Sustainability challenges of German technology Small and Medium Enterprises - evaluating the influence of sustainability and social value factors on meso level

Abstract

There are more and more obvious problems with sustainability issues in economic, ecologic and social terms. The focus of changing economical ways towards sustainability lies mainly on larger enterprises as well as technical solutions. However, sustainability is important in all areas of life. In order to achieve sustainability all four pillars of sustainability – economical, ecological, culture and social - need to be sustainable and balanced otherwise real sustainability is not achievable. The large enterprises have the largest impacts on social and ecological sustainability due to their size and global actions and trading which is also the reason why the focus is often on LEs. However, the impact of Small and Medium Enterprises (SMEs) is seen from single company perspective, but many SMEs together have a fairly large impact. SMEs are the backbone of Germany’s economy and many smaller companies are market leader in specialist fields. According to the “Statistisches Bundesamt” (Federal Statistic Office) 99.3% of all companies in Germany are SMEs where 60% of all employees work (see Table 1).

The export oriented industry in Germany has influences towards and from sustainability worldwide and therefore a wide range of impacts into different countries.

This research evaluated factors influencing Germany SMEs on a Meso-environment level taking the macro- and micro environment and social value into account. In addition, the research understood how German technology SMEs handle sustainability in the context of business and social aspects.

This research took the value and perception of customers and employees into account. Customers can be divided in private and industrial customers. Many German SMEs serve industrial markets and therefore serve mostly industrial customers. The influences of the customers groups are different especially towards SMEs.

The focus is on factors which influence values like education or personal rational choice. These factors play an important part in the culture and politics domain and influence social values and therefore actions of all stakeholders. The problems many German SMEs face is that their stakeholder have a different cultural background since many foreign markets are served. Customer demands and competition in these markets can also avoid sustainability implementation.

This research has been conducted by performing a literature review and collecting data by interviews and questionnaires. In addition, the SMES which refused to take part were evaluated and their internet page researched in order to find reasons in more detail. The internet pages were searched for engagements in sustainability, CSR and environmental protection measures in order to define the level of engagement in sustainability actions. This research methods used were Engaged Theory in combination with Circles of Sustainability. This method offered high flexibility and a framework which supports sustainability research. The focus on this method is taken the different sustainability areas as well as practitioners into account.

The findings of this research are that German SMEs are influenced by their customers as well as employees and managers. The underlying rationale is personal rational behaviour/decisions which focuses on the customers benefits without taking the interest of other groups or society in to account. This phenomenon is also known as social dilemma and could be identified as strongest influencing factor, internally (by employees and managers) and externally (customers and other external stakeholders).

The influencing effect of customers is also connected to a speciality of German SMEs: many German SMEs have their main market abroad and these markets are often price sensitive and therefore customer values focusing on price rather than sustainability. Furthermore, all researched German SMEs have no ideas how a sustainable society could look like which is important to set a sustainable vision and mission. This means that long term planning is not followed in German SMEs. The reasons for this are twofold – lack of education in sustainability and the lack to see the needs to implement sustainability.

Education is also verified as an important factor to influence sustainability but is often overwritten by the social dilemma factor. Other factors which were researched were trust, marketing and institutional theory, which play also a vital rule but have less influence towards sustainability in German SMEs. However, missing trust within the company culture is a barrier for innovations and seems to be German SME problem.


The data gained by the evaluation of the internet pages of non-responded SMEs showed the lack of engagement in sustainability and could strengthen the data gained by the interviews and questionnaires.

Finally this research found similarities in the context of social dilemma, between approaches towards sustainability and communism.

This research contributes to knowledge by finding out factors and its connections which influence sustainability in German SMEs. It also pointed out the problems German SMEs face when trying to implement sustainability. Furthermore, this research used a unique and hardly used research methodology: Engaged Theory and Circles of Sustainability. The use of this method adds to the knowledge base of sustainability research.

Date of Award	2015
Original language	English
Awarding Institution	Coventry University
Supervisor	Chris Smith (Supervisor)