Sustainability Barriers in SMEs
A study of strength of sustainability barriers and practical
solutions in Green product lifecycle at SMEs
THESIS WITHIN:
General management NUMBER OF CREDITS: 15
PROGRAMME OF STUDY: Engineering Management AUTHOR: Alireza Alipour
Mehdi Rahimpour JÖNKÖPING: August 2020
Master Thesis in General Management
Title: Sustainability Barriers in SMEsAuthors: Alireza Alipour, Mehdi Rahimpour Tutor: Sambit Lenka
Date: 10/08/2020
Key Words: Green product lifecycle, green marketing, SMEs, eco-guideline, eco-barrier
Background: Small and medium-sized firms (SMEs) have their impact on the environment
besides their benefits. While a business grows, naturally destroying impacts are also growing. SMEs have a variety of barriers to be green and sustainable. There are some simple and non-complicated actions that firms can take, to reduce their destructive impacts on the environment. This study analyses the existing barriers and focuses on small and medium sizes firms (SMEs) around Jonkoping. Besides, this study includes interviews with successful and sustainable companies and reflects their solutions to overcome those barriers in a different step of the green product lifecycle.
Purpose: This is a practical study of how sustainability process in SMEs can drive product lifecycle greener. The purpose of this thesis is to study the existing practical and simple solutions for different environmental sustainability barriers in SMEs which located in Jonkoping region. Also, it goals to reveal solutions which applies by sustainable businesses to overcome to the sustainability barriers.
Method: To fulfil the purpose of the thesis, an experimental research design was applied, and the data was provided from in-depth, semi-structured interviews. Ten interviews were conducted with successful businesses in sustainability practice in the Jonkoping region. The data analysis for this study was created by an inductive approach.
Conclusion: This study has revealed that the successful green businesses categorizing their barriers into general, segmental, and individual groups. After that, by evaluating the strength of obstacles in different steps of GPL and considering their available resources they plan to apply proper solution. The other main finding in this thesis was a practical framework according to what have been done in our research.
Table of Contents
1 Introduction ... 6 1.1 Background ... 6 1.2 Environmental sustainability ... 7 1.3 Small and Medium sized Enterprises ... 8 1.4 Green product lifecycle ... 8 1.5 Problem Discussion ... 9 1.6 Purpose and research questions ... 11 2 Literature review ... 12 2.1 Literature search ... 12 2.2 Sustainability barriers in SMEs ... 12 2.2.1 Information barriers ... 12 2.2.2 Lack of resources ... 13 2.2.3 Legislation and regulation ... 14 2.2.4 Market ... 15 2.2.5 Barrier categorizing ... 16 2.3 Environmental sustainability solution ... 18 3 Methodology ... 20 3.1 Research Design ... 20 3.2 Research philosophy ... 21 3.3 Research Approach ... 21 3.4 Research nature ... 22 3.5 Research strategy ... 22 3.6 Data collection ... 23 3.6.1 Primary data collection ... 23 3.6.2 Secondary data collection ... 23 3.6.3 Qualitative interview ... 23 3.7 Quality assurance ... 24 3.7.1 Credibility ... 25 3.7.2 Dependability ... 25 3.7.3 confirmability ... 25 3.7.4 Transferability ... 25 3.8 Ethical considerations ... 26 4 Empirical Finding ... 27 4.1 Environmental sustainability barriers ... 27 4.1.1 Lack of awareness in garbage recycling ... 28 4.1.2 Guideline ... 28 4.1.3 Green supplier ... 28 4.1.4 Energy ... 29 4.1.5 Staff knowledge ... 30 4.1.6 Convince Market ... 30 4.1.7 Lack of resources ... 30 4.2 Green product lifecycle ... 314.3 Problem solution ... 33 4.3.1 Recycling partnership ... 33 4.3.2 Eco-Certification ... 33 4.3.3 Consultancy ... 34 4.3.4 Green logistic ... 34 4.3.5 Basic order forecast ... 34 4.3.6 Sustainable investment partnership ... 35 4.3.7 Eco-friendly material ... 35 5 Discussion and conclusion ... 36 5.1 Barrier analysis ... 36 5.1.1 General barriers ... 36 5.1.2 Segmental barriers ... 36 5.1.3 Individual barriers ... 37 5.2 GPL barrier evaluation ... 37 5.3 Adopt environmental sustainability procedure ... 38 5.4 Solutions ... 39 6 Conclusion & Implications ... 41 6.1 Conclusion ... 41 6.2 Contributions and implications ... 42 6.3 Limitations and Suggestions for Future Research ... 42
List of Tables and Figures
Tables
Table 1. Categorizing barriers in different steps of green product development lifecycle ... 16
Table 2. Overview of data sample ... 24
Table 3. Distribution of barriers in Green Product Lifecycle steps ... 32
Figures
Figure 1. Earth Overshoot Day ... 6Figure 2. Green product lifecycle ... 9
Figure 3. Research structure ... 20
Figure 4. sustainable activities adaptation method ... 39
Abbreviations
GMP- Green Manufacturing Process GPL – Green Process Lifecycle
1
Introduction
The purpose of this part is to introduce the reader to what will be covered in the chapter. This is presented at the start of each chapter and is adapted to reflect the content of the chapter. This will be followed by a section outlining the discussion of the problem and will conclude by determining the purpose and the research questions of this study.
1.1 Background
In the current century, one of the significant topics in the discussion about the future of the companies is adapting sustainability processes and saving the earth from an ecological catastrophe which evaluated as an opportunity of $12 trillion (Elkington, 2017). Figure 1 illustrates the terrible history of our planet which is called The Earth Overshoot Day and concerns all the inhabitants of the Earth. It means that all consumption resources which Planet Earth can retrieve during one calendar year, have been consumed until that day. And every year the Earth Overshooting Day happens sooner (Earth Overshoot Day, 2019).
Figure 1. Earth Overshoot Day
Source: Global Footprint Network National Footprint Accounts 2019
To establish a balance on exploiting the planet resources, businesses have an important contribution. Therefore, they are under the huge pressure by the society and stakeholders to adapt their processes to be more environmental friendly and they use environmental activities for their marketing purpose. The question which all of the organizations are looking for the
answer is how they should start adapting environmental sustainability action while they continue to economic growth. And furthermore, they want to know if there is any applicable framework to help them in this process (Knight, 2009). But there is a misunderstanding about the concept of sustainability when we speak about this topic. In public perception, sustainability is trying to use the resources on the earth in a way that is not harmful to the environment. However, this definition could be correct, but it is just a piece of a definition of environmental sustainability as one of the sustainability areas. There are three main different pillars in sustainability which include environmental, economic, and social sustainability (Anand, 2000; Neumayer, 2012; Vallance, 2011; Spreitzer, 2012) which each business according to its perspective and aims try to develop each of them.
It is crystal clear that it would be hard or impossible to envision a sustainable society without a sustainably productive environment to create a resource base. In the same way, sustainable economy relies on a balanced distribution of energy, material, and environmental resources. Thus, economic systems will fail without sustainable environment (Morelli, 2011).
1.2 Environmental sustainability
Throughout all aspects of our lives, environmental sustainability is addressed from building eco-friendly houses and environmentally conscious communities through to the purchase of recycled goods, low impact furniture and clothes, and green energies. But the question is that what is the actually meaning of environmental sustainability. There are several different definitions utilized by policymakers, green organizations, and businesses. According to a definition by (Park, 2013) environmental sustainability means the long‐run maintenance of ecosystems and other environmental resources for future generations. In fact, the terms “environmental sustainability” is rather broad and complex. We introduce environmental issues first to make it clear. Pollution in water, which is for example releasing chemical substances in factories. Air-pollution is mainly due to fossil-based material consumption, plastics, oil spills, heavy metals, climate change and global warming, CO2 emission, land degradation and agricultural constraints, drought, habitat and biodiversity loose (Arora, 2018).
In recent years sustainable development has become a significant task for companies to mitigate the tension between environmental degradation, high energy use and economic growth (Juan, 2011). According to Confente & Russo (2009), “balancing economic and environmental performance has become increasingly important for organizations facing competitive, regulatory, and community pressures” (p.2). Thus, the companies are under pressure not only
to provide economic benefits but also to tackle environmental and social issues (Meixell, 2015). Furthermore, companies are expected to have plans to reduce their products and services which have environmental impacts because of rising environmental sustainability stresses (Lewis H. a., 2001; Sarkis J. , 1995; Sarkis J. , 2001). Most businesses have outlined their policies in line with the desires of the stakeholders and market-oriented product demands and consumers’ expectations of sustainability issues (Hult, 2011). In this changing market landscape, a common marketing approach has been to modify current products or introduce new ones and manufacturing practices to minimize environmental impact and increase environmental efficiency (Cronin, 2011). Since the introduction of environmental friendly products enables companies to meet environmental requirements, it will create competitive advantages and promote future growth (Nidumolu, 2009). Therefore, in the future, the activities of sustainable product development are expected to grow (Varadarajan, 2015). In order to achieve these conditions in a company, a commitment to sustainability must be established at the level of strategic management and must permeate to all management levels (Hallstedt, 2013). Among different aspects of sustainability, at present, the focus is principally on environmental pollution (Visvanathan & Kumar,1999).
1.3 Small and Medium sized Enterprises
According to the World Bank (2019), Small and Medium Enterprises (SMEs) play a paramount role in most economies and are significant contributors to work growth and to global economic progress. SMEs constitute about 90 percent of companies and more than 50 percent of jobs worldwide. There is no single definition of an SME. The European Union (2019) defined SMEs as a Non-subsidiary firms with fewer than 250 employees, annual turnover less than € 50 million and/or a balance sheet total not over € 43 million. By this definition 99% of all businesses in Europe are categorized as SMEs (European Commission, n.d.). On the other side, the number of employees in SMEs varies across other countries. In some countries 200 is the maximum number of employees in SMEs, while this number increase to 500 employees in the United States (OECD, 2019).
1.4 Green product lifecycle
In the past two decades, because of many environmental problematic issues such as raising global temperature, material scarcity, decreasing natural resources, increasing CO2 emission,
high energy consumption, population explosion, and the other global industrial impact the Green Product lifecycle (GPL) came into prominence and the businesses try to improve GPL to decrease their environmental impact. Thus, GPL plays a paramount role in green marketing strategy and helps the businesses and economies move rapidly toward a sustainable environment. GPL is defined as creating, designing, producing environmental friendly goods which could helping to protect the environment (Pochat, Bertoluci, & Froelich, 2006) and Figure 2 shows the different steps in process of green product life cycle. Chen (1994) reported that developing the green product lifecycle is the "end of pipe technology" where businesses become mindful of ecological problems across the development cycle and product design and in another study in 2001 the most effective steps in GPL are minimize the non-renewable resources usage, using renewable resources, and preventing toxic substances during the whole product lifecycle.
Figure 2. Green product lifecycle source: (Gholve, 2015)
1.5 Problem Discussion
Historically, there is a belief that SMEs do not have important impact on environment rather than large firms. Although each individual SMEs has less destructive effects on environment compare to a large company, but their overall environmental impact are considerable. In general, around 70% of the environmental impact and 64% of the industrial pollution in the EU relate to SMEs (OECD, 2019). According to another report by NetRegs, UK SMEs employed together in industry compensate for around 60% of industrial waste and 80% of emissions incidents (Reeve, 2003). There are some sectors which have main environmental impact and are dominated by SMEs such as construction, food and beverage, textiles, printing, metal
R&D Design Supply
Logistic & distribution Market Disposal In te rn al m an ufa ctu re Manufacturing Investing Regulation8
finishing, livestock farming, some electronics sub-sectors (UNESCO, 2017). Moreover, the impacts of SMEs on environment are categorized in a vast range such as NOx, Sox, CO2, energy
use, PM10, waste and hazardous waste, and so on (European Commission, n.d.; OECD, 2019). Sustainability management practices are increasingly being adopted by firms and more and more companies claim to be sustainably managed (Dyllick, 2016; Landrum, 2018). Stakeholders of multinationals companies and small and medium-sized enterprises (SMEs) often put pressure on them to incorporate sustainability as part of their operations (Handoko, 2014), but in reality, this does not take place on a scale that is broad enough to meet today’s challenges (He, 2014). Thus, despite the increase in sustainability management of industrial development, and available strategies designed for SMEs to be sustainable (Nulkar, 2019), not only there is no sign of reduce for global emission of greenhouse gasses and consumption resources, but also, they increased in both industry and energy use in 2019 (United Nations Environment Program (UNEP), 2019). “EnviroINNOVATE” and “Envirowise” in west midlands are samples for available environmental strategies. According to European Commission just 24% of SMEs are actively trying to reduce their environmental impact (EuropeanCommission).
To approach to this problem, we assume two reasons: first, the available academic frame works are not accessible for the SMEs, and second, the frame works are really broad and not helpful for SMEs.
Generally, there are two types of SMEs: the first group are not aware about their important effect on environment and they think because their size is not big, so their environmental impacts are not effective compare to the big firms. This is the reason they do not think about developing their activities to cover environmental sustainability. The second group of SMEs are the businesses that are aware about the importance of environmental sustainability, but they do not know how they should develop their processes and activities. These days, by increasing the number of second group and the awareness of customer about ecofriendly product, the need of developing GPL come into prominence. Thus, there are three main challenges for SMEs: Firstly, designing, developing, planning, and performing the activities should attract, satisfy and keep the customers (Dangelico R. M., 2010). Secondly, whilst sustainable activities entail tremendous development costs for an organization, but they can offer a lot of benefits (Hart, 2007). Finally, environmental sustainability process is complex and needs certain knowledge and skills to implement (Dangelico R. M., 2010; Hart, 2007). The interesting subject to learn is that if there is any similar method that SMEs can be successful to overcome their barriers on
In this sense, different approaches to reshape our manufacturing and commercial industries may theoretically lead to different environmental outcomes. And shows, different obstacles imply during the implementation of sustainability systems in various industries (Tsalis, 2013).
1.6 Purpose and research questions
The overall aim of this thesis is to contribute to the understanding of the application of environmental sustainability systems in SMEs and how those systems can serve as instruments in order to promote sustainable development integration in small and medium-sized enterprises.
The thesis is based on the following research questions:
1. Which different barriers the SMEs in production and manufacturing industry face to adopt green actions and how we can categorize them?
2. Which solutions help to SMEs to improve their Green activities?
3. How SMEs can overcome to their barriers and find best green actions?
By analyzing the barriers in SMEs and the activities that these companies apply to decrease environmental impact we tried to find a general platform.
2
Literature review
The aim of this chapter is to provide a detailed theory-based structure for the reader to deepen comprehension of the study topics and the relevant intent. Firstly, the chapter will begin with the evaluate the different obstacles that happen for SMEs. The researchers will relate those barriers with the Green product lifecycle to understand in which steps of GPL the focus of problems is more. Lastly, this chapter will provide some solutions which previous researchers worked on them.
2.1 Literature search
Literature review has been conducted using Primo, Scopus, Google scholar and Web of Science as famous databases to find sources. For the first step, we started searching about “sustainability barriers” and “sustainability product development”. For the next step, we narrowed our topic by searching about “green market” and “SMEs” as two terms of bibliometric analysis based on citation rate and publication date. The snowballing technique was the other way to search for relative articles.
2.2 Sustainability barriers in SMEs
It is clear that small and medium size companies face a wide range of internal and external barriers such as human, political, structural, cultural dimensions, and so on to expanding its environmental friendly activities (Evans, 2012).
2.2.1 Information barriers
Some scholars believe that the lack of management awareness, lack of awareness of sustainability issues and available program are two of the major sustainability barriers in most of SMEs (Hasan, 2016; Dayaratne, 2015; Tsalis, 2013; Johnson, 2016; Lewis, 2015). In addition, low eco-literacy, lack of understanding about environmental management, and lack of accessibility to data are other parts of awareness barrier which makes it difficult for some businesses to interpret the rules and understand how the rules may affect their business (Revell A, 2007; Revell & Rutherfoord, 2003; Sulong, 2015; Fresner, 2017; Meath, 2016).
Furthermore, difficulty in identifying, receiving, and understanding relevant environmental information to the business is another barrier in front of SMEs in environmental sustainability issue (Conway, 2015; Ghazilla, 2015; Auer, 2017). According to (Nulkar, 2019) environmental risks are not perceived at all due to poor environmental sustainability practices for SMEs and environmental risks are not considered significant. Revell et al. (2010) studied on 220 different SMEs and found around 30 percent of them had lack of information about what they should do to environmental reform and 57% wanted more information about the way that they can help the environment. The other types of information barriers include lack of inventory data (Heidrich, 2013), low employee skills levels (Mbuyisa, 2015), lack of awareness on tool‐based products/processes among customers (Ghadge, 2017; Ghazilla, 2015), educational systems being insufficient to accommodate the dynamism and the requirements of the businesses (Casalino, Ivanov, & Nenov, 2014), language and culture barrier (Lewis, 2015), lack of experienced tool verifiers (Ghazilla, 2015), and lack of information on suitable firms with which to collaborate (Lewis, 2015). Sometimes providing understandable environmental information for SMEs is an issue because they have problem to interpret the specific information for environmental management system such as ISO 1400 (Darnall, Gallagher, Andrews, & Amaral, 2000). And this is one of the reason that only 0.4% of small and medium size business use a certified Environmental Management System (Ratiu, 2014; Testa, o.a., 2014).
2.2.2 Lack of resources
Many studies found that lack of resources is another environmental challenge for SMEs and include less environmental expertise, financial, technical knowledge, and time (Ghazilla, 2015; Ghadge, 2017; Auer, 2017; Malá, 2017; Johnson, 2016). Financial resources are vital for the adoption of environmental activities of SMEs (Vernon, Essex, Pinder, & Curry, 2003). Thus, researches mentioned financial concerns as one of the biggest obstacles which include lack of funding for environmental project, high cost of implementing environmental practices, and long period to return investment (Hasan, 2016; Conway, 2015; De Steur, 2020; Gamal Aboelmaged, 2011; Jadhav, 2014). The researches show that if business costs decline, around 70% of firms want to make environmental improvement and they mentioned increased costs as a barrier (Revell A. S., 2010; N, K, & M., 2003), and almost 50% believed that environmental friendly would increase profits (Revell, 2010). Moreover, lack of suitable investors (Bocken, 2015; Hasan, 2016; Casalino, Ivanov, & Nenov, 2014) which sometimes
happens because of short-term investor min-set (Bocken, 2015). The other obstacles that SMEs should face with them beside the financial issues such as difficulties in acquiring financial capital (Casalino, Ivanov, & Nenov, 2014; Ghazilla, 2015; Zhou, 2015; Auer, 2017; Neto, 2017; Conway, 2015; Fresner, 2017; Mbuyisa, 2015; Nowotarski, 2015), high initial capital cost to implement GMP (Ghadge, 2017; Hjorth, 2016; Ghazilla, 2015; Zhou, 2015; Neto, 2017; Malá, 2017; Fresner, 2017; Mbuyisa, 2015; Dayaratne, 2015), and high cost of certification/verification (Ghazilla, 2015; Auer, 2017; Lewis, 2015). Lack of time is another challenge that SMEs face (Hjorth, 2016; Ghazilla, 2015; Heidrich, 2013; Fresner, 2017; Neto, 2017; Conway, 2015). According to Jenkins (2006) lack of time and recourses are the major environmental obstacles for small and medium size firms, and lack of staff time is an environmental barrier of around 53% of the businesses (Revell, 2010). SMEs are well known for the lack of human resources in implementation and maintenance both in technical knowledge (Zhou, 2015; Fresner, 2017; Sulong, 2015; Meath, 2016) and number of expertise (Neto, 2017; Johnson, 2016; Malá, 2017; Mourtzis, 2016; Ghazilla, 2015; Conway, 2015). Cherrafi et al. (2017) mentioned that some governmental organization such as US Environmental Protection Agency (EPA) for SMEs to reduce waste and improve environmental and economic performance offer some toolkits and training courses. These actions can help to remove managerial, behavioral, and technical barriers such as poor quality of human resources, lack of top management involvement in adopting Green lean initiative, lack of expertise training and education, and lack of Kaizen culture.
2.2.3 Legislation and regulation
Over the past decades, governmental support has increased not only for public purpose such as economic growth, but also for environmental activities such as climate investment (Stiglitz, 2016). Earlier scholars show the paramount role of governmental regulations on environmental decisions of firms. According to Parker (2009) SMEs’ sustainability decisions are only affected if the regulations are sufficiently consistent and enforced consistently among all small and medium-sized enterprises to put pressure on them to improve their environmental activities. Therefore, lack of laws that regulate sustainability (Sulong, 2015; Ghadge, 2017; Johnson, 2016; Dayaratne, 2015), Lack of reinforcement of existing laws (He, 2014; Neto, 2017), absence of incentives and policies for implementation of tool (Ghadge, 2017; Ghazilla, 2015; Dayaratne, 2015; Zhou, 2015; Neto, 2017; Johnson, 2016), and lack of support and guidance
from regulatory authorities (Auer, 2017; Ghazilla, 2015; Hasan, 2016; Malá, 2017) are four obstacles to implement environmental practices.
Some researches mentioned that ignorance about regulations is another challenge that SMEs have in adopting their environmental practices and most of them do not know about relevant environmental legislation to their business (Hjorth, 2016; Auer, 2017; Lewis, 2015; Neto, 2017). On the other side, some studies show that even if some SMEs have general awareness about the relevant regulation and understand about environmental laws, but the complexity of legislations and sustainability management standards is an obstacle in front of them to adopt environmental practices (Casalino, Ivanov, & Nenov, 2014; Ghazilla, 2015; Johnson M. P., 2016).
Revell et al. (2009) found that around 60% of SMEs agreed that legislation and regulation could help implementing environmental activities and 60% believed that there should be further regulations to monitor the environmental effects of corporations. However, compulsory environmental legislations are a motivation for businesses to take environmental action, but generally companies fulfill just the minimal requirements (Revell A, 2007). The other legislation barriers which scholars mentioned as a prevention for SMEs are lack of involvement from stakeholders as an external barrier (Ghadge, 2017; Auer, 2017; Malá, 2017; Zhou, 2015) and Restrictive or slow company policies towards changes for sustainability as an internal obstacle which can intensify the others barriers (Ghazilla, 2015; Auer, 2017; Meath, 2016; Bocken, 2015).
2.2.4 Market
There are different barriers which happen on the market relate to environmental sustainability in SMEs. Some studies mentioned that lack of market performance or demand (Sulong, 2015; Malá, 2017; Ghadge, 2017; Ghazilla, 2015; Mourtzis, 2016), low attitudes towards sustainability in society (Ghazilla, 2015; Johnson, 2016), and weak market position (Ghazilla, 2015) are the barriers which prevents SMEs to adopt sustainable activities. In addition, lack of competition (Mbuyisa, 2015), lack of competitive advantage (Casalino, Ivanov, & Nenov, 2014; Bocken, 2015), and less competitiveness due to implementation of GMP (Ghazilla, 2015) are three obstacles to implement environmental practices. Bocken (2015) reported that there are two main reason that SMEs could not be successful in green market. The first reason is that the businesses could not understand the market needs and the demands of the customers about
green products. Second one is that they think if they copy business models from the other industries it can help them to be successful.
2.2.5 Barrier categorizing
There are other barriers which previous scholars found SMEs face in environmental sustainability. Table 1 categories the barriers in different steps of green product lifecycle. According to this table we can understand the focus of barriers in each step of GPL is different. We can see the biggest number of obstacles for green sustainability is in manufacturing and marketing steps. The next parts that have the most volume of problems is R&D, Regulation, and Investing parts. Finally, Supply, Logistics & distribution, Disposal, Design are the steps that SMEs have less obstacles in green process. But if the number of barriers in each steps can be the only factor to analyze the obstacles and is enough?
Table 1. Categorizing barriers in different steps of green product development lifecycle
sector Barriers
R&D
• Lack of accessibility to data (Sulong et al., 2015) (Selech et al., 2014) (Meath et al., 2016) (Fresner et al., 2017)
• Inadequate R&D, design and testing within the organization (Ghazilla et al., 2015) (Auer & Jarmai, 2017)
• Lack of inventory data (Heidrich & Tiwary, 2013)
• The need to disclose confidential information to a third party (Lewis et al., 2015)
• Copied business models from other industries (Bocken, 2015)
• Difficulties in obtaining information (Ghazilla et al., 2015)
• Educational systems being insufficient to accommodate the dynamism and the requirements of the businesses (Casalino et al., 2014)
• Difficulties in obtaining information (Auer & Jarmai, 2017)
• Unwillingness to exchange information (Grimm et al., 2016), (Ageron et al., 2012), (Walker et al., 2008),
(Govindan et al., 2014), (Kache and Seuring, 2014)
Design
• Disbelief regarding the benefits of tool (Sulong et al., 2015) (Ghazilla et al., 2015) (Mbuyisa & Leonard, 2015)
• Lack of accessibility to data (Sulong et al., 2015) (Selech et al., 2014) (Meath et al., 2016) (Fresner et al., 2017)
• Lack of expertise (Sulong et al., 2015) (Nowotarski & Paslawski, 2015) (Ghazilla et al., 2015) (Mourtzis et al.,
2016) (Malá et al., 2017) (Heidrich & Tiwary, 2013) (Conway, 2015; Johnson & Schaltegger, 2016) (Neto et al., 2017)
• Inadequate R&D, design and testing within the organization (Ghazilla et al., 2015) (Auer & Jarmai, 2017)
• Lack of a qualified female workforce in the labor market (Auer & Jarmai, 2017)
Supply • • Low bargaining power with suppliers (Sulong et al., 2015) Poor supplier and/or distributor commitment to sustainability (Ghazilla et al., 2015) (Malá et al., 2017)
• Firms capabilities and resources (Roehrich et al., 2014) (Schrettle et al., 2014)
Manufacturing
• Compatibility of tool with existing equipment (Sulong et al., 2015) (Zhou et al., 2015)
• Disbelief regarding the benefits of tool (Sulong et al., 2015) (Ghazilla et al., 2015) (Mbuyisa & Leonard, 2015)
• Lack of expertise (Sulong et al., 2015) (Nowotarski & Paslawski, 2015) (Ghazilla et al., 2015) (Mourtzis et al.,
2016) (Malá et al., 2017) (Conway, 2015; Johnson & Schaltegger, 2016) (Neto et al., 2017) • Corruption inside the company (He et al., 2014)
• Time of work shifts (Nowotarski & Paslawski, 2015)
• Lack of resources (Ghadge et al., 2017) (Ghazilla et al., 2015; Zhou et al., 2015) (Auer & Jarmai, 2017) (Malá
et al., 2017) (Brauns & Loos, 2015) (Handoko et al., 2014) (Witczak et al., 2014) (Tsalis et al., 2013 ) (Bocken, 2015; Conway, 2015; Fresner et al., 2017; Johnson & Schaltegger, 2016; Lewis et al., 2015)
• Outdated machines and tools (Ghadge et al., 2017) (Trianni & Cagno, 2015) (Neto et al., 2017)
• Compatibility of tool with existing (Zhou et al., 2015)
• Improper communication structures to support tool (Ghazilla et al., 2015)
• Lack of accreditation and/or certification procedures inside the company (Casalino et al., 2014)
• Lack of empowerment to support tool (Ghazilla et al., 2015)
• Management has high resistance towards sustainability or tool (Ghazilla et al., 2015) (Auer & Jarmai, 2017)
(Lewis et al., 2015) (Neto et al., 2017) (Dayaratne & Gunawardana, 2015)
• Restrictive or slow company policies towards changes for sustainability (Ghazilla et al., 2015; Zhou et al.,
2015) (Auer & device Jarmai, 2017) (Meath et al., 2016) (Bocken, 2015)
• Weak Organizational Structure (Ghazilla et al., 2015) (Auer & Jarmai, 2017) (Lewis et al., 2015)
• Low employment status (Witczak et al., 2014)
• Low employee skills levels (Mbuyisa & Leonard, 2015)
• Lack of relevance to the business (Conway, 2015)
• Being in a leased or listed building, or being only in a short‐hold tenancy from which the occupants may not gain any benefit from installing new equipment such as solar panels (Meath et al., 2016) (Conway, 2015)
• Corrupt regulatory authorities (Hasan, 2016)
• High cost of certification/verification (Ghazilla et al., 2015) (Auer & Jarmai, 2017) (Lewis et al., 2015)
• Lack of experienced tool verifiers (Ghazilla et al., 2015)
• The complexity of sustainability management standards and tools (Casalino et al., 2014) (Ghazilla et al.,
2015) (Johnson & Schaltegger, 2016)
• Unavailability of tool‐based alternative solutions (Ghazilla et al., 2015) (Malá et al., 2017)
• Lack of a qualified female workforce in the labor market (Auer & Jarmai, 2017)
Investing
• Lack of involvement from external stakeholders (Ghazilla et al., 2015; Zhou et al., 2015)
• Difficulties in acquiring financial capital (Nowotarski & Paslawski, 2015) (Neto et al., 2017) (Conway, 2015;
Fresner et al., 2017) (Mbuyisa & Leonard, 2015)
• High initial capital cost to implement tool (Ghadge et al., 2017) (Hjorth & Brem, 2016) (Ghazilla et al., 2015;
Zhou et al., 2015) (Neto et al., 2017) (Dayaratne & Gunawardana, 2015) (Malá et al., 2017) (Fresner et al., 2017) (Kurczewski, 2014) (Mbuyisa & Leonard, 2015)
• Lack of involvement from external stakeholders (Ghadge et al., 2017) (Auer & Jarmai, 2017) (Malá et al.,
2017)
• Difficulties in acquiring financial capital (Casalino et al., 2014) (Ghazilla et al., 2015; Zhou et al., 2015) (Auer
& Jarmai, 2017)
• Lack of suitable investors (Casalino et al., 2014; Hasan, 2016) (Bocken, 2015)
• Short‐term investor mind‐set (Bocken, 2015)
Regulation
• Ignorance about regulation (Hjorth & Brem, 2016) (Auer & Jarmai, 2017) (Lewis et al., 2015) (Neto et al.,
2017)
• Lack of laws that regulate sustainability (Sulong et al., 2015) (Ghadge et al., 2017) (Johnson & Schaltegger,
2016) (Dayaratne & Gunawardana, 2015)
• Lack of reinforcement of existing laws (He et al., 2014) (Neto et al., 2017)
• Absence of incentives and policies for implementation of tool (Ghadge et al., 2017) (Neto et al., 2017)
(Ghazilla et al., 2015; Zhou et al., 2015) (Johnson & Schaltegger, 2016) (Dayaratne & Gunawardana, 2015) • Inadequate industrial self‐regulations (Ghazilla et al., 2015)
• Lack of environmental enforcement (Ghazilla et al., 2015)
• Lack of support and guidance from regulatory authorities (Ghazilla et al., 2015) (Hasan, 2016) (Auer &
Jarmai, 2017) (Malá et al., 2017)
• Theory‐driven regulations that don't reflect the reality (Auer & Jarmai, 2017)
Logistics & distribution
• Low quality of logistics infrastructure (Ghadge et al., 2017)
• Unavailability of wider distribution channels (Casalino et al., 2014)
• Security concerns (Mbuyisa & Leonard, 2015)
• Logistics infrastructure (Silvestre, 2015) (Soysal et al., 2014)
Market
• Consumer eco-literacy (Giunipero et al.,2012) (Reuter et al., 2012) (Govindan et al., 2014) (Mathiyazhagan et
al., 2013) (Govindan et al., 2014) (Gualandris and Kalchschmidt, 2014)
• Absence of perceived benefits (Hasan, 2016) (Conway, 2015; Johnson & Schaltegger, 2016)
• Business performance priority (Zhou et al., 2015)
• Lack of awareness of sustainability issues (Hasan, 2016) (Dayaratne & Gunawardana, 2015) (Tsalis et al.,
2013) (Johnson & Schaltegger, 2016; Lewis et al., 2015)
• Lack of competitive advantage (Casalino et al., 2014) (Bocken, 2015)
• Lack of financial gains through tool (Hasan, 2016) (Conway, 2015)
• Less competitiveness due to implementation of tool (Ghazilla et al., 2015)
• Low internationalization (Casalino et al., 2014)
• Not understanding the market (Bocken, 2015)
• Informality of the businesses (Mbuyisa & Leonard, 2015)
• Lack of market preferences/demands for tool‐based products (Sulong et al., 2015) (Ghadge et al., 2017)
(Ghazilla et al., 2015) (Mourtzis et al., 2016)
• Consumers and society in general lacking the means to defend their rights in legal disputes (He et al., 2014)
• Lack of awareness on tool‐based products/processes among customers (Ghadge et al., 2017) (Ghazilla et al.,
2015)
• No transparency of the market (Ghadge et al., 2017) (Brauns & Loos, 2015)
• Lack of financial gains through tool (Ghazilla et al., 2015; Zhou et al., 2015)
• Society with low attitudes towards sustainability (Ghazilla et al., 2015) (Johnson & Schaltegger, 2016)
• Customer engagement required during certification and tests (Auer & Jarmai, 2017)
• Lack of competition (Mbuyisa & Leonard, 2015)
• Lack of market preferences/demands for tool‐based products (Malá et al., 2017)
• Product price (Walker et al., 2008) (Reuter et al., 2012) (Ramirez et al., 2014) (Roehrich et al., 2014)
Disposal
• Lack of resources (Heidrich & Tiwary, 2013)
• Lack of scientifically robust assessment methodology to determine environmental aspects and impacts that can be readily adopted by SMEs (Heidrich & Tiwary, 2013)
• Lack of expertise (Heidrich & Tiwary, 2013)
• Lack of time (Heidrich & Tiwary, 2013)
• Lack of inventory data (Heidrich & Tiwary, 2013)
2.3 Environmental sustainability solution
Past scientists have predicted that waste volumes will rise dramatically until 2025 (Geyer, Jambeck, & Law, 2017). Many studies have done to offer sustainable solutions and general framework toward sustainable waste management. There are literatures and successful approaches in reducing CO2, waste or water consumption so far, For example:
Textile manufacturing contributes to different environmental pollutions including a high level of raw material, producing waste in big volume and too much wastewater. Environmental solutions helped the textile industry to improve overall environmental effects by reducing waste by 12%, carbon dioxide by 10-11 per cent, 9-11 per cent nitrogen oxide and energy consumption by 5% (Mousumi, Parag, & Parimal, 2020).
Recycling water is a very effective way to reduce wastewater and saving costs. In India, the textile industry contributes important role to employment, hence, a general green model was needed to control the manufacturing environmental effects. According to (Mousumi, Parag, & Parimal, 2020) a general technical solution needed to apply in the textile industry or other similar industries for example paper and leather fields.
Another big challenge for industries is scrap management, especially the metal industry. It seems easy but there are limitations. A research has been done and provides solutions directly for metal scrap, and indirectly on emission CO2. According to (Mastos, o.a., 2020), They revealed how using smarter equipment efficiently decrease waste materials. The main strategic values are optimizing the use of content from waste handling to recyclable products for
substantial financial benefits for companies. Findings and solutions influenced positively and directly on automation and negotiation of the procedures between waste solution providers and scrap management departments, and indirect reduction on CO2 emission.
In another interesting research project, they managed to use bio-based materials for construction industry. The study shows how low-tech, informal, self-organizing solutions can serve as a basis for cleaner productions and environmental sustainability. Mussel canning industry release thousand tons of mussel every year which has a great impact on the environment. Mussel usually uses in feeding poultry industry, but several researches have done on the physical specification of the mussel and identified that mussel isolation specification is very good and can be substituted in building isolation industry materials, like polystyrene and polyurethane which both have a great negative impact on the environment (Martínez-García, González-Fonteboa, Carro-López, & Pérez-Ordóñez, 2020). Another simple solution is to use waste materials in the building industry as cheap fillers. In constructing green concrete for sustainable buildings, littered items such as waste metallic plastic and palm oil fuel ash waste (POFA) can be used as a cheap part (Alrshoudi, o.a., 2020).
Studies show that energy efficiency has a direct impact on CO2 reduction, the International Maritime Organization (IMO) estimated that the shipping industry can reduce 25-75% CO2 emissions which most of this achievement can be due to energy efficiency (Johnson H. J., 2013) As an example of using renewable energy, a study has been done in a bakery in Germany, since the bakery is one of the most important industry in Germany. The Bakery is 950 M2 with an energy cost of 68300 DM (Kannan & Boie, 2003). By implementing photovoltaic solar system, the co2 reduced up to 33% and energy cost saved 4000 DM per year which is about 6% of the total energy cost.
3 Methodology
3.1 Research Design
The role of research designs is to structure study activities to facilitate the achievement of the purpose of the research. Exploratory experiments appear to develop from the discovery of such phenomena and instead seek to investigate certain particular phenomena (Easterby-Smith, Thorpe, Jackson, & Jaspersen, 2018; Saunders, Lewis, & Thornhill, 2009). The general summary of our methodology to find the answers for our research questions is illustrated in Figure 3.
Figure 3. Research structure
In this research, through the literature review we found a list of different types of barriers which SMEs face during product development and proposed drivers and identified in which steps of product development lifecycle the focus of barriers is high and the sustainable manager should focus on those part more than the others. As a result, we aim to propose a general framework according to the methods which successful SMEs used to solve their barriers which they faced in environmental sustainability field.
According to the Bryman (2012), in the management and business field of research, we should emphasize the words rather than quantification. Therefore, in empirical data collection and analysis in these two field of study qualitative research strategy is preferred. The first step in qualitative research method is one or more general questions relating to research which often
Data analysis method Thematic Analysis Primary Data collection method Semi-structure Interview Research Strategy Participatory method Research Approach Inductive approach Research Philosophy Social constructivism
start with the terms of Why or How (Myers, 2013). According to Myer (2013) three main purpose of qualitative research are what people say verbally, how they behave, and as an action why a particular context matter. A main aspect of qualitative method that differentiate it from quantitative method, is the idea that qualitative methods begin with the behaviors and perspectives in the subjects studied and include an interpretive, naturalistic worldview (Alvesson, 2018).
Therefore, in this research we chose qualitative research strategy to explore how some SMEs could be successful to decrease environmental effect and solve some barriers in this way and understand deeply in which step of product development life-cycle SMEs has more difficulty to be green.
3.2 Research philosophy
To answer how empirical data collected, and how and using which methods and techniques those data analyzed a research philosophy designs. Learning the philosophy research helps explain how the researcher views the world that can help him understand the context of the analysis. According to Easterby-Smith, Thorpe & Jackson (2015), Ontology of research indicates how the author(s) define reality. Concerning everyone’s point of view to the reality, we believe that no one knows the truth and knowledge construct in communication and interaction of people together on a subject. So, in this thesis, a relativism approach has been applied. So different individuals interviewed to reflect their perspective on the sustainability, sustainability barriers and their approach to overcoming those barriers. On the other hand, epistemology is the best way to explore the essence of the universe, positivism or constructionism maybe two viewpoints of epistemology (Easterby-Smith, Thorpe & Jackson,2015). As earlier mentioned, we believe that knowledge constructs through the interaction of society, so a social constructivism approach is applied in this research.
3.3 Research Approach
There are three main research approaches which are abductive, inductive, and deductive (Saunders, 2016). The structure of thinking between data checking of current theories and constructing theories of gathered different evidence are different in these approaches (Collis, 2014). Deductive research is developing hypotheses (or a hypothesis) based on current theories, and then establish a testing method to evaluate the hypothesis by empirical observation (Collis,
2014). Inductive research is a method which develop a theory by empirical observation (Collis, 2014). Therefore, the main difference between deductive and inductive approach is that deductive approach testing an existing theory while inductive approach developing and generating a theory. The last approach is abductive which is a mix of two methods and the research process move between data and theory (Saunders, 2016).
The inductive approach is the preferred method for this study because it is compatible with our research philosophy. This relates to our method of gathering evidence, which is focused on interviews, and our form of thinking, because we move from conclusions to inferences.
3.4 Research nature
According to the purpose of research there are four classifications, exploratory, analytical, descriptive, and predictive (Collis, 2014). Research exploratory is described as analysis to explore an unclear problem. It leads to a better understanding of the problem, but not to final results. The purpose of this form of research is to try and build models and concepts and develop a hypothesis instead of testing it (Collis, 2014). According to our purpose of this research, we used exploratory methods.
3.5 Research strategy
There are a variety of interpretive methods which can be used for exploratory study, including
Ethnography, Case studies, Action research, Hermeneutics, narrative, Grounded theory, and Participative inquiry (Collis, 2014). Participatory research involves inquiry and action. People speak about their problem, possible solutions, and possible actions they need to do. In this method participators are involved during research. Therefore, participatory approach increases learning, improve motivation, and activate community empowerment (Denzin NK, 2000). This research in build on a participatory approach as a methodology that is used to explore the answer of our research question and discover how the SMEs (our cases) solve their environmental sustainable problems.
3.6 Data collection
3.6.1 Primary data collection
According to Easterby-Smith (2018), primary data is new information which is collected directly by scholars. In order to collecting primary data in qualitative research there are different method such as individual interview, observation, questionnaires and surveys, action research and so on (Easterby-Smith, 2018). One of the most common methods for primary qualitative data collecting is interview.
Interview is one of the most common methods for collecting primary qualitative data. Using the suitable method depends on various factors namely research topic and context. There are three different types of interview that differ in terms of the degree of environmental qualifications and the study purpose which called unstructured, semi-structured and highly-structured interview (Easterby-Smith, Thorpe, Jackson, & Jaspersen, 2018).
In this research, in order to collecting detailed data, we were looking for an interview method which give us simultaneously a main framework and flexibility to ask question. Therefore, an unstructured and highly structured interview methods were eliminated, and we chose semi-structured interview as the main data collection method.
3.6.2 Secondary data collection
Primary data in this research were complemented with data obtained from secondary sources in order to create trust in the results. Secondary data is information that has already been collected by someone other than the user in forms of publications such as textbooks, encyclopedias, book reviews, magazine articles, commentaries, or other types of electronic media (Easterby-Smith M. T., 2018). In this research, we used the annual report and company webpage to complete the information we obtained from interview.
3.6.3 Qualitative interview
To have more precise research about the overall understanding and problematizing different barriers, we run qualitative research within the following companies as our case study.
In this research, because of prevalence of the pandemic COVID-19 we chose online interview to data collection. Primary data may be obtained by interviews in the form of spoken words
and written text in natural language and are used to translate and evaluate meaning and context (Easterby-Smith M. T., 2018). In addition, we chose interview as the way to collect data because of previous interview experience, access to interviewees, and our exploratory purpose (Easterby-Smith M. T., 2018).
For this research, we selected 10 companies, as show in Table 2, that already have an acceptable positioning in environmental sustainability, then study the gradual improvement of their green activities. Moreover, conducting sampling in Sweden will avoid traditional stereotypes as the Swedish society is more "sustainable oriented" than in for instance Asian countries.
Table 2. Overview of data sample
Company Industry Interviewee Length
A Food production Founder 45 min
B Textile production Founder 53 min
C Part production manager 62 min
D Textile production Sustainable manager 71 min
E Food production Sustainable manager 70 min
F Part production owner 47 min
G Auto part production Founder 57 min
H Part production Sustainable manager 60 min
I Food production CEO 43 min
J Part production Sustainable manager 58 min
3.7 Quality assurance
According to Guba (1981), Authors considered four principles of credibility, dependability, confirmability and transferability to ensure the gathering, presenting and analyzing a study in a trusty manner.
In addition, to ensure that the published literature review is fresh and reliable, articles were deliberately chosen from peer-reviewed journals and reliable academic literatures. The criteria followed and were set down by Guba (1981) will be negotiated accordingly.
3.7.1 Credibility
Credibility can be significantly influenced by an extended association with the object of research. The method for determining the scope of the research also known as credibility of a research (Guba, 1981). In order to obtain a comprehensive picture of the research, document analysis and interviews have been done. At the same time, documents and secondary data compared with outcome of interviews for more credibility of this study. Just published and archived data have been used in this study for more trustworthy. In addition, the theoretical basis of the study created on the themes and key points defined in the academic literature. The interpretation of the data collected is not complex; thus, another viewer would have the same conclusions
3.7.2 Dependability
Presentation of fair and valid findings, replicated in other words, is important to research trustworthiness (Guba, 1981). Dependability was exercised in this study trough explanation of procedure in a simple way that the reader can follow. Furthermore, the methodology was selected to achieve best results in this research. Finally interviews, Company selections and interviewees have been chosen in a way that not influence by gender difference.
3.7.3 confirmability
confirmability indicates if the same findings are possible through another research or another researcher and how comprehensive a study has been carried out impartially (Guba, 1981). Confirmability is an evaluation for the study to prevent bias. Unprofessional or personal views is not included in this research in order to meet the confirmability.
3.7.4 Transferability
Potential of transmitting study results to a substitute structure known as Transferability (Guba, 1981). Via this study we have clarified clearly each step enabling the findings to be generalized. The research procedure and methodology have been described well to ensure that this study is transferable. The study conducted in Sweden, so there could be alternative results in another country since every country has individual ethics and attitudes toward sustainability which may
result different from country to another country depending the degree of cultural and public attitudes to environment. But due to improvement of public awareness toward the sustainability generally in all countries, the findings on this study can be globalized accordingly.
3.8 Ethical considerations
According to Cooper and Schindler (2008, p. 34) ethical issues in research are norms or behavioral standards which direct moral decisions about our actions and our relationships with interviewees. Therefore, related to research ethics in our research, we should consider to follow the moral way in clarification our topic and questions, data collection, data processing, data analyzing, and write up our finding (Saunders, Lewis, & Thornhill, 2009). Moreover, the key principles in research ethics are protecting of research community integrity and protecting the interests of the participants (Bell, 2007).
In our research, due to following the research ethical issues, we sent the description of the research purpose to participants in order to make informed decisions about their involvement in the research. Before starting interview, we asked for permission to record interview. They were also informed that any time during interview and after interview if they want, they can withdraw from the research and we will delete all the interview data of them. In addition, in order to save their data hidden, we will delete their interview recording file after we transcribed the data. Besides, to secure the privacy of the participants and their companies we kept anonymous the name of the interviewees and their companies.
4 Empirical Finding
This chapter will present our finding from primary and secondary data collection. In this chapter, regarding to our research questions and our purpose from this study, we structured different subcategories. Moreover, in order to better illustration of our finding we mention some of the quotations.
Our interview questions are designed to find the answer of the questions about which type of difficulties the SMEs face in environmental sustainability activities and the focus of these barriers are on which steps of green product life cycle. The other question was about the solutions they applied to decrease the harmful effect on environment and How much they have reduced the company's environmental impact.
4.1 Environmental sustainability barriers
The data from literature review illustrate that there are many different types of barriers in front of SMEs to adopt green activities. According to the data from interviewees, there are two types of barriers which they should deal with: general barriers and individual barriers.
Company C: “same as other companies we have some general problems […], but on the other side we are dealing with some difficulties that happen just for us”
Company E: “Most of our barriers are same as others but not all of them.”
In addition, segmental barriers are related to the field of SMEs’ business. For example, if the business of SME relates to the manufacturing and production it will be different with service companies.
Company D: “As a sustainable manager in this business, I should think about how I can find a solution to decrease the environmental impact of my company […]. Each business has different type of effects on environment.”
Company A: “[…] absolutely there are different types of barriers in green activities in our company as a food manufacturing business compare to others like IT companies.”
4.1.1 Lack of awareness in garbage recycling
Lack of awareness is one of the general barriers that happen in most of SMEs. It can happen in any steps of the green product development lifecycle. In garbage dispose as the last step of product lifecycle, lack of awareness is prevalent.
Company H: “One year after the establishment of the company, when we thought in which step of company we should be sustainable, my partner said maybe we should think about recycling our garbage, because of plastic and other harmful substances for the environment, but I didn’t feel we need to sort our garbage. I thought we don’t have a lot of plastic in our trashes. […] but after running a trial of separating our garbage, I understand a big percentage of our trash is plastic and the substances that we can recycle.”
Company F: “[…] Contrary to what we thought, waste segregation and recycling helped us to decrease big amount of our impact on environment.”
4.1.2 Guideline
When you decide to take the first step in sustainability, it can be confusing for you because you do not know what you should do, what you need in this way, and you should start from where. Therefore, lack of knowledge of comprehensive guideline is a general barrier which can happen for each company that wants to start sustainability activities.
Company D: “[…] for our environmental goals we had a lot of idea, for designing, manufacturing, marketing, or disposal. But we found out very soon that we surrounded by many ideas that confused us, we didn’t know we should start from which point.”
4.1.3 Green supplier
Finding a right partner and supplier with good knowledge and passionate about sustainability is a barrier in supply material step for any businesses. This is the reason that SMEs looking for a supplier not only with good database of wide range of green products and materials, but also has passionate to help SMEs in this journey.
Company I: “[…] one of our biggest problem around 2009 was that it was hard for us to find a right material for our product because the suppliers didn’t have good assortation of organic products.”
Company C: “[…] in that time we have problem to find local materials, because we as a foreigner didn’t have close relation with local producers. Thus, they sent their productions to the market and then we got it back here to our company.”
Company E: “big problem that we had with suppliers when we wanted to have green package was that we had to do a big part of searching by ourselves, because they focus on disadvantages of the environmental friendly packages such as higher prices, lack of sustainable local material, or sometimes because of lack of knowledge they tried to convince us to use plastic. So, it was our responsibility to search on different data base to find a green product and ask our suppliers to order for us.”
4.1.4 Energy
Discussing about consuming energy is a wide range area of sustainability. This problem is one of the most basic and biggest barriers of environmental sustainability. In this field knowledge and money are two big barriers. The main subjects in this area are how we can reduce energy consumption in our business, how we can produce one part or whole of our energy by ourselves, how we can replace renewable energy, if green energy is affordable, how much we should invest, how long it takes to return our investment, and other type of question like them. Company A: “we wanted to improve our energy consumption, but we didn’t have knowledge about that […]”
Company F: “[…] for this project I need a large investment around 1,000,000 SEK and it was not an easy decision, because this investment took away financial resources from core of the business. […] at first, I didn’t have any perspective about how long this project takes time to return my investment.”
Company H: “[…] we had some convenient options like solar system, wind turbine, geothermal heating system and each option needs different financial resources and had different yield. […] our biggest challenge that we thought about that was our company located in a rental place. Therefore, we were not sure if this project was affordable or not.”
4.1.5 Staff knowledge
The knowledge of employees about environmental sustainability as people who work in frontline of production and manufacturing is a significant barrier in this journey. You prepare plan, financial part, and generally any steps that you need your business to be sustainable and green but without employees who has knowledge and understand your goal in this area, you have done practically nothing.
Company E: “[…] so the biggest issue was training staffs in production part for implementing new waste separation method.”
Company C: “[…] probably the most difficult part was telling the people how they should separate their waste.”
Company F: “when I decided to lead the business toward sustainability, my biggest challenge was teaching my employees what they should do. […] some of them couldn’t understand why they should do that, and they thought it is useless.”
4.1.6 Convince Market
The other challenge that manufacturing SMEs face is convincing their customers to choose environmental friendly product even if the price is higher than normal product.
Company G: “The more complicated aspect is, the more difficult the end user is to persuade. The main of our customer are from automotive industry. Therefore, if we just produce three or four complex organic and carbon neutral item, the car companies cannot create a commercial strategy out of it.”
Company J: “[…] so there is no benefit for the economically driven companies if they buy green but expensive product and just use as a small part of end product.”
4.1.7 Lack of resources
Cost of sustainability is one of the general barriers when you are a SMEs. Moreover, time and human resources are two other factors that can make a difficulty for businesses on their journey.
This problem comes from limited resources and the leader of the business should identify the priority of sustainability from the perspective of the company.
Company F: “as a small business we have limited financial resources and always we wonder do we have enough money for our decisions, so sometimes we should postpone our sustainability decision.”
Company B: “[…] so because of lack of financial, time, and human resources and because the scope of our business is not big, we cannot do everything at once.”
Company I: “[…] time was one of the resources that effected on our activities during our sustainability journey. […] for example, time play a paramount role in transporting product and material. So, time determine the transport medium. For long distance orders, if we have time, we use sea freight which is less polluting option compare to air cargo”
4.2 Green product lifecycle
In order to process the production and manufacturing businesses, the barriers can categories in different steps of green product lifecycle. It can help to managers of the company to understand in which steps of their product lifecycle the accumulation and strength of the barriers is higher. Therefore, they can make a priority of their barriers according to their available recourses and the perspective of the company and make a better plan to find solution and go forward to be green company.
Company B: “Since the first day of starting this company, I have known, we face many difficulties for being green company, but we should focus on those with high priority and those we can solve them by our sources.”
Company H: “My knowledge about green product development lifecycle help me next to consultation with other managers, find priority and face better with problems […].”
According to the data collection from interviewees and documents that they gave us about the various barriers in different green product lifecycle steps, we understood which steps have strongest barriers and which ones have weakest one.
Company C: “[…] we had different barriers in this way, […] when I think about that time, we tried to understand which problems we had through our production. […] we found how strong are obstacles in each production steps.”
Company H: “[…] these are not the only barriers that we had […] for example in addition to the difficulties raised for environmental sustainability, we had different barriers with designing and our stockholders while those weren’t strong obstacles, but we didn’t face problem in the other steps.”
We ask the companies to mention about the power of obstacles in each step according to the extent of their impact on the green activities of company. Table 3 shows how different barriers were distributed in each steps of GPL in the companies that participated in this research. There are three distinct categories. Strong barriers that by solving them a big amount of environmental impact of the company reduce (P), moderate barriers that their impact on green activities of company are not as much as strong ones (~), weak barriers that their impact on green activities of the company are so small that can be ignored (Î).
Table 3. Distribution of barriers in Green Product Lifecycle steps
A B C D E F G H I J R&D ~ ~ Î P Î Î ~ Î Î Î Design Î ~ ~ Î ~ Î ~ Î Î ~ Supply ~ P P ~ P ~ ~ ~ P P In te rn al ma nu fa ct ur e Manufacturing P Î ~ P P P Î P ~ Î Investing ~ P ~ Î Î P P ~ ~ Î Regulating Î Î Î ~ Î Î ~ Î Î Î Logistics & Distribution P P ~ Î ~ ~ Î P P ~ Market P P Î ~ Î Î P ~ Î P Disposal ~ ~ P Î ~ P ~ P P ~
