Topic One Corporate Social Responsibility

Drivers of Corporate Social Responsibility in the Small and Medium-sized Enterprises (SMEs) (75%)

 

The concern by the public, government, employees, customers and other stakeholders of the social and environmental consequences of human activity in general and business operations in general, had made making popular the idea of sustainability as explained by the three pillars of economic, environmental and social (de Grosbois).

Owing its emergence to the seminal work of Bowden (1953) in Inyang (2013); and Vázquez-Carrasco and López-Pérez (2013) on the social responsibility of business, Corporate Social Responsibility (CSR) whose history was firmly rooted in large corporate organisations is today considered “as a global trend incorporating business corporations, states, international organizations and civil society organisations” Sahlin-Anderson (2005).

Therefore, in an attempt to define the connection between business and the larger society, CSR discourse by academic research, public policy and media commentaries centre mainly on large corporate organisations which are expected to behave responsibly (Inyang, 2013)

It could be concluded as claimed scholars like Fuller (2003) in Tseng, et al. (2010); Inyang (2013); and Vázquez-Carrasco and López-Pérez (2013), that there is a dearth or very little literature exist currently to enhance understanding about the engagement of small- and medium-sized enterprises (SMEs) in CSR. However, with the recognition of the growing significance of the SMEs, often variously defined, in terms of turnover, gross asset value, number of employees and ownership structure as an important sector worldwide, led to an emphasis on their social and environmental impacts.

 

The Observatory of European SMEs (2002) in Spence (2007), opined that a different vocabulary and approach rooted in the empirical reality of the small business context is crucial if SMEs are to adopt CSR measures or, as is often the case, simply acknowledge activities they do as being in keeping with CSR since they are already active in the area.

 

This report aims to provide just that through a review of the literature that defined the nature and the characteristics of SMEs, the aggregate contributions of the sector to economies of both developed and developing nations and the drivers as well as barriers to their role engagement in CSR.

 

To achieve this objective, the report is divided into four parts. Part I provides a background introduction. Part II discusses the literature review from conceptual and theoretical issues. Part III provides a critique or discussion of the drivers of CSR in the context of SMEs. Part IV provides the conclusion of the topic under review.

2.1 Conceptual Definitions and Theoretical Issues

2.1.1 Corporate Social Responsibility (CSR)

Weber (2008) posits that although CSR is widely discussed in theory and practice, Turker (2009) both cited Akinyomi (2013) concludes that a universally accepted definition of CSR is yet to emerge. CSR according to Griffin (2000) can be conceptualised differently by individuals which made Helg (2007) in Osemene (2012) to assert that several definitions of CSR are formed to fit any organisation in question.

 

This therefore led to many definitions of CSR, but this report will adopt the following two: “…. CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (EU Commission, 2002, 347 final:5. cited Inyang, 2013). In a similar vein, Mordi et al. (2012:2) in Raimi et al., (2014) conceived of CSR simply as ‘the moral obligation to promote viable societal values for the generation of a peaceful atmosphere within a given society by the firms carrying out their lawful operations in that society.’

 

Ademosu, (2008) in Akinyomi (2013) summed up by saying that what an organisation does to contribute to the social, economic, political or educational development of the community where it is located, but which it is not compelled to do by any law is CSR is all about.

 

The literature of CSR according to Tombs (2005); Hart, (2012); UN Global Compact (2014) in Raimi et al., (2014) has identified three areas of regulations, namely: self-regulation, government regulations and international regulations. In terms of self-regulation, the company is expected to voluntarily comply with social involvements and reporting (Hart, 2010 in in Raimi et al., 2014). While the governmental regulations Is in the form of state intervention through the formulation of laws which compel business to comply with extant laws on health & safety, labour standards, consumer protection, host community rights, sustainable business operations, environmental reporting and stakeholder management (Parker, 2007; Wells, 2010 in Raimi et al., 2014). The international regulations on the other hand are those policies, protocols, conventions and at times laws that are to elicit compliance from corporations on international standards and best practices on business by institutions like ILO, UN (Leisinger, 2006; UN Global Compact, 2014 in Raimi et al., 2014).

2.1.2 Small Medium-sized Enterprises (SMEs)

Like CSR, Pedersen (2009); Oluwatayo (2011); Sen and Cowley (2013); Inyang (2013) affirms that SMEs as a concept do not have a universally accepted definition; therefore, meaning different things to different people (schools of thought). The definition of SMEs thus varies in context across countries, industries, organisations, agencies and the academic community (Inyang, 2013).

 

The definition offered by the European Union Standard that define SMEs as “any business with fewer than 250 employees and a turnover of up to 50 million Euros and a balance sheet of about 43 million Euros”, Inyang (2013) is adopted in this report. However, it should be noted the definition of SMEs above is not exhaustive as SMEs considered large in one country may not be so in another. From the foregoing, it could be seen that SMEs comprise of a very broad range of enterprises from established traditional family business employing over a hundred people to survivalist self-employed people working in informal microenterprises (Inyang, 2013).

2.2. Theories of CSR

2.2.1 Stakeholders Theory

Several theories have been put forth to explain SMEs approach to the issue of CSR, among them two – stakeholder theory (ST) and social capital theory (SCT) stand out as the most popular ones (Adapa and Rindfleish 2011 in Sen and Cowley, 2013). ST proponents such as Brenner and Cochran (1991); Freeman (1984) Sen, S. and Cowley, J.(2013), and Pirsch, Gupta, and Grau (2007) in Akinyomi (2014) believes economic objective of profit maximisation to be the most important stakeholder influence, in participating in social activities.

 

The ST prioritises paying attention by managers to the needs and rights of all the stakeholders in a business to be a convenient way of developing socially responsible behaviour (Maignan and Ferrell, 2004 in Akinyomi, 2014). Akinyomi (2014) referring to the works of Gibson (2000); and Weiss (2003) claim that in a socially responsible organisation, stakeholders obligations figure prominently in the decision-making of managers.

 

Early research in the area of stakeholder management by the Stanford Research Institute (SRI) in 1963 (Freeman 1984, p. 31 cited Sen and Cowley) defined stakeholders as “those groups on which the organisation is dependant for its continued survival, limiting its focus to shareholders whose needs were perceived to be the only goals of a business”. In 1984, Freeman (p. 47) redefined stakeholders having integrated stakeholder concepts into a coherent construct as ‘‘any group or individual who can affect or is affected by the achievement of the firm’s objectives’’ (Sen and Cowley, 2013; and Rahim et al., 2011 in Akinyomi, 2014).

2.2.2 Social Capital Theory

On the contrary, the proponents of social capital theorists like Bourdieu (1986); Coleman (1990); Putnam (1993) cited Sen and Cowley are concerned primarily with the importance of relationships and their networks as a resource (social capital) embedded within the networks of mutual acquaintance and recognition, thus making organisations to actively participate in social activities with the aim of increasing their social capital.

 

Both the World Bank and the Organisation for Economic Cooperation and Development (OECD) equally share the value of social capital. The OECD (2001, p. 1) defines social capital as ‘‘networks together with shared norms, values and understandings that facilitate co-operation within and among groups’’. The World Bank (1999) on its part argues that social capital is not the institutions, relationships, and norms that shape the quality and quantity of a society’s social interactions; rather it is the glue that holds them together (Akinyomi, 2014).

In the light of the above differences, a scholar like Perrini (2006) in Sen and Cowley (2013) proposed that large firms should be based their CSR on ST, whereas, in SMEs, should approach it from SCT. Consequently, Russo and Perrini (2010) in Sen and Cowley (2013) later submitted that the two theories should be taken as alternative and not complementary for explaining CSR in any organisation. In addition, they opined that neither ST nor SCT can exclusively and respectively explain large firm and SME responsible behaviour. It could be argued that the literature remains inconclusive on the legitimacy of both the theories in the context of SME responsibility.

3.1 Drivers of CSR in SMEs

Von Weltzien and Shankar (2011) in Vázquez-Carrasco and López-Pérez (2013) posits that CSR should be seen as a value-building factor in SME contexts, independently of whether the motivation behind it is altruistic or not and therefore should be conceived of more in terms of opportunities than costs for the company.

 

Authors such as Jenkins (2006) cited Vázquez-Carrasco and López-Pérez (2013) suggests that the motivation behind adopting CSR principles in SME contexts can differ with respect to corporate scenarios.

 

Kusyk and Lozano (2007) cited Inyang (2013) conceptualised these motivation or drivers into two – the internal and external pressures, both of which are based on internal decision making autonomy and external market pressure respectively.

 

Inyang (2013) citing the works of several scholars summarised the drivers of CSR in SMEs from both the internal and external point as presented below.

 

In the class of internal motivations or drivers for engagement in responsible activities are the following:

Firstly, the manager’s personal values or ethical orientation and level of morality play a major role in determining his level of commitment to the implementation of social responsibility programmes in the enterprise. The emerging literature provides support for this factor (Vives, 2006; Vives 2009; Leopoutre and Heene, 2006; Hsu and Cheng, 2011; Freisleben, 2011).

 

Secondly, The engagement is purely based on “normative case” where SMEs see it as the “right thing to do” to give back something to the community of business location. This is the desire or need to be good citizen in the community.

 

Thirdly, the “business case” is also important where the enterprises anticipate gaining benefits from community engagement or philanthropy. Such benefits may be improved community image, better business returns and improved customer loyalty.

 

Lastly, the strong identification with the community also provides driving force for SMEs engagement CSR.

 

On the hand, the external pressures that compel SMEs to engage in CSR are:

 

In the first place, the supply chain pressure from large organizations helps the SMEs to adopt ethically responsible practices to sustain their business relationship with such big firms.

 

Secondly, community pressure – the local media and non-governmental organisations and community-based organisations often bring pressure to SMEs to handle the issues of social performance.

 

Thirdly, the need to obey laws and regulations and avoid sanction and negative publicity is another driver compelling SMEs to undertake CSR.

 

Finally, the issue of customer loyalty is also important. The SMEs offer improved services and undertake responsible practices to maintain reputation and integrity to retain and attract customers on a continuous basis.

 

Realisation of the above motivations seems to suggest the claim by the promoters of CSR who argued that SMEs should integrate economic, social and environmental concerns in management tools, business strategies, as well as their activities, by going beyond compliance and investing more on human, social and environmental capital (Belal & Momin, 2009; Perrini, 2006 in Inyang, 2013).

 

The benefits of CSR to SMEs are enormous that made Von Weltzien and Shankar (2011); Perrini et al. (2007), Perrini (2006) and Jenkins (2006) emphasise that cultivating CSR has its advantages for SMEs. Tables 1,2 and 3 provides additional support in terms of benefit and the principal differences between the focus of CSR in SMEs and large scale companies.

CSR as a concept continues to be as fluid, as debated in the literature. Despite a range of understandings put forward, SMEs have come to terms with the fact that businesses have obligations beyond economic and legal responsibilities. In fact, SMEs see participation in such activities as an obligation towards the community members who trust them, and an opportunity to show how the business shares the social values.

 

It should be noted however, that an organisation is not doing any special favour to the society by incorporating CSR as a core business but is indirectly creating more avenues for a greater growth, success and profitability for its business. Reputational damage may also follow for failure to incorporate CSR. Thus, it could be argued that failure to carry out social responsibilities will cause more harm to a business than any good.

 

Akinyomi, O. J. (2012) Survey of corporate social responsibility practices in Nigerian manufacturing sector, International Journal of Research Studies in Management. [online], 2(1).

Inyang, B. I. (2013), Defining the Role Engagement of Small and Medium-SizedEnterprises (SMEs) in Corporate Social Responsibility (CSR), International Business Research. [online], 6(5), pp, 123-132.

Oluwatayo, I. B. (2011) Information and Communication Technologies as Drivers of Growth: Experience from Selected Small-Scale Businesses in Rural Southwest Nigeria. pp. 1-17

Osemene, O. F. (2012) Corporate Social Responsibility Practices in Mobile Tele-Communications Industry in Nigeria, European Journal of Business and Management. [online], 4(8), pp.149-159.

Pedersen, E. R. (2009)The many and the few: rounding up the SMEs that manage CSR in the supply chain, Supply Chain Management: An International Journal. [online], 14(2), pp.109–116.

Raimi, L., Aljadani, A., Fadipe, A. O., & Adeleke, I. A. (2014) Full Length Research Paper How Adequate and Efficient are Regulations on Corporate Social Responsibility and Social Reporting? Evidence from the Nigeria Telecommunication Industry, Advanced Business Management and Entrepreneurship. [online], 2(04), pp. 049-061.

Sahlin-Anderson, K. (2006) Corporate social responsibility: A trend and a moment, but what and for what? Corporate Governance. [online], 6(5), pp,595-608. http://dx.doi.org/10.1108/14720700610706081.

Sen, S. and Cowley, J.(2013) The Relevance of Stakeholder Theory and Social Capital Theory in the Context of CSR in SMEs: An Australian Perspective, Journal of Business Ethics. [online], 118(2), pp.413–427

Spence, L. J. (2007) CSR and Small Business in a European Policy Context:

The Five “C”s of CSR and Small Business Research Agenda 2007, Business and Society Review. [online], 112(4), pp. 533–552.

Tseng, Y. F., Wu, Y.J., Wu, W. and Chen, C. (2010) Exploring corporate social responsibility education: The small and medium-sized enterprise Viewpoint, Management Decision. [online],48(10), pp.1514-1528. www.emeraldinsight.com/0025-1747.htm.

Vázquez-Carrasco, R. and López-Pérez, M. E. (2013) Small and medium-sized enterprises and Corporate Social Responsibility: a systematic review of the literature, Springer Science+Business Media. [online],48(10), pp.3205-3218.

Table 1 Benefits of implementation of CSR by SMEs

Literature/Research Works	Findings: Benefits Highlighted
Andreasen, 1996; Sagawa, 2001; Wymer and Samu, 2003	– Increased sales – Brand differentiation – Enhanced brand image – Improve employee recruitment – Morale and retention – Enhanced government relations – Ability to reach new customer segments
Risks, 2005 Â	– Increase visibility – Enhanced corporate image – Thwarting negative publicity
Madden, Scaife and Crissman, 2006 Â	– Increased sales – Building staff morale. – Building and maintaining client relationships – Show concern for staff and their interest.
Vyakarnam, Bailey, Myers and Burnett, 1997 Â	. – Enhanced reputation – Enhanced professional image – Increased confidence and loyalty
Jenkins, 2006 Â	– Improved image and reputation – Improved trust and understanding – Larger, more prominent profile – Better market position – More business – Increased employer motivation – Increased attractiveness to potential recruits – Cost savings and increased efficiency – Risk management – Benefits company culture
Dzansi, 2011	– Community improvement – Customer satisfaction – Happy workers – Employability – Sales growth – Profit growth – Community goodwill – Employee loyalty – Motivated workforce
Santos, 2011	– Better reputation – Higher employee motivation – Raising quality – Better productivity

 

Source: Adapted as modified and adapted by Inyang 2013

 

Table 2 Principal differences in CSR focus: SMEs versus large enterprises

SMEs	Large enterprises
Philanthropy, altruism	Economic perspective, strategic orientation
Discretionality	Holistic focus
More intimate relationships with stakeholders; importance of the local community	More formal/distant relationships with stakeholders
Strong inspiration, poor integration, moderate innovation	Weak inspiration, strong integration, poor innovation
Ethical conception, owner values,	Instrumental orientation economic objectives
Nonsystematic, unstructured, non-formalized	Systematic, calculated, formalized, measurable

Source: Adapted from Jamali et al. (2009) in Vázquez-Carrasco and López-Pérez (2013)

 

 

CSR impact factor	Large enterprises	SMEs
Drivers	External pressure, business rhetoric (risk reduction, brand reinforcement, anticipation of legislation, investment)	Internal motivation, values Structure
Stakeholders	Broad relations with all plus interaction with civic organisations	Different degrees of intensity (depending on links with the community of reference)
Experience and Management capacity	Strategic planning, standardised reports, reactive or adaptive profile	Depending on the owner/manager’s know-how and discretion
Organisational structure	Formal	Informal
Market type	Brand reinforcement (above all in consumer markets)	No market pressure except partnership demands (for instance supply chains)
Advantages	Considerable impact (above and beyond the organisation)	Flexibility, potential short-term benefits
Disadvantages	Prevalence of economic criteria/motivation	Budget constraints and difficulties measuring results
Conceptual framework	Organizational level, Stakeholders Theory	Individual level, Social Capital Theory (Stakeholders Theory implicit)

Source: Adopted from Preuss and Perschke (2010) in

Topic Two

Social Media Marketing (SMM)

The Impact of Social Media Marketing on Small and Medium-sized Enterprises (75%)

Renown scholars in the field of marketing posits that the term marketing is not a new concept as it existed in some shape and form for as long as human beings lived or traded with each other (Jahdi and Acikdilli, 2009). Accordingly, Ab Hamid, Akhir and Cheng (2013) observed that the advent of technology in the form of social media seems to alter the decision of consumers in the purchase of goods and services due to the ways they not only seek for, but process information. This in the view of Curley and Abgrab Noormohamed (2014) results into so much hype about the impact of social network platforms on marketing globally resulting into companies establishing their presence in different social media as it is believed to promote casual communication with customers on favourable terms.

The barriers to the use of social networking technologies are said to be very minimal thus making the use of social media by SMEs without much need for resources the same way with the well-established large scale enterprises (Derham, Cragg, and Morrish, 2011). They added that the social media platform also offers to the customers the opportunity of not only viewing the content served to them by the SMEs on a static website, but can at the same create and upload their content, leading to active interaction between the company and other customers alike.

The need to develop clear social media strategies by the SMEs that integrate social media with marketing communication Hanna et al., (2011); Mangold and Faulds, 2009 cited Chikandiwa, Contogiannis and Jembere (2013) becomes highly necessary. It should be noted that there are, however, challenges and opportunities that SMEs may face when adopting social media marketing.

 

Available findings by Derham, Cragg, and Morrish (2011); Nevin and Torres (2012); Chikandiwa, Contogiannis and Jembere (2013) and Borker (2014) revealed that not much work has been previously done on the use social media marketing (SMM) in the SMEs. This report thus attempt to show how social media could be utilised as an innovative tool available to the SMEs to grow their respective businesses. The report is therefore, organised as follows, the first section introduces the latest developments in social media, the next one will look at the literature review followed by critique or discussion of findings and then conclusions and recommendations will conclude the paper

 

2.1 Conceptual Definitions and Theoretical Issues

2.1.1 Social Media Marketing

In business parlance, networking is not a completely new addition but said to have a new medium – social media that tends to open windows of opportunities linking friends, families and customers – paving way for a new tool of marketing (Schmidt and Ralph, 2011). Social media marketing is marketing strategy that uses online communities, social networks, blog marketing and more (Singh, 2013). Thus, she added that it is said to be currently the latest “buzz” in marketing.

Social media have been given different shades of definitions by different scholars. Social media marketing is defined as ‘‘a group of internet based applications that builds on the ideological and technological foundations of Web 2.0, and it allows the creation and exchange of user-generated content’’ (Kaplan and Heinlein, 2010, p.61 in Singh, 2013 and Luo, Wang and Han, 2013).

Therefore, social media marketing could be said to be a system that integrates social media principles with marketing communication elements in an effort to create strong and lasting relationships through the allows marketers to engage, collaboration, interaction, and harnessing collective intelligence crowd sourcing for marketing purposes (Chikandiwa, Contogiannis and Jembere, 2013).

 

The technology takes different forms and the major types of social media are

• Social Networks or online communities
• Blogs
• Microblogs
• Really Simple Syndication – RSS.

 

Blogs and microblogs like Twitter, Social Network like Facebook, MySpace, Bebo and LinkedIn, as well as RSS are used by companies, particularly the large scale companies to market their products, services and companies. Using these tools in marketing requires new skills as well as different approaches, although in reality, they have not alter the fundamental question of when and how to use it so as to be effective, efficient and successful (Schmidt and Ralph, 2011). This view is in line with that of Dragger et al. (2009) cited Chikandiwa, Contogiannis and Jembere (2013) who suggested that companies should do a situational analysis when developing a social media marketing plan.

Recently, there has been a rise of social media channels such as Facebook, YouTube, Google, and Twitter, which according to Hennig-Thurau et al., (2010) in Nevin, and Torres (2012) that allow customers to take a more active role as market players and reach (and be reached by) almost everyone anywhere and anytime

 

The social media which was used in the past as a means for connecting, communicating and sharing, is today adopted as a business tool (Derham, Cragg, and Morrish, 2011 referring to Bughin and Manyika, 2007). The recent paradigm shift in the use of social media led scholars like Kim et al, (2010); Harris and Rae (2009b); Hawn (2009) to claim that many businesses now have a presence on social networks. This it is believed will assist with business processes such as marketing (Kim et al, 2010; Harris and Rae (2009b), customer relations management, (Kim et al, 2010; Harris and Rae, 2009b; Hawn, 2009), business networking both inside (Kim et al, 2010; Leader-Chivée et al, 2008; Misner et al, 2009) and outside (Misner et al, 2009; Kim et al, 2010) the company and recruitment (Millard 2007).

Below is a brief discussion of the popular social media network commonly used by businesses.

Facebook

Facebook, a website started in 2004 by Mark Zuckerberg is the most popular and most effective social media website for marketing purposes Nevin, and Torres (2012) and Kuhikar (2013). Facebook has at 28 January 2015 1.393 billion active users with about 890 million daily users and 1.19 billion monthly users (Constine, 2015)., thus making it world’s most visited website.

 

This provides a very promising platform for SMEs to market their products and Services on Facebook using Pages and Ads and Sponsored Stories. Pages, as claimed by Smith and Treadaway, 2010 in Kuhikar (2013) are for businesses, organisations and brands to share their stories and connect with people, by so doing growing its audience as people who like marketer’s Page will get updates in their news feeds.

 

The following example will suffice, Tommy Burgers send messages to its friends on Facebook with date time and location of one of their restaurant where they will sell their burger at 50$ is shared to other friends on Facebook. Equally, Nadia Cupcakes for instance, used Facebook to promote special as well as get rid of products before they expire successfully

 

The above notwithstanding, critics such as Raskin (2006) in Nevin, and Torres (2012) believe the popularity of Facebook may actually lead to its ultimate demise, as it becomes oversaturated with marketers’ messages. This seems to inform Morrissey (2010) Nevin, and Torres (2012) who suggested the microblogging site Twitter as a less cluttered and more unique alternative for marketers who wish to engage in social media marketing.

Twitter

Twitter, created by Jack Dorsey in 2006 is an online social networking and micro-blogging site that brings people closer to what is important to them by allowing its users to send and read text based messages of up to 140 characters, called as ‘tweets’ Kuhikar (2013). He maintained that Twitter is now one of the top ten most visited websites on the Internet worldwide and on daily basis; millions of users connect to their interests, to share information and to interact. He added that as at December 2012, Twitter has 500 million registered users and has become very popular worldwide.

 

Twitter can also be used in a variety of ways such as creating a buzz about your company, product, or service, or if one is creative enough, the company can use it to engage a group of followers so as to promote the product or an event or promotion, and even get followers to go to a location (Kuhikar, 2013).

It has been criticised on the ground that sometimes the amount of information that is Tweeted that is useless as some users out of addictedness to it use it with their Facebook page and post on their Facebook wall every detail of their day.

YouTube

An online video-sharing website founded by Steve Chen, Chad Hurley and Jawed Karim in February 2005, YouTube permits registered users to upload, view and share unlimited videos on (Chen et al., 2005 Kuhikar, 2013). Thus, consumers regard YouTube as ‘amusing’, ‘entertaining’ and ‘addictive’ Nevin, and Torres (2012).

 

Social Media in SMEs

SMEs are not a homogeneous group as they differ in so many respect, for instance, SME owner-managers differ from each other in their age and level of educational, their attitude towards eBusiness, their degree of entrepreneurship, market and/or export orientation, business goals and their degree of preference for face-to-face interaction with customers, strategic focus, customer orientation, business growth,

business processes, owner attitude and social networks, level of eBusiness knowledge and skills, as well as pressure from customers and/or suppliers to use eBusiness (Chua et al., 2009 and Parker and Castleman, 2007 in Derham, Cragg, and Morrish, 2011).

 

They continued that due to these glaring differences, it shows that every SME should use different social media as some are more suitable tool for some than others. In addition, it has been discovered that many of the decision makers in SMEs are governed by other objectives such as social and family motives, maintaining personal identity or maintaining family connections against typical business objectives such as profit, growth and competitive advantage.

 

Accordingly, Harris et al. (2008) cited Derham, Cragg, and Morrish (2011) pointed out that SMEs have often struggled to adopt technology largely owing to their lack of skills, resources and technical knowledge compared with large firms. Notwithstanding the above, it could be favourably argued that Web 2.0 provide the SMEs with the prospect to overcome these difficulties. This is possible because according to Harris et al. (2008) Derham, Cragg, and Morrish (2011) the internet has massively reduced costs of marketing compared to traditional methods. He thus concluded that “gifted amateurs” can “punch above their weight” because businesses can now take advantage of others‟ connections to each other to market their products, services and brands.

In the present day where cutthroat competition is the order of the day in business, organisations are interested in exchanging and spreading information, trading products or services, staying close to current and potential customers, acquiring a better understanding of their customers and other benefits generated by social media.

 

The increase of communication flow of information among customers together with the increased availability of assorted communication channels is creating a new level of complexity in the design and implementation of new marketing strategies. Social media does not replace the traditional marketing tools but can be used as a complement to existing traditional promotional tools. Therefore, the SMEs should avail themselves of this great opportunity offered by the social media in order to boost their profitability as well as sustainability in business.

 

Ab Hamid, N. R., Razak, U. T. A., Akhir, R. M., and Cheng, A. Y. (2013) Social media: an emerging dimension of marketing communication, Journal of Management and Marketing Research. [online], 12, pp.1-8.

Borker, D. R. (2014) Social Media Marketing in Emerging Economies: A Mongolian Case Study. International Journal of Marketing Studies. [online], 6(2), pp. 31-45.

Chikandiwa, S. T., Contogiannis, E., and Jembere, E. (2013) The adoption of social media marketing in South African banks, European Business Review. [online], 25(4), pp. 365-381.

Curley, C. B., and Abgrab Noormohamed, N. (2014) Social Media Marketing Effects On Corporate Social Responsibility, Journal of Business and Economics Research (JBER). [online], 12(1), pp. 61-66.

Derham, R., Cragg, P., and Morrish, S. (2011). Creating value: An SME and social media. Pacific Asia Conference on Information Systems (PACIS). [online], pp.1-9.

Deshwal, P. (2013) Social Media: a tool for the marketers to grow their business, e-vaani: an International Journal of Research in Management and IT. [online],1(1),pp.80-90.

Kuhikar, P. (2013) Social Media as a Future Marketing Tool in India: an overview. PRIMA: Practices and Research in Marketing. 3(2), pp.15-21.

Luo, L., Wang, Y., and Han, L. (2013) Marketing via social media: a case study, Library Hi Tech. [online] 31(3), pp. 455-466.

Nevin, F. and Torres, A. M, (2012) Club 2.0: Investigating the Social Media Marketing Strategies of Nightclubs in the Midlands and West of Ireland, Irish Journal Management. [online], 15(11), pp.77 – 93.

Schmidt, S. M., and Ralph, D. L. (2011) Social media: more available marketing tools, The Business Review. [online], 18(2), pp.37-43.

Singh, A. (2013) Social Media: It’s role in marketing, , e-vaani: an International Journal of Research in Management and IT. [online],1(1), pp, 146 – 153.

 

 

Figure iii- worldwide Monthly active user’s on twitter

 

Figure iii- worldwide Monthly active user’s on twitter

 

 

Figure iv: worldwide Youtube users

Source: http://www.youtube.com and http://www.trefis.com.

Topic Three

Environmental Sustainability

SMEs and Environmental Sustainability In The Tourism Industry (70%)

Tourism is today the world’s largest service industry in terms of gross revenue (Maggioni, Marcoz and Mauri, 2012 and Yadav, 2013). Maggioni, Marcoz and Mauri (2012) added that this seems to be responsible for the faster recovery of international tourism than expected from the impacts of the global financial crisis and economic recession, which started in late 2008. There have tremendous increase in international tourist by 4.6% from 2010 to 2011, with a growth rate registered in all regions in the world, a trend that according to United Nations World Tourism Organization (UNWTO) is expected to continue but at a slower rate in the next five years (Maggioni, Marcoz and Mauri, 2012).

About 1.6 billion international trips are forecasted by UNWTO (2013) in 2020, nearly three times the 592 million trips made in 1996 (Maggioni, Marcoz and Mauri, 2012) and there will be an upsurge of total population that will travel for tourism, especially going on holidays more often and farther away from their home country during the 21st century.

 

The tourism industry plays a significant role in the economic development of countries because of its multiplier effect in terms of wealth transfer, Amalu, Ajake, Oba, and Ewa (2012) and employment creation (Maggioni, Marcoz and Mauri, 2012). They added that the World Travel Tourism Council (WTTC, 2013) supports this position as its statistics showed that the tourism industry accounted for 8% of worldwide global employment in 2010, providing 235 million jobs, thus making government to consider tourism industries as one of the drivers of the development of a country.

The aforementioned growth and contribution of the tourism industry notwithstanding, there exist the possibility as claimed by Wilson et al. (2012) cited Lewis, Cassels and Hernan (2014) that the collective activities of the Small and Medium-sized Enterprises (SMEs) in the tourism industry will have an adverse effect on the environment globally.

 

This is because as pointed above, the positive impact has brought along with it some negativity that led to growing concern shown for the environment and its quality (Gray et al., 2000; Gustafsson et al., 2003; Antony et al., 2004 cited Rodriguez-Anton et al., 2012). This concern for environmental sustainability, defined in some studies as ‘‘maintaining natural capital’’ has today becomes a ‘‘hot’’ issue for managers of business (particularly SMEs) and thus accorded high priority on the agenda of governments all over the world (Goodland and Daly, 1996, p. 1003 in Alonso and Ogle, 2010).

Therefore, it becomes imperative for the SMEs in this sector to adopt and maintain practices considered environmentally acceptable. Although in theory, the assertion sounds both reasonable and logical; it is rather highly complex in reality (Masurel, 2007 in Lewis, Cassels and Hernan, 2014). According to Lewis, Cassels and Hernan (2014) in reference to the work of Gonzalez-Benito and Gonzalez-Benito (2005) advanced reasons that are believed to be responsible for the above to include issues that are sectoral in nature, industrial, as well as those at the level of the firm.

Williams and Schaefer (2013) citing the scholarly works of Carr (2003); Spence and Rutherfoord (2003) argued that there exist shortage of literature on how SMEs engage with environmental sustainability and social issues in general. Thus, the significance of this report is to contribute to the growing body of theoretical literature on environmental sustainability in the tourism industry with particular emphasis on the SMEs.

 

This report is structured as follows. First, an introduction on the topic of environmental sustainability in the tourism industry is provided in Section 1. This is followed by an extensive review of the literature on the topics under review (Section 2). Section 3 provides a critique or discussion of the environmental sustainability in tourism industry from the SMEs angle. While Section 4, concludes the report.

2.1 Conceptual Definitions and Theoretical Issues

2.1.1 Environmental sustainability

In contemporary world, the term sustainability is a buzzword and one of the objectives that which every economy strives for (Nagpal, 2013). Literally, sustainability denotes the notion of durability, stability and the capacity to endure or sustain. The concept was first brought into focus by World Commission on Environment and Development (WCED) 1987 to address environmental and social issues along with economic development. This led to the publication of the Brundtland Report ‘Our Common Future’ that defines sustainable development as that “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Nagpal, 2013). Kumar and Arora (2013) in Nagpal (2013) added that it emphasises inter-generational equity that is, equality between generations and its core is system maintenance. Sustainability has three important components, referred as “Triple Bottom Line (TBL)” economic, social and environmental as shown by the diagram below.

 

 

Figure 1: Components of sustainability modified by the author

 

As shown by figure 1 above, environmental sustainability requires companies (SMEs inclusive) to strike a balance between social, economic and environmental objectives for both present and generations yet unborn (Nagpal, 2013). To Danciu (2012); Saxena and Khandelwal (2010), creating a balance between these three aspects is a challenging task that can only be achieved through adopting sustainable production patterns along with changes in the consumption patterns and thinking of the society.

2.1.2. The concept of Tourism

Scholars have defined the term tourism differently. This report adopts the OECD glossary of statistical terms, which define tourism as “the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited”(Yadav,2013)

Figure 2 Units in the Tourism Industry as adopted from Yadav, 2013

 

As can be seen from figure 2 above, tourism is a highly fragmented industry that is, characterised by the coexistence of a variety of SMEs competing in the same environment by providing complementary products or services capable of delivering a comprehensive tourist experience (Greffe, 1994; Hjalager, 1999; Wanhill 1996 and 2000; Pavlovich, 2003 cited Maggioni, Marcoz and Mauri, 2012).

Palmer and Bejou (1995) postulates that a basic feature of tourism organisations operating within a destination is their interdependence despite their independence, although the co-location and other combined nature of the tourism products and services may lead to the condition of unintentional competition (Kylänen & Rusko, 2011), yet their activities are strongly dependent on each other (both cited Yadav, 2013).

2.1.2 SMEs and environmental sustainability in the Tourism Industry

Results from studies conducted shows that the SMEs differ from larger firms in terms of their engagement with social and environmental issues, as they seem to engage in less explicit environmental and social behaviour than larger firms (Lawrence et al., 2006) since they rarely have a codified social or environmental policies (Spence, 2007; Hamann et al., 2009 in Williams and Schaefer, 2013).

In addition, study results further prove that the number of SMEs that are oriented towards sustainability has increased in recent years, but the implementation still encounters a variety of limits. This situation is to be expected, as many SMEs claim not to see themselves in a position to implement environmental sustainability as part of the corporate strategy due largely to financial and time constraints (Drenk 2009 in Orth, and Kohl, 2013). They therefore suggests that concepts and methods need to be produce that will provide new and promising instruments particularly for the SMEs which constitute the majority of global economic strength.

Recently activities related to environmental sustainability in SMEs seem to have proceeded at a slower pace (Madsen and Ulhøi, 2006 in Madsen and Ulhøi, 2014). The tourism industry seems to have promise more than what it could actually deliver (Blowers, 1997); which justify the claim by Madsen and Ulhøi (2014) that a plausible explanation may be that most organisations now primarily cut cost due to increases in taxes and charges, making additional initiatives harder to justify in terms of return on investment. In a related development, Madsen and Ulhøi (2006) cited in Madsen and Ulhøi (2014) contend that the current market mechanisms do not seem to motivate firms to undertake environmental initiatives that go beyond the ones required by legislation and/or may have a longer and more uncertain payoff perspective. This implies that the SMEs in tourism industry having done what law expects of them do not make any additional effort for environmental sustainability, as they believe it does not add to their competitive advantages.

 

While pressure from different stakeholders is seen as a driver that arouses behavioural change by making large firms to be proactive in environmental sustainability or lose their brand name, reputation or corporate image, this has not been so with the SMEs in the tourism industry (Studer et al., 2006 in Madsen and Ulhøi, 2014). This seems to confirm the positions of scholars like Collins et al. (2007); Lawrence et al. (2006); and Tilley et al. (2003) referred to by Madsen and Ulhøi (2014) that most SME owner-managers are not subjected to any form of external pressure on their environmental practices. This led to conclusions made by some scholars about the lack of ‘visibility’ of SMEs in comparison to the large firms, but it has been discovered of recent that the SMEs are equally visible, even though in different ways such as at a community, rather than country, level (Lepoutre and Heene, 2006 in Madsen and Ulhøi, 2014).

Making reference to environmental sustainability as a means for the SMEs to exploit customers demand for green products and services did not yielded significant result as research suggests that SMEs either are not experiencing ‘green demand’, or remain insufficiently convinced that the investment in such a strategy will reap the promised rewards (Revell and Blackburn, 2007).

In spite of the non-active participation by the SMEs in tourism industry on environmental sustainability, a growing number of studies are demonstrating how, in a variety of contexts the SMEs can made to key in to the current trend. One of such is the collaborative approaches which capitalise on formal and informal networking activities that SMEs already participate in (Tilley, 1999), and are most successful when relationships are formed on a voluntary basis (del Brio and Junquera, 2003) that is consistent with management imperatives and styles typically found within SMEs (Madsen and Ulhøi, 2014).

Tourism industry has various positive as well as negative impacts on the country’s economy, society, culture, and the environment. The negative influences of the tourism industry activities should be taken into account and should be mitigated, by the SMEs and other organisations that are involved in tourist activity. Although, The voluntary or coercive application of environmental sustainability practice is said to have a negative impact on the profit and loss account of these enterprises, given the cost increase and damaged done to the environment, calls for the adoption of these practices. Therefore, all hands must be on deck in order to guarantee the achievement of the UNWTO (1995) sustainable tourism that has as its cardinal objectives “meeting the needs of present tourists and host regions while protecting and enhancing opportunity for the future”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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