SME leaders' drivers to embrace environmental uncertainty and develop their sustainable business model strategy

Abstract

SME’s that have an owner-manager that is both creative and innovative, having a well-defined business plan and model, is most likely to be experiencing higher growth and productivity than those businesses who don’t. This body of research supports that the SMEs’ growth is dependent on developing a more sustainable business model that reflects the leaders’ attitudes and value towards opportunities and risks. The significant threats of environmental issues on future economic growth, and the wider social community in terms of human health and impact on living conditions, also impacts on future SMEs’ economic and employment growth. This study explores the environmental uncertainty responses of these SMEs, with a particular focus on their sustainable business model innovation strategies and the leaders’ environmental concerns. This paper analyses the two main research questions on the links between environmental uncertainty and SME leaders’ attitudes, values and behaviours. The study collected data, both quantitative and qualitative, from 60 SMEs in the East of England. The findings indicate that SME leaders’ alignment of attitudes, values and behaviour towards external environmental uncertainty is dependent on their level of knowledge, understanding and commitment to SBM change, and as importantly the sector’s need for changes. Those that are proactive are more successful, being first-mover in the sector, and inevitably seeking more ways to co-produce to add both business and customer value. Achieving significant sustainable business model innovation is possible when either driven by the industry towards compliance, and/or when the SME leader is committed to it, for either personal reasons (altruism) or in recognition of the business and customer value, both short and long-term. SME leaders gain confidence in implementing sustainable innovations when they have a holistic framework, the business model, to envision its impact.