Sustainability Strategy in SMEs: Conceptualization, Motivations, and Processes for Development and Implementation
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Our society is facing major environmental, social, and economic challenges, and Small and Medium Enterprises (SMEs) can play a significant role in tackling these challenges. Sustainability strategy is becoming increasingly important for companies, and SMEs are no different. A sustainability strategy can increase a firm’s competitiveness, bring new business opportunities, and guide a firm to become more sustainable. Yet, little research has been carried towards a better understanding of the conceptualization, motivations, and various pertinent issues with respect to the development and implementation of the sustainability strategy in different SMEs. This study aims to address these open research gaps. The study was conducted using 19 in-depth semi-structured interviews with managers working in SMEs, as well as three consultants. The aim of these interviews was to understand the conceptualization, motivations, and processes involved in the development and implementation of a sustainability strategy by SMEs. The collected qualitative data were analyzed using grounded theory. A sustainability strategy directs SMEs on how to handle environmental, social, and economic challenges. Due to their scarce resources, the sustainability strategy focus on key areas of improvement, containing targets, Key Performance Indicators, and an action plan. Our findings indicate that SMEs are motivated by financial incentives such as a license to operate, business opportunities, branding, and access to financing or intrinsic motivations. The study presents a process model for developing and implementing a sustainability strategy in SMEs. A deeper understanding of the topic will be useful for further research because the increased understanding can guide and influence SMEs that are aiming to achieve sustainability goals. Governments and larger companies can use these insights when approaching SMEs and evaluating their sustainability efforts. By the preliminary literary review, it became clear that the conceptualization of sustainability strategy in SMEs is scant and as to the authors' knowledge, this thesis conceptualization is the first of its kind. Previous studies have provided a perspective of why larger corporations are motivated to go through the process of developing and implementing a sustainability strategy, but insight into what motivates SMEs is still missing. A process model for understanding how SMEs approach sustainability strategy is also sparsely mentioned in the litterateur. Combined, these three themes will give an increased understanding of sustainability strategy.