Sustainability and legitimacy theory: The case of sustainable social and environmental practices of small and medium‐sized enterprises

Richard M Crossley,Mohamed H Elmagrhi,Collins G Ntim

doi:10.1002/bse.2837

Abstract

AbstractThe aim of this paper is to identify and gain insights into small and medium‐sized enterprises' (SMEs) rationales (why) for engaging in sustainable social and environmental practices (SEPs) that influence social and environmental policy and sustainability changes. Specifically, we depart from the predominately quantitative‐orientated SEPs literature by conducting in‐depth interviews and analysis of owners and managers of SMEs in the United Kingdom within a legitimacy theoretical framework. Our findings from a comprehensive number of interviewees show that SMEs employ a complex mix of both symbolic and substantive SEPs with the aim of enhancing the legitimacy and sustainability of their operations. The results emphasise the strengths of social engagement, reputation and image, environmental embeddedness, industry differentiation and education facilitators. In particular, the paper shows that legitimating strategies can have a dual purpose of being symbolic in nature but also inferring a substantive legitimacy claim. Evidence of SMEs maintaining their legitimacy position stretches further via either a moral and/or a pragmatic standpoint.

Highlights

This paper explores why small and medium-sized enterprises (SMEs) voluntarily engage in sustainable social and environmental practices (SEPs).1 SMEs have played and continue to play an increasingly important role in the global economy and contribute significantly to output, employment and incomes
This paper, extends, as well as contributes to the extant limited qualitative evidence by providing insights on why SMEs engage in SEPs
Its design is a thorough hybrid thematic coding system, which offers evidence within an interesting context. It creates and uses a thematic review to uncover rationales that go some way to understand why SMEs engage in SEPs and the impact it has on their businesses

Summary

Introduction

This paper explores why small and medium-sized enterprises (SMEs) voluntarily engage in sustainable social and environmental practices (SEPs). SMEs have played and continue to play an increasingly important role in the global economy and contribute significantly to output, employment and incomes. SMEs have played and continue to play an increasingly important role in the global economy and contribute significantly to output, employment and incomes. At the start of 2019, SMEs accounted for 99.9% of all private sector businesses in the United Kingdom in 2018 (Department for Business, Energy and Industrial Strategy [DBEIS], 2019). They accounted for 60% and 52% of all private sector employment and turnover, respectively (DBEIS, 2019). SMEs cause significant harm to the environment and wider society, thereby raising major ethical, social and environmental dilemmas for stakeholders, such as customers, governments, regulators and activists. In the UK context, SMEs account for about 60% of commercial waste, and they cause about 43% of serious industrial pollution incidents (Blundel et al, 2013)

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