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Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice

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A special issue of Sustainability (ISSN 2071-1050).

Deadline for manuscript submissions: closed (25 March 2022) | Viewed by 44846

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Special Issue Editors

Prof. Peter A. Murray

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Guest Editor

School of Business, Faculty of Business, Education, Law & Arts, University of Southern Queensland, Toowoomba City, QID 4350, Australia
Interests: Sustainability Leadership in Organization; Technology; Environment

Dr. Ananda Wickramasinghe

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Guest Editor

The Business School, Faculty of Business & Law, University of Wollongong, NSW 2522, Australia
Interests: Contemporary leadership; Strategic Sustainability; Social Entrepreneurship

Special Issue Information

Dear Colleagues,

The purpose of this special issue is to define and explain how sustainability leadership theories translate into sustainable practices within small to medium-sized enterprises (SMEs). Research in sustainability places a strong theoretical lens on the resource-based view, institutional and organizational perspectives and psychological theories when seeking to expand and understand sustainable issues. However, much less emphasis surprisingly is focused on leadership per se, including leadership in systems and ecological theories, leadership diversity including the effects of sustainable practices on environmental and social outcomes. Moreover, practitioners are often left to ponder how such theoretical ideas advance the practice of sustainable strategies. Scholars such as Haney, Pope & Arden (2020); Osagie et al. (2016), and Ploum et al 2017) note that sustainable, environmental, and sustainability leadership is often used interchangeably yet it is not entirely clear what each of these terms mean from a practical perspective. While many core competencies are required to address sustainability challenges such as anticipatory skills required to collectively analyze, evaluate, and craft pictures related to future sustainability issues (Haney et al. 2020: 158), it is less certain how such competencies are realized in practice. Some interesting questions related to theory and practice can be posed. For instance, how can future scholarly work translate theory into practical advice for leaders and managers of SMEs with respect to sustainable practices? How does a natural resource-based view extend the RBV and how does natural resource dependence theory build on resource dependence theory? How do leadership theories inform practice and how do theories approaching a systems and ecological perspective influence the practice of SMEs?

While many different theoretical approaches provide a useful lens that bridges the divide between sustainability leadership and practice, the special issue welcomes review papers, empirical papers or case studies, on one or more of the areas of focus. The special issue editors encourage submissions that seek to redefine or extend what sustainability leadership means within a specific context. Papers that attempt to explore how different theoretical approaches can be implemented within typical SME practice are particularly encouraged. The special issue editors are cognizant however of many different sustainable approaches including but not limited to micro business practices, leadership transitions, diversity and entrepreneurship, advanced technologies and their application, marketing sustainable products, sustainable leadership in bottom of pyramid settings, in disadvantaged communities, social entrepreneurial leadership including the effects of sustainability on social practices.

Prof. Peter A. Murray
Dr. Ananda Wickramasinghe
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

Sustainability Leadership
Diversity and Social Inclusion
Sustainable Practices
Ecological Theory
Sustainable Entrepreneurship

Published Papers (7 papers)

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Research

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22 pages, 1600 KiB

Open AccessArticle

Practice of Sustainability Leadership: A Multi-Stakeholder Inclusive Framework

by Payyazhi Jayashree, May El Barachi and Feras Hamza

Sustainability 2022, 14(10), 6346; https://0-doi-org.brum.beds.ac.uk/10.3390/su14106346 - 23 May 2022

Cited by 5 | Viewed by 3790

Abstract

Sustainability leadership aims at balancing short-term economic goals with long-term sustainable development goals by considering the interests of all stakeholders instead of just shareholders and focusing on a triple bottom line: people, planet, and profit. The existing research on sustainability leadership has mainly focused on the role of individual competencies without considering other meso and macro level factors that can impact the enactment of sustainable leadership. The studies that have considered these micro, meso, and macro levels have conceptualized these levels as stratified and discrete, assuming a hierarchical relationship between them. Such a conceptualization constitutes an impediment to the dynamic communication and engagement that is necessary to the achievement of sustainability goals. Drawing on stakeholder theory, this study investigates the key factors impacting the practice of sustainability leadership in a contextually relevant manner. More specially, we propose a multi-level, multi-stakeholder framework for sustainability leadership that is data driven and supported by evidence. This framework is meant to portray a holistic model that is dynamic and reciprocal in the manner in which micro, meso and macro factors impact each other. Qualitative research methods and purposive sampling were used for four stages of data collection, from 39 individuals with diverse profiles across the sustainable-engineering sector. The data collected were analyzed thematically, and the findings formed the basis of the dynamic inclusive business model for sustainability proposed in this paper, which challenges the traditional hierarchical business models. The data-driven, multi-level, multi-stakeholder framework proposed in this work extends the literature by providing insights on the key factors that impact the practice of sustainability leadership in the context of SMEs, operating in an emerging market. This framework demonstrates that the effective practice of sustainability leadership by SMEs is influenced by the interplay of factors at micro, meso and macro levels, as represented by individuals, organizations/firms, and governments. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

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21 pages, 346 KiB

Open AccessArticle

Environmental, Social, Governance & Financial Performance Disclosure for Large Firms: Is This Different for SME Firms?

by Amir Gholami, Peter A. Murray and John Sands

Sustainability 2022, 14(10), 6019; https://0-doi-org.brum.beds.ac.uk/10.3390/su14106019 - 16 May 2022

Cited by 8 | Viewed by 4795

Abstract

This study examines the association between a firm’s environmental, social and governance (ESG) performance and financial performance by examining the extent to which stakeholder and legitimacy theory help explain the effects on explanatory variables used in the study. Moreover, the study makes a novel contribution to existing ESG and performance-based studies by exploring the explanatory effects of ESG and firm performance over ten years. In addition, the study discusses the ESG-performance link of SMEs, thus advancing existing knowledge related to ESG in respect of SME performance. The study uses an extensive Australian sample from Bloomberg’s database from 2007 to 2017, while panel regression analysis is applied to investigate the relationship between a firm’s ESG performance and profitability. The robustness of the results is evaluated after incorporating several robustness checks to address methodological, endogeneity and causality issues related to a firm’s ESG performance disclosure. The empirical findings of this study suggest that improving a firm’s ESG performance is beneficial to all stakeholders of large firms in the long run but not for SME companies. The theoretical model suggests that listed SMEs do not disclose their ESG activities for various reasons, such as a lack of necessary resources. Specifically, the study extends scholarly understanding of existing theory and discusses the significance of the findings for future research. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

18 pages, 649 KiB

Open AccessArticle

Impact of ICTs on Innovation and Performance of Firms: Do Start-ups, Regional Proximity and Skills Matter?

by Khorshed Alam, Mohammad Afshar Ali, Michael Erdiaw-Kwasie, Md Shahiduzzaman, Eswaran Velayutham, Peter A. Murray and Retha Wiesner

Sustainability 2022, 14(10), 5801; https://0-doi-org.brum.beds.ac.uk/10.3390/su14105801 - 11 May 2022

Cited by 10 | Viewed by 2837

Abstract

Managers need to better understand how information and communication technologies (ICTs) lead to informed decisions about the investment and advantages of such technologies. However, at best, the empirical evidence on the business value of technology is mixed in relation to small firms. A total of 43 firms satisfied the study’s definition of start-ups. The final survey included 54 questions on access to and use of ICTs, innovation, firm characteristics, as well as the participants’ demographics, of which 11 factors were analyzed as part of this study. We found compelling evidence to support the positive effects of ICTs on firm-level innovation and performance based on the primary survey data of 270 small and medium enterprises (SMEs) operating in an Australian regional area. Moreover, we found that ICT strategies and skills are important factors that drive innovation and the overall performance of SMEs. In addition, various conditions, such as an agile workplace culture and international trade, can help firms improve their performance. Young businesses, particularly start-ups with ICT skills, show an improved innovation capability. However, remoteness appears to influence innovation negatively for nascent firms. Thus, managers should focus on improving ICT skills, strategies, and networking that help facilitate tangible ICT investments to foster innovation and growth. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

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36 pages, 642 KiB

Open AccessArticle

Sustainable Leadership Practices and Competencies of SMEs for Sustainability and Resilience: A Community-Based Social Enterprise Study

by Suparak Suriyankietkaew, Krittawit Krittayaruangroj and Nacharee Iamsawan

Sustainability 2022, 14(10), 5762; https://0-doi-org.brum.beds.ac.uk/10.3390/su14105762 - 10 May 2022

Cited by 44 | Viewed by 12300

Abstract

Current studies on how a sustainability leadership theory can influence the practice of SMEs, such as a context of community-based social enterprises, is still lacking, with scanty research to date. These small enterprises in the bottom of the pyramid settings are indeed the important socio-economic backbone of many nations around the world. The COVID-19 pandemic crisis has significantly hit all sectors and has adversely impacted them. Our study aims to broaden the limited scholarly knowledge and advance the developing SL theory in this realm. Hence, our critical research inquiries address: (1) What are the essential sustainable leadership practices and sustainability competencies for sustainability and resilience in a CBSE context? (2) How can a CBSE business apply the theoretical frameworks in practice to survive and thrive for sustainable futures, especially during the COVID-19 era? This study employs an integrative theoretical examination of sustainable leadership frameworks and sustainability leadership competencies to investigate the sustainable business practices in the SME sector, particularly in a community-based social enterprise context. Our business case centers on a green, social enterprise, which is an award-winner of Best Responsible Tourism and is located in a small coastal fishing village of Thailand. Using a case study research method, the multi-data collection methods include in-depth interviews and focus groups with multiple stakeholders. Evidence was found to comply with six-category sustainable leadership practices and five essential sustainability leadership competencies to varying degrees. The findings suggest that sustainable leaders and entrepreneurs should develop and integrate the value-based practices and competencies (i.e., strategic, systems thinking, interpersonal, anticipatory, ethical competencies) in business. The critical sustainable practices include enabling human capital with care for stakeholders, fostering ethical values and norms via altruism, cultivating social capital through social innovation, and supporting pro-environmental behavior and social responsibility to achieve inclusive growth, sustainability and resilience. The research results advance the theoretical development of the interconnected fields of sustainability leadership and sustainable entrepreneurship. An alternative sustainable business model for sustainability and resilience is also proposed. Overall, the insightful findings can provide practical advice and beneficial policy implications for sustainable futures. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

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15 pages, 1067 KiB

Open AccessArticle

Sustainable Leadership in Microfinance: A Pathway for Sustainable Initiatives in Micro and Small Businesses?

by Nadeera Ranabahu and Ananda Wickramasinghe

Sustainability 2022, 14(9), 5167; https://0-doi-org.brum.beds.ac.uk/10.3390/su14095167 - 25 Apr 2022

Cited by 2 | Viewed by 2563

Abstract

Microfinance is used to enhance micro and small enterprise start-up and growth in developing countries. Although there is some discussion of how microfinance institutional activities lead to their own sustainability in the extant literature, the same cannot be said of the ways in which microfinance institutions shape the sustainability agendas of micro and small enterprises (MSEs). In this paper, we conceptualise and explain the way that joint liability lending in microfinance shapes the sustainability of micro and small enterprises owned by borrowers. Using sustainable leadership as a theoretical foundation, we conceptualise the strategic, operational, and community-level leadership functions associated with joint liability and construct a framework. Based on the conceptual framework, we also develop propositions and explain them using an illustrative case study. Our conceptual work reveals that leadership tasks at strategic, operational, and community levels influence MSEs’ sustainability. Our conceptual framework, propositions, and illustrative case evidence contribute to theory and practice by highlighting that joint liability mechanisms are a possible pathway for MFIs to facilitate sustainable initiatives in micro and small enterprises. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

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16 pages, 3982 KiB

Open AccessArticle

Leadership in Sustainability: Collective Wisdom, Conversations, Creativity, Contemplation and Courage, the Five Pillars of a Master’s Teaching Unit

by Mike Mouritz, Peter Newman, Renée Newman, Jayne Bryant, Aimee Smith and Elaine Olsen

Sustainability 2022, 14(9), 5070; https://0-doi-org.brum.beds.ac.uk/10.3390/su14095070 - 22 Apr 2022

Cited by 2 | Viewed by 12833

Abstract

This paper provides an overview of insights and lessons learned from nearly 20 years of running a Master’s unit called Leadership in Sustainability and how it has been used to foster change agents in small business enterprises, as well as other parts of our economy and community. The unit is based on five ‘C’ pillars, which are discussed in this paper to show how the teaching was able to assist potential leaders in their journey towards sustainability. Collective Wisdom is the theory of how leaders have used their imagination to solve collective ‘wicked problems’ and how sustainability requires such wisdom. The unit covers such theory from innovation, complexity, leadership, management and sustainability literatures, and the students are required to show they used this in solving a problem. Conversations are the main tool that is used because only through integrating diverse opinions have solutions been found to such problems as sustainability. The unit is based around case studies from leaders (including SMEs) who have approached sustainability from various perspectives, and conversations were created with the leaders to illustrate this. Creativity is introduced as a tool that draws upon different layers of perspectives on how to tackle wicked problems, as well as facilitating the breadth of conversations and actions required to solve them. The unit requires students to make a creativity contribution and the teachers provide assistance in how to make this work. Contemplation is designed to show how leadership requires reflection to enable the creativity and conversations to reach the depth and breadth required. The unit introduces students to the Theory-U tools to help instil the link between creativity and reflection or contemplation in addressing sustainability challenges and enabling leadership that creates change in personal, organizational and social systems. Finally, Courage is shown as a necessary part of the role of a leader in sustainability to make the magic of collective and creative solutions, based on conversations and contemplation, come to life through a demonstration-based transition. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

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Review

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19 pages, 671 KiB

Open AccessReview

The Intellectual Domains of Sustainability Leadership in SMEs

by Jane Boeske and Peter A. Murray

Sustainability 2022, 14(4), 1978; https://0-doi-org.brum.beds.ac.uk/10.3390/su14041978 - 09 Feb 2022

Cited by 11 | Viewed by 4143

Abstract

The goal of this paper is to review the intertwined range of conceptualizations that have blurred developing leadership knowledge regarding environmental sustainability. An examination of the leadership literature reveals differential descriptions about sustainable, environmental, and sustainability leadership which are increasingly being used to imply what sustainability-focused leaders do, their interactions, their relationships, and how they address sustainable challenges. While extant research supports that leadership is a critical capability to respond and adapt to constant external environmental and economic upheaval in large firms, agreement about the types of leadership practices necessary to achieve positive environmental sustainability and eco-efficient outcomes is less clear in Small and Medium Enterprises (SMEs). To resolve these problems, we synthesize the sustainable, environmental and sustainability leadership literature by (a) reviewing and clarifying these leadership constructs, (b) theoretically unravelling these overlapping concepts, and (c) developing an integrated framework of intellectual capital and sustainability leadership practices. From a theoretical perspective, this paper seeks to make a significant contribution to the scholarly leadership literature by offering several leadership classifications of skills and knowledge relevant to leadership knowledge domains. Given that extant research has conflated many leadership approaches, this paper builds on the theoretical knowledge of the kind of leadership skills required for sustainability leadership. From a practical perspective, we provide SME leaders with knowledge about the types of leadership practices, behaviours, and activities that will enhance sustainable productivity in their firms. The paper is designed to advance a new way of thinking about existing sustainability leadership by presenting an original contribution that alters and reorganizes potential causal maps, that are potentially more valuable. Whilst most of the leadership research involves large firms, we seek to better understand and inform sustainability leadership in SMEs. Full article

(This article belongs to the Special Issue Sustainability Leadership in Small to Medium-Sized Enterprises (SMEs): Bridging the Divide between Theory and Practice)

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