A Study into the Motivating Factors
1. Introduction
Small and medium enterprises (SMEs) are the key drivers in several economies. Munro (2013) reveals that SMEs employ 60% of the population of the world and account for 90% of the world’s firms. In the UK, they account for over three fifths of the employment and constitute half of UK’s private sector (fsb.org.uk). It is evident, then, that SMEs are in integral part of the UK’s economy. Because of this, the requirement for these enterprises to adopt a sustainable approach to production becomes essential, as it contributes towards tax benefits, cutting costs, attracting more business and being more ethically responsible. The following project will offer an insight into what are the major factors that are influencing SMEs to adopt sustainable techniques in the past few years. First, it will examine existing literature on the topic and isolate key factors. Second, it will contextualise those factors and lastly, it will formulate a suitable methodology for carrying out this project.
2. Research Objectives
The objective of this project is to critically examine the reasons SMEs in UK choose to pursue environmentally business models. By looking at the various reasons these businesses go green, the project will map out the dominant incentives they have for pursuing greener policies. The purpose of embarking on this exercise is twofold; first to examine these reasons from the perspective of economic profit and ethical considerations. Second, it allows us to look more realistically at incentives that can be offered to small and medium sized businesses in order for them to apply greener business models. The project looks at the Greater Manchester county SME sector as a case study to examine these phenomenon. . .
.
3. Literature Review
Australia has over the years perfected its governance systems and policy impacting significant safety and elevated standards of living for its citizens. According to Gov.AU (2019) the country has a vision 2030 Agenda for sustainable development involving both domestic and international Agenda. Over the past years the Australian government through the ministry of foreign affairs and trade as well as the department of the Prime Minister and Cabinet (PM&C), have effectively overseen implementation of sustainability development goals. According to Australia’s Voluntary National review of 2018 cited by Australia’s Department of Foreign Affairs and trade (DFAT, 2018), the country has made significant head way in handling sustainability problems and challenges in multiple fields. Aspects such as responsible production, climate action as well as environmental conservation and protection have seen significant improvements on account of Australian ministers. Despite its involvement in sustainable development however, Saudi Arabia still faces challenges and problems that are from within the country including culture and saudization of systems all of which are posed to significantly impact the sustainability development process. Given that the ministers are part of the system, and more likely to be susceptible and supportive of the systems, the realization of the SDGs may be significantly compromised. To be able to determine the effectiveness of the Saudi Arabian ministers’ mitigation and management techniques, their management and challenge mitigation strategies will be comparatively analyzed with those of Australian ministers.
.
business which doesn’t have a turnover greater than 6.5 million pounds, a balance sheet total of not more than 3.26 million pounds and not more than 50 employees. A medium enterprise is defined as one not having a turnover more than 25.9 million pounds, balance sheet total of not more than 12.9 million pounds and not more than 250 employees (University College London). The official UK government website stipulates that as of 2019, SMEs form about 99.9% of the business population. Hence, their contribution to the economy is enormous. Consequentially, their impact on the environment must also be proportionate. Throughout the years, the priorities of these industries have changed. Stakeholder’s now are just as much concerned about sustainability as profits (Lewis et al, 2015). Unfettered developmental projects in post 1800s in the UK led to severe impact on the environment, in the Greater Manchester area alone, sewage and industrial pollution in rivers. Additionally, suspended particulate matter and nitrogen oxides in the air have become major issues in the area (Douglas et al, 2002). In order to make a business model than can adapt to the growing concerns, SMEs cannot deny the logic of going green. Research has accurately identified economic growth in SMEs which came about because of sustainable practices (Jayeola, 2015). Research has indicated that cost of operation, capital and the flow of cash are the main indicators towards healthy.
business growth. Different enterprises have different priorities, hence their approach to sustainability is different. However, there are strong links between a economic end goal being the cause of green business models and not ethical considerations (Malesios et al, 2018).
According to a 2019 HSBC report, 26% of the UK companies they surveyed claimed they intend to adopt/have adopted sustainable principles because it improves efficiency. The same percentage of people are meeting the regulatory standards that have been set by the UK’s Sustainable Development Goals (SDGs). According to the UK government website this is the case particularly the Goal 8 of UK’s SDG agenda, which promulgates growth of industries in a greener and cleaner way (www.gov.uk). Hence, following state regulations is a big motivational factor for SMEs to embrace green business models. In a report published in The Renewable Energy Hub, Ellie Richardson reports that according to the financial services company Barclays, 75% of businesses are embracing green business models primarily because the initial costs of sustainable measures are more than made up for in the long term benefits (Richardson, 2020).
A pertinent reason why small and medium industries go green is to reduce waste. The principle of circular economy has proven to save small and medium industries in manufacturing sector upwards of $630 billion and the everyday consumer goods industry upwards of $700 billion annually (Ellen MacArthur Foundation, 2015).
The sustainable principle of circular economy has enormous benefits in creating employment as well. Research showed that in current economic situation, employment of the sustainable method of circular economy could lead to the creation of 54,000 jobs by 2030, in recycling and remanufacturing industries (Morgan and Mitchell, 2015). Keeping in mind the economic profits, the ease of opting for greener manufacturing products has been a big push for SMEs in going green. Marketing Stockport in an October 21st, 2020 article reported that SMEs in Greater Manchester are being provided business grants, ranging from anywhere between £1000 to £12000, to update their heating and lighting system for more energy efficient alternatives in the coming winter months. These grants are being provided by Business Growth Hub, which is partially funded by European Regional Development Fund. A similar scheme for industries is the Greater Manchester Low Carbon Fund, which made £15m available for businesses to borrow from to invest in technologies to decrease their carbon footprints (businessgrowthhub.com).
4. Research Methodology
In light of the current situation, the research project will rely wholly on secondary sources in order to fulfil its research objectives. The first step of the research methodology is developing clear research questions, an objective which has been fulfilled. The following methods will be used in order to gather data.
The usage of books and journal articles will be the major source of data collection in this topic. The project will rely on primary data which has already been collected and compiled by the authors of the books and journals relevant to the topic. The literature will mainly be categorised into three categories, for the ease of collecting and compiling data. The first will focus on the industrial scenario of Greater Manchester, both historical and in contemporary times. Second category will consist of literature concentrating on SMEs and depending on the field research by other academics, draw out the drivers responsible for SMEs adopting green business models. Lastly, it will look for sources that make plausible connections between the economic structure and regulations in the UK, the nature of SMEs and the motivational factors. This will be done in an attempt to draw connections between different bodies of literature across the decades to find out which factors, in present times, influence SMEs the most when choosing to go green in their business approaches.
4.1.2 Government Datasets
Data sourced from government funded projects are reliable and time efficient as they will contain a large volume of data, spanning up to several decades. Some of the archival open data sites that will be used in this project are data.gov.uk, nationalarchives.gov.uk, statistics from gov.uk, ons.gov.uk, ukdataservice.ac.uk and so on. The purpose of accessing these sites is to graph trends like the increasing number of green initiatives by UK SMEs, the increasing/decreasing investment of SMEs into sectors like recycling and waste management, the growth of SMEs in the Greater Manchester area and so on. The representation of this kind of data will be through the usage of graphs, pie charts and through drawing conclusions in the body of the text.
4.1.3 Websites
This includes websites for news reporting as well. All the websites used in this following project will make sure the data comes from authentic sources and will corroborate the findings with further internet searches.
4.2 Data Analysis
While it is true that secondary data from books and journals doesn’t leave a lot to be compiled and analysed independently, unused data from these sources and raw data from government websites need to be analysed and inferred.
4.2.1 Textual Analysis
The text will be read to fulfil two purposes; to identify strands of thought and discoveries made in the areas the research objective is looking at and secondly, to critically examine gaps in the literature. The latter will serve as an entry point for the inferences made by this project. The textual analysis will have to be mindful of a few things; the sample size and location will be carefully considered, the objective of this project is to analyse SMEs in Greater Manchester. Using data relevant only to samples in very different socio-cultural and economic situations will not be of much use to the project. The analysis also needs to be mindful of the time period in which the research was produced. While in some aspects the source needs to be several decades old, like when tracing the history of industry in Greater Manchester, sources about the contemporary industrial situation needs to be new. These are understood as the latent content of the data, where the background of the authors and the date of the work are considered data themselves (O’Leary, 2017).
4.2.2 Managing Data
The project will primarily concentrate on secondary data from books and journals, but in order to fill the gaps that those sources haven’t filled, it will also try to compile data from archival records and reliable data banks, i.e; government datasets. The software that will be used to clean and compile the data will be IBM’s SPSS software.
6. Ethical Considerations
The project will make sure to conduct all inquiries with full disclosure about the project and its objectives. The project will cite every source it uses for its literature review and to collect data. If the project uses information that isn’t published, then it will give due credit to the supplier of the information. If requested, the project will maintain complete anonymity of any participant who gives input to the project.
The project also pledges to not misrepresent and misquote other works, when it uses direct quotes or ideas, it will cite the sources in its references. The author of this project realises not doing so is plagiarism and unacceptable in the academic community.
The project will not represent any data or source which doesn’t exist in reality. It will not, in any way, expand or shrink the sample size of a given research project to suit its needs and represent findings as authentically as possible. Since the project will not involve participation by samples, because it will rely on secondary sources, the question of an ethics application form doesn’t arise.
7. Limitations
The obvious limitation of the research method is the inability of this project to carry out field research, owing to the situation of the pandemic. However, it hopes to gain authentic data from several secondary sources and since the particular topic chose has great scope for inquiry, it hopes to have a large number of sources to work with.
8. Tentative Timeline
Semester 1
Preliminary research and identification of major trends in literature, starting a data log, consulting the advisor.
Semester 2
Working with datasets, historical data, archival records, continue working with books and journals, start formulating project, consult advisor.
Semester 3
Prepare first draft of project, get feedback from advisor, continue doing research.
Semester 4
Prepare final draft based on feedback and research, prepare for presentation.
References
1 GOV.UK. 2020. Business Population Estimates For The UK And Regions: 2019 Statistical Release (HTML). [online] Available at:
2 Munro, D., 2013. A guide to SME financing. Springer.
3 Lewis, K.V., Cassells, S. and Roxas, H., 2015. SMEs and the potential for a collaborative path to environmental responsibility. Business Strategy and the Environment, 24(8), pp.750-764.
4 Jayeola, O., 2015. The impact of environmental sustainability practice on the financial performance of SMEs: A study of some selected SMEs in Sussex. International Journal of Business Management and Economic Research, 6(4), pp.214-230.
5 Malesios, C., Skouloudis, A., Dey, P.K., Abdelaziz, F.B., Kantartzis, A. and Evangelinos, K., 2018. The impact of SME sustainability practices and performance on economic growth from a managerial perspective: Some modeling considerations and empirical analysis results. Business Strategy and the Environment, 27(7), pp.960-972.
6 GOV.UK. 2020. Implementing The Sustainable Development Goals. [online] Available at:
7 Business.hsbc.com. 2020. Navigator | United Kingdom | Global Commercial Banking | HSBC. [online] Available at:
8 Renewableenergyhub.co.uk. 2020. Why UK Businesses Should Go Green In 2020 | The Renewable Energy Hub. [online] Available at:
9 Ellen MacArthur Foundation, 2015. Delivering the circular economy: A toolkit for policymakers. Ellen MacArthur Foundation.
10 Morgan, J. and Mitchell, P., 2015. Employment and the circular economy: Job creation in a more resource efficient Britain. Green Alliance.
11 GC Business Growth Hub. 2020. Greater Manchester Launches £15M Green Energy Fund | GC Business Growth Hub. [online] Available at:
12 Williams, S. and Schaefer, A., 2013. Small and medium‐sized enterprises and sustainability: Managers' values and engagement with environmental and climate change issues. Business Strategy and the Environment, 22(3), pp.173-186.
O'leary, Z., 2017. The essential guide to doing your research project. Sage.
FSB, T., 2020. UK Small Business Statistics. [online] Fsb.org.uk. Available at:
Dig deeper into A Critical Analysis of the Influx into Nigeria with our selection of articles.
What Makes Us Unique
- 24/7 Customer Support
- 100% Customer Satisfaction
- No Privacy Violation
- Quick Services
- Subject Experts
