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The relationships between competitiveness, environmental performance and management of Small and Medium sized European manufacturing firms


On firm competitiveness the research found no convincing evidence that firms with better economic performance adopt more environmental initiatives, and that economic performance has a negative effect on competitiveness. In all three industries there were small positive effects on employment. The most important obstacle to the take up of initiatives was capital. Also important was the pursuit of other management priorities, and a lack of skills, expertise or advice to adopt initiatives. Attitudes towards the environment were positive, irrespective of the level of environmental performance. Strong environmental performance was not necessarily associated with a strong environmental culture. There is not a shortage of sources of advice for the adoption of environmental initiatives. However, there is a gap between need and demand. External advices are important to environmental performance.
The major aim of this research is to identify and weigh the importance of factors which promote and constrain the adoption of environmental initiatives by small and medium sized European manufacturing firms (SMEs). The study focuses on three interrelated hypotheses which recur in the literature, affecting the adoption of clean technologies; these are concerned with:
(a) competitiveness,
(b) management environmental awareness/culture and
(c) external information sources and relationships and linkages to the firm (trade associations, universities, R&D organizations, official government sources, business to business networks, environmental consultants, customers, suppliers etc).
The relationship with firm competitiveness is likely to involve positive feedback in both directions: the fact that the firm is competitive may lead to the early adoption of clean technologies while at the same time clean technologies are expected to have consequences for the competitiveness of firms. The role of management and the culture of the business organization is important because the achievement of sustainable business activity requires a shift in management thinking, values and practice. An understanding is required of how the organization decides to choose cleaner technologies. Imperfect information is inherent to the process of technological change and markets for information are notorious for being imperfect. Furthermore, the skill and know-how of management and the labour force at SMEs is variable. It is hypothesised that suppliers, customers, environmental and other consultants and agencies play a crucial role in enabling firms to adopt environmental initiatives.
The research tests hypotheses and relationships which have been previously the subject of little or no research, particularly in Europe. The breadth of the work is designed to capture all environmental initiatives undertaken. The large size of the proposed samples make the data amenable to statistical testing: proposed survey work will provide data on between 500 and 750 firms in each country, and in-depth interviews will be conducted with 215 firms (at least 115 of which are additional to the survey companies). The sample design which includes a matched comparison between firms classified according to a threefold typology of environmental performance; compliance, compliance+ and excellence; will focus on the characteristics of best practice firms. In addition the work involves a variety of methods to give breadth and depth to the analysis and includes the use of focus groups to explore decision processes. The research work and team skills are interdisciplinary and this will facilitate broader insights.
The work will investigate SMEs in three or four sectors where environrnental costs are significant. Variations within the EU with respect to environmental regulation, environmental performance and firm competitiveness will be exemplified by the study of firms across four member states: Germany, Italy, Republic of Ireland and the UK.
The research is designed to produce results which will benefit policy makers at both the national and EU level (the work will estimate the transferability of best practice features between regions and countries) in attempts to devise policies which will achieve both competitiveness and environmental targets.
The research aims to create a better understanding of the process of application and diffusion of clean technology, especially of the key dimensions discussed above (including measurement of the employment implications arising from clean production methods and products). The proposed research is especially important since SMEs have been-assigned a key role in improving the overall competitiveness and hence growth and employment performance of EU manufacturing.

Funding Scheme

CSC - Cost-sharing contracts


Queen's University of Belfast
University Road
BT7 1NN Belfast
United Kingdom

Participants (2)

Institut für Ökologische Wirtschaftsforschung GmbH
30159 Hannover
Istituto di Sociologia Internazionaledi Gorizia
Via Mazzini 13
34170 Gorizia