Concerning small and medium-sized enterprises (SME), little seems to change. And SME - all enterprises with less than 250 employees and an annual turnover not exceeding 50 Million Euros - represent 99 % of all businesses in the European Union (acording to the European Commission). If they don't change, nothing does, really. But what factors hinder SME to undergo the necessary change towards more attention to sustainability? And how can they overcome such barriers?
To start with, people look at SME and sustainability from different perspectives. Large, corporate customers see SME as a danger to their own reputation, if the small supplier has a poor social and environmental performance. SME themselves feel like victims, as they hardly have the resources to meet those sustainability and CR expectations - while competing for the lowest price at the same time. Sustainability sceptics simply advice SME not to care about corporate responsibility (CR), as the distribution of rights on a global stage is nothing SME could influence. Yet others emphazise that SME are important for delivering corporate responsibility, as they account for the bulk of jobs created and taxes paid, and they have a unique relationship with local communities.
All those perspectives are valid in some way, although only the last one hits the nail on the head but is still somewhat underrepresented. Hardly surprising, thus, that many companies won't go much further than making superficial adjustments to their business practices, such as recycling, without really adopting a systems view that would allow them to identify the real factors and issues that cry for attention.
Factors preventing business change towards sustainabiltiy - and how to overcome them
Some of the most prevalent factors impeding change to happen are (1) uncertainty about regulation and consumer behaviour, (2) corporate governance (i.e. variables related to ownership and management), (3) resistance and (4) lack of knowledge. So what can be done?
1. SME should actively interact with suppliers and consumers through sharing information and knowledge as this will provide new ideas, processes, technology, etc. which can raise productivity, effectiveness. Internet technology can help to bridge gaps of time and space. External expert advice and close monitoring of industry magazines will reduce uncertainty about regulation and legal obligations.
2. SME need to invest sufficient time and resources in searching for solutions outside their corporate environment. Ideally, companies would look for an experienced external adviser, whose expertise and confidentiality they trust, thus overcoming the fear to disclose their "problems of unsustainability" to an unknown audience. Especially very traditional (often family owned) enterprises will find it difficult to change from within, as it is in the nature of tradition to ensure persistence.
3. To overcome resistance, SME need to focus on reflection and inquiry skills, enabling their employees to talk openly about complex, conflictive issues without invoking defensiveness. This could be achieved e.g. through an informal possibility to post comments and make suggestions, such as installing a letterbox in the canteen. Employees should also be integrated in the process of goal definition, asking them where they would like to see their company – and themselves - in five years time and then use backcasting as a means to identify concrete steps each of them need to do to achieve this goal.
Addressing resistance is crucial because all too often, differences in status, position, and interest among the members of a social system result not in constructive complementarity and effective cooperation but in persistent and obstructive stalemates - impasses with which all concerned are unhappy, but which they are unable to change. Resistance does not only occur when new threats appear to the status quo, but can also emerge when people become overpowered by feelings of ambiguity or loss of control. When people feel they have no say in what is to be accomplished or how the organisation will achieve its goals, they may feel disenfranchised and attempt to sabotage the effort.
4. Lack of knowledge really shouldn't be a factor any more, but it is. SME are still trapped in their small-every-day-routine-world. Changing this requires skills of ‘systems thinking’: to see and deal with interdependencies and deeper causes of problems. SME need to learn to change through becoming a learning organisation.
In fact, the pursuit of new knowledge and innovation is the essence of organisations, which in turn requires an environment that is supportive and nurturing. Providing employees with new information and encouraging them to take responsibility for their own learning creates opportunities for the generation of ideas.
It is a complex world we live in, and nobody can be expected to understand the whole picture. However, businesses - SME in particular, as they are somewhat behind in this - really need to "think out of the box" and make change to more attention towards sustainability happen.
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