Small and Medium Enterprises in Green Business Industry - Research Proposal Example

? Business Report: Small and Medium Enterprises (SMEs) in Green Business Industry of UK Table of Contents BACKGROUND 3 Green Business Industry 3 Relevance of the industry with the operations-based customer issue 3 Aims and Objectives 4 CURRENT RESEARCH 4 Current Industry and Research into Sector 4 Current Business Operations in the Chosen Business Sector 5 CURRENT ISSUES AND CHALLENGES 6 Identification of challenges faced by sector/company 6 Implication to the Economy and Society 7 Application of research to issues 7 CONCLUSION 7 RECOMMENDATIONS 8 REFERENCE LIST 9 BACKGROUND Green Business Industry UK is behind 19 countries in European Union when it comes to creation of green jobs, especially in the SME segment. In this context, countries like Spain, Sweden, Italy and Poland are way ahead of UK. However, with the rising importance of environmental issues and companies are placing this issue at the top in their corporate agenda. As a result of that green business is catching up fast and has gained top priorities in Britain. Although of late, this activity is gaining momentum in the country and it is expected that approximately 70,000 jobs will be created in future in green business industry. Presently around 18,000 employees are working on a full time basis in UK SME segment of the green business industry (London Stock Exchange, 2013a, 2013b, 2013c, 2013d). An investment of around ?29 billion is expected and planned in this sector and this will help green small and medium business to prosper and flourish (London Stock Exchange, 2013a, 2013b, 2013c, 2013d). As far as the economic scenario of the industry is concerned, it has grown considerably in the recent years, with a drastic increase in revenue from 2009 to 2012. The highest increase was seen in 2009, when the revenue augmented to almost 60 percent, but the growth halted after 2009 because of the financial crisis. . In the coming years if the British companies streamline themselves with the guidelines of the government in cutting down the emission standards by 18 percent till 2020, then UK would be among those top countries, which creates good number of green jobs in the SME segment (London Stock Exchange, 2013a, 2013b, 2013c, 2013d). As stated by the Confederation of British Businesses, the green business SME segment accounts for ?122 billion of the global market, which is worth ?3.3 trillion (UNEP, 2011; London Stock Exchange, 2013a, 2013b, 2013c, 2013d). Relevance of the industry with the operations-based customer issue This study has been developed for the management personnel of local SMEs in the Southern England region. In order to enlighten them about the current operations related to customers’ issues in the SME segment of UK, the Green business Industry has been considered because it is not possible to analyse the operations of SMEs in every industry. Furthermore, SMEs in UK such as Vectair Holdings and Basingstoke Skip Hire & Southern are functioning in the green business industry in the country, which would be considered for drawing several examples, so that the operations and business issues are explained in better manner. The Green business industry involves companies which are supplying energy, recycling plastic and concerned with water and energy cost management functions (Time for Change, n. d.). In this report the focus would be on evaluation of the current operations such as functions in management, capacity planning, location analysis, operation network, performance and business strategy, which will assist in analysing their effect on the customers and their requirements. Green business industry has been considered for this study because of several reasons. Firstly, this is the most innovative and lucrative industry in the present times, which is soon going to lead the race in future. Secondly, SMEs in this industry of southern part of England are not just small business houses, but well-established companies, which are established with the prospect of becoming market leaders in near future. Thirdly, due to diverse activities the companies are engaged in, most of the current operations can be discussed considering this industry. Moreover, customers are bound to get affected in this case (Saundry, 2010). Aims and Objectives The report is aimed at getting into a comprehensive discussion regarding the various business operations, research about their significance in the current business environment and analyse them in the backdrop of the Green business industry and its SMEs belonging to the Southern part of England. Keeping in mind this aim, the objectives have been developed, as stated below: - To explore the current issues and business operations in the SMEs of Southern England belonging to the green business industry. To understand the implication of the companies or sector towards the economy and society. CURRENT RESEARCH Current Industry and Research into Sector In this section of the study, the current research on the industry would be analysed with respect to the business operations and its effect on customers’ issues. The discussion would be segregated based on the theories and business operations. Vectair Holdings is a privately held company which has been categorized under the holding companies. The company is involved in the process of manufacturing and selling hygiene products. The company has a workforce of 40 employees and a ?9.90 million. Previous years the sales of the product were ?9.2 million. This shows that the company has been growing steadily. The demand of these products is increasing at a robust rate and it is believed that such companies will drive the green business industry. Likewise, another renowned SME of Southern England, Basingstoke Skip Hire & Southern is a company involved in the business of waste management services. The company has net sales of ?9.90 million and employs around 68 people. The company is highly recognized as one of the most responsible citizens of the society. The green business industry is considered for this study because firstly, green business is the future of global market and extensive research and learning are going on in this industry. Among the SMEs, the green business is one of the top industries which have become the most inspiring segment in the world market, according to the London Stock Exchange (London Stock Exchange, 2013d). Current Business Operations in the Chosen Business Sector In these SMEs, organisational design, layout design, location, supply network design, operational strategy, design of the process and operational strategies are diverse, yet they function in the same industry. The organisational designs in the SMEs are based on the scientific management which consist of theories stated by Henry Fayol. It includes roles of specific workers, reduction of employee laziness and production line. It describes the principles related to organisational efficiencies. There is unity of command in SMEs and division of labour because the segment of green business is niche and required specialised skilled workforce. Division of labour is necessary as organisational efficiencies cannot be achieved if specific individuals are not allocated their work. In SMEs the numbers of employees are less, so laziness at work is strictly discouraged. The quantitative techniques such six sigma, Total quality management, etc are used in green business SMEs for procuring and utilising resources which are beyond the boundaries of the organisation. This organisation structure affect the economic efficiency and productivity in the firm and boost the morale and job satisfaction level of the employees (London Stock Exchange, 2013c.). The location and the capacity planning depend on the products and services offered by the company. Vectair Holdings is involved in the business of manufacturing and selling of hygienic products and as a result of that it is evident that the production technique is obvious to differ. The strategy of resource allocation will also differ and will be accordingly decided by the management of the firm. However, Basingstoke Skip Hire & Southern is involved in the business of providing waste management services and thus there is no prevalent concept of manufacturing. There only concern is providing appropriate services. The set up of the organization will definitely differ as the core focus of this business will be on the service. In the similar way as Vectair Holdings, Basingstoke Skip Hire & Southern will set up their office at convenient places of the service area. There are two different categories of stimuli which assist the management of the organisation to decide the locations such as, transformation in demand of products or services or change in supply. The purpose of changes in location or decision to choose a decision is based on the cost, flexibility of operation and revenue generation from that area of operation. In case of green business segment, procurement of raw materials, supply to customers and flexibility of operation are major issues. In the demand side, suitability of the place, skills of the labours, convenience of the consumers are considered. On the other hand, land, energy, community issues, transportation and labour cost play significant role from the supply side. Considering all these criteria from both sides, the feasibility in terms of location selection is identified. The third most significant area of operation in the green business segment is the supply network or supply chain. However, supply chain is available in those companies in the industry which are associated with manufacturing. The offerings of Basingstoke Skip Hire & Southern are such that it does not require any kind of manufacturing as the company is involved in the business of waste management services. On the contrary, the role of supply chain network is prevalent for Vectair Holdings as manufacturing is s key function of this company. It is a combination of all the significant operations, which interact with the suppliers and customers. It is concerned with scheming, developing and controlling the resources and processes of the organisation to produce goods and services. Supply chain is usually evaluated from supply as well as demand side. In case of SMEs, the supply chain is usually small because companies try to eliminate the middle men and reduce cost of production, so that the price of their offering remains attractive (London Stock Exchange, 2013b). The major operational functions that almost all the companies have to perform irrespective of industry are marketing and sales, operations and product and service development. In the green business segment too these operations are prevalent, but alterations or change can be seen in the way these operations are carried out. The marketing and sales of green business and products are more sophisticated in terms of medium used. Products and services are delivered with the help of highly advanced machinery and equipments. Supply chain is regulated and control with the help of an IT enabled infrastructure. In all these aspects, the customers have a major role to play (London Stock Exchange, 2013a). CURRENT ISSUES AND CHALLENGES Identification of challenges faced by sector/company In this segment the challenges faced by the SMEs in the green business industry of South England would be discussed keeping in mind the companies those have been considered as examples. The small business owners have to face various challenges no matter whatever precautions are taken. In the green business sector, challenges ranges from funding the business to its operation. In the present volatile environment convincing the venture capitalist for funding business in the green business sector is difficult because for the venture capitalist green businesses are not so profitable. Skilled labour for green businesses is also less compared to other businesses. Moreover, SMEs generally do not pay very high remuneration to its employees, so employees skilled in this sector tend to avoid working in the SMEs, unless the company is renowned. Choosing appropriate location for plant set-up at optimum cost is yet another challenge because the capital is limited. Even aspects like research and learning, daily operations, supply chain management, etc become challenging in green business because resources are scares and price of procurement is highly leading to an increasing price of the offering for customers, which they fail to understand and accept (Carbonica, 2012). Implication to the Economy and Society The above discussion reveals the challenges which generally all the SMEs in the green business segment face. In this section, the focus would be towards identifying the implications for the sector. Green business segment is itself challenging because it is new, different from the traditional business and also encourages revolutions in the business environment. Investors and stakeholders are apprehensive because they cannot trust a lucrative return on investment. In this scenario companies which have got extended set-up or operations are steadily surviving because they have the strength of capital and manpower. On the other hand, the SMEs planning to come up with innovative idea in the green business segment have to push themselves into the global green business sector to establish their position. Companies like Vectair Holdings and Basingstoke Skip Hire & Southern, are also in this segment which has become so successful that they have become the face of the industry. These companies started their business only with handful of employees and limited capital. However in the course of time, these companies went on to become successful. The challenges discussed above were abound to come. However, the core reasons behind overcoming these challenges are good relationship with suppliers, attainment of sustainability even during establishment, which signify transparency, ethics and governance (Carbonfund, n. d.). Application of research to issues The rising establishments of SMEs and interest of the customers towards buying eco-friendly products are due to the extensive academic as well as business research conducted by scholars and researchers in these sectors. Environmental concerns are rising due to the results of the study and researches. The changing environment of the planet, the increasing rate of natural calamities and the geological transformations reveal that it is time that the current research studies should be considered seriously. However, green business is the future of global marketplace, which would not only be appropriate but highly lucrative because companies establishing business now would reap extensive profits then. These SMEs based on Southern part of England are established now will be able to overcome their challenges with time and grow into bigger organisation. The world is moving towards creation of ecological future. So it can be expected that SMEs focusing towards establishing sustainable business by taking into consideration the researches and their applications, would be reaping profit because at that time the establishment cost of the business would increase and competition in the market would be high, so penetration would be much difficult for SMEs in this industry compared to today (Aras and Crowther, 2012). CONCLUSION The objective of this study was to provide a comprehensive overview to the management personnel about the business environment of SMEs belonging to the Southern part of England. The study considered the SMEs of South England belonging to the green business industry of UK. The green business industry was considered because it is maturing yet one of the most revolutionised sector in the global marketplace. It was found that though green business segment is the future of the world market, yet it is facing numerous challenges due to lack of knowledge among investors, customers and other stakeholders. However, there are companies which have been successful in overcoming these challenges and have become the face of the industry. This implies that the SMEs have started taking the research results and their implications seriously in business environment too. The ecological depletion, transformation of weather conditions and increasing waste on the planet are few of the consequence of the research conducted by the research scholars towards. Since in every country SMEs contribute the major portion in the national income, so in Green business sector also they must have a reasonable approach. RECOMMENDATIONS The recommendations have been put forward keeping in mind the challenges that the SMEs generally face in establishing their venture in the green business sector. Venture capital or bank loan can be procured if the owner has a solid feasibility plan to support. This is only possible through extensive research which can be either done by conducting a market survey or by considering the existing researcher papers by different establish scholars. Development of strategies must be based on a the assumptions and set of principles Green business should be established on the business model which supports sustainable development in terms of corporate governance, ethics, corporate social responsibility, etc REFERENCE LIST Aras, G. and Crowther, D. 2012. A handbook of corporate governance and social responsibility. Surrey: Gower Publishing, Ltd. Carbonfund, no date. About Climate Change and Carbon Emission. [Online]. Available at: [Accessed on June 13, 2012]. Carbonica, 2012. What is my Carbon Footprint. [Online]. Available at: [Accessed on June 13, 2012]. London Stock Exchange, 2013a. Green Business. [online] Available at: [Accessed 26 December 2013]. London Stock Exchange, 2013b. Argent Energy. [online] Available at: [Accessed 26 December 2013]. London Stock Exchange, 2013c. Utilitywise. [online] Available at: < http://www.lseg.com/green-business/utilitywise> [Accessed 26 December 2013]. London Stock Exchange, 2013d. Eco Plastics. [online] Available at: [Accessed 26 December 2013]. Saundry, P., 2010. Overview of Greenhouse Gas Control Policies in Various Countries. [Online]. Available at: [Accessed on June 13, 2012]. Time for Change, no date. Cause and effect for global warming. [Online]. Available at: [Accessed on June 13, 2012]. UNEP, 2011. GREEN Economy: Pathways to Sustainable Development and Poverty Eradication. [Pdf]. Available at: [Accessed on June 13, 2012]. Read More