Does the Environment Matter, a Closer Look at the Environmental Approach by Small Businesses in Africa Developing Countries

Environmental Social Responsibility (ESR) is a notion, where business integrates environmental concerns in their operations and the interaction with stakeholders, without compromising profit. To this day, ESR studies are limited to areas of ethics, society and employees while literature is blunt on its impact on societies, consumer behaviour and governments. SMEs in developing countries are not spared their approach to ESR as a sustainability strategy. SMEs’ approach seems to digress from leverage on loyalty which emanates from their nearness to communities who in turn are potential customers. This paper takes a closer look at SMEs’ approach to ESR driven by SME business owners’ perception towards ESR. The paper will take account of SMEs’ behavioural response towards ESR and establish whether they regard ESR a strategic sustainability approach with long-term positive bottom-line benefits.

Introduction he 20 th -century businesses have witnessed an increase in environmental catastrophes that are contributed by the unprincipled business interest and human careless environmental attitudes (Banyte 2010). Corporates are turning to Corporate Social Responsibility (CSR) as its payback tool to communities, employees and environment. It is widely expected for companies to actively seek to integrate environmental consideration into their operation and activities. Most of these environmental considerations would be targeted Author: Bycdi Holdings, Pretoria, South Africa. e-mail: chazboby@gmail.com on promoting the advantages of eco-friendly products, eco-tourism; naturing environment-friendly behaviour through workplace climate (Nik and Naja, 2011: 240) and environmental conservation activities initiated by communities.
While concluding CSR as a multidimensional construct, as most of the dimensions are discussed more relevant to corporate governance issues and organisational performance as the unit of analysis, studies to do with the implementation of ESR with external stakeholders, especially its customers, community are hardly explored.
There is a general belief about SME businesses being key to the development of most economies in Africa. SMEs have been labelled as productive drivers of economic growth and development in local economies such as developing countries.
The presence of functional SME businesses in these areas has saved a significant employment gap which large corporations have failed to cover. The adverse condition is that of SME failure rate is still high leading to their status as critical job creators substantial diminishing. Nonetheless, for a variety of reasons, SMEs are lacking practises of modern brand growth strategies such as ESR.
Despite their vital contribution to economic growth, SMEs in the developing countries still face numerous challenges that inhibit growth. The frustrating growth rate has been predominantly contributed by SMEs failing to embrace sustainable growth strategies such as ESR. SME lament cost linked to adoption, implementation and practise of ESR. However, apart from SME funding and access to finance, Global Entrepreneurship Monitor Reports (2018: 21) still maintain that developing countries SMEs suffer from inadequate business training or technical education that can equip them to run the business effectively. Furthermore, SME business owners' ethics play a prohibitive role in the adoption of ESR as a strategy to build brand loyalty and other benefits realised through the successful practice of ESR.
To date, very little research has been conducted in developing countries on the perceived role of the owner's ethical values which directly or indirectly impact on the business' adoption, practise or implementation of ESR. Research on ESR in SMEs is limited, especially in developing countries. While playing such a significant role in the economy, to address this, the study will also investigate the perceived role of SME business owner's ethics to ESR as a stimulant of growth for SMEs in developing countries.
Developing countries experience abundant socio-economic challenges, and the challenges are however to a large extent linked to high levels of unemployment. Hall (2018: 126) pointed out that the unemployment rate on average is approximately above 30 percent. Garwe (2016:101) revealed that growth failure rate of SMEs in developing countries is around average 75 per cent, which conveniently contributes to vast unemployment in the country. Nevertheless, according to the Stakeholder Theory, by involving all stakeholders in the business activities, SMEs improve their relationship with customers, work in an accommodative business environment, and engage motivated workforce, willing community and increased brand loyalty resulting in the potential growth of the business (Freeman, 2011: 57). Therefore, the purpose of this paper was to establish the perception of SME business towards ESR.

a) Key Literature arguments
ESR activities refer to the instrument or measures a business can take to diminish its negative impact on the natural environment, such as the ecological and economic use of natural resources; energy and water conservation, recycling; using environmentally friendly packaging, and pollution control waste reduction. The most important ESR activities concern the consumption of materials and energy and the handling of pollution and waste in the most environmentally friendly approach. ESR activities are generally aimed at designing environmentally friendly products or production processes or being actively engaged in recycling activities (Holbrook, 2014: 33).
Supanti (2018: 200) observed that ESR activities had a positive impact on their business reputation, which in turn influenced their competitiveness. A survey of local SME owners in the Western Cape South Africa revealed a positive relationship between embracing ESR activities and increased competitiveness in terms of profitability. Customers find it desirable to associate themselves with businesses and products that are ecofriendly. Hence, businesses that are environmental stewards stand to gain many satisfied and loyal customers.
When it comes to environmental sensitivity, there is a significant positive relationship between regulated ESR activities and the increased competitiveness of SMEs. This implies that if a business applies government regulations about the environment outside what the law requires and uses environmentally friendly packaging materials, it is more likely to be well known among its Stakeholders and become competitive in the long run. Taylor, Bowen and Ryu (2019: 304) stated that SMEs should consult with the government on the ESR initiatives that are most beneficial to important stakeholders and the business. SMEs should also focus on the use of environmentally-friendly packing materials that are at the end of the day cost-effective to advance their image and enhance their competitiveness (Shepherd, 2019: 67). However, according to Kulkarni and Rao (2017: 68), whilst SR has progressed to be a trendy topic of investigation since the early 19th century, it has gained momentum in recent years as academics and practitioners began recognising SMEs' environmental impact. Since large organisations have always been focusing on SR and all its dimensions holistically, ESR activities in SMEs are often ignored and misjudged. These judgements germinate from a range of unfounded assumptions derived from large organisations. As a result, the ESR approach of SMEs has, until recently, remained largely unexplored (Pless, Maak & Stahl, 2015:45).
Concerning the statements above, Zeng (2014: 90) argues that ESR, instead of being a persistent concept in business management, has been predominantly investigated at the level of the large corporates. As a result, several authors are sceptical about the application of traditional ESR concepts for the investigation of its activities in SMEs. This justifies the need to develop a holistic understanding of the characteristics of SMEs. If a business implements government regulations about the environment beyond what the law requires and makes use of environmentally friendly packaging materials, there are greater chances of the SME business being well known amongst its stakeholders and becoming competitive in the long run. Hence, SMEs in developing countries should consult with their governments on the ESR initiatives that are most beneficial to important stakeholders and the business. SMEs should also focus on the use of environmentally friendly packing materials that are costeffective to improve their image and enhance their competitiveness.
Shin (2014: 108) establishes that one of the most vital contributions to the definition of CSR was made by the Committee for Economic Development (CED). The CED articulated a triple concentric model of the concept. The inner-circle shows the clear-cut basic responsibilities for the efficient execution of economic functions like productivity, job and economic growth reflecting the notion of 'business responsibility'. The intermediate circle encompasses the responsibility of the economic function about changing social values and priorities such as environmental conservation, employee relations and more rigorous expectations of customers for information, fair treatment and protection from injury. The outer circle outlines emerging and still amorphous responsibilities that the business should assume to become more broadly involved in actively improving the social environment. Carroll describes the CED model as a landmark contribution to the concept of SR' which illustrates the changing relationship between business and society (Carroll 1999). Following up on SMEs, Carroll's (1999:23) model in essence states that business is expected to assume wider responsibilities in the society than ever before and to serve a broader range of community values. Developing countries SMEs, in effect, are also expected to contribute more to the quality of societies they operate in through ESR activities than just supplying quantities of goods and services. In as much as SMEs exist to serve society, its life and future will rely on the quality of the SME business owner's attitude and response towards the changing ESR expectations of the communities.

b) ESR vs Stakeholder theory
Firstly, the theory seems ethically superior to maximising shareholder value because it takes into consideration Stakeholder rights and their legitimate interests and not only what is strictly required by law in manager Stakeholder relations (Griffith-Jones & Karwowski, 2013). Secondly, Stakeholder theory has dated the theoretical imprecision of CSR by addressing concrete interests and practices and visualising specific responsibilities to specific groups of people affected by business activity (Chandler & Werther Jr, 2013).
Considering researchers Griffith-Jones and Karwowski (2013) and Chandler and Werther Jr's (2013) contributions, in simpler terms, Stakeholder theory is a managerial theory that is related to organisational goals and does not come within reach of business management. The theory ensures long-term rather than short-term success. However, further research will be required to establish sound conclusions about the relationship, profitable linkages between Stakeholder theory and CSR.
Stakeholder theory gives us the correct way to think about entrepreneurial risks (Driessen & Hillebrand, 2015: 220). According to Melé (2008), taking a Stakeholder approach enables us to develop a more robust theory of entrepreneurship, one in which the role of entrepreneurial risk is better understood. Taking such an approach would lead to risk avoidance behaviour by managers because according to them, constituencies except for the residual cash flow claimants have incentives to dissuade managers from taking excessive entrepreneurial risks (Baumgartner, Gelbmann & Rauter, 2013: 173).
Leaving aside the question of excessive risks and whether avoiding excessive risks is a good or bad thing, this argument shows that Driessen and Hillebrand's (2015: 86) view of Stakeholder theory is one of allocating benefits to other stakeholders at the expense of shareholders. Of course, it is in each Stakeholder's interest in management to take risks that can lead to increasing the size of the pie for everyone. Indeed, in the real world, as opposed to the world of economics journals, managers often work with Stakeholder groups, such as customers and suppliers, to jointly test new products and services. Often, customers and suppliers will accept some of the risk inherent in developing new ideas, products and programs (Delchet-Cochet & Vo, 2012:70).
It is vital to pay attention to the recent wave of corporate alliances and the emergence of issues such as supply chain management as evidence that Stakeholders can see their interests as joint, not just opposed. By focusing on the allocation aspect of Stakeholder theory, Driessen and Hillebrand (2015: 156) miss the idea of seeing entrepreneurial risk in its richer context of joint Stakeholder relationships.

c) Theoretical arguments
The limitations of the Stakeholder theory have been discussed by a number of authors, Shafiq (2014: 121) citing Wang and Bansal (2012: 45) pointed out that Stakeholder theory in all circumstances fails to address the mute Stakeholders (the natural environment) and the absent Stakeholders (future generations or potential victims). In agreement, Smith (2015:82) also pointed out that the natural environment should be considered a Stakeholder.
This standpoint received huge criticism since the natural environment cannot be considered a Stakeholder. The term Stakeholder usually refers to groups or individuals and therefore, cannot be considered a Stakeholder. In this case, only humans can be considered as organizational Stakeholders. In the same context, another criticism is that the power of Stakeholder groups is weakened by Stakeholder theory because the theory advocates that corporations should treat all equally. Thus, labour unions could be avoided, grounded or even eliminated. In addition, corporations will become weak because they will obviously attempt to serve all Stakeholders' interests. Naturally, corporations will struggle to cater for all Stakeholders and protect their owners at the same time (Shapiro, 2015: 149).
Precisely, Stakeholder theory argues that corporations are expected to treat all Stakeholders fairly and by doing so can improve their performance in the marketplace, and thereby securing their future (Meier, Favero & Zhu, 2015:31). However, Freeman (1999:16) stated that if organisations want to be effective, they will pay attention to all and only those relationships that can affect or be affected by the achievement of the organisation's purposes.
This view suggests some advantages for organisations. For example, if organisations treat their Stakeholders fairly, then the power of Stakeholder groups could be weakened, like, labour unions, that cannot be powerful when eliminated. However, organisations could be weakened when trying to Organisations have no legal responsibility to their Stakeholders other than to their shareholders.
The paper achieved its aim by expressing the perception of SME business owners towards ESR and highlighting as a conclusion that the owner's positivity in perception plays a very important role in response to societal needs.

Methodology
It is against the gaps in the literature caused by different research methods that this study is anchored by Stakeholder theory, which directly feeds into the Research Paradigms, i.e. Interpretivist (aligned to a qualitative perspective): promotes self-reflection of stakeholders and considers that there are multiple realities since all knowledge is relative to the knower. Interpretivist aims to work alongside others as they make sense of, draw meaning from and create their realities to understand their viewpoint. While Positivist is aligned to a quantitative perspective. Considering stakeholders, the positivist position presumes the social world exists objectively and externally, and that knowledge is valid only if it is based on observations and consideration of this external reality. The two paradigms build-up to a post-positivist perspective which is aligned to a Mixed approach, which generates complementary results to this study (Moriarty, 2014: 6).
Therefore, the philosophical paradigm that guided the research was post-positivist, which subsequently recommends a mixed-method approach (qualitative and quantitative). The problem under study required the participants' experiences (qualitative) and their quantitative opinions, which justifies a mixedmethod approach. Qualitative research can be defined as any research that produces findings not arrived at by employing statistical procedures or other means of quantification (Creswell, 2012). Quantitative research aims to test the predictive and cause-effect hypotheses about social reality, and it encompasses surveys which are often used for descriptive and explanatory resolutions (Bechhofer & Paterson, 2017: 283).
A case study research design was used as a frame work for collecting data to answer the research questions. As well, since SMEs in developing countries are made up of different stakeholders which is in line with the Stakeholder theory a case study allowed the researcher to use multiple methods (interviews, questionnaires) to collect data.
The researcher applied the case study approach to answering questions such as: what is the perception of SMEs business towards ESR; to what extent do SME businesses practice of ESR. Results presented in this article were driven from a sample survey of 365 SMEs in developing countries. The qualitative results were complementary to the quantitative results to produce highly concerted research conclusions.

a) SMEs perceived importance of the environment
Analysis of the surveyed respondents showed that the majority of SME owners hold the view that their organisations completely had no obligation concerning them protecting and preserving their surroundings, in this case, the environment. Approximately 64.30 percent rated the environment as least important, important and moderately important. Just a smaller chunk of about 35.7 percent at least rated the environment as important to extremely important. The analysis revealed that the environment is a cause for concern as more than 50 percent of the respondents rated the environment as least important to moderately important due to various reasons that range from tax, council levies, import and export duty and licensing to tollgates. The rating of the environment as 'least important' was contributed to by the fact that SME feel the government as a stakeholder and other regulatory bodies are obliged to service the environment in its entirety since SME businesses pay a lot of money to the government in the form of tax and other expenses that are directed to government functions.
SMEs see the local municipal as more obliged to preserve the environment since a local authority's obvious prime duties are to manage the habitat. However, SMEs were concerned with the nature of the business that they operate, which in this case (lighter industry) does not affect the environment, pointing fingers with a myopic belief that heavy smoking industries are the prime source of environmental pollution and damage. In essence, SMEs subscribe to an approach where they generally concentrate on their day-to-day tight busy business schedules rather than wasting time trying to preserve the environment.
b) The extent to which SMEs practise environment social responsibility Commenting on the issue, Boiral, Baron and Gunnlaugson (2017:88) stated that SMEs in Toronto who introduced comprehensive waste management programmes realised remarkable benefits and the majority reported significant savings from 30-70 percent for water, approximately 30 percent for electricity between 20-60 percent for solid waste; approximately 10 percent for raw materials, and from 25 percent to as high as 95 percent for consumables. The objective is committing to the target of increasing terrestrial protected areas to 17 percent of the territory and marine protected areas to 10 percent, will also be important in maintaining and increasing ecosystem services that are a foundation for the economy and society, helping in the adaptation to climate change by improving ecosystem resilience.
However, it is important to note that in Africa, the benefits depend consistently on the industry in which the SME is operating. From the above, the level of savings will not be the same if one compares manufacturing SMEs against retail SMEs. Manufacturing SMEs may realise large savings while minimum in the retail, service and tertiary sectors. One cannot dispute the fact that correct environmental management such as waste management will result in the reduction of company overheads, which eventually lead to large profit margins.
It is discouraging to note that an analysis of the results in Table 1

Importance of the environment
Does the Environment Matter, a Closer Look at the Environmental Approach by Small Businesses in Africa Developing Countries the practice, the percentage is too small to convince the existence of such as to practise in organisational policies. As highlighted before, the use of recycled material is dependent on the type of business and products that one is dealing with. In most cases, recycled material is used in production. In this research study, only 27.4 percent agreed to use recycled material. The outcome of this analysis concerning recycled material compares unfavourably to a similar study which was carried out in Brazil where almost 76 percent of SMEs make use of recycled material. Concerning the environment, the results discussed above are totally different from a similar survey which was carried out in Kyoto, Japan. The survey revealed that SMEs practising responsible business towards the environment were more successful than the ones which do not practise. It is on record also that SMEs in Africa are not really under the pressure of minimising the impact of operations on the environment, unlike their counterparts in Europe Surprisingly, some multinational companies (MNCs) who are naturally the drivers of ISO standards and have been certified with ISO 14001 are found to have been flouting the same environmental laws that they are certified in. As an observation, if some multinational companies can go for so many years with breaking the law without authorities noticing, then surely SMEs will never be discovered, considering their size (Fatoki & Chiliya 2012: 198).
To establish the reason why SMEs behave negatively towards the environment, a further literature review reveals some facts. Fatoki and Chiliya (2012: 191) boldly stated that the limited environmental involvement of SMEs has been attributed to attitudinal and behavioural characteristics. In particular, a lack of knowledge about relevant legislation; the assumption that the impact of SMEs on the environment is negligible; and the failure by SMEs to integrate the environment into business activities. There is a larger number of shortcomings as far as preservation of the environment is concerned since the majority of SMEs in developing countries are of the view that preservation of the environment is the duty of large corporations who produce much smoke in the ecosystem and that the SMEs operations effect on the environment are of less than large corporations. Nevertheless, Boiral, Baron and Gunnlaugson (2018: 456) concluded that strengthening the regulatory framework becomes a fundamental requirement for inducing improvements in the environmental behaviour of small and medium enterprises.
Nonetheless, considering the analysis above, results are below expectations as SMEs is developing African countries' attention to environmental responsibilities is invisible compared to similar businesses around the world like Canberra Beach City in Australia (Preston, 2004:80).
Furthermore, there is a contradiction where a large number of SME owners agree to pay attention to environmental responsibilities, but on the other hand, fail to acknowledge a link between environmental responsibilities and business growth.
This acute condition seems to reflect that a substantial SMEs in Africa's developing countries view that a business can actually practise responsible business while at the same time not necessarily consider being environmentally responsible. This view arises as SME owners believe that following responsible business does not actually reflect being environmentally responsible. These SME owners are not satisfying the practices of Stakeholder theory in that the moment one identifies with being a socially responsible business, then automatically the Stakeholder Theory comes into play, which implies that all Stakeholders including the silent ones(environment) must be treated equally. It is their view that they can practise CSR selectively and avoid the need to consider other building blocks of CSR, like the environment.

Conclusion
SMEs in developing countries regrettably distanced themselves from extra-curricular responsibilities, apart from their core business. Concerning the environment, SMEs are aware of the need to take part in protecting and preserving the environment as part of their SR. However, most of their views point to large corporates as the major culprits. Once they pay tax, SMEs expect the government to take care of the environment.
According to the definition of sustainable growth, the business must maintain a growth rate without disadvantaging or creating other significant economic problems, especially for future generations. A future generation is when a business considers the effects of its growth on its employees, community and the environment. It is highly recommended that SMEs be involved in all programmes meant to stabilise, maintain and conserve the environment (e.g. the yearly Durban Climate Change Conference). In Zimbabwe, South Africa and Ghana, SMEs' environmental impact cannot be ignored since they constitute a significant percentage in the economy. SMEs in developing countries have the obligation to support environmental initiatives and improve their environmental performance. For this to be achieved it is recommended that to achieve sustainable growth, SMEs in developing countries must balance their growth with environmental obligations. Therefore, it is recommended that developing countries' environmental policy framework should be galvanised/strengthened to enforce SME participation and support by cultivating a positive attitude and behaviour towards environmental issues. Otherwise, the maintenance of the environment guarantees African SMEs sustainability of business with its preserved natural resources.
Furthermore, it is recommended that the environmental regulatory authorities improve their monitoring on SMEs and make sure environmental laws are adhered to. The regulatory authorities should create policies that will treat businesses the same, in line with the laws of the country and SMEs must be encouraged to regard themselves as fully-fledged businesses required to carry the responsibility according to Stakeholder Theory and to move away from the belief that environmental responsibilities are for large corporations because of the assumed impact of their operations. Not forgetting the challenges that SMEs in Developing countries go through in terms of their balance sheets, it is worth considering the adoption of the following low-cost environmental conservation approaches Park and Ghauri (2015: 34): • Send used plastic and waste paper to recycling companies rather than dumping or littering or leaving them to fly in the streets. • Progressively moving to paperless offices by fully utilizing modern technology such as electronic filing. • Avoiding sending notices or memos to individuals rather use emails or notice boards; • Use of energy-saving lights in their company premises, for example, compact fluorescent lamps use less energy as compared to ordinary lights; • Support street clean up campaigns; • Donate ageing equipment to communities, clinics or old age's homes; • Make use of recycled material like printer cartridges, toilet papers, etc.; • Print back to back for all internal communication purposes; and • Serve energy by switching off all computers, lights, warehouse machinery by the end of the day.