Abstract
Traditionally, it is believed that small- and medium-sized enterprises (SMEs) do not have enough ability to adopt and persistently practice social sustainability. This is because SMEs are not capital-intensive companies and neither are their returns nor skills. At the same time, the wellbeing of the employees in SMEs cannot be ensured and sustainable development goals cannot be achieved without making SMEs socially sustainable, as they account for the majority of world businesses. Moreover, the expectation of the stakeholders and subsequent pressure on SMEs to practicing social sustainability remains. Such pressure from the stakeholders creates a “mismatch problem” between stakeholders’ expectations and SMEs’ abilities to adopt socially sustainable practices. This study aims to explore what factors are responsible for this “mismatch problem”, and how SMEs can handle this mismatch to be socially sustainable firms. Based on a rigorous literature review, this study reveals that both internal issues, such as a lack of resources and awareness, and external issues, such as the non-existence of a tailored social sustainability standard for SMEs and lack of institutional support, are responsible for this gap. This study develops several propositions that highlight the requirements in various situations and provides strategies outlining the implications for SMEs and their stakeholders to make SMEs socially sustainable. Overall, this study discloses that cooperative support from stakeholders, especially during a disruption such as the COVID-19 pandemic, a finance mechanism, the development of awareness and human capital in SMEs, and a unified standard for SMEs are likely to improve social sustainability practices in SMEs.
Highlights
There has been a widespread agreement that achieving social sustainability is critical for businesses, organizations, and society [1,2]
While the advancement of multi-national and big corporations in this regard is appreciable, the full benefit of social sustainability cannot be realized by society unless small- and medium-sized enterprises (SMEs) implement sustainability practices (SSPs), as these smaller firms account for the majority of the businesses in all countries around the world
Aiming to provide guidelines to make SMEs socially sustainable, this study has explored why there is a gap between stakeholders’ expectations and the SSPs adopted by SMEs, and how the gap can be minimized
Summary
There has been a widespread agreement that achieving social sustainability is critical for businesses, organizations, and society [1,2]. On the other hand, underlying factors in adopting SSPs are different in multinational or large companies and SMEs [4], suggesting that knowledge on social sustainability in the context of large firms is not readily applicable to SMEs. studies are needed in the context of SMEs to understand the “matching problem” and to formulate strategies to handle the problem. Based on a rigorous literature review, we first explore the factors responsible for creating the gap between stakeholder expectation and SMEs’ abilities to adopt SSPs. we find strategies to reduce the gap so that SMEs can be socially sustainable.
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