Responsible and sustainable business practices: An empirical study of KwaZulu-Natal-based small and medium enterprises.
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Date
2021
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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.
Description
Masters Degree. University of KwaZulu-Natal, Pietermaritzburg.