The microlevel actions undertaken by owner‐managers in improving the sustainability practices of cultural and creative small and medium enterprises: A United Kingdom–Italy comparison

• Published date: 01 November 2017
• Date: 01 November 2017
• DOI: http://doi.org/10.1002/job.2237

SPECIAL ISSUE ARTICLE

The microlevel actions undertaken by owner‐managers in

improving the sustainability practices of cultural and creative

small and medium enterprises: A United Kingdom–Italy

comparison

Manlio Del Giudice

1,2

|Zaheer Khan

3,4

|Muthu De Silva

3,5

|Veronica Scuotto

6,7

|

Francesco Caputo

8

|Elias Carayannis

9,10

1

Department of Management, University of

Rome “Link Campus”, Rome, Italy

2

Paris School of Business ‐Rue Nationale,

Paris, France

3

Kent Business School, University of Kent,

Canterbury, U.K.

4

College of Business, Hankuk University of

Foreign Studies, Seoul, Republic of Korea

5

Birkbeck, University of London Malet Street,

London, UK

6

School of Business and Enterprise, University

of the West of Scotland, Paisley, U.K.

7

Léonard de Vinci Pôle Universitaire, Research

Center (Business Group), Paris La Défense,

France

8

Department of Pharmacy, University of

Salerno, Fisciano, Italy

9

School of Businessof the George Washington

University, Washington,DC, U.S.A.

10

National Research University Higher School

of Economics, Moscow, Russia

Correspondence

Veronica Scuotto, School of Business and

Enterprise, University of the West of Scotland,

Paisley Campus, PA1 2BE, U.K.

Email: veronica.scuotto@uws.ac.uk

Summary

This article discusses microlevel actions undertaken by owner‐managers, and how such actions

affect stakeholders in enhancing the sustainability of small and medium enterprises (SMEs),

the knowledge on which is lacking in the extant literature. The paper, by adopting an inductive

analytical approach, draws key insights from the literature on microfoundations and sustainability

and evidence from representatives of 5 Cultural and Creative Industry SMEs in Italy and of 5 in

the United Kingdom. The findings suggest that owner‐managers play a crucial role when engaging

in sustainability activities jointly with employees and other stakeholders, through which

individual‐level actions enhance collective organizational‐level sustainability practices. The U.K.

and Italian cases highlight 2 contrasting approaches to dealing with sustainability; thus, the paper

contributes to the emerging literature on SME microfoundations and sustainability.

KEYWORDS

Cultural and Creative Industry, microfoundations, SMEs, sustainability, top managementactions

1|INTRODUCTION

In this paper, we examine microlevel actions and how they lead to col-

lective outcomes in improving the sustainability practices of small and

medium enterprises (SMEs). In relation to improving their sustainability

practices, SMEs suffer due to the liability of smallness, weak resource

bases, and poor access to funding (Revell & Blackburn, 2007). In recent

years, various stakeholders have increasingly pressured companies to

improve their sustainability scorecards (Carayannis & Rakhmatullin,

2014; Freeman, 1984; Høgevold et al., 2016; Mitchell, Agle, & Wood,

1997; Verbeke & Tung, 2013). In response to such pressure, companies

from various industrial settings have been proactively striving towards

improving their sustainability scorecards (Aguilera, Rupp, Williams, &

Ganapathi, 2007; Aguinis & Glavas, 2012; Eccles, Ioannou, & Serafeim,

2014; Høgevold et al., 2016).

In this context, there is growing interest in understanding how and

why organizations engage in sustainability practices (Akhtar, Khan,

Frynas, Tse, & Rao‐Nicholson, 2017; Carayannis, Grigoroudis, Sindakis,

& Walter, 2014; Carmeli, Brammer, Gomes, & Tarba, 2017; Lozano,

2015; Shoham, Almor, Lee, & Ahammad, 2017; Strauss, Lepoutre, &

Wood, 2017). These studies have made significant contributions to

improving our understanding of the factors that promote sustainability.

Received: 12 May 2016 Revised: 22 August 2017 Accepted: 22 August 2017

DOI: 10.1002/job.2237

1396 Copyright © 2017 John Wiley & Sons, Ltd. J Organ Behav. 2017;38:1396–1414.wileyonlinelibrary.com/journal/job

However, much of the existing research on this topic has focussed on

large multinational enterprises that have the resources and capabilities

necessary to deal with sustainability and corporate‐social‐responsibil-

ity‐related challenges (e.g., Brammer & Pavelin, 2006; Jamali, Zanhour,

& Keshishian, 2009; Khan, Lew, & Park, 2015; Kolk & Pinkse, 2008;

Lozano, 2015). Furthermore, much of the focus of the existing studies

on sustainability has been on understanding the macrolevel aspects of

sustainability practices. Scholars have noted a relative lack of research

on understanding the role played by microlevel actions such as those

relating to leadership, the specific skills of individuals in improving sus-

tainability, and employee behaviours (Aguinis & Glavas, 2012; Akhtar

et al., 2017; Carmeli et al., 2017; Eccles et al., 2014; Epstein & Roy,

2001; Kolk, 2004; Lozano, 2015; Scuotto, Del Giudice, & Carayannis,

2017). In addition, the extant studies have not addressed

microfoundational thinking (e.g., Barney & Felin, 2013; Felin, Foss, &

Ployhart, 2015; Foss & Lindenberg, 2013) within the resource‐based

view (RBV) of companies and sustainability,and how microlevel actions,

such as sustainabilityinitiatives at the organizational level, lead to collec-

tivism. Thisaspect is currently underexplored in the research on sustain-

abilityand, more broadly, in the context of corporate social responsibility

(Akhtaret al., 2017; Frynas & Yamahaki,2016). As individual‐and group‐

level factorsare the building blocks that explain company heterogeneity,

the examination of suchmicrolevel factors is vitally important in under-

standing the mechanisms that shape corporate sustainability practices

(Abell, Felin, & Foss, 2008; Aguinis,Boyd, Pierce, & Short, 2011; Akhtar

et al., 2017;Carmeli et al., 2017; Felin, Foss, Heimeriks, & Madsen, 2012;

Felin et al., 2015; Foss, 2011; Foss & Lindenberg,2013).

In this context, this paper aims to understand the sustainability

practices of SMEs by paying greater attention to the microlevel actions

undertaken by managers, and how such actions contribute to organiza-

tional‐level sustainability. The context of this research is represented

by Cultural and Creative Industry (CCI) SMEs from the United Kingdom

and Italy. This industry tends to “push out”and “pull in”social changes

(Messarovitch & Arnault, 2000; Scuotto, Del Giudice, Della Peruta, &

Tarba, 2017) and is based on sustainability‐driven SMEs (Keskin, Diehl,

& Molenaar, 2013) that pay particular attention to emerging social and

economic dynamics (O'Connor, 2010). Such a context is unique as

most of the existing studies have focussed on a single context,

and cross‐country comparative perspectives on understanding the

microlevel processes of sustainability are lacking. As SMEs do not have

clear and explicit policies pertaining to social and environmental sus-

tainability, they are quite different from large companies (Hammann,

Habisch, & Pechlaner, 2009; Spence, 2007; Vázquez‐Carrasco &

López‐Pérez, 2013). Existing research has noted that, compared to

large companies, the owner‐managers of SMEs play an important role

in making day‐to‐day decisions and have greater autonomy in making

important ones (Hammann et al., 2009). Such decision‐making freedom

can be important in enacting sustainability initiatives in SMEs. In such

contexts, the personal responsibilities and motivations of SME owner‐

managers are highlighted as important factors in setting the strategic

directions of these companies, which can lead to greater engagement

with environmental and social issues (Hammann et al., 2009;

Vázquez‐Carrasco & López‐Pérez, 2013; Vives, 2006). Some studies

have even pointed out that, due to their weak resource base and lim-

ited access to finance, SMEs have limited abilities and motivations to

engage in social and environmental issues (Del Giudice, Campanella,

& Dezi, 2016; Gerrans & Hutchinson, 2000; Hammann et al., 2009;

Spence, 2007; Vázquez‐Carrasco & López‐Pérez, 2013). In relation to

this, however, other studies have indicated that the SME contribution

to global pollution is around 70% (Revell, Stokes, & Chen, 2010) and

have highlighted that most SMEs have yet to implement any sustain-

ability practices aimed at reducing such contribution (Revell & Black-

burn, 2007). However, recent evidence suggests that growing

numbers of SMEs are now engaging in some social and environmental

initiatives (Brammer, Hoejmose, & Marchant, 2012; Cassells & Lewis,

2011; Johnson, 2015; Revell et al., 2010; Williams & Schaefer, 2013).

Regardless of the growing interest in understanding the key drivers

of SME sustainability, however, little research has applied the

microfoundational perspective to understanding the sustainability

practices of SMEs. This is despite the fact that microfoundational

thinking has recently emerged as an important theoretical lensthrough

which to understand organizational‐level phenomena such as sustain-

ability (e.g., Abell et al., 2008; Akhtar et al., 2017; Felin et al., 2012;

Foss, 2011). Such an approach has contributed to the examination of

the influence of individual actions and interactions on company‐level

heterogeneity. As noted by Felin and Foss (2005, p. 441) in their influ-

ential work, “organizations are made up of individuals, and there is no

organization without individuals. There is nothing quite as elementary;

yet this elementary truth seems to have been lost in the increasing

focus on structure, routines, capabilities, culture, institutions and vari-

ous other collective conceptualizations in much of recent strategic

organization research”. Thus, as stated above, understanding the

microlevel processes and mechanisms that shape SME sustainability

practices is vitally important to provide a comparative view of how

such actions contribute to the sustainability practices of SMEs vís‐a‐

vís large companies. In this context, the main purpose of this paper is

to examine the microlevel actions undertaken by the owner‐managers

of SMEs to understand the sustainability practices of SMEs from the

two different contexts of the United Kingdom and Italy.

2|CONCEPTUAL BACKGROUND

2.1 |Sustainability and small companies

Sustainability addresses ways to use current environmental and social

resources that do not involve sacrificing the ability of future genera-

tions to meet their needs (United Nations, 1987). There is an increasing

emphasis on the fact that businesses should focus on adopting policies

and practices that lead to the advancement of the social, economic, and

environmental conditions of the contexts in which they operate (Porter

& Kramer, 2011). Combining those three aspects, companies are

expected to achieve long‐term sustainability. It is generating persistent

profits, while consuming environmental resources efficiently and effec-

tively with no or minimum environmental pollution and adding value to

the community within which they operate (Dyllick & Hockerts, 2002).

Nevertheless, a lack of alignment between these dimensions and tradi-

tional profit‐orientated behaviours means that many businesses, even

well‐established ones, are finding it hard to fulfil such expectations

(McWilliams, Siegel, & Wright, 2006; Saviano, Barile, Spohrer, &

Caputo, 2017).

DEL GIUDICE ET AL.1397