A framework development to evaluate the needs of SMEs in order to adopt a sustainability-balanced scorecard

Abstract

Recently, many scholars have proposed the sustainability-balanced scorecard (S-BSC) as an essential strategic management tool and suitable approach for evaluating corporate sustainability because of its ability to combine financial and nonfinancial measurements, which provide indispensable information in order to have an overall picture of corporate sustainability performance. Despite appropriateness of a S-BSC as a measurement framework of corporate sustainability performance, limited empirical work has been implemented in relation to the barriers and challenges that small- and medium-sized enterprises (SMEs) face in their efforts to adopt a S-BSC. To contribute to this field, this paper provides a framework, based on SWOT (strengths, weaknesses, opportunities, and threats) analysis, to facilitate the investigation of managers' and owners' opinions of SMEs regarding S-BSC implementation. The findings of this work show that the majority of managers, from SMEs sampled, report the increased awareness of their environmental responsibilities and the fact that it is easy to handle very important incentives to adopt a S-BSC, while they consider as important disincentives the cost requirements and the existence of alternative tools with less management needs.

Keywords::

• corporate sustainability
• environmental management
• sustainable development
• SWOT analysis

Introduction

As the interest in sustainability issues has been increased by a range of stakeholders, a number of firms have attempted to incorporate them into their core management goals in order to respond to stakeholders' expectations (Hubbard 2009). To achieve such goals, firms adopt various environmental management practices and integrated environmental management systems (EMSs) such as ISO 14001, eco-management and audit scheme (EMAS), and carbon footprint (Hubbard 2009; Shaw et al. 2010). However, such management practices have received criticism concerning the obstacles that firms are confronted with during their implementation. An important criticism focuses on the distinction of environmental management from the core management system of firms (Hockerts 2001; Figge et al. 2002; van der Woerd and van den Brink 2004; Schaltegger and Wagner 2006). According to Figge et al. (2002), the deficient implementation of environmental management practices render managers unable to understand the real contributions of sustainability performance to economic performance. Schaltegger and Wagner (2006) alleged that firms, which do not recognize the relationship of corporate social responsibility (CSR) activities and economic performance, establish “a parallel organization in the company” (p. 682), responsible only for environmental and social issues, whose funding is cut when the company is in financial trouble. Finally, one more significant drawback of EMSs is that they mainly pay attention to lagging indicators that evaluate the past performance of environmental activities and they are unable to inform companies of their future success (Hockerts 2001).

To overcome such criticisms, some identify the necessity of a new management approach that incorporates intangible assets and nonfinancial aspects of corporate performance, such as sustainability goals, into the main management system. To this end, the sustainability-balanced scorecard (S-BSC) is considered as an essential tool to encompass environmental and social issues into core business activities, offering a proper structure for general strategic management and sustainability performance evaluation (Johnson 1998; Epstein and Wisner 2001; Hockerts 2001; Dias-Sardinha et al. 2002; Figge et al. 2002; Bieker 2003; Schaltegger and Wagner 2006; Hubbard 2009; Hsu and Liu 2010; Länsiluoto and Järvenpää 2010). In principal, the S-BSC is a modified form of conventional balanced scorecard (BSC) approach introduced by Kaplan and Norton (1992), as a framework for performance measurement. It is highlighted that BSC will assist firms in “translating” their vision and strategy into operational objectives and initiatives around four business perspectives, namely, financial, customer, internal business process, and learning and growth (Kaplan and Norton 1996).

Although the literature provides sufficient insight into how firms could build and implement their environmental strategies using the BSC, there is little empirical evidence to show how companies evaluate the factors that encourage them to engage in S-BSC framework (Länsiluoto and Järvenpää 2008, 2010). Taking into account the current gap in the literature, the aim of this study was to shed light on the challenges that companies may face during the introduction and implementation phase of the environmental BSC. To do this, a strengths, weaknesses, opportunities, and threats (SWOT) analysis was used to assess internal and external factors that could play a critical role in S-BSC adoption by small- and medium-sized enterprises (SMEs). In other words, it seeks to identify the strengths, weaknesses, opportunities, and threats, which influence the decision of SMEs to adopt BSC techniques to meet environmental issues. SWOT is a useful strategic management tool that provides a robust context for developing research questions and questionnaire surveys. The acronym SWOT stands for the words strengths, weakness (organizations' external-based factors), opportunities, and threats (organizations' internal-based factors). Studies in the corporate environmental management literature have recently began to use the SWOT analysis to identify the most crucial factors that could play a critical role in a firms' selection of the best ways to face contemporary environmental challenges.

The remainder of this paper is organized as follows: In Section 2, the opportunities and barriers that firms encounter during the implementations of S-BSC are discussed. In Section 3, the methodology framework used in this study is analyzed in depth. The analysis of the data is presented in Section 4. Finally, Section 5 discusses the conclusions of this study and some points for future research.

Opportunities and barriers to implement the S-BSC

Some specific aspects of SMEs' sustainability

In general, SMEs make up the greatest part of the business community because they constitute over 90% of the total population of firms worldwide and are considered responsible for 70% of the total pollution (Hillary 2004). Many authors propose various sustainability practices for SMEs in order to tackle those environmental and social responsibilities. The current literature shows two general categories of driving forces that have a crucial impact on SMEs' decision in their effort to face environmental and social problems: (a) the reactive character of environmental management of SMEs as a result of the severe regulative regime of sustainability public policy and (b) the proactive actions that are undertook by SMEs to address such challenges and to exploit new entrepreneurship opportunities (Angel de Brio and Junquera 2003).

Many studies have focused on SMEs that arise when firms implement environmental management practices. Azzone, Bianichi, et al. (1997) supported that the small size of firms could be an important factor that has a strong influence on the decisions of SMEs mainly in their effort to implement environmental management practices. Angel de Brio and Junquera (2003) identified a range of barriers that are faced by SMEs in order to implement environmental management practices. Some significant barriers are the lack of financial resources, the peculiar characteristics of organizational structure, the management style (only implement what legislation require – reactive response), the lack of environmental training in human resources, the limited level of technological access, and the perception for a low level of innovation. Similarly, Love and Irani (2004) identified that construction SMEs will face, inter alia, some important weaknesses in order to adopt software information systems (IT) for environmental issues such as the reluctancy of employees to use new technologies and the inability of managers to select suitable technology.

S-BSC discussion

Although many authors have mentioned the suitability of the BSC to address sustainability or environmental issues, the relevant literature includes a limited number of empirical studies that show how this management tool is really suitable for SMEs. Before analyzing the current literature, it is necessary for the concept of sustainability to be clearer. In general, corporate environmental literature defines sustainability as a combination of three aspects (through triple-bottom-line approach), namely, economic, environmental, and social, while environmental sustainability is referred as an environmental aspect of corporate performance. Actually, regardless the focus of scholars (environmentally or sustainability), the rationality behind the procedures that are used for changing a BSC (e.g., “greening” or “sustaining”) presents significant similarities and their examination will provide common lessons.

In particular, some of the present studies only focus on different methodological frameworks, which firms could use to build a S-BSC in order to define sustainability or environmental targets (Epstein and Wisner 2001; Hockerts 2001; Figge et al. 2002; Sidiropoulos et al. 2004). For example, Figge et al. (2002) present an array of potential ways to assist firms in integrating sustainability concerns into the four conventional perspectives of BSC, by adding an extra nonmarket sustainability perspective and by building a separate scorecard to address sustainability aspects. Similarly, Epstein and Wisner (2001) propose a set of suitable indicators that can be used to address potential environmental and social goals through a BSC, while Sigma Project (2003) provides a comprehensive guideline to build a S-BSC. Another part of the literature includes some theoretical studies that provide normative frameworks based on S-BSC approach for measuring, monitoring and disclosing corporate sustainability performance, adding an extra perspective for sustainability issues, or incorporating such issues into four standard BSC perspectives (Möller and Schaltegger 2005; Yongvanich and Guthrie 2006; Hubbard 2009; Panayiotou et al. 2009). In addition to these contextual and descriptive studies, the literature includes some empirical case studies. These studies consider the level of applicability of the S-BSC in different industrial sectors, such as the automobile, tourist, and furniture sectors (Dias-Sardinha et al. 2002; van der Woerd and van den Brink 2004; Dias-Sardinha and Reijnders 2005; Laurinkevičiūtė et al. 2008; Hsu and Liu 2010).

The proponents of the S-BSC support that the use of S-BSC brings many benefits for the firms that decide to implement it. In this context, Epstein and Wisner (2001) stress that the use of S-BSC facilitates firms to implement successfully their sustainability strategy. It is a strategic tool that identifies the links between long-term sustainability goals and short-term financial targets (Möller and Schaltegger 2005). The use of it will help everyone within the firm to recognize the importance of environmental and social issues and how they could contribute to the firm's financial success (Epstein and Wisner 2001; Sidiropoulos et al. 2004; Dias-Sardinha and Reijnders 2005; Panayiotou et al. 2009; Länsiluoto and Järvenpää 2010). Another benefit derived from S-BSC implementation is associated with its ability to assist managers in planning and decision-making of sustainability issues (Sigma Project 2003; Laurinkevičiūtė et al. 2008), while it has also been proposed as a tool for measuring and reporting information regarding environmental performance of companies (Länsiluoto and Järvenpää 2008; Hubbard 2009). Finally, it is worth noting that companies that implement a S-BSC in order to address environmental or sustainability issues may strengthen their accountability and legitimize their operation (Epstein and Wisner 2001).

The adoption of S-BSC also assists firms in improving their corporate image (Länsiluoto and Järvenpää 2008). Laurinkevičiūtė et al. (2008) emphasized the ability to identify causal relationships between different aspects of sustainability when using the S-BSC. Hsu and Liu (2010) pointed out that S-BSC facilitate firms to design, inter alia, sound environmental management projects. Dias-Sardinha and Reijnders (2005) examined a range of driving forces that affect the decision of firms to adopt a S-BSC such as financial incentives from governments, pressure from competitors, and interest in environmental and quality awards. Leon-Soriano et al. (2010) supported that the S-BSC and strategic management could offer important cost savings in different industry sectors. The positive impact of S-BSC lies in the fact that it provides certain techniques to estimate intangible assets of firms and provides managers with insights into the stakeholders' attitude toward corporate environmental strategy.

In contrary, some shortcomings and limitations may arise during a S-BSC implementation. According to the present literature, these obstacles could be classified into two main categories. The former category is associated with the lack of adequate guidelines to facilitate firms to construct successfully a S-BSC. What is more, managers are inundated with difficulties and hurdles when they opt for sustainability measures and determine strategic initiatives (Epstein and Wisner 2001; Nikolaou and Tsalis 2013). The latter category contains a set of obstacles such as increased requirements in time, effort, and resources, which firms need to allocate when they are willing to develop a S-BSC (Nikolaou and Tsalis 2013). A S-BSC is characterized as a multidimensional framework that uses a number of different measures. These characteristics of S-BSC demand a great deal of data, which is a weary process for firms not only to gather the necessary information but also to elaborate it so as to evaluate the overall corporate performance. In addition, demands in time and effort are required in the initial stages of S-BSC implementation when the top management tries helping employees overcome their distrust toward the S-BSC in order for it to gain acceptance within the organization. Finally, financial and human resources are very important factors in order for SMEs to successfully achieve sustainability goals (Nikolaou and Tsalis 2013).

Methodological framework

Research structure

The aim of the proposed methodological framework is to evaluate a firm's perception regarding the barriers and challenges that they may face when they decide to introduce and implement a S-BSC. Actually, it aims at evaluating basic factors that could hinder or motivate the process of S-BSC implementation for SMEs. A limited number of studies have been conducted on how managers of SMEs perceive the crucial factors of sustainability and environmental management practices. The majority of present studies provide methodological frameworks to rank such practices from the best to worst. A range of hybrid methodological frameworks have been proposed that rest on linear programming and multicriteria techniques such as analytic hierarchy process, analytic network process (Tsai and Chou 2009) and statistical techniques (McKeiver and Gadenne 2005). The former category of techniques is very valuable and reliable and assists mainly in ranking the importance of critical factors that play a role in decision-making. The latter category contributes mostly by estimating how crucial factors could affect a companies' decision to adopt a S-BSC.

In addition, a number of methodologies that rest on the SWOT analysis have been proposed in order to reveal the most crucial factors that affect manager's decisions to adopt environmental management practices, green entrepreneurship ventures, and CSR strategies (which are based on triple-bottom-line approach). For example, Nikolaou et al. (2011) proposed a SWOT analysis as a concrete framework to develop a questionnaire survey at province level in order to identify crucial factors that affect managers to invest in green entrepreneurship. Castka et al. (2004) used face-to-face interviews to reveal the views of stakeholders about CSR topics and develop a SWOT analysis for SMEs. Seidel et al. (2009) highlighted that a SWOT analysis could provide a suitable framework in order for SMEs to plan improved environmental programs. Terrados et al. (2007) supported that the SWOT analysis is an analytic tool that is suitable in participatory planning approaches.

Actually, the SWOT analysis is a strategic tool useful for managers to design various strategies in order to exploit new opportunities and avoid potential barriers. The SWOT analysis has many different uses from a single firm to a sector or an overall economy. Bernroider (2002) considered that the usefulness of SWOT analysis in the field of SMEs lays in the fact that it provides sufficient information for the most critical factors that affect their operation as a result of empirical research.

Considering these academic works, the methodology of this paper is based on statistical techniques and information obtained through questionnaire surveys. The framework underlying this methodology is the SWOT analysis. The majority of the previous studies in the field of environmental management of SMEs have examined the potential barriers and opportunities arisen from the use of environmental management practices, mainly based on a loosely scientific context through literature review (Perez-Sanchez et al. 2003; Hillary 2004). In addition, previous studies are more exploratory and point out more critical factors that affect managers' decisions rather than what managers consider more suitable to adopt (Lee and Klassen 2008). This paper proposes a more rigorous framework in order to identify the most potential factors that could play a critical role in SMEs' decision to implement S-BSC.

Research questions development

This section is organized into four basic components as derived from the SWOT analysis. The majority of authors, who proposed S-BSC as good strategic tools, have provided a list of potential benefits for firms if they decide to adopt S-BSC (Länsiluoto and Järvenpää 2008; Hsu and Liu 2010; Leon-Soriano et al. 2010). Figge et al. (2002) considered S-BSC as a very useful tool for achieving the sustainable goals of firms owing to the capability to use information that cannot be monetarized. Epstein and Wisner (2001) referred that a S-BSC will increase employees' satisfaction, improve corporate image, and decrease operational and administrative costs. These works are mainly based on normative assertions and logical sequences of scientific findings arisen from the general literature on corporate environmental management as well as following a loosely methodological framework. To examine the importance of such benefits, following the first component of SWOT analysis, the following rational question was raised:

Question 1. Which are the strengths that the managers/owners of SMEs regard as important in order to adopt S-BSC?

This question looks into the internal strengths that SMEs consider important for adopting a S-BSC. Specifically, this question aims to identify the potential benefits gained by SMEs implementing the S-BSC such as improvements in the corporate environmental performance, general acceptance, and knowledge within the organization of the corporate environmental liabilities.

In addition, a number of weaknesses are identified for firms in the process of adopting a S-BSC such as the organizational culture, the low internal acceptance by employees, the lack of technical support, and limited financial capital (Braam and Nijssen 2004; Papalexandris et al. 2004). To examine such limitations through the SWOT analysis, the following question was raised:

Question2. Which are the weaknesses that the managers/owners of SMEs regard as important in order to adopt S-BSC?

This question looks into the weaknesses that sustainability management systems (SMSs) may face when introducing a S-BSC. In particular, the objective of this question is to find the internal obstacles that emerge from S-BSC adoption. These weaknesses are mainly associated with the problems caused due to the increased demands of time, effort, and information that are necessary for successful implementation.

The possible benefits gained by SMEs as a result of adopting a sustainability management practice are not only internal but also external. Some important external benefits for firms include a better relationship with customers, the acquisition of “social license” to operate, improvements in the relationships with suppliers, and the gaining of competitive advantage. For instance, Epstein and Wisner (2001) described some case studies about how firms implement certain practices in order to support customers, such as product safety, the recycling of postconsumer waste, and consumer education. In addition, a range of other environmental management practices have gained a great momentum among business community members such as EMSs (e.g., ISO 14001, EMAS), green supply chain management, and eco-design. Although some academics works have aimed to help managers to identify the best option through multicriteria techniques, there is a fuzzy picture regarding the approaches that are adopted to identify the criteria. The previous studies of S-BSC provide a confused presentation between external and internal benefits (under the general category “benefits”) so as to provide a weak signal to managers for the potential challenges that would be identified from the adoption of a S-BSC. The following question was raised:

Question 3. Which are the opportunities that the managers/owners of SMEs regard as important in order to adopt a S-BSC?

This question examines the opportunities that SMEs may gain during the implementation of the S-BSC. These opportunities are derived from a SMEs' external environment, and they are related to improvements in the corporate image as well as in the relationships with stakeholders such as suppliers or local communities.

Nevertheless, a range of external threats are identified when a SME adopts an environmental management practice. For example, some important barriers for SMEs could be the existence of other cost-effective environmental management tools and EMSs promoted by industry. Indeed, the disincentives to adopt a S-BSC will be better to be separated in two general categories internal and external in order for the managers of SMEs to have a full and more adequate picture before investing in S-BSC. This information will be very useful for decision-makers in order to design suitable policies to facilitate SMEs to implement S-BSC. In order to examine how the managers of SMEs would face these external threats, the following question was raised:

Question 4. Which are the threats that the managers/owners of SMEs regard as important in order to adopt a S-BSC?

This question analyzes the external threats to SMEs that arise when implementing the S-BSC. More specifically, these threats involve extra future expenditures or resources to support the implementation of the S-BSC or the existence of other alternative environmental management approaches with lower demands of time, effort, and resources.

Finally, an important question is how all these factors simultaneously affect the decision of managers of SMEs to adopt a S-BSC. This question is formed as follows:

Question 5. Which are the SWOT factors that the managers/owners of SMEs regard as important in order to adopt a S-BSC?

A SWOT analysis description

The SWOT analysis is a well-known technique that could be used to analyze the surrounding environment of an implemented plan or a future plan (Nikolaou and Evangelinos 2010). It is an effective tool for mangers in decision-making, strategy formulation, and the strategic planning process of environmental management (Geneletti et al. 2007; Toksoy et al. 2009). Using the SWOT analysis, all critical aspects of a project are identified, pinpointing its strong and weak points (Helms and Nixon 2010). The strong points are the strengths and opportunities that the firm implementing a plan may gain, while the weak points are the weaknesses and threats that firms have to avoid or to overcome in order to achieve the desired goals of a plan (Nikolaou et al. 2011).

There are a number of studies in the literature wherein the SWOT analysis has been used to analyze different environmental issues (Srivastava et al. 2005; Lozano and Vallés 2007; Markovska et al. 2009; Nikolaou and Evangelinos 2010; Coşkun and Turker 2011; Nikolaou et al. 2011). For example, Nikolaou and Evangelinos (2010) used the SWOT analysis to analyze the factors that influence public policy organizations in designing a plan for green entrepreneurship. Markovska et al. (2009) used the SWOT analysis to describe the current situation of the energy sector in FYROM and to draw possible future plans for sustainable energy development, while Srivastava et al. (2005) used the SWOT analysis to formulate strategic plans for successful implementation of municipal solid waste management with both government and public participation. Finally, it is worth mentioning that there are studies that propose the combination of SWOT analysis and BSC approach for strategic purposes (Lee et al. 2000; Lee and Sai On Ko 2000; Ip and Koo 2004; Koo et al. 2008; Manteghi and Zohrabi 2011).

Sample and data collection

The target sample includes a set of Greek SMEs that operate in the regions of Thrace and west Macedonia in north Greece. North Greece is considered less developed than other regions and many plans have been prepared in order to stimulate local SMEs to adopt new managerial tools to improve their competitiveness. Amid the severest financial crisis of recent times, rescuing Greece from bankruptcy is a current affair, and thus there is increased interest in the prefectures of Thrace and west Macedonia as there are discussions to install a Free Economic Zone in order to promote entrepreneurial development. SMEs are selected by the records of the industrial chamber of the regions. Initially, all SMEs were contacted by phone calls to present and inform them about the aims and scope of the research and its targets. Next, the questionnaires were sent out, followed by call reminders to ensure the maximum possible response rate. The total numbers of sent questionnaires were 300. In total, eighty-two completed questionnaires were received (27% response rate). The research was conducted between January 2010 and January 2011.

Questionnaire development

The data required were collected through a fully structured questionnaire. According to the framework of SWOT analysis and the current literature on S-BSC and corporate environmental management, the questionnaire was divided into four main parts, namely, strengths, weaknesses, opportunities, and threats. These four parts included thirty-three close-ended questions that were ranked using a 6-point Likert scale: not important, 0; little important, 1; quite/moderately important, 2; very important, 3; very much important, 4; extremely important, 5.

In particular, the first part of the questionnaire includes 11 items to examine how important are the potential benefits arisen by the adoption of S-BSC. These items are based on the present literature of S-BSC and pertain mainly to the internal environment of SMEs. The second part consists of eight items aiming to identify the perception of respondents in relation to a set of weaknesses that could be arisen from an adoption of S-BSC such as new responsibilities for managers/owners and much time for gathering adequate information. The next part includes seven items concerning opportunities that respondents are likely to meet in their efforts to adopt S-BSC. These items mainly focus on the external environment of SMEs. The final part contains seven items primarily to explore the awareness of respondents for a set of external threats that are associated with the adoption a S-BSC.

Analysis and results

In the following sections, the hierarchical classification of all the components of the SWOT analysis is presented. This classification is based on the answers from managers/owners of Greek SMEs that evaluated the strengths, weaknesses, opportunities, and threats that they may face throughout the S-BSC implementation. Tables 1234 present the stated level of importance of each component of the SWOT analysis as well as the importance ranking of them. Specifically, the ranking of high importance is based on the percentage of “extremely” stated level of importance.

Table 1 The stated level of importance (%) and importance ranking of strengths of the S-BSC application.

Strengths	Not important (1)	Little important (2)	Quite/moderately important (3)	Very important (4)	Very much important (5)	Extremely important (6)	Importance ranking (7)
S1: Improvement in understanding of corporate environmental responsibilities	0	0	7.3	11	34.1	47.6	2
S2: Improvement in planning of environmental targets	0	0	3.7	23.2	25.6	47.6	2
S3: Improvement in employees' attitude toward their environmental responsibilities	0	3.7	12.2	20.7	28	35.4	6
S4: Improvement in cooperation between different business units regarding environmental issues	0	2.4	7.3	23.2	37.8	29.3	8
S5: Improvement in employee communication regarding environmental issues	2.4	8.5	18.3	24.4	31.7	14.6	10
S6: Improvement in environmental performance	0	0	3.7	20.7	29.3	46.3	3
S7: Improvement in resource allocation	1.2	0	2.4	13.4	31.7	51.2	1
S8: Potential facilitation of the introduction of other EMSs	0	1.2	3.7	18.3	34.1	42.7	4
S9: Improvements in data collection and data quality	0	1.2	0	19.5	39	40.2	5
S10: Connection between environmental and financial targets	1.2	4.9	6.1	18.3	39	30.5	7
S11: Alignment of different business units in common environmental targets	0	1.2	6.1	24.4	41.5	26.8	9

Table 2 The stated level of importance (%) and importance ranking of weaknesses of the S-BSC application.

Weaknesses	Not important (1)	Little important (2)	Quite/moderately important (3)	Very important (4)	Very much important (5)	Extremely important (6)	Importance ranking (7)
W1: Low level of internal acceptance of S-BSC	2.4	9.8	20.7	34.1	18.3	14.6	2
W2: Increased demands of training regarding the S-BSC	1.2	9.8	11	25.6	32.9	19.5	1
W3: Employees' confusion regarding the environmental targets	7.3	4.9	18.3	31.7	23.2	14.6	2
W4: New responsibilities for top management	6.1	15.9	12.2	24.4	26.8	14.6	2
W5: Increased demands required to gather the necessary data	3.7	6.1	15.9	28	34.1	12.2	4
W6: Increased demands in time for S-BSC implementation	3.7	4.9	12.2	23.2	43.9	12.2	4
W7: Increased demands of time for gathering the necessary data	2.4	4.9	17.1	23.2	40.2	12.2	4
W8: An extra burden on the firm which have already implemented other EMSs	3.7	7.3	11	42.7	22	13.4	3

Table 3 The stated level of importance (%) and importance ranking of opportunities of the S-BSC application.

Opportunities	Not important (1)	Little important (2)	Quite/moderately important (3)	Very important (4)	Very much important (5)	Extremely important (6)	Importance ranking (7)
O1: Acquisition of competitive advantage	0	0	4.9	19.5	36.6	39	3
O2: Customer satisfaction concerning environmental issues	3.7	1.2	6.1	22	42.7	24.4	5
O3: Acquisition of social license to operate	0	0	3.7	13.4	39	43.9	2
O4: Improvement in firms' borrowing capability	1.2	7.3	8.5	15.9	31.7	35.4	4
O5: Enhancement of corporate image	0	0	2.4	9.8	29.3	58.5	1
O6: Improvements in relationships with local community	1.2	1.2	8.5	17.1	32.9	39	3
O7: Improvements in relationships with suppliers	0	4.9	11	28	20.7	35.4	4

Table 4 The stated level of importance (%) and importance ranking of threats of the S-BSC application.

Threats	Not important (1)	Little important (2)	Quite/moderately important (3)	Very important (4)	Very much important (5)	Extremely important (6)	Importance ranking (7)
T1: Existence of similar environmental systems with low cost	1.2	3.7	11	32.9	35.4	15.9	6
T2: Existence of similar environmental systems with effortless implementation	1.2	2.4	4.9	28	46.3	17.1	5
T3: Existence of similar environmental systems with low demands on knowledge	1.2	7.3	11	22	37.8	20.7	4
T4: Existence of other more effective environmental systems	2.4	1.2	4.9	25.6	42.7	23.2	2
T5: Existence of environmental systems promoted by industry sectors	2.4	8.5	14.6	24.4	32.9	17.1	5
T6: Future increase in S-BSC implementation cost	1.2	2.4	11	20.7	35.4	29.3	1
T7: Future increase in management demands for S-BSC implementation	1.2	2.4	7.3	30.5	36.6	22	3

Research question 1: strengths

In this section, the high importance ranking of strengths that arise from S-BSC implementation and the stated level of importance by managers/owners of Greek SMEs are analyzed. The results show that managers/owners do not consider that factors such as “the improvement in employee communication regarding environmental issues” (S5), “the alignment of the different business units in common environmental targets” (S11), and “the improvement in cooperation between different business units regarding environmental issues” (S4) to be important strengths in order to implement a S-BSC (see Table 1, column 7). These factors indicate that the managers/owners of Greek SMEs believe that improvements in internal communication at a single business level as well as in collaboration with different business units on environmental issues will be necessary strategies for them in order to face environmental problems. This could be explained by the fact that the number of employees of SMEs is very limited, and thus the resource-based capabilities are very limited as well. The low importance of these strengths could also be explained by the fact that Greek SMEs have already paid attention to these factors as necessary means to achieve their financial and environmental goals. This is in line with studies of Azzone, Bertele, et al. (1997) who identified that SMEs' employees have a low level of environmental awareness and del Brío and Junquera (2003) who concluded that the low level of environmental awareness of employees leads SMEs to a vicious cycle. The lower the level of the employees' environmental awareness, the more unwilling a company is to adopt any environmental practice and vice versa.

In addition, “the improvement in resource allocation” (S7), “the improvement in understanding of corporate environmental responsibilities” (S1), and “the improvement in planning of environmental targets” (S2) are the three most important strengths, which are clearly shown in column 7. These factors indicate that managers/owners of Greek SMEs have difficulties in understanding their environmental liabilities and defining their environmental strategy. Evidently, Greek SMEs need tools that facilitate them to formulate and implement correctly their environmental actions in order to effectively improve their environmental performance. Managers/owners explained that the size of their firms is very small and ultimately they feel that they have little impacts on the natural environment. Actually, many studies in environmental management of SMEs have shown that the majority of managers believe that their firms' environmental impacts are imperceptible (van Hemel and Cramer 2002; Shi et al. 2008).

Research question 2: weaknesses

The high importance ranking of weaknesses that surface when SMEs decide to adopt a S-BSC are presented in Table 2. The results indicate that the weaknesses of least importance for managers/owners of Greek SMEs are “the increased demands of time for gathering the necessary data” (W7), “the increased demands in time for S-BSC implementation” (W6), and “the increased demands required to gather necessary data” (W5), shown column 7. These factors denote that the increased demands of effort and time for the successful implementation of the S-BSC do not concern managers/owners of the Greeks SMEs, and they do not deter them from introducing a S-BSC. This finding is confirmed by Burke and Gaughran's (2007) work that indicated the significance of time implementation of an environmental management practice by SMEs and their benefits from this practice. As for the most important weaknesses, Greek firms consider “the increased demands of training regarding the S-BSC” (W2), “the low level of internal acceptance of S-BSC” (W1), “the employees' confusion regarding the environmental targets” (W3), and “the new responsibilities for top management” (W4) as significant hindrances that emerge from S-BSC implementation. Managers/owners explained the importance of these factors as an effort to avoid any strategy that could disrupt the internal business stability and lead to confliction within the organization. Similarly, Shi et al. (2008) identified that SMEs consider as very significant factors the lack of technical training of employees and management resistance to change as very significant factors.

Research question 3: opportunities

As for the opportunities that SMEs may gain from a S-BSC implementation, Table 3 presents the high importance ranking of opportunities. The results show that the three opportunities considered the least important are “the customer satisfaction concerning environmental issues” (O2), “the improvement in firms' borrowing capability” (O4), and “the improvements in relationships with suppliers” (O7), shown in column 7. These factors show that managers/owners of Greek SMEs do not consider customers' environmental concerns as well as their relationships with suppliers and funding institutes to play an important role in their decision regarding the introduction of S-BSC. Indeed, managers/owners have limited knowledge regarding the usefulness of costumer and supplier cooperation as well as issues regarding green supply chain, green supplier selection, and reverse logistics. These findings are confirmed by the work of Williams (2006), which indicated that even though a range of benefits could be gained by SMEs (mainly the furniture sector) under certain conditions, a limited number of SMEs have adopted strategies such as green supplier selection and green supply chain management. Moreover, “the enhancement of corporate image” (O5), “the acquisition of social license to operate” (O3), “the acquisition of competitive advantage” (O1), and “the improvements in relationships with local community” (O6) are considered very important by managers/owners of Greek SMEs. These opportunities could be explained by the increasing attention of the managers/owners of Greek SMEs given to issues that could enhance SMEs' reputation and their relationships with local communities. In addition, it is obvious that Greek SMEs place emphasis on actions that are associated with their competitiveness and actions that help distinguish them from their competitors as a result of the recent (announcement for a) policy that was introduced to improve the competitiveness of the Greek economy to face the contemporary challenges of the financial crisis.

Research question 4: threats

The high importance ranking of threats that firms could be faced with during the S-BSC implementation is presented in Table 4. The results indicate that “the existence of similar environmental systems with low cost” (T1), “the existence of similar environmental systems with effortless implementation” (T2), and “the existence of environmental systems promoted by industry sectors” (T5) are the first three threats of low importance (see column 7). These factors indicate that managers/owners of Greek SMEs are willing to sacrifice more resources and time in order to implement a S-BSC, which could simultaneously enhance their environmental and financial performance. This is a logical approach that is confirmed by a range of studies in the corporate environmental literature. The pioneers of this field, Porter and van der Linde (1995), supported that, under certain conditions, some types of environmental standards could be suitable tools that can play a leverage role in order for SMEs to achieve both economic and environmental benefits (win–win theory). Moreover, the low importance of threat T5 could be explained by the absence of an environmental system promoted by the industrial sectors and local industry champers. This indicates the absence of institutional incentives that could stimulate the efforts of SMEs to adopt environmental management practices (Peters and Turner 2004). Despite the fact that Greek SMEs do not consider the demands on resource and effort as a deterrent factor for the introduction of S-BSC, they seem to be concerned about a possible increase in demands in the future, which would be required in order to ensure the successful implementation of a S-BSC. This conclusion is derived from high importance threats that are presented in column 7. Specifically, “the future increase in S-BSC implementation cost” (T6) and “the future increase in management demands for S-BSC implementation” (T7) are the two important threats according to the answers of managers/owners of Greek SMEs. These findings are confirmed by many studies of corporate environmental management that show that the future cost of implementation is very important factor (van Hemel and Cramer 2002). Finally, it is worth noting that “the existence of other more effective environmental systems” (T4) as a significant threat indicates that Greek SMEs seek to implement an EMS that brings substantial improvement in their environmental performance. The respondents seem to desire a management tool in order to improve their performance in various environmental aspects such as better energy conservations, elimination of water use, decreasing waste production, and controlling air emissions. This finding contradicts many other studies that indicate that SMEs seek to identify only financial benefits through environmental management practices (Quazi 1999; Perez-Sanchez et al. 2003). Actually, they prefer S-BSC to be an easy tool well tailored and fitted for their managerial, financial, and environmental needs.

Research question 5: the impact of SWOT factors on SMEs decision to adopt a S-BSC

In this section, a binary regression model was run to elicit which of the above SWOT factors could affect the decisions of managers/owners of Greek SMEs to implement a S-BSC with dependent variable options: 1, likely to implement S-BSC; 0, unlikely to implement S-BSC (Table 5). To facilitate the interpretation and analysis of the results, all variables were re-coded to dichotomous format. Independent variables (strengths, weaknesses, opportunities, and threats) were recorded as important = 1 (correspond to “extremely important”) and not important = 0 (otherwise).

Table 5 Estimated model for S-BSC implementation.

Variables and statistics		Wald x^2	p
Constant	− 1.453	8.820	0.003
S1	2.394	11.566	0.001
S8	1.842	8.567	0.003
W6	4.784	9.080	0.003
T1	5.107	7.995	0.005
T2	− 4.684	7.381	0.007
T6	− 2.353	7.329	0.007
Pseudo R^2	0.489
− 2 LL	75,825
Hosmer and Lemeshow test		8.643	0.279
Overall predictive accuracy		79.3%

When managers/owners of Greek SMEs were asked whether they would implement a S-BSC, 53.7% reported likely, while 46.3% unlikely. The results indicate that Greek SMEs that regard the improvement in understanding of corporate environmental responsibilities (S1) and the potential facilitation of the introduction of other EMSs (S8) as important strengths seem more likely to implement a S-BSC ( = 2.394, p = 0.001 and  = 1.842, p = 0.003, respectively) (see Table 5). Moreover, representatives from those firms who stated that the increased demands in time for the implementation of a S-BSC (W6) as well as the existence of similar environmental systems with lower cost (T1) as high importance weaknesses and threats, respectively, might also be more probable to decide to implement a S-BSC ( = 4.784, p = 0.003 and  = 5.107, p = 0.005, respectively). These findings could be interpreted by the fact that managers have deep understanding of both the S-BSC and the other current environmental systems. On the other hand, managers/representatives of Greek SMEs who believe that the existence of similar environmental systems with effortless implementation (T2) and the future increase in S-BSC implementation cost (T6) are important threats are less likely to introduce a S-BSC (strategic) management system ( = − 4.684, p = 0.007 and  = − 2.353, p = 0.007, respectively).

Conclusions

This paper provides a framework based on the SWOT analysis in order to make more comprehensive the factors that are likely to play a crucial role in the decision of managers and owners of SMEs to adopt a S-BSC. Actually, it is important to point out, due to limited number of questionnaires, this study can not draw out concrete conclusions regarding the implementation of S-BSC. To this sense, the findings conclude that the majority of managers/owners of SMEs who participated in this research considered the better understanding of environmental responsibilities and the compatibility with other EMSs as very important incentives for adopting a S-BSC. Although the majority of managers/owners consider the time requirements for S-BSC implementation and alternative management tools with low costs as very important weaknesses, they supported that they are likely to adopt a S-BSC. Finally, managers/owners of SMEs considered the existence of EMSs that are easily implemented and the need for future management and maintenance cost requirements as deterrent threats for implementing a S-BSC.

The proposed framework also contributes to the current literature in two ways. First, it contributes to the S-BSC literature that so far includes a limited number of studies that only focus on measuring corporate performance through a S-BSC as well as various normative academic works for proposing ways to introduce sustainability principles into the conventional realm of BSC (Epstein and Wisner 2001; Dias-Sardinha and Reijnders 2005; Burke and Gaughran 2007). Actually, the limited number of present empirical studies aimed at examining how experts could measure corporate sustainability performance by means of traditional BSC that assist in combining financial and nonfinancial measurements (necessary for corporate sustainability performance measurement; Hsu and Liu 2010). The normative works, except different proposals for building a S-BSC, provided examples for measuring corporate sustainability (Figge et al. 2002). The proposed framework aims at contributing to this literature by presenting data in order to assist in increasing the academic audience's understanding of managers/owners views on S-BSC.

Secondly, this paper provides useful insights into environmental management of SMEs (del Brío and Junquera 2003; Perez-Sanchez et al. 2003; Peters and Turner 2004). In this field, the expected contribution could be seen as twofold: (1) knowledge regarding what managers consider as obstacles and challenges for adopting a new environmental management tool like S-BSC (corporate environmental management-based impact) and (2) comprehension about how managers of SMEs understand the usefulness of a S-BSC adoption (SMEs' literature-based impact).