Sustainable business strategies in SMEs: Their antecedents and organizational consequences

This doctoral investigation addresses Environmental Sustainability (ES) in the Small and Medium Enterprises (SMEs), the principal business entities that generate most of the employment in a nation’s economy. The research examines the antecedents and consequences of ES business strategies in the SME context, focusing on the reality experienced by Spanish and Chilean SMEs. Principally, this is to understand their reality, thus approaching their factors, conditions, and obstacles that influence ES application in their business activity through in-depth interviews with SME managers -18 in Spain and 29 in Chile-. The qualitative research findings show that SMEs possess limited knowledge on the Circular Economy (CE) practices, where companies have a reactive and non-risk-taking perspective on environmental activities. Furthermore, the lack of client pressure in these topics reinforces this behavior. Another aspect is that the environmental regulation and waste management systems do not adapt to the reality of SMEs. The principal differences between Spain and Chile are: 1) The SMEs level of knowledge of the CE is higher in Spain and centered in lower CE practices, 2) Spanish SMEs tend to be more environmentally sustainable compared to the more conservative Chilean SMEs, and 3) In Spain, SMEs are limited to comply with environmental regulations; the traceability is the bigger problem (while in Chile, environmental regulation is in the gradual implementation phase). Yet, SMEs do not feel afraid of these regulations due to the historical lack of inspections. Henceforth, this research proposes a model to analyze the relationship between the CE's learning processes, their organizational consequences. The model was tested using a Structural Equation Model (SEM) from a data sample of 205 surveyed Chilean SME managers. The results show that Learning Orientation and Organizational Learning positively affect CE adoption, where SMEs age has a moderating effect that requires further research. Additionally, CE has a positive effect on competitive advantages and market performance. However, the results show that CE practices are anchored in the low levels of circularity. This thesis contributes to the literature with a concrete vision about ES adoption factors and consequences in SMEs. This research generates insights for policy-makers and practitioners for their implementation.