Towards Green Credentials of SMEs: Qualitative Insights on Barriers to Green Responsiveness from a Developing Economy

Abstract

This study explored the drivers/stimulators behind the effective implementation of green strategy and how firms can strategically minimise barriers and hurdles. It investigated the barriers to green responsiveness encountered by small and medium-sized enterprises (SMEs) from the perspective of owners/top managers in a developing economy. The present study utilised qualitative data gathered from 16 semi-structured interviews with manufacturing and service sector SMEs in Sri Lanka. It adopted directed qualitative content analysis to determine how firms interpret and judge the barriers to green engagement, which are classified into responsibility, practicality and individual barriers. The study found that responsibility and practicality-related barriers are the most salient barriers experienced by SMEs. The gaps in environmental regulatory frameworks, acts and ordinances, weak coordination and monitoring systems, and excessive political interventions caused resentment towards the prevailing command-control policies, as well as the lack of government support and incentives to navigate the embryonic stage of utilising market-based approaches in green responsiveness. The study outcome offers policymakers valuable implications regarding environmental policy development and suggests SME owners/managers focus on the existing barriers and formulate strategies to overcome them to ensure corporate sustainability.

Barriers to Implementation of Environmental Management Accounting in South African Small and Medium Enterprises for Sustainable Performance

“…An adequate sample of SMEs was applied. For instance, using in-depth interviews researchers such as Rajapakse et al (2022) adopted a sample of 16 SMEs in their study. The reliability of the gathered data was amplified by respondents asked the same interview questions.…”

“…The interview guide was designed with particular reference to the corporate green awareness barriers available in the environmental literature. The interview guide was grounded on the contentions submitted by Rajapakse et al (2022) that the attitude-behavior gap is caused by ‚responsibility, practicality, and individual barriers.‛ In addition, SME owners and top managers are important decision-makers for strategies and practices on environmental management.…”

“…These incentives can include tax concessions and subsidies on environmental initiatives that are at present not relevant to SMEs in South Africa. Similarly, SMEs in Sri Lanka report the absence of government support as a factor hindering the adoption of green initiatives (Rajapakse et al, 2022).…”

“…The process is very complicated in contrast to the way it is promoted.‛ Contemporary environmental literature also provides to support this finding. Rajapakse et al (2022) andJan et al (2019) observe that a lack of adequate financial resources is acting as a barrier to EMA adoption. This means that most governments in developing countries remain focused on economic development rather than reducing environmental impacts.…”

Business network and balanced scorecard: an analysis of small and medium enterprises in Malaysia

“…If part of the company network involved with these companies is better known, it may be more advanced. To obtain the best market share, an aspect such as the increased necessity to share knowledge quickly amongst SMEs via the business network (Maskell and Malmberg, 1999;Yeung, 2000;Glasmeier, 1999;Rajapakse, Azam, & Khatibi, 2022) is also necessary. Kulmala and Uusi-Rauva (2005) stated that an enterprise's network comprises a type of social activity, while the Business Network continues this same collective behaviour.…”