Sustainability Barriers in SMEs1462056/...barriers into general, segmental, and individual groups....

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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

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Master Thesis in General Management

Title: Sustainability Barriers in SMEs

Authors: 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.

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Table of Contents 1 Introduction.................................................................................................................................61.1 Background..................................................................................................................................6

1.2 Environmentalsustainability.................................................................................................7

1.3 SmallandMediumsizedEnterprises...................................................................................8

1.4 Greenproductlifecycle.............................................................................................................8

1.5 ProblemDiscussion...................................................................................................................9

1.6 Purposeandresearchquestions........................................................................................11

2 Literaturereview.....................................................................................................................122.1 Literaturesearch.....................................................................................................................12

2.2 SustainabilitybarriersinSMEs...........................................................................................122.2.1 Informationbarriers.......................................................................................................................................122.2.2 Lackofresources..............................................................................................................................................132.2.3 Legislationandregulation............................................................................................................................142.2.4 Market...................................................................................................................................................................152.2.5 Barriercategorizing........................................................................................................................................16

2.3 Environmentalsustainabilitysolution............................................................................18

3 Methodology..............................................................................................................................203.1 ResearchDesign.......................................................................................................................20

3.2 Researchphilosophy..............................................................................................................21

3.3 ResearchApproach.................................................................................................................21

3.4 Researchnature.......................................................................................................................22

3.5 Researchstrategy....................................................................................................................22

3.6 Datacollection..........................................................................................................................233.6.1 Primarydatacollection..................................................................................................................................233.6.2 Secondarydatacollection.............................................................................................................................233.6.3 Qualitativeinterview......................................................................................................................................23

3.7 Qualityassurance....................................................................................................................243.7.1 Credibility............................................................................................................................................................253.7.2 Dependability.....................................................................................................................................................253.7.3 confirmability.....................................................................................................................................................253.7.4 Transferability...................................................................................................................................................25

3.8 Ethicalconsiderations...........................................................................................................26

4 EmpiricalFinding....................................................................................................................274.1 Environmentalsustainabilitybarriers............................................................................274.1.1 Lackofawarenessingarbagerecycling.................................................................................................284.1.2 Guideline..............................................................................................................................................................284.1.3 Greensupplier...................................................................................................................................................284.1.4 Energy...................................................................................................................................................................294.1.5 Staffknowledge.................................................................................................................................................304.1.6 ConvinceMarket...............................................................................................................................................304.1.7 Lackofresources..............................................................................................................................................30

4.2 Greenproductlifecycle..........................................................................................................31

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4.3 Problemsolution.....................................................................................................................334.3.1 Recyclingpartnership....................................................................................................................................334.3.2 Eco-Certification...............................................................................................................................................334.3.3 Consultancy.........................................................................................................................................................344.3.4 Greenlogistic......................................................................................................................................................344.3.5 Basicorderforecast.........................................................................................................................................344.3.6 Sustainableinvestmentpartnership........................................................................................................354.3.7 Eco-friendlymaterial......................................................................................................................................35

5 Discussionandconclusion....................................................................................................365.1 Barrieranalysis........................................................................................................................365.1.1 Generalbarriers................................................................................................................................................365.1.2 Segmentalbarriers..........................................................................................................................................365.1.3 Individualbarriers...........................................................................................................................................37

5.2 GPLbarrierevaluation..........................................................................................................37

5.3 Adoptenvironmentalsustainabilityprocedure...........................................................38

5.4 Solutions.....................................................................................................................................39

6 Conclusion&Implications....................................................................................................416.1 Conclusion..................................................................................................................................41

6.2 Contributionsandimplications..........................................................................................42

6.3 LimitationsandSuggestionsforFutureResearch.......................................................42

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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 .................................................................................................. 6

Figure 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

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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

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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

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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,

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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

Internal manufacture

Manufacturing

Investing

Regulation8

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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

their way to become environmental friendly.

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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.

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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).

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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

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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

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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

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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)

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• 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) • Weak market position (Ghazilla et al., 2015)

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• 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

19

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.

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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

DataanalysismethodThematicAnalysis

PrimaryDatacollectionmethodSemi-structureInterview

ResearchStrategyParticipatorymethod

ResearchApproachInductiveapproach

ResearchPhilosophySocialconstructivism

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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,

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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.

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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

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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.

25

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

26

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.

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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.”

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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.

29

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.”

30

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.

31

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.

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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

Inte

rnal

m

anuf

actu

re 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 ~

33

4.3 Problem solution

4.3.1 Recycling partnership

Making a partnership to recycle the garbage of the company can supply part of the energy and

raw materials.

Company H: “[…] after negotiating with several companies that could help us to recycle our

garbage and analyzing different factors such as how much percentage can return to the

production line of company; we made our decision. […] now, 24% of our raw plastic material

and a part of our energy comes from our garbage. It’s beautiful and big step in our company

toward our green future.”

Company F: “[…] we start our cooperation for segregation and recycling our garbage with

(company X) three years ago. […] now we progress in this part and with collaboration our

partner, not only we recycle our garbage, but also, we buy the garbage from our neighbors

and it is like our side business.”

4.3.2 Eco-Certification

Eco-certificates prepare a detailed guideline to help businesses to identify the right area to

understand from where they should start to improve. There is different certificate like Svanen

(Swedish organization certificate), EU Ecolabel, EDGE (Excellence in Design for Greater

Efficiencies), PEER, and many other standards and certificate.

Company D: “[…] so EU Ecolabel certificate helped us to earn different points in each area

of our business and made a model for us. […] by installation water saving model, the usage of

water reduces by 35 %. […] it cost around 20,000 SEK to apply the model, but in two months

we gained all of that and now we use 35% less water.”

Company F: “[…] so according to ISO 14001, we decided to establish environmental

management system. […] at beginning I wonder if certification can help us and works? Now I

know that was best decision for future of my company.”

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4.3.3 Consultancy

Getting advice from consulting company can help businesses to attain knowledge to identify

the areas they can improve in sustainability issues.

Company I: “We start to conversation with TÜV to understand what we have and what we

have to do. […] they show us the start point.”

Company G: “[…] consultant company for our company was like a teacher for a student. They

helped us to find our way in this way and find our position in sustainability area.”

4.3.4 Green logistic

We can divide logistic activities to inbound and outbound. Green logistic help companies to

decrease the amount of their CO2 emission in both logistic sections.

Company H: “[…] we change all of our vehicles to electric ones in both inside and outside

logistics. […] we bought eclectic forklift and use green energy from our solar panel. […] we

are happy because it”

Company B: “[…] we knew buying green energy car was economically adverse for company

and we should buy diesel car, but we made this decision knowingly.”

Company A: “[…] by controlling the time for ordering the raw material we use sea freight

instead of air freight for our logistic. Therefore, now we are one more step closer to our

sustainability goal.”

4.3.5 Basic order forecast

There are always some errors in production planning in manufacturing businesses which cause

ordering more than the required amount of raw material, delay in shipment, consuming more

energy, increasing warehouse expenses, and so on. Basic order forecasting is one way can help

companies to forecast minimum amount of ordering for current year according to the last year

ordering.

35

Company J: “[…] we use Basic order forecast at the beginning of each year in product planning

meeting. We evaluate the list of ordering for last year and find the minimum amount for order

in that year. That amount is our basic order for current year so we preorder that amount and

our supplier will prepare and send our basic order by sustainable transportation way like sea

freight. For the rest of our raw material we wait for market demand in that year.”

4.3.6 Sustainable investment partnership

According to our research, many SMEs have not a private building and run their business based

on rent contracts; and they cannot invest for long term sustainable solutions like solar panels

or wind turbines. This barrier leads them to think and apply for partnering with a third party

for their long-term sustainability solutions.

Company F: “We rent a building for our production facility and it was not logical to invest on

solar panel energy. We agreed on a partnership contract with our landlord to get financial

benefit for our clean energy project”.

4.3.7 Eco-friendly material

Using eco-friendly material is a big step through green activities for manufacturing companies.

It can help to businesses to decrease the amount of harmful impact on the environment by using

less substances like plastic and help to postpone the earth overshoot day.

Company B: “[…] we decided use organic cotton instead the normal one. […] we were lucky

because when we were looking for that, we saw an advertisement that shows a big company

use organic bed linen. After negotiating with them, they accepted to provide our raw material

to help us.”

Company E: “[…] so in order to decrease plastic in a part of our packages, we found a supplier

to provide bioplastic with a reasonable price. […] we reduced around 30% of our plastic

consumption.”

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5 Discussion and conclusion In this chapter we have discussed barriers that influence sustainability practices in several ways

in SMEs. General barriers which mean that majority of cases have them in common, segmental

barriers which return to specific industry groups and individual barriers which each SME is in

challenge due to their own specific situation or generated by the corporate structure, culture or

geographical location of that company.

we examine the individual, segmental and general barriers in our interviewees and, their

specific motivation and their procedure to finding solutions and overcome these problems for

additional clarification of our findings.

5.1 Barrier analysis

Through our research and interviews we found we can categorize the barriers in the three

following groups:

1. General barriers

2. Segmental barriers

3. Individual barriers

5.1.1 General barriers

Majority of companies have common barriers, for example, human resource barriers, financial

barriers or lack of enough knowledge about sustainability.

Company D: “We have no enough staffs to put for sorting the trashes, so , we decided everyone

try to manage energy in their work station”.

Company A: “Our budget is limited and according to the company policy we allocate most of

our budget to the production, sales and marketing”.

5.1.2 Segmental barriers

During our interviews, several interviewees complaint that their final products will be

expensive if they spend money on their environmental activities, and they cannot compete with

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their competitors. Since there are few people who willing to pay extra on greener products. As

an example, we had an interview with the household manufacturer, who tried to use recycled

materials for their vacuum cleaners, and the final products are more expensive since the plastic

recycling process is expensive.

5.1.3 Individual barriers

Each company has its limitations and barriers which is different from one company to another.

To be clearer, the following conversations are from our interviews with two companies:

Generally, transportation by train is more sustainable than truck, air freight and sea freight. But

sustainable transport is not always available, depending on the geographical locations.

Company F: “We are locating in an area that there is no train connection for our inbound and

outbound logistics. That is why we put efforts on managing our water and energy

consumption”.

In another case, several manufacturers have no access to the recycling consultants. This is a

big barrier for them to have a sustainable production cycle.

Company F: “We do not have access to any recycling company or sorting service providers in

this area. In the latest sustainability meeting, we agreed and set a target of 5 per cent reduction

in waste materials in production line”.

5.2 GPL barrier evaluation

According to the literature, evaluating barriers in different parts of green product lifecycle in

the process of production businesses, shows that the number of obstacles is different in each

step. It shows that manufacturing and marketing steps have the largest number of barriers,

while supply, logistics & distribution, and Disposal have the smaller number of barriers. Our

findings during this research showed that the number of barriers in each step is not a sufficient

factor in evaluating barriers in different companies.

In this research we found that the strength of barriers in each step of GPL in each business is

more important than the number of barriers, which means that by solving those barriers how

much of environmental impact of the company will be reduce. It is obvious that different

38

barriers have distinct environmental impact in different companies. But if we want to illustrate

generally, by evaluating the data in Table 3 we can see that supply and manufacturing steps

have the strongest obstacles, while supply part has one of the smallest number of barriers.

Moreover, disposal, logistic & distribution, market, and investment parts are in the next step of

strength in GPL; however, disposal and logistic & distribution do not have high number of

obstacles. On the other side, we can see that the strength of barriers in regulation step is so

small that can be ignored, while this step has a considerable number of obstacles. Moreover,

two other steps, design and R&D, despite having a considerable number of barriers, we can

ignore them.

This evaluation gives us a general conclusion which shows the strength of barriers in each step

of GPL are not related to the number of obstacles in that step. The other key finding of this

research is that the strength of barriers in each step of GPL is vary according to the company

under review.

5.3 Adopt environmental sustainability procedure

Through our findings, we understood that most of successful green SMEs in production and

manufacturing field that participate in this research follow the similar strategy for adopting

their sustainability activities which shows in Figure 4. For the first step, they categorize barriers

to general, segmental and individual obstacles. After that they categorize those barriers in

different steps of GPL to understand the strength of each step to have a better view from the

way forward. In next step, they compare their barriers with their available resources such as

time, financial, and human resources and understand on which barriers they can focus more

and allocate resources. After this step the company has a list of barriers according to its

available resources. Next step is sifting barriers according to the environmental sustainability

goals of the company. Next, the company try to find solutions for those barriers. When they

find solution, it is the time for acting.

39

Figure 4. sustainable activities adaptation method

5.4 Solutions

During this study we found seven different solution that companies used to solve their strongest

barriers. Most of these solutions are the solutions that most of the companies know about them

and use for decreasing their environmental impact such as Eco-certification, consultancy, green

logistic, Eco-friendly material, or recycling partnership. But, two companies for solving two

big common obstacles in green process applied wisely solutions.

First common problem is that many of SMEs does not have private building for their companies

and run their businesses based on rent contract, so it’s not efficient for them start renewable

energy project such as solar panels or wind turbines just for the duration of their contract. The

solution that company F applied to solve this problem was sustainable investment partnership.

It means the company start negotiating with the landlord about the percentage of partnership

in this project according to the duration of the renting contract and the cost of project. The

company can use from the profit of the project until the end of the contract and after that the

project is belong to the landlord.

Second common problem is about errors in production planning and ordering material in

production business. These errors make some problem such as delay in shipment, consuming

more energy, increase warehouse expenses and so on. For example, delay shipment makes time

Barri

ers

General

Individual

Segmental

Activities

Environmental sustainability

targets

Resources (Time, financial,

human, …)

Solution

Categorize barriers to

distinct steps of GPL

Final Barriers

40

limitation for company and they should use transportation methods that are not environmental

friendly such as air freight. In order to solve this problem, company J applied basic order

forecast method at the beginning of every year. In this method the company forecast the

minimum amount of ordering of material for current year according to the minimum amount

of ordering in the last year. After that they preorder that minimum amount and their supplier

start to prepare and send their basic order by sustainable transportation way like train or sea

cargo. The rest of ordering will do according to the market demand in the new year.

41

6 Conclusion & Implications

6.1 Conclusion

The purpose of this research was trying to understand the environmental sustainability process

in production SMEs and find the way that successful SMEs follow in this green sustainability

journey. To achieve this goal, we designed three research questions:

RQ 1: Which different barriers the SMEs in production and manufacturing industry face to

adopt green actions and how we can categorize them?

RQ 2: Which solutions help to SMEs to improve their Green activities?

RQ 3: How SMEs can overcome to their barriers and find best green actions?

In order to answer to our research questions, we started to conduct the literature review to find

a good view about our path through this study. Thus, we found different barriers that happen

for SMEs and some solution for them. After that we categorize those barriers which made

according to the accumulation of barriers in different steps of green product lifecycle.

Furthermore, we tried to understand if we can use this category to make a priority of the green

activities in SMEs. Based on that knowledge we interviewed with ten successful green SMEs

in production and manufacturing field.

Our findings show that generally there are three types of barriers in each company that we can

call them general, segmental, and individual barriers. General barriers are the common

obstacles that majority of companies face them regardless of the type of business they are, such

as human and financial resource difficulties in green sustainability. Segmental barriers are

related to the type of business that SME do. For example, some of the obstacles that occur to

the automotive industry are meaningless to food production industry and vice versa. The last

types are individual barriers which are related to the limitation and specific situation of each

company and varies from company to company.

The other key finding of this research was that accumulation of barriers in different steps of

GPL are not accurate factors for make a priority of green activities in SMEs. Instead, the

strength of barriers in different steps of GPL is a factor that SMEs can use to make priority and

plan for their green activities.

42

Relate to second research question, we found different solutions that our companies used to

remove their obstacles such as using eco-material, consultancy, green logistic and so on.

moreover, we found two wisely solutions that SMEs can use to solve two common obstacles.

First solution was sustainable investment partnership which help the companies that want to

run the green energy project to provide renewable energy for their businesses but because they

run their businesses based on rental contract it is not economical. Therefore, by making an

investment partnership with landlord they can solve this obstacle. Second solution was basic

order forecast. With this solution the companies could solve the ordering barriers such as delay

in shipment, increase warehouse expenses and so on.

Last research question is about if there is any general procedure that SMEs can find best green

actions for their businesses. In this research we found that most of the successful SMEs that

participated in this study followed an almost similar method that shows in Figure 4. At first

they categorized their barriers in general, segmental, individual level as we explain above. After

that categorized those barriers in GPL steps and identified the strength of the barriers in each

step. After that according to their resources and the targets of the company their choose the

obstacles that they wanted to work and solve them. Finally, by finding the solution for those

barriers they start to action.

6.2 Contributions and implications

Although the study was conducted in a very special context, we tried to provide sufficient

information on our research environment to improve transferability (Lincoln & Guba, 1985).

We hope our research and findings facilitate sustainability practices in SMEs in entire Sweden

and even efficiently contribute to the world climate control in higher scale. We believe

sustainable solutions that our cases developed can be as some simple and practical guidelines

for other SMEs or big manufacturers and even service providers. As potential users can be

newly founded SMEs who are in lack of experts and resources to implement sustainability

practices in their entire product cycle, Or SMEs who aim to start green development and reduce

their climate impact directly and indirectly through experimental solutions.

6.3 Limitations and Suggestions for Future Research

The biggest limitation of this study was corona pandemic, which limited conducting required

interviews. Many companies had restricted contact with the outside and many were struggling

43

with keeping business running rather than providing information, set the meetings and so on,

which means it was very difficult to reach to saturation level.

Furthermore, due to limitation in our budget and time, we planned to focus only on SMEs

located in Jonkoping city area which is not representing the SMEs in Sweden, or other

countries. So SMEs located geographically different may have different resources to manage

sustainability, for example, limitation access to the new technology, or view to sustainable

development which may lead to different results. in addition to above, most small and medium-

sized enterprises have not official and organized information that we can use as secondary data.

We do not know how sustainability barriers are categorized in other geographical area and how

those barriers interact with each other. Hence, that would be interesting to study how

sustainability barriers are connecting. Therefore, we suggest further study on barriers in

different countries other than Sweden that we located, to find out if they can be categorized

within general, segmental and individual barriers clearly and how they overlap and interact in

SMEs in other geographical locations.

Also, we compared our findings against current theories and discussed the result.

Simultaneously, we came up with this idea that these solutions can be generalized for the other

SMEs to establish any sustainable practice as the future study.

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