The Strategy of Using Consultants for Sustainable Business Development Within SMEs

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The Strategy of Using Consultants for Sustainable Business

Development within SMEs

BACHELOR THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15 hp

PROGRAMME OF STUDY: International Management AUTHORS: Christoffer Högbom Brinkmann & Viktoria Gelfgren TUTOR: Ulla Saari

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Acknowledgements

First and foremost, we would like to thank our tutor, Ulla, for the rich feedback and guidance throughout this thesis process. We also want to express our gratitude for the help and support

that has been offered by peers in our thesis group seminars. We would especially like to thank all the consultants that made this thesis possible. From the great interviews with you, one of the hardest parts in this thesis was to select which of the many brilliant quotes we were

going to use for the final submission. We would also want to extend our gratitude towards family, friends, and loved ones that have supported us in various ways through this semester.

Finally, we are grateful for the opportunity to conduct this thesis together, it has been many long hours but without each other, this thesis would not be the same.

___________________________________ ___________________________________

Christoffer Högbom Brinkmann Viktoria Gelfgren

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Bachelor Thesis in Business Administration

Title: The Strategy of Using Consultants for Sustainable Business Development within SMEs Authors: Christoffer Högbom Brinkmann & Viktoria Gelfgren

Tutor: Ulla Saari Date: May 18, 2020

Key Terms: Sustainability, Small and Medium-sized Enterprises (SMEs), Sustainability Consultants, Corporate Sustainability, Business Strategy

Abstract

Problem:

A decisive majority of Swedish firms are small and medium-sized enterprises (SMEs) and studies indicate that most of these lack, among other things, financial resources, which often limit smaller firms from implementing sustainable practices. Since SMEs compete with larger enterprises, with more established departments and therefore, they cannot strategize their sustainability work to the same extent. The problem emerges when requirements from stakeholders, based on the 2030 agenda, cannot be met due to lacking organizational abilities.

Purpose:

The purpose of this thesis is to gain an understanding of how sustainability consultants support SMEs in their sustainable development work. The research, therefore, investigated the practical processes of consultants when they work with SMEs. The varying processes between sustainability consultants will also be investigated, so similarities and differences can be discovered in their processes.

Method:

The research conducted follows a grounded theory, an exploratory approach, an abductive research design, all under an interpretive philosophy. The primary data collected consists of semi-structured interviews with sustainability consultants in the Jönköping area. Following the grounded theory, this included three stages of analysis namely open coding, axial coding, and selective coding. During selective coding, it is critical to use an abductive design to ground the empirical findings in existing literature and theory. The analyzed findings were thereafter transformed into a proposed model which is supported by both the empirical findings and theory.

Conclusion: Sustainability consultants can support SMEs with their knowledge and expertise

when developing sustainable business practices in smaller firms. This research also contributes to a proposed model that shows the process for SMEs and further explains how SMEs and consultants can work together to develop strategic goals for regenerative firms. However, it is noted that contextual factors and specific gains in knowledge cannot be conveyed in a model. Although, describing the processes of knowledge transfer using an adaption of agile methodology was found suitable for this study. Conclusively, the model’s success is highly based on contextual factors such as firm maturity and the knowledge of the consultant in the specific field under development.

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iv 3.6.1 Research Trustworthiness ... 17 3.6.1.1 Credibility ... 17 3.6.1.2 Transferability ... 17 3.6.1.3 Dependability ... 18 3.7 Ethical Considerations ... 18 3.8 Data Analysis ... 19 3.8.1 Selection of procedure ... 19 3.8.2 Open Coding ... 21 3.8.3 Axial Coding ... 21 3.8.4 Selective Coding ... 21 4. Empirical Findings ... 23 4.1 Interview Background ... 23 4.1.1 Consultant A ... 23 4.1.2 Consultant B ... 24 4.1.3 Consultant C ... 24 4.2 Interview findings ... 24 4.2.1 Background ... 24

4.2.2 Mission and purpose ... 26

4.2.4 Stakeholders ... 29

4.2.5 Working Process ... 31

4.2.7 Obstacles for Sustainable Development ... 33

5. Data Analysis ... 36 5.1 Open Coding ... 36 5.2 Axial Coding ... 38 5.3 Selective Coding ... 41 5.4 Proposed Model... 43 6. Conclusion ... 47 7. Discussion ... 49 7.1 Limitations ... 49 7.2 Implications ... 49

7.3 Suggested Future Research ... 50

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v Figures

Figure 1 Five-Level Model of FSSD ... 12

Figure 2 The Grounded Theory Approach ... 20

Figure 3 Coding Paradigm ... 38

Figure 4 Circular Consulting Process ... 43

Tables Table 1 Open Coding ... 36

Appendices Appendix A Figures of SMEs ... 57

Appendix B Interview Guide ... 58

Appendix C Additional Interview Questions... 59

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1. Introduction

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This part will introduce the background and problem of the thesis. It will further state the research question and delimitations for this research. The last part of the introduction will provide the reader with relevant definitions to gain an understanding of the key concepts.

__________________________________________________________________________________ 1.1 Background

The current situation where the awareness of companies’ impact on the global environment is steadily increasing, the need for sustainable companies is more urgent than ever before. Viewing the emerged sustainable development goals that arise as a countermeasure, it can be derived that there is a need for change (United Nations, n.d.). The UN 2030 agenda may, however, be difficult for companies to fully reflect upon as achievable, especially in the case of small and medium-sized companies (United Nations, n.d.). Reviewing previous studies by Orozco, McElroy, and Simard (2008) and Burmeister and Eriksson (2019) on the field of sustainable business practices within Small and Medium-sized Enterprises (SMEs) it is found that a majority of these lack instruments for implementing sustainability to their everyday operations. Therefore, SMEs have fallen behind larger firms when implementing sustainability strategies in the firm.

Figures from the European Commission (2018) (see Appendix A) show that most of the companies in not only Sweden but also on the global market are small and medium-sized businesses. Given the lower amount of resources compared to larger firms, it is imperative that SMEs find alternative ways to create strategic goals to build their sustainable practices. Due to the lack of studies done on the Swedish market within the topic, a comparison with previous studies performed in South Korea and Romania was found suitable. The case study performed in South Korea shows that enterprises within this size category tend to circumvent the issue by utilizing consultants from specialized agencies (Lee & Seo, 2018). In Romania, similar research was performed with a focus on the services consulting companies offer to SMEs that need a competitive edge when competing with the multinational organizations within the same market. The study states that small and medium-size companies required a way to cope with the new challenges posed by the competition in the domestic market, namely the lack of knowledge and information when compared to the opposition. Drawn from this, consultancy

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services aimed directly at the knowledge gap were established with the focus on supporting the smaller firms on the Romanian market (Bucs & Hegedüs, 2017).

Similarities between the South Korean study and the Romanian study were used to generalize the challenges SMEs may face regardless of industry or market. It is found that larger enterprises tend to distance themselves from the use of consultants since they tend to have separate departments for tasks such as sustainable business development and information gathering (Bucs & Hegedüs, 2017). While an organizational restructure to include departments with similar focus would likely be beneficial, this is something the smaller firms cannot implement themselves since they do not possess the resources required (Lee & Seo, 2018; Bucs & Hegedüs, 2017). This leaves a gap in what is available and what is out of reach. Orozco et al. (2008) conducted a survey that targeted SME entrepreneurs interested in sustainability with respondents from nine different countries, including Sweden. The results showed that more than 60 percent of the companies’ stakeholders responded with a positive attitude for further development in sustainable business practices. When asked why the companies do not dive further into the development, the response concluded that obstacles in resources and knowledge were once again present.

1.2 Problem

Reviewing the challenges, the main issue regarding sustainable development in SMEs refers to the lack of information that SMEs possess when developing sustainable business practices, and how they can obtain said information. It is found that SMEs struggle compared to larger competitors in foreign markets (Lee & Seo, 2018; Bucs & Hegedüs, 2017), leaving questions behind on the state of SMEs in the Swedish context. To understand the current situation in Sweden, one must evaluate the impact a lack of knowledge could have. When addressing the possible impact of an inefficient transition into sustainable business practices, one factor is the disposition of SMEs in the market. Given that 99,9% of Swedish companies are categorized as SMEs (see Appendix A), the impact they have on the Swedish economy and society cannot be neglected (European Commission, 2018).

Moreover, if the goal is to restructure the organization, one must consider how consultants can support the transition towards sustainable business practices. Consequently, one must evaluate if the knowledge of a consultant can be compared to the larger firms' department with the same or similar tasks. As mentioned by Faust (2002), consultants have occupied a larger role in the modern organization, but if their expertise can compete to the same extent when utilizing the

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limited resources of an SME is a questionable perspective. Given the sheer amount of companies this potentially could affect, this research aims to find how SMEs with limited resources work around the lack of models and frameworks aimed at sustainable development. 1.3 Purpose

This research will contribute to the understanding of how SMEs can utilize external resources to become more strategically sustainable. According to Lee and Seo (2018), the use of external sources, such as consultants, is one way to solve organizational challenges. This research will, therefore, evaluate the usefulness of consultants in the development of sustainable business practices within SMEs. Therefore, this study will be investigating practical processes that consultants contribute with to guide the small and medium firms. Moreover, the term sustainability will be further examined within the consultants work in order to evaluate differences and similarities within their processes. However, one must first understand what sustainable business practices are, to fully implement them in practice. The role of consultants in times of implementation of sustainable practices is found to be relevant as a result of a vast knowledge gap between SMEs and larger firms on the same market. The rise of consultancy has paved the way for smaller firms to acquire the same or similar knowledge of a market as previously required academics within the field or countless years of experience (Faust, 2002). Although, currently there is little research conducted on the Swedish market in terms of consultancy aimed towards SMEs sustainable development, leaving a clear research gap to be investigated further. To fill this research gap, the process of formulating the SMEs sustainable strategy in collaboration with consultants will be the focus of this study.

1.4 Research Question

Derived from the previous studies, the interest in reviewing the Swedish market was awoken with regards to the utilization of consultants within Swedish SMEs. From this, the research question was formulated:

How can sustainability consultants support SMEs when they incorporate strategic sustainability as part of their business practice?

1.5 Delimitations

The delimitations set on this research include the selection of interviewees, geographical positioning of the study, as well as the choice of the problem itself. For this research, the authors have selected to focus on the perspective of the consultants in question. This includes understanding their processes when supporting SMEs from how they plan and execute said

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plans together with SMEs. Subsequently, this excludes the narrative from the SMEs’ point of view. This is an important view but was left out of the scope for this research since the study will examine the consultant's processes specifically. Furthermore, when reviewing what can and cannot be included in the scope, factors to consider include the total time available for the study, the available budget for the research, as well as geographical restrictions. For these reasons, the research will assume the geographical area of Jönköping. Moreover, this research is delimited by the authors in such a way that topical interest guides the objectives, the research question, as well as the methodology used. This is the subjective reality and it will be discussed more thoroughly during the reasoning for specific method usage (Leedy & Ormrod, 2010; Saunders, Lewis, & Thornhill, 2016).

1.6 Definitions

Small and Medium-sized Enterprises

SMEs refers to companies with a turnover lower than, or equal to, €50 million or with less than, or equal to, 249 employees (European Commission, 2018). These criteria are essential for an enterprise to be classified as an SME’s; however, it can meet either the headcount or the turnover ceiling, not necessarily both (Gunasekaran, Rai, & Griffin, 2011; Nicolae & Constantinescu, 2011). The size classes that go under the category SMEs are micro firms (0-9 persons employed), small firms (10-49 persons employed), and medium-sized firms (50-249 persons employed) (European Commission, 2018).

Sustainability

Sustainability tends to be differentiated into either a single pillar model or a three-pillar model/multi-pillar model. Single-pillar models, according to Littig and Griessler (2005), are predominantly built around the environmental dimension. Both social and economic are described in such a model, however mainly as a means of support of the main dimension. It is described as a necessary means to have functioning social and economic dimensions for the ecological to be at its best. In the multi-pillar model of sustainability, all dimensions are assumed to be separate, yet connected at the same time. Simply explained as interdependent of each other to be fully functioning. The World Commission on Environment and Development subsequently defined sustainable development as: "development means meeting the needs of the present without comprising the ability for future generations to meet their own needs." (cited in Stubblefield Loucks, Martens, & Cho, 2010, p. 179).

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Economic Sustainability

Economic sustainability refers to the consistency of which operational profits can be made in both businesses and nations while using their resources in an efficient and responsible manner. The key to economic sustainability is that the operations are conducted responsibly and efficiently for the organization or nation to be truly sustainable in the long run (WCED, 1987; Stahel, 2016).

Environmental Sustainability

The ecological pillar builds upon the principle that resources are not abundant, while some may be more easily obtainable, the scarcity principle applies, meaning at some point in time, non-renewable resources will run out. For this very reason, the ecological pillar speaks of the consumption of these resources at a manageable rate, with little damage to the environment during extraction and use of said resources (WCED, 1987; Littig & Griessler, 2005).

Social Sustainability

Several different definitions are available where some consensus can be found in the life-enhancing effects that follow from the practice of it (McKenzie, 2004; Barron & Gauntlet, 2002; Littig & Griessler, 2005). Ambiguity around the social pillar arises within the definition itself that is described with more vaguely defined concepts such as community and society (Davidson, 2007).

Consultant

Historically, management consulting has had many definitions of both consultants and the services offered. However, a definition of the Association of Consulting Management Engineers (Higdon, 1969) refers to consultants as specially trained with expertise within identifying and solving issues regarding their specific field. This, in turn, refers to a professional service aimed towards areas where the hiring company may lack competence or prior knowledge and require aid during the planning and implementation of new processes. Kubr (2002) defines consultants similarly and emphasizes the expertise of consultants when solving clients’ problems. Indeed, it is a vague description of an industry, but simultaneously depicts the main strength of the industry as knowledgeable and competent in solving complex issues. Thereby, a sustainability consultant is a consultant with expertise within the field of sustainability.

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Business Strategy

There are various types of business strategies that characterize a company. Croteau and Bergeron (2001) define business strategy as different factors that influence the performance of an organization. In other words, organizational decisions that influence environmental, structural, and process factors that guide the company and create a better understanding of the business strategy (Croteau & Bergeron, 2001).

Triple Bottom Line

The triple bottom line approach is based on the concepts of corporate sustainability which includes the environmental, social, and economic aspects. Svensson et al. (2018, p. 975) state that the triple bottom line and business sustainability are “[...] based on society at large needing to follow an economic development approach that is sustainable over time”. Engert, Rauter, and Baumgartner (2016) argue that these three dimensions are set up as a base for incorporating sustainable development into strategic management. Regarding this study, the triple bottom line is used for firms to recognize the three aspects of sustainability, to create a strategic sustainable strategy.

Stakeholder

Stakeholders in a company represent those who provide the company with critical support that is necessary for the company’s existence. This entails that without the essential support, the company would suffer large losses, and/or experience organizational failure. As described in the stakeholder theory by Freeman (2010), stakeholders are divided into internal, and external categories related to the company in question. A keynote on stakeholders is the possible influence they have over the company, unlike interested parties with no actual influence of the state of the company.

Backcasting

The incentive of backcasting originates from the notion that the strategical route is the route that is pre-designed with moves that gradually and systematically transforms the situation towards the visualized future scenario (Missimer, 2015). This act is performed after a vision for the organization is formulated and a current situation analysis is finalized. Backcasting is used for finding all the possible strategical paths, usually through practical workshops or brainstorming activities.

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2. Frame of Reference

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This part provides relevant literature about sustainability, consultants, and SMEs. This is to gather the existing literature for the reader to get a better understanding of the topic.

__________________________________________________________________________________ 2.1 Corporate Sustainability

The term sustainability can be linked to three different pillars which include the social, environmental, and economic responsibilities within a company (Gimenez, Sierra & Rodon, 2012). Dyllick and Hockerts (2002, p. 131) define corporate sustainability as “meeting the needs of a firm’s direct and indirect stakeholders [...] without compromising its ability to meet the needs of future stakeholders as well”. It further explains that while companies are working toward the goal of corporate sustainability, they also must manage their social, environmental, and economic responsibilities. One of the most famous definitions of sustainable development is made by the World Commission on Environment and Development (WCED, 1987) which follows: “[...] development means meeting the needs of the present without compromising the ability of future generations to meet their own needs.” (cited in Stubblefield Loucks et al., 2010, p. 179). However, Gimenez et al. (2012) criticize this broad definition of corporate sustainability since it gives the firm little guidance on how to apply and identify the present and future needs of the firm, which is essential. Engert et al. (2016) also criticize the definitions and mention that one solution that fits all companies does not work in the context of corporate social responsibilities (CSR).

Most approaches within the field of corporate sustainability are associated with the triple bottom line which examines the social, environmental, and economic dimensions (Engert et al., 2016). This approach contributes by guiding the firm to contribute to sustainable development. For this research, it is important to gain a full understanding of corporate sustainability, as it is crucial for the company to develop its sustainable strategy in the firm’s core business.

2.1.1 Stakeholder Expectations

Firms today face many challenges when incorporating sustainability, which is somewhat based on the expectations regarding the triple bottom line from its stakeholders. Failure to uphold the expectations of one’s stakeholders can, therefore, damage the company in various degrees, depending on the possible influence the stakeholder possesses. Many companies engage in

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CSR activities and sustainability work as a result of stakeholder pressure, and along with the increase of awareness regarding planetary degradation, failure to respond may have catastrophic results for organizations (Garvare & Johansson, 2010; Weng, Hsu, & Liu, 2019). It is argued that although the triple bottom line has been used over the last two decades, there is still confusion about the interaction between the three dimensions (Svensson et al., 2018). Dyllick and Hockerts (2002) explain the correlation between three elements and how a single-minded focus on one of the elements may only succeed in the short run. However, to be satisfied in the long run, one needs to look at all the aspects of sustainability and how they intertwine. It is important to acknowledge the need for solving these sustainability problems to benefit a large group of stakeholders (Schaltegger, Hörisch, & Freeman, 2019).

2.1.2 Corporate Social Responsibilities

Corporate social responsibility (CSR) has been a strategic concern for a long time and can be identified as a language across the world on the expectation's stakeholders have on the company, more than just making a profit and to follow laws and regulations (Albuquerque, Koskinen, & Zhang, 2019; Carroll, 2015). Wang, Chen, Yu, and Hsiao (2015) explain that businesses work with the principles of ethics to maintain CSR which in turn benefits all the stakeholders within a company. Firms with large public-interest tend to be involved with business activities that enhance corporate sustainability. These activities benefit society and are associated with the environmental, social, and economic elements mentioned previously. When reviewing CSR, it is essential to understand that there is a huge emphasis on ethics and philanthropy, and for a company to benefit the most from CSR, all aspects should be included. Graafland (2018) argue that many firms engage in CSR to improve the overall reputation of a company. However, it is shown that by engaging in CSR, it can very efficiently make a company gain a competitive advantage in that sense (Yuan, Lu, Tian, & Yu, 2018).

2.1.3 Constraints of Developing Sustainability within SMEs

It is found that the global population is currently more aware of environmental threats than ever before. As a result of this, more companies emphasize CSR, however, due to constraining factors such as limited resources, SMEs fall behind on this topic compared to larger enterprises (Stubblefield Loucks et al., 2010; Jansson, Nilsson, Modig, & Hed Vall, 2017). Since SMEs represent the majority of firms on the market, as stated before, they also have an extensive impact on the environment (Gunasekaran et al., 2011; Nicolae & Constantinescu, 2011). A study conducted by Jansson et al. (2017) within the European region shows that SMEs stand for most of the pollution caused by companies. Even though it is difficult to examine the total

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impact firms categorized as SMEs have on the environment, the cause of pollution shows that there is a need for an implementation of sustainable processes within these firms.

Since SMEs operate differently from larger firms, they need a different approach to the development of sustainability. Therefore, SMEs need different tools and instruments to fit their needs since they have limited resources (Stubblefield Loucks et al., 2010). Usually, SMEs are financially constrained meaning that they generally cannot afford to build an organization with a system to respond to an always-changing market. The financial constraints may impact the ability to hire enough staff for challenges on the horizon, which forces SMEs to prioritize some issues over others and therefore lack a competitive edge. Due to this restriction, SMEs was therefore found to seek the use of external sources to solve these organizational problems (Lee, & Seo, 2018).

All companies need to prioritize examining the external environment to identify the situation in both the short run and in the long run. Strategies to develop sustainability “requires that businesses do nothing more than to recognize that the well-being of their community and natural resources has everything to do with the well-being of their business, to plan accordingly, and reap the rewards” (Stubblefield Loucks et al., 2010, p. 194). Stubblefield Loucks et al. (2010, p. 194) also states that the next step for SMEs is to “adopt sustainable business practices not just because it will drive their businesses to the leading edge, but because the planet matters to them as businesses, as individuals, and members of a community”. 2.2 Consulting Processes

2.2.1 Consultants

The benefit of utilizing consultants when referring to management consultants, the key outtake is found to be the expertise within emerging fields of study. For example, the movement of sustainable practices as a strategy for companies is relatively new in the sense described previously. For this reason, when implementing change regarding sustainable corporate practices, consultants are found to be an untapped well of knowledge (Galea, 2009). It is further argued that developing a company within a relatively emergent topic, specialist expertise in the selected field is a definite advantage.

Galea (2009) also states that the consensus when one lacks knowledge is to seek advice from those who have it. Meaning that if a company were to undertake an endeavor for sustainable practices, the reasonable step that would follow is to hire knowledgeable personnel, namely sustainability consultants. By better understanding the project, one can, therefore, implement

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sustainability from a strategic point of view. This helps the company gain a competitive advantage rather than simply implementing sustainable improvements at the cost of the company and its stakeholders (Mankins & Steele, 2005).

While an accurate process of each consultant is challenging to present, one can categorize consultants as a specialist within a field that operates as a mobile asset between firms. The advantage of these specialists is mainly that the knowledge consultants possess tends to be obtained through either extensive internal training from the consultancy firms, through long occupational experience or previous academic accomplishments. In other words, to access the same amount of knowledge that consultants possess without utilizing such external sources would likely make the objective obsolete in the fast environment of sustainability (Galea, 2009). Sustainability consultants are still a broad label for the occupation given the various meanings of sustainability and are believed to be sub-divided within the pillars of sustainability themselves too.

2.2.2 Cross-Industry Consulting

Galea (2009), states that consultants can be regarded as a well of knowledge. One can argue that this knowledge is developed through various means, especially from actual work experience with clients. As mentioned earlier, however, a source of this knowledge also originates from extensive training and other practices that are facilitated by the consultancy firms (Galea, 2009). What is worth noting with the experience of consultants is that even though the area of expertise remains the same, consultants can move relatively effortlessly between industries that employ consultants for similar tasks (Kipping & Clark, 2012). A consultant specialized in economics can, therefore, have one assignment in the agricultural industry as well as another assignment in an IT firm since the subsequent may still require assistance in managing the economy. This, in turn, means that while the work performed generally resembles what was done in another industry, consultants gain insight into operations across firms from this cross-industry work. This business insight may also be founded in a prior experience outside of the consultancy, as business leaders, professionals in specific fields, or other positions of great influence (Kipping, 2012).

2.3 Framework for Strategic Sustainable Development

Reviewing sustainability and strategic implementation across the three main fields, namely economic, societal, and ecological, one is left with countless possible steps to take. The first implication of sustainability is the various definitions between the fields of usage. The

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Framework for Strategic Sustainable Development (FSSD) was therefore iterated as a transdisciplinary development to suit all fields (Broman & Robèrt, 2015). The framework was constructed for sustainability models to be utilized more intuitively within businesses. The framework is therefore meant as a bridge between the various definitions and meant to be used as a translation tool between the pillars of sustainability as it covers them all.

However, the FSSD fails to properly address social sustainability, according to Missimer (2015). It is reflected that while the three pillars of sustainability, as mentioned previously, are all addressed throughout the FSSD. The scientific rigor behind the ecological and economical dimension simply are not depicted as well for the social dimension. While it is discussed that the life-enhancing effects come from different sources, it is focused around equitable, just, and self-reliance. There are challenges when defining the social context as they include more unassertively defined terms. Namely, concepts such as society and communities that do not quite have a convincing definition (Davidson, 2007). Because of this, the FSSD does not provide a generalized definition for sustainability but instead leaves it open for interpretation to the practitioners themselves, which leads to a vague description of how to apply it into practice (Missimer, 2015). The concept is argued to be oversimplified and under-theorized according to Colantonio, Dixon, Ganser, Carpenter, & Ngombe (2009). However, these issues are just the topic of which the FSSD aims to resolve, to simplify the elusive concept of sustainability and to create common ground for the various models and theories available to be applied and put into use (Broman & Robèrt, 2015).

2.3.1 Five-Level Model of FSSD

As a response to the lack of clarity regarding the field of sustainability, the five-level model for strategic sustainable development was developed as a transdisciplinary framework. This would bridge the gap between the rigorously developed ecological and economical elements to the vaguely described social sustainability. By effectively leaving the expectation to categorize and label what is, and what is not considered to be sustainability, and instead leave it to each practitioner to adapt to their context. Therefore, the five-level model provides a systematic way to approach sustainability strategically (Missimer, 2015).

The five interactive levels are all describing the steps of which an organization, regardless of industry, can approach the task to strategically plan their sustainable business practices. The different levels, as seen in Figure 1, are formulated where the practitioner can evaluate the sustainable element that it concerns. From there, step one is to build an understanding of the

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current situation regarding e.g. the ecological element. After the practitioner has evaluated the situation, the second step is then argued by Missimer (2015), that one should define the success factors. When the factors for a successful endeavor has been stated, one can approach the situation strategically (Broman & Robèrt, 2015). In the third step, the strategic planning encourages the act of backcasting to visualize the desirable future situation, and where the practitioner is currently in the process. The incentive of backcasting originates from the notion that the strategical route is the route that is pre-designed with moves that gradually and systematically transforms the situation towards the visualized future scenario (Missimer, 2015). Following the strategic guidelines for successfully implementing sustainable business practice, the five-level model describes the actions that have been undertaken. Thereby specifying the process that was formulated in prior steps, with the intention to report the current progress and inspire further progress.

The fifth and final step, the tools level, represents the concepts and instruments that can help levitate the effort or are required for the progression to be possible in the first place. This can include ways to incorporate the new strategy in the minds of one's employees. Accomplished through knowledge transfer or technical equipment that supports the actions performed in line with the strategical guidelines (Missimer, 2015). The tools are present throughout any or no steps and are commonly used to better define or explain each level included in a systematic manner (Kianian, Daly, & Andersson, 2018).

Figure 1

Five-Level Model of FSSD

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3. Method

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This part will introduce the method that will be used for this thesis throughout. It will explain the methodology chosen and explain why it suits this research.

__________________________________________________________________________________ 3.1 Research Philosophy

Since the research aims to gather the perspective of consulting companies on the benefits and drawbacks of utilizing them, the philosophy for this thesis will therefore broadly be interpretivism. The fundamental assumptions of interpretivism are that knowledge and information gathering are subjective and based on the perspectives of both the participants in the research and the researchers. One can argue that the results of the research are supported by objective evidence, although the gathering of said evidence will still be affected by the researcher's area of interest (Smith, 1983). A general interpretation of interpretivism is any research that is not grounded in quantitative methods of data collection where evidence is supported by statistical means.

Furthermore, the researchers are under the assumption that perspective may vary between the participants in the research, which further underlines the reason for interpretivism as a paradigm. Because of this epistemological assumption, the research permits the view of subjective evidence as valid since the use of other validation methods will not be used. Moreover, through similarities between cases and the use of contextualizing data, the data can be verified and deemed reliable (Morgan & Smircich, 1980). The possibility to replicate a study has high relevance in evaluating the reliability of the data in the positivistic paradigm. However, in an interpretivism research emphasis lies on the procedure of data gathering, extensive protocols from potential interviews all to underline the authenticity of the research. 3.2 Research Approach

For this study, the exploratory approach is suitable since the previous research within the specified field is found to be limited. With the unsaturated research within the field of sustainable consulting in mind, an exploratory study may help with raising awareness of undiscovered factors that influence this industry. The exploratory research also enables the creation of theory from empirical findings in a way that neither descriptive nor explanatory approaches permit. Furthermore, the exploratory research highly depends on methods such as interviews, testing the interview questions in focus groups, and methods such as either case

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study or action research. It can thereby be regarded as qualitative research, which once more corresponds to the intention of this research (Saunders et al., 2016).

3.3 Research Design

Following the selection of research philosophy and approach, it is found that this research cannot be purely conducted through an inductive nor deductive approach. The inductive design to research aims to build theory from the gathered data by comparing similarities and recurring patterns. This research will incorporate most of the steps that follow an inductive approach, however, it will also include a subsequent data collection to test the primary data and compare the empirical findings to generate theory. The subsequent data collection is thus in accordance with a deductive approach. For this very reason, to bridge between the two, the selected research design for this study is abduction (Corbin & Strauss, 2008).

The abductive research approach was generated as a result of critique aimed towards the extreme views that follow both deductive and inductive approaches as a medium in between both. By finding support in previous literature after the initial data collection is done, the research can more easily determine if the result is reliable through triangulation (Saunders et al., 2016). The benefit of utilizing an abductive approach, when conducting this type of research, is that it does not solely rely on existing data as deductive research would. Yet, it benefits from the existing data throughout the process of analysis (Suddaby, 2006). The abduction begins with a theory based on either phenomenon or literature with the intention to further investigate. This is often described as a surprising phenomenon and it may occur at any point in the research but likely during the initial phases of data collection, and from that point, it will influence the scope of the research (Van Maanen, Sørensen, & Mitchell, 2007). In the case of this thesis, that phenomenon is perceived to be the gap in knowledge and methods that SMEs can utilize when developing sustainable strategies.

3.4 Research Strategy

This study will incorporate multiple perspectives from several consultants. This, in turn, will result in multiple meanings and interpretations of social realities. The study predicts that many cases may produce strong support for literal replication, where the same context is tested within several cases to produce support for theory (Saunders et al., 2016). The grounded theory, while extensive and thorough, suits the data collection intended for this study. The primary objective of the selected strategy is to extrude theory from the data obtained using the qualitative approach. While this type of fixed context and subjectively bound findings are criticized in

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previous literature, it has been found that the value of qualitative studies using mixed methods have gained recognition generally favoring this type of strategy (Flyvberg, 2011; Bansal & Corley, 2011; Denzin & Lincoln, 2011). Moreover, researchers advocate the use of inductive methods to build theories from case studies to give context to exploratory research. Following the inducted theory that is the first step of grounded theory, a deductive step will follow to find data that support the findings in the empirical data. This mixed approach is essential for grounded theorem but may seem unorthodox when compared to other traditional approaches (Suddaby, 2006).

3.5 Data Collection

3.5.1 Literature Review

In order to conduct any research, it is essential to gather information and data, which can be divided into two categories: literature review and primary data. Literature review is the data collected from existing studies from any given topic and is summarized for the purpose of this research, meaning it will be retrieved from publications, journals, and databases, etc. (Collis & Hussey, 2014). This study will mainly use existing literature collected from journals, publications, and books retrieved from Jönköping’s University Library. More specifically, databases such as Google Scholar, Primo, and Scopus.

The importance of existing literature for this research will provide the researcher with information about the topic and thereafter support for future findings. It will contribute inspiration when formulating the questions for the interviews and will thereby guide the research. Moreover, the collection of existing literature also enables the triangulation of information which may prove critical when providing the conclusions in this research (Saunders et al., 2016). Common keywords when searching for literature for this thesis were

sustainability, small and medium-sized enterprises, SMEs, consulting, sustainability consulting, corporate sustainability, sustainable development, business strategy. Additionally,

references related to some articles may be used to obtain the original publisher of that content. Some publications may, therefore, be relatively old; however, this is done to put the source in a proper context.

3.5.2 Primary Data

Primary data constitutes the new information that is collected during the research. The primary data is sourced by the researchers directly from the primary sources. When gathering qualitative data for this research, the method of utilizing interviews for the collection of data

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will be used. The interview approach is in line with the inductive reasoning in that it enables the gathering of rich, exploratory data that when analyzed could help with forming new theory. Combining primary data and existing literature can provide a different interpretation of the data collected (Saunders et al., 2016).

3.5.2.1 Sampling Process for Primary Data

The subjects will be selected from a process of snowballing sampling which is a form of judgmental sampling. Snowballing is a sampling process is beneficial when the desired subset of a population is difficult to pin-point (Saunders et al., 2016). Following the interpretivism, a small sample set will be used, this to enable the gathering of rich qualitative data since it will not be analyzed using statistical means. The interviewees for this research will consist of different consultants working within the field of sustainability. The purpose is to gather several perspectives on the impact the consultants have on the process and find similarities when strategizing sustainable business practices within SMEs.

The choice of selecting consultants as representatives rather than the SMEs is made due to the focus on process, i.e. how they work with SMEs to incorporate sustainable business practices, rather than the result of said work. As mentioned by Saunders et al. (2016), a potential obstacle with this type of volunteer sampling is that initiating contact with a network may prove challenging. Although, it is still considered to be a plausible course of action to reach potential interviewees using this sampling process. The issue of respondent bias is non-existent here since as described by Lee (1993), it is perceived to be beneficial when limiting the negative effect of heterogeneous samples. The emphasis lies in understanding the process of how consultancy services can be utilized to aid SMEs, any unknown elements may, therefore, affect the outcome beyond the study’s grasp.

3.5.2.2 Interview Structure for Primary Data

Staying true to the research approach, the primary data gathered during this study will be qualitative. In order to find reliable qualitative data of which the research can be based upon, the order of action for gathering primary data will be through semi-structured interviews. This structure is based on the authors having pre-written interview questions, but the authors are still able to diverge from the set questions (Murphy, Klotz, & Kreiner, 2017). From the interviews, the objective is to gather rich and fully formulated responses that can be analyzed, contextualized, and reported. The semi-structured interviews also allow a discussion to take

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place that can provide data relevant for the study but that may not have been directly asked for (Saunders et al., 2016).

To ensure the aforementioned, the interview questions will undergo thorough testing to ensure open-ended questions that enable the interview participants to reflect and respond to their best ability. All questions will be based on relevant literature, as well as the previous knowledge of the researchers. When conducting the interviews, rich communication channels are preferred, such as face-to-face personal communication or using electronic communication through video conference services such as Microsoft Teams. Using communication channels that enable the transfer of information beyond just verbal or written communication helps with the gathering of data that categorizes as non-verbal communication. From this, the study can note expressions such as discomfort or avoidance from the participant, that otherwise would be unavailable, during the interview that can provide further insight when analyzing the responses later. 3.6 Research Quality

3.6.1 Research Trustworthiness

When conducting research, it is critical to consider the quality of the research to ensure that the research is credible. It is found that one reason to improve the quality of the research is by using several interviewers and data analysts (Saunders et al., 2016), which this research intends to follow. Furthermore, according to Lincoln & Guba (1985), there are different criteria to assess the quality of the research. These criteria are credibility, transferability, and dependability.

3.6.1.1 Credibility

One of the criteria is credibility and is described as whether the information used for the research is presented correctly. In other words, ensuring that the representation of the research portrays the intended meaning of the participant (Saunders et al., 2016). Since all interviews were conducted in the original language, Swedish, the quotes used from the interviews will be provided in both Swedish and thereafter translated to English by the authors. This is done to provide the reader with both the original and the translated interpretation of that quote as part of the research’s ethical considerations.

3.6.1.2 Transferability

Transferability is also an important aspect to ensure credibility. The reason for this is to allow other researchers to compose a related research project through the provided information. To

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do so, the research needs to provide a complete description of different components such as the research questions, design, findings, and results, etc. (Saunders et al., 2016).

3.6.1.3 Dependability

Thirdly, dependability highlights the importance of the research process and whether it is systematic and well documented (Lincoln & Guba, 1985). In the context of interpretive research, it focuses on the research progress and how the recording of changes is reliable (Saunders et al., 2016). These three criteria are quite similar thematically, however, they carry equal importance for the research trustworthiness (Collis & Hussey, 2014).

3.7 Ethical Considerations

The objective of the collection of primary data is to gather rich qualitative information. To ensure the quality of the interviews, several ethical actions were considered. To enable the participants to make an informed decision before participating in the interview, the topic and aim of the research will be explained. The structure of the interview and the questions themselves will also be sent to the interviewees beforehand. Enabling informed consent before the interview is crucial for both finding relevant participants and ensuring that the interviews will be finalized once commenced (Brinkmann, 2013). The interviewees will be informed that all gathered data will only be anonymous, including possible clients and/or associates mentioned during the interview. Remaining anonymous throughout the process can also, according to Wilson (2016) enable more detailed responses, which is a beneficial consequence for the research. The ability to refrain from answering will be permitted, giving the interviewee full ability to decline from answering questions they feel uncomfortable with answering. All the interviews will be audio-recorded to ensure full data recovery from the interviews (Collis & Hussey, 2014). Since this study is based on the grounded theory research approach, the audio-recording will be fully transcribed, however, this will be done in the original language, Swedish (Saunders et al., 2016). To contain the meaning of the interview, only the necessary quotes will be translated, and reported with the original simultaneously (Saunders et al., 2016; Corbin & Strauss, 2008). However, the transcript will not be disclosed within the report itself. Instead, the full transcription gives the authors the ability to include all the relevant quotes from the interview into the empirical findings section. It will also enable the authors to analyze all parts of the interview which will be included later in the data analysis section.

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3.8.1 Selection of procedure

Following the grounded theorem when analyzing the gathered data, the steps are divided between the systematic approach of Corbin and Strauss (2008) and the relatively more flexible alternative produced by Bryant and Charmaz (2007). While the procedure throughout carries similarities between these, the more structured and systematic approach offered by Corbin and Strauss (2008) is preferred for this research as it can more easily categorize the empirical data. One should, however, consider that the analytical process has been revised over the years and does differ somewhat between editions (Strauss & Corbin, 1998; Corbin & Strauss, 2008). Unlike the analytical procedures discussed by Bryant and Charmaz (2007), where the two main phases of coding are denominated as initial and focused coding, Corbin and Strauss (2008) offer more steps during the process of coding. While triangulation of data is usually preferred, on this occasion this research will keep to the steps of Corbin and Strauss (2008) with the reason being that it will yield a more consistent study. Saunders et al. (2016) advise that selecting one approach over combining multiple can lead to a more comfortable and developed study than a mix of these.

The procedure selected to be undertaken may be adapted slightly to suit this research, although the steps of self-memos throughout, and the structure of open, axial, and selective coding will be utilized following Corbin and Strauss (2008). These steps have emerged to enable the researchers to find relationships in the empirical data that then can be utilized to extrude theory from the interrelated nature of these (Saunders et al., 2016).

A visual summary, as shown in Figure 2, adapted by the authors based on Murphy et al. (2017), shows the reader the steps included in the grounded theory. The abductive approach can be seen during the theoretical saturation, working deductively to strengthen the qualitative empirical findings with additional literature.

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Figure 2

The Grounded Theory Approach

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3.8.2 Open Coding

Initially, the procedures of Corbin and Strauss (2008) are very similar to the initial coding coined by Bryant and Charmaz (2007), and at this stage, it is truly difficult to separate the two. However, staying true to one approach, open coding refers to the action of separating the data from each interview into components, meaning that it is divided into sets of data that are given an initial label (Murphy et al., 2017). This method of coding often yields multiple labels of which none are usually explicitly connected to a theory, as described by Saunders et al. (2016). This process is however important given that it enables the research to be conducted in an exploratory manner with the constant development of the scope of the research and even the focus of the research question in mind. The objective is, in the end, to be left with broad labels of which the research can analyze further within the axial and the selective coding. This stage is therefore not developed with the purpose to recognize patterns, but rather to develop labels of which the following steps can connect and then select which are relevant for this study (Corbin & Strauss, 2008; Saunders et al., 2016).

3.8.3 Axial Coding

The open coding process intends to create broad labels, following this stage is the axial coding which includes explaining relationships between these labels. Some labels may be deemed irrelevant for further investigation and others are further developed using subcategories and titles describing the relationship connecting multiple labels. The objective of axial coding is to find and explain the relationships that occur, analyzing why they may be affected by certain factors (Saunders et al., 2016). Strauss and Corbin (1998) recommend the use of hypothetical statements when later analyzing these correlations as a way of investigating the relationships found in the empirical data to that of existing literature in an abductive manner, something that is also discussed in later editions as well (Corbin & Strauss, 2008). Axial coding is also perceived to be the initial process of the theory development that is crucial for grounded theory (Saunders et al., 2016). According to Kendall (1999), it is important to keep in mind during all stages of the coding that the investigators influence the selection of relationships. Kendall (1999) mentions that the subjective nature of the grounded theory is acknowledged by the likes of Corbin, Strauss, and Glaser and is crucial to consider.

3.8.4 Selective Coding

The stage of selective coding is the unification of categories around what from this stage will be referred to as the core category (Corbin & Strauss, 2008). The act of selective coding can theoretically occur simultaneously as the previous stages in the sense that core categories can

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be found throughout the process of transcribing, open coding as well as during the axial coding. However, this stage usually occurs once theoretical saturation from the analyzed data is achieved, generally found in the later stages of one's study (Saunders et al., 2016; Corbin & Strauss, 2008).

The core category should show correlations between the coded data and underline the phenomenon investigated within the research. This step is essential since it also includes the removal of coding that may be of less relevance for the construction of a theoretically grounded model and emphasizing of the codes that are vital for the success of it. Underdeveloped categories, i.e. those who lack properties to describe them, will likely be discovered during this stage of scrutinizing the analyzed data. It is therefore common for additional literature to be introduced to complement the gaps in the primary data collection, alternatively commencing additional analysis of the categories to fill those gaps.

The process of selective coding is conceptualizing the importance of the emerged core category and relating the importance of it to the subsequent categories. This step is critical for the understanding of this research, and the further studies that may be undertaken because of it. The final step is to put the analysis into writing and show the research findings in a descriptive manner, in this case, show the grounded theory in a proposed model that can later be tested separately (Corbin & Strauss, 2008; Strauss & Corbin, 1998).

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4. Empirical Findings

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This chapter presents the gathered primary data from the conducted interviews’ transcripts. To give context to the interviews, a brief background for each participant will be presented. The findings are then presented in chronological order aligned with the interview guide (see Appendix A). The empirical findings include data collected from the baseline interviews and further connect it with the additional interview conducted. This is ultimately performed to gather required primary data in an effort to fulfill the purpose of this thesis.

__________________________________________________________________________________

4.1 Interview Background

Following the methodology and ethics of this thesis, the interview participants will remain anonymous. However, to provide a foundation for the empirical findings, a brief background to the participants will be given. Namely the background and professional role of each participant. The interviews were divided into two segments, which the authors will denote as

Baseline- and Additional Interview. The segmentations of these are based on the coding process

which requires themes to be labeled and thereafter categorized. These categories are then separated into what requires further investigation and what can be left out of this study. Exclusion at this point does not imply that the category is irrelevant for the topic, but simply that it is outside of the scope of this research. The selected themes are then the basis for constructing the additional interview.

The separate participants are given a letter of reference for further analysis. The baseline interviewees are denominated with the letters A and B respectively, and the additional interview is labeled C. Therefore, the participants will be referred to as Consultant A, B, and C. Throughout this section, the quotes from the interviews will be presented in English. However, since all interviews were conducted in the participants’ native language, Swedish, the quotes used from the interviews will be provided in Swedish and then translated into English, by the authors (see Appendix D).

4.1.1 Consultant A

Consultant A works as a sustainability consultant but describes the professional role as a process leader, sustainability strategist, and a coach. The participant has two master's degrees in business administration from two separate business schools located in Sweden, as well as additional education in the areas of economics, entrepreneurship, and theology. The

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participant's interest in sustainability arose the year 1997 when the participant got involved with the environmental questions at their previous workplace. Thereafter, the participant has worked with sustainability in both Sweden and Africa, been a sustainability consultant since 2012, and is currently researching within the topic sustainability. Consultant A is also involved in several consulting agencies and, at the time of the interview, were establishing a new company with an international niche to sustainable consulting.

4.1.2 Consultant B

Consultant B is currently working as a sustainability consultant, just like Consultant A. The participant has an education in economics at a University in Sweden and oriented classes in environmental economics. With that being said, the interest in sustainability arose during that time. This made the participant to work within the area of sustainable responsibilities in organizations in Asian and African countries. The participant also studied communication at university level which led the participant to become a communication executive at a municipality-owned energy company where the environment and social accountability played an important role. Thereafter, in 2009, the participant started working as a sustainability consultant in Stockholm and later moved to Jönköping year 2013 and continued their professional life on the same path.

4.1.3 Consultant C

In the additional interview, it was found that Consultant C works mainly within the environmental pillar of sustainability. The consulting agency, the participant currently works at, was founded in 1995 when Consultant C, together with a friend, graduated with a bachelor's degree in business administration. Ever since graduation, the participant's occupation has revolved around the environmental impact of companies where the key focus is laid on ecological sustainability regardless of the size of the client. Consultant C emphasized the importance of finding the relationship between the environment and how to manage a business with that in mind. Furthermore, Consultant C would describe their professional role as an environmental consultant who enables companies to structure their sustainability processes. The role also includes certification processes with a more operative positioning in a firm. 4.2 Interview findings

4.2.1 Background

Initially, sustainability consultants work with companies to sustain and develop their work toward sustainability. However, sustainability is a broad topic and there are different ways of

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working with it. Different companies have different needs which make the consultant work differently with each case. These differences vary between industries of which the companies operate within, but also depend on where in the supply chain the company is located. The maturity of companies can also influence the work required and possible to do on behalf of the consultant.

“One can go incredible wide within the topic of sustainability whether it’s social, environmental, or economic.” - Consultant A

“[...] in general, I help companies [...] with their sustainability work in different ways.” - Consultant B

“Then it can vary in complexity depending on what their supply chain looks like - what they need to do, responsibilities and what opportunities they have. Then it may be about how mature they are as a company when it comes to these issues, which means that assignments can look very different.” - Consultant B

Both Consultants A and B have worked with sustainability for over a decade and reports that there has been a major change in how companies work within this topic. Consultant B explains how in 2009, when the participant started working as a sustainability consultant, SMEs focused on their risks and thereafter on how to minimize them, meaning that sustainability work essentially meant contingency planning for threats. Moreover, these companies also worked with CSR in the way of donating money and afterward believe that they have done their part through philanthropic means. Additionally, companies followed the Swedish laws and regulations on sustainability reporting and did not see the importance to develop further on this topic or to do more than was the minimum requirement from them.

“Today, one looks a lot more on how the business affects the environment and the people, what consequences it has, and what they have for business opportunities.” - Consultant B

Consultant A also mentioned the tremendous change in the way SMEs work with sustainability. It was emphasized that the lack of knowledge plays an important role in the reason why many companies do not include the aspects of sustainability in their business plan. Consultant A further underlines that as little as three years ago, many SMEs knew what sustainability was, however, did not have the knowledge or enough understanding of its importance to implement it in their business.

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"It's been a radical change over the past two years." - Consultant A

4.2.2 Mission and purpose

Throughout the interviews, a key topic was to understand the purpose of working towards sustainable business practices and why the utilization of consultants is beneficial. To do this, the interviewees were faced with questions that enabled them to reflect on the work that they have done over the years and are currently doing, as consultants. The questions were phrased in a manner that enabled the consultants to discuss how they motivate SMEs to work sustainably. From the baseline interviews, it was found that motivating the companies has been a large aspect of the task towards implementing sustainable business practices. Consultant A emphasized the importance of working sustainably to be competitive in the ever-changing market. Being competitive in that sense implies that regardless of what product or service one may provide, the workplace conditions such as living wages, reasonable working hours, and job security is just as important as low costs and durable products. When running a business, Consultant B mentioned the importance of being competitive to both customers and coworkers. The importance of not overlooking the wellbeing of one's employees was further emphasized, otherwise, it would not be a sustainable business. Throughout the baseline interviews, it was found that the social pillar of sustainability was of great importance when formulating the mission and purpose with the SMEs.

"I believe that in order for them to survive in the future, these perspectives [of internal sustainable work] need to be brought up since the customers demand them." - Consultant B

The economical sustainability was rarely overlooked as it was perceived to be more in line with the core of the firms. Consultant B mentioned that the environmental and social dimension of sustainability can be viewed as additional work, while a sustainable revenue stream is not optional in that same sense. In the end, the company must make money to stay afloat, meaning going bankrupt will not add to the societal nor ecological well-being. However, when discussing the supply chain, viewing how the firms’ influence or are influenced by their suppliers and producers. It was mentioned that the social dimension is often not acknowledged since it is outside of their area of effect beyond their own walls. Over time, the possible requirements the firms can put on their suppliers have shifted since the demand has shifted towards more sustainable products and services by the final consumer. Consultant B underlined that in order to survive the shifting demand, the companies must also set new demands on their suppliers, ultimately scrutinize the supplier’s operations to have full transparency.

The Strategy of Using Consultants for Sustainable Business Development Within SMEs