SLT (situational leadership theory) as a leadership model compatible with development of the appropriate behaviours and values within the SME environment.”

Dears @Ljubomir and @Nageswara , interesting information.

Dear Dr.Nageswara, What the leader of each SME organization should do is struggling for existence.This is rather common practice because as an entrepreneur they may grow up from very small business or industry. So they learn this thing day by day and adjust their business overtime.However once they want to jump start business, it is high time to seek assistance from outsiders either from government agencies, research institutions or chamber of commerce or federation of industry.

I agree Choen Krainara it is not easy for SME to survive particularly in developing countries. Any small mistake will be a disaster. However sustainability principles such as reduction in the use of energy, waste generation, recycling and multiple use of resources should be inculcated as part of the methodology for everybody working in an SME. Sustainability as a philosophy should be made part of training imparted to the employees. That will actually benefit the organization.

Small and middle sized enterprises and industries are the basic chain of the economic tissue. Their existence is connected with the market needs from goods and products, their ability to innovation and their ability to competition. Even if governments act with policies in favor of SME, SME themselves must be competitive with their management rules, their human resources, their tools and products and their marketing strategy. If an enterprise couldn't sell its products, any policy from governments or any organization couldn't help it. However a social regulation from employment is needed (people need salaries for surviving!!), governments could act as regulator of taxes and charges, if not sufficient from societal care, governments could initiate public or semi public middle sized enterprises. In that case governments enter the market as competitors too, which is a dilemma from regulation, economic competition and social care and stability. So the role of governments become ambivalent, do they keep neutral regulators of a market becoming global, do they give salaries to people without employment even if this unemployment is long period, do they enter market competition ' then who acts as regulator??'.... consequently the sustainability becomes a key question for enterprises, as well for governments who must face their nation economic conditions as well as the global one..

Prof PN Rao, thanks for developing an interesting thread.

The role o leadership is too keep the ball rolling in a sustainable manner !. The role is also to develop linkages with LSEs so that best practices can be borrowed and adapted to the needs and aspirations of being a sustainable SME in its own right.

A few key references on the topic:

1. Kerr, I. R. (2006). Leadership strategies for sustainable SME operation.Business Strategy and the Environment, 15(1), 30-39.

2. Bos‐Brouwers, H. E. J. (2010). Corporate sustainability and innovation in SMEs: evidence of themes and activities in practice. Business Strategy and the Environment, 19(7), 417-435.

3. Moore, S. B., & Manring, S. L. (2009). Strategy development in small and medium sized enterprises for sustainability and increased value creation.Journal of cleaner production, 17(2), 276-282.

4. Van Weenen, H. (2000). Towards a vision of a sustainable university.International Journal of Sustainability in Higher Education, 1(1), 20-34.

5. Tsai, W. H., & Chou, W. C. (2009). Selecting management systems for sustainable development in SMEs: A novel hybrid model based on DEMATEL, ANP, and ZOGP. Expert Systems with Applications, 36(2), 1444-1458.

6. Simpson, M., Taylor, N., & Barker, K. (2004). Environmental responsibility in SMEs: does it deliver competitive advantage?. Business Strategy and the Environment, 13(3), 156-171.

7. von Malmborg, F. (2003). Conditions for regional public–private partnerships for sustainable development—Swedish perspectives. European Environment, 13(3), 133-149.

8. Collins, E., Lawrence, S., Pavlovich, K., & Ryan, C. (2007). Business networks and the uptake of sustainability practices: the case of New Zealand. Journal of Cleaner Production, 15(8), 729-740.

Dear Fairouz

Thanks for your response. Yes the SMEs really serve the system with “their ability to innovation and their ability to competition.” As you say the government could act as a conduit to provide a proper direction in terms of environmental regulations which should not stifle the spirit of SMEs. At the same time the government has it social responsibility to the people as well as environment. It is a big question as to how that will be fulfilled.

Dear Dr Deshmukh

Thanks for your response. The SMEs being in the supply chains of LSEs would adopt their strategies. That is happening to some extent but many are also being violated. Examples are some of the companies in China that supply to Walmart and Apple. Therefore they really require some kind of overseeing mechanism to ensure that the green practices being followed.

Yes environmental regulation within the equation of economical competition must be ruled and controlled by governmental agencies for a sustainable common grow and health. May be SME could be only interested by their living and market competition and miss the environmental care or destruct it, without any ruling from the state agencies.

Enabling Sustainability through Responsible Leadership – An Action Research Project with SMEs

"Based on the work with the participating SMEs the paper reports on how leaders grow in their own awareness, mindfulness and personal accountability and how they perceive, learn to work with and grow with respect to sustainability challenges at three organisational levels, namely;

1. macro level, e.g., business legitimacy, stakeholder engagement and social capital development

2. mid-level, e.g., brand identity, organisational culture/climate and performance measures

3. micro level, e.g., personal interactions and impact on followers’ behaviours, attitudes, knowledge, motivation and job satisfaction."

http://web.up.ac.za/sitefiles/file/2012_alcrl_Enabling%20Sus%20through%20RL%20action%20research%20with%20SME%20-%20Prof%20Arnold.pdf

Canada’s SME Sustainability Road map

"This tool will assist you in achieving your goals of sustainability. Each section is also part of a larger area of management, operations or leadership. The business case is a stand-alone document. Many examples of sustainability in practice are offered throughout the document. Where possible, they refer to the practices of SMEs.

Many examples of sustainability in practice are offered throughout the document. Where possible, they refer to the practices of SMEs. In some cases, however, examples that refer to larger companies are included for illustrative purposes."

http://www.ic.gc.ca/eic/site/csr-rse.nsf/eng/h_rs00174.html

Hi Nag,

The leadership of SME's is the key determinant in determining sustainable business results.

Paper refers::

https://www.researchgate.net/publication/299747565_Towards_a_talent-driven_outward-oriented_globally-competitive_SME_framework_Discussion_Paper

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