Small and Medium Enterprises' Role in Establishing of Ecology - Essay Example

Introduction Climate change has become an indelible reality. The world is witnessing ever-increasing global temperature at a very fast speed. More and more parts of world are losing their original weather conditions and bringing hotter climatic impacts on the social and economic aspects of life. Consequently, more and more people have started to feel the heat of climate change by experiencing a new kind of medical disease, severe and prolonged drought conditions, and abnormal trends in the global rain and weather conditions. In this regard, both large and Small and Medium Enterprises (SMEs) have to some extent equally contributed to the above mentioned environmental abnormalities. And, a sufficient number of scholars necessitate that managers to consider the natural environment more as a subjective or a strategic problem than as an ethical or normative one (Aragon-Correa et al., 2004; Banerjee, 2001; Cordano and Frieze, 2000; Sharma, 2000). Consequently, they support a strategic mindset and approach to promote change from within the organization (Clemens, 2001). For SMEs, it is in their organizational interests to pursue such environmental policies that make them a responsible part of the environmentally responsible organizations; more importantly, the SMEs do not exist always to be identified with this term, they need growth and economic prosperity on a very strong footing; their entire future growth is largely associated with their current outlook seen and observed by the stakeholders; they need to invest in environmentally friendly activities. However, it is and will not be an easy task for SMEs as they face many problems such as limited financial resources, under-developed organizational structure, raw management style and so on are those factors that do not help SMEs to introduce a positive outlook denoting them as ‘an environmentally friendly entity.’ In the subsequent parts of this paper, first, it is argued for the topic and followed by arguing against the topic; after that a conclusion is provided. Arguing for Every organization always wants to grow particularly SMEs. And, nowadays, growth requires more social and environmental investment as a way to promote their name as an environmentally friendly entity. Most of the larger organizations have been enjoying growth in their net profit figures by providing the annual Corporate Social Responsibility (CSR) reports along with their annual reports. In these reports, they account for such economic, social and environmental investment either that have been carried or they intend to invest in the coming days. In this regard, Aragon (1998) argues that larger companies usually enjoy more benefits while complying with the Public Administrations’ programs to enhance their employees’ environment-related understanding and provide them environmental training. Additionally Dean and Brown (1995) state that environmental regulation is uniform concerning the companies. Furthermore, some critics argue that environmental regulation may introduce a positive impact for SMEs; and they contend that using preferential treatment for SMEs from Public Administrations. To encourage more environmentally friendly investment from the SMEs, some legislators have termed it appropriate to protect SMEs from the negative but disproportionate impacts of some environmental measures (Pashigian, 1984). As a result, Brock and Evans (1985) state that by doing so the SMEs would benefit from the regulatory measures or the actions requiring minimum legal compliance. Further, with time, the stakeholders are becoming more concerned and inquisitive about the more responsible role from the companies involved in damaging the environment or other social issues that negatively impact the lives of others. It is this stakeholders’ pressure in the recent history that has greatly demanded from the lager organizations to become socially and environmentally responsible. And, the larger companies have considerably provided their social and environmental contributions, decreasing their negative effects on the environment and other factors. Within that context, SMEs are not less in damaging the environment and its constituent parts. The available data suggest that SMEs produce around 70% of the total global pollution (Smith and Kemp, 1998), 60% of the aggregate of carbon emissions (Marshall, 1998), and the total sum of these statistics highlights that the SMEs’ environmental impacts outshine the combined environmental effect of the larger firms (Hillary, 2000). Beyond any doubt, these statistics require SMEs to invest in environmental activities. By doing so, SMEs will have the benefits; first, they will observe that the environmental groups would no more be there to lobbying against them rather they would be showing less aggressive attitude towards them. Second, and the major benefit of this activity would positively affect the sales and business figures of the SMEs, their annual profit and sale margins would experience a reasonable growth fuelled by the positive image being attached with the SMEs’ role towards the environment and social activities. Arguing against SMEs do not avail of a sufficient amount of financial resources. Azzone and Noci (1998) argue that SMEs are companies with limited availability of financial resources. Thereby, they find it very difficult to develop long processes of competence accumulation, not even to provide for funds for ecological initiatives or the secondary aspects of the company’s fundamental activities. This insufficiency of financial resources hinders the development of environmental improvements (Noci and Verganti, 1999). Additionally, Brio and Junquera (2003) argue that many studies suggest that among the difficulties faced by SMEs while implementing environmental actions, are the peculiar characteristics of their organizational structure. While comparing such characteristics, Brio and Junquera (2003) contend that larger companies are better equipped over SMEs about environmental protection. Adding to this point, Alberti et al., (2000) opines that environmental practices are easier for companies having a standardized and well-structured organization such as the larger ones. Besides, environmental management needs to be intensive in human resources and relies on the development of tacit skills with the active participation of employees’ involvement (Hart, 1995). In this regard, some studies highlight that SMEs provide routinely a very minimal amount of environmental awareness. Also, Brio and Junquera (2003) analyze the presence of significant differences associated with the employee’s level of environmental training about the companies’ level of environmental action development. Consequently, they argue that the higher the percentage of employees trained in environmental management, the higher the development of the companies environmental strategies. Moreover, advanced environmental approaches require a sufficient amount of resources. SMEs are not equipped to that extent rather they face several difficulties in acquiring human and financial resources; they find it difficult both to invest and obtain benefits from ‘green’ technologies (Azzone et al., 1997). Additionally, SMEs do not have such a level of innovative capacity that is enjoyed by the larger firms. And, to fulfill their innovative needs relating to their manufacturing processes and the issues relating to the environment, the larger companies considerably invest in the Research and Development (R&D) department. On the other hand, SMEs, needless to say, again are financially ill-equipped and insufficient to install an R&D department, enabling them to carry out the innovative processes helping them to become an environmentally friendly entity. Similarly, Noci and Verganti (1999) highlight that the SMEs have limited capacity to involve or develop new relations with Public Administrations, research laboratories, logistic services, and other external companies. Due to this insufficiency, the SMEs consider it as a hindrance for their environmental action development. Conclusion Globally, environmental issues are fast-growing. These issues are mostly fuelled by the rising level of global weather temperature, melting of ice, and a considerable increase in green house gases. Without any doubt, many critics do not doubt the much of the problem is caused by the irresponsible role being played by the larger and smaller companies. They continue to pollute this planet’s environment; and at the same time, they do not play their necessary role to reduce the impacts of green house gases. As mentioned earlier, SMEs are polluting more than the larger companies; they have a larger responsibility in this regard. By investing in green or environmentally friendly activities, the SMEs may enjoy such benefits as are enjoyed by the larger companies. First, they would escape the lobbying of environmental groups and other stakeholders; this would help them to develop their positive and environmentally responsible role. And, the recent history suggests that the consumers are becoming considerably inquisitive about the companies environmental policies; by investing in environmentally friendly activities, the SMEs would enjoy the increased volume of sales, augmented margin of profits, greater recognition from the consumers and other related stakeholders. However, such benefits do not come easy for SMEs as they are financially ill-equipped. And, this insufficiency does not help to achieve their environmental goals. Besides, the SMEs have limited human resources along with nearly zero innovative capacity. Also, SMEs have less environmentally trained staff and this again puts minimum use of environmental management policies. 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