Responsible and sustainable business practices: An empirical study of KwaZulu-Natal-based small and medium enterprises.

Abstract

Historically, responsible and sustainable business practices have been mostly associated with large companies, not only in developing countries, but all around the world. However, since the joint sitting of the Rio de Janeiro Earth Summit in 1992, embracing sustainable development has become paramount for all businesses regardless of their size. South Africa is one of the most prominent countries in Africa. In the past decades, it has undergone massive social and economic developments (increased large-scale trade, infrastructure developments, increase in industrialisation, technological advancements, etc.). Consequently, these developments have highly accelerated the severity of social and environmental deteriorations in the country. South African businesses now face unprecedented challenges such as climate change, environment degradation, scarcity of resources, etc. These challenges force businesses to implement more responsible business practices to support the current rapid pace of economic growth. In most developing countries, there is limited concrete evidence on the adoption of sustainable and responsible business practices, particularly in the small business sector. Previous studies have poorly highlighted the role of SMEs in social and environmental responsibility. This study sheds light on the dynamics of SMEs with regard to social and environmental engagement through viable business practices. This study has, among other key objectives, discussed the barriers that deter SMEs from becoming responsible enterprises and examined the key drivers behind SMEs’ engagement in responsible social and environmental undertakings. The Stakeholder theoretical framework has been the key guide for this study. A non-systematic literature review was conducted, where insights were drawn from a wide range of available secondary sources such as journal articles, books chapters, peer-reviewed publications research papers and online articles. Quantitative primary data were collected by means of a selfadministered survey instrument. A total sample size of 333 SMEs within the Durban Metropolitan area of KwaZulu-Natal, South Africa were examined. Furthermore, a convenience sampling method was used to select participants with additional assistance from the Durban Chamber of Commerce and Industry (DCCI). The study, however, yielded a 52% overall response rate. The acquired data were captured and analysed using the Statistical Package for the Social Sciences (SPSS). The data were then further construed by the researcher using a series of descriptive statistical methods. The empirical findings of the study revealed that 40.2% of SMEs in Durban, KwaZulu-Natal are aware and understand the social and environmental issues surrounding their business. However, 45.4% of SMEs in the area still have a limited understanding of responsible and sustainable business practices. Even though some of the SMEs surveyed provided no concrete evidence that they are responsible businesses. The data sourced shows that 82.8% of SMEs in the area believe that they are responsible businesses and that that they engage in activities that enhance the social and environmental wellbeing of their surroundings. The study ascertained some of the challenges that SMEs face with regard to adopting responsible and sustainable business practices in the area. These challenges were, among others, are limited resources, time constraints, lack of knowledge of such business practices.