Small business owners often think that they do not have as much impact on the environment as large corporations. However, the sum of small businesses combined actually accounts for a lot of the damage to the environment. Stokes (2000) attributes the poor environmental performance of small businesses to the low level of awareness of their environmental impact.
In building green entrepreneurship trend, there has to be an integration of environmental issues into the economy and technology. However, that kind of integration and awareness is complicated because it requires a new approach to technology and an economic point of view shift. This requires time and financial investment and it does not automatically guarantee better return for the stakeholders.
In essence, since most companies exist to generate profit, most company owners will feel that the shift to greener technology is too expensive and time consuming. Businesses are constantly faced with the pressures to be efficient and effective. As Andersen (2000) quotes, “There are consequently generally very high shifting costs in turning towards environmentally friendly technologies and business practices”
According to Andersen (2000), the green trend differs from other innovations for its strong policy element, its radicality (including strong normative and cognitive elements), its complexity and its broadness in scope. His theory holds true in a way that a green trend requires a shift in perception in the context of strong environmental commitment.
The lack of adequate institutional organisations, both governmental and non governmental, such as Greenpeace, Environmental, Health and Safety Department., etc. that support the activity of green entrepreneurs is also a barrier to the trend. Institutional bodies can promote green activity by providing acknowledgements and incentives to those companies that apply green principles in their practice. At the same time, they can also apply pressure on other companies to comply with an environmental benchmark.
GOs and NGOs can also provide necessary information and create seminars to help companies understand the switching process. “NGOs (Non governmental organisations) are now the Fifth Estate in global governance-the true credible source on issues related to the environment and social justice” (Vogl, 2003). Chapas (2003) further confirmed, “A coalition of business schools, non-profit organizations, governments, and industry is needed to accelerate true sustainability by providing credibility, market information, and shared learning”.
The popularity of green entrepreneurship is getting stronger. However, in practice, green entrepreneurship is not always able to create a competitive advantage in business. This depends more on the circumstances and the external factors in which the industry competes. Christmann (2000) suggests that whether or not a firm can gain an advantage from being environmentally responsible primarily depends on external contingencies, such as the structure of the industry and characteristics of the product market in which a firm competes.
There seems to be no direct relationship between environmental practices to competitive advantage, rather the success of it is more dependent on the company’s ability to manage external factors in the context of the adopted environmental program.
1. Andersen, M. M, 2000, Green competitiveness as a business strategy. [Online], April 2003
2. Chapas, R.B., 2003, “Sustainability is an opportunity – seize it”, Research Technology Management, Vol. 46, Issue 1, pp. 8-9
3. Christmann, P., 2000, “Effects of “best practices” of environmental management on cost advantage: The role of complementary assets”,Academy of Management Journal, Vol 43, Issue 4, pp. 663-680
4. Schaper, M., 2002, “Small firms and environmental management” , International Small Business Journal; Vol 20, Issue 3, 235:251
5. Teece, D., 1986, Profiting from technological innovation: Implications for integration, collaboration, licensing, and public policy. Research Policy, Vol 15, pp. 295-305.
6. Vogl, A. J., 2003, “Does it pay to be good?”, Across the Board, Vol 40, Issue 1, pp. 16-23
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