Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 32451
A Systems Modeling Approach to Support Environmentally Sustainable Business Development in Manufacturing SMEs

Authors: Manuel Seidel, Rainer Seidel, Des Tedford, Richard Cross, Logan Wait


Small and Medium Sized Enterprises (SMEs) play an important role in many economies. In New Zealand, for example, 97% of all manufacturing companies employ less than 100 staff, and generate the predominant part of this industry sector-s economic output. Manufacturing SMEs as a group also have a significant impact on the environment. This situation is similar in many developed economies, including the European Union. Sustainable economic development therefore needs to strongly consider the role of manufacturing SMEs, who generally find it challenging to move towards more environmentally friendly business practices. This paper presents a systems thinking approach to modelling and understanding the factors which have an influence on the successful uptake of environmental practices in small and medium sized manufacturing companies. It presents a number of causal loop diagrams which have been developed based on primary action research, and a thorough understanding of the literature in this area. The systems thinking model provides the basis for further development of a strategic framework for the successful uptake of environmental innovation in manufacturing SMEs.

Keywords: Environmentally benign manufacturing, SMEs, Systems modeling.

Digital Object Identifier (DOI):

Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 1969


[1] Shahbazpour, M. and R. Seidel. Using sustainability for competitive advantage in 13th CIRP International Conference on Life Cycle Engineering. in 13th CIRP International Conference on Life Cycle Engineering. 2006. Leuven, Belgium.
[2] Collins, E., et al., Business networks and the uptake of sustainability practices: the case of New Zealand. Journal of Cleaner Production, 2007. 15: p. 729e740.
[3] Williamson, D., G. Lynch-Wood, and J. Ramsay, Drivers of environmental behaviour in manufacturing SMEs and the implications for CSR. Journal of Business Ethics, 2006(67): p. 317-330.
[4] Zuber-Skerritt, O., Action Learning and Action Research: Paradigm, Praxis and Programs, in Effective Change Management through Action Research and Action Learning: Concepts, Perspectives, Processes and Applications. 2001, Southern Cross University Press: Lismore, Australia. p. 1-20.
[5] Statistics New Zealand. New Zealand Business Demographics. 2008
[cited 20 August 2008]; Available from:
[6] Maani, K. and R. Cavana, Systems Thinking, System Dynamics - Managing Change and Complexity. 2007, Auckland: Pearson Education New Zealand.
[7] Doppelt, B., Leading Change Towards Sustainability: A Change Management Guide for Business, Government, and Civil Society 2003, Sheffield: Greenleaf Publishing.
[8] Senge, P., The Fifth Discipline: The Art and Practice of the Learning Organization. 1990, New York: Doubleday/Currency.
[9] Sterman, J.D., Business Dynamics: Systems thinking and modeling for a complex world. 2000: McGraw Hill.
[10] Seidel, M., et al., A Systems Approach to the Implementation of Environmentally Benign Practices in Manufacturing SMEs, in 15th CIRP International Conference on Life Cycle Engineering. 2008: Sydney.
[11] Seidel, R.H.A., Shahbazpour, M. and Seidel, M.C, Establishing Sustainable Manufacturing Practices in SMEs, in 2nd International Conference on Sustainability Engineering and Science, Talking and Walking Sustainability. 2007: Auckland.
[12] Jenkins, H., Corporate social responsibility - engaging SMEs in the debate. 2004, Research Centre for Business Relationships, Accountability, Sustainability and Society.
[13] Vives, A., Social and environmental responsibility in small and medium enterprises in Latin America. 2005, Inter-American Development Bank: New York.
[14] Mandl, I., CSR and competitiveness - European SMEs good practice. 2005, Grant Programme of the European Commission: Vienna.
[15] Willard, B., The Next Sustainability Wave: Building Boardroom Buy-In. 2005, Gabriola Island: New Society Publishers.
[16] Epstein, M.J. and M.-J. Roy, Strategic evaluation of environmental projects in SMEs. Environmental Quality Management, 2000: p. 37-47.
[17] Shrivastava, P., The role of corporations in achieving ecological sustainability. The Academy of Management Review, 1995. 20(4): p. 936-960.
[18] Kerr, I.R., Leadership Strategies for Sustainable SME Operation. Business Strategy and the Environment, 2006. 15: p. 30-39.
[19] Petts, J., A. Herd, and M. O-Heocha, Environmental responsiveness, individuals and organizational learning: SME Experience. Journal of Environmental Planning and Management, 1998. 41(6): p. 711-730.
[20] Biondi, V. and F. Iraldo, Achieving sustainability through environmental innovation: the role of SMEs. International Journal of Technology Management, 2002. 24(5/6): p. 612-626.
[21] R. Hillary, Small and Medium-sized enterprises and the environment: Business imperatives. 2000, Sheffield: Greenleaf.
[22] NetRegs, NetRegs Benchmarking Survey: How green are small businesses? A snapshot of environmental awareness and practice in small and medium sized enterprises (SMEs). 2002.
[23] NetRegs, SME-nvironment 2005: A review of changing environmental attitudes and behaviours among small and medium-sized businesses in the UK. 2005.
[24] Friedman, A. and S. Miles, SMEs and the environment: Two case studies. Eco-Management and Auditing, 2001. 8: p. 200-209.
[25] Groundwork, Small firms and the Environment. 1995, Groundwork Foundation: Birmingham.
[26] Pimenova, P. and R. van der Vorst, The role of support programmes and policies in improving SMEs environmental performance in developed and transition economies. Journal of Cleaner Production, 2004. 12: p. 549-559.
[27] Tilley, F., The gap between environmental attitudes and environmental behavior of small firms. Business Strategy and the Environment, 1999. 8: p. 238-248.
[28] Perez-Sanchez, D., J.R. Barton, and D. Bower, Implementing environmental management in SMEs. Corporate Social Responsibility and Environmental Management, 2003. 10: p. 67- 77.
[29] Rutherfoord, R., R. Blackburn, and L. Spence, Environmental management and the small firm: An international comparison. International Journal of Entrepreneurial Behaviour and Research, 2000. 6(6): p. 310-325.
[30] Shearlock, C., P. Hooper, and S. Millington, Environmental Improvement in Small to Medium-Sized Enterprises: A Role for the Business-Support Network. Greener Management International, 2001(30): p. 50-60.
[31] Schaper, M., The challenge of environmental responsibility and sustainable development: Implications for SME and entrepreneurship academics, in Radical Changes in the World: Will SMEs Soar or Crash? 2002: St Gallen: Switzerland.
[32] Gerstenfeld, A. and H. Roberts, Size matters: Barriers and prospects for environmental management in small and mediumsized enterprises, in Small and Medium-Sized Enterprises and the Environment, R. Hillary, Editor. 2000, Greenleaf Publishing: Sheffield. p. 106-118.
[33] Le Pochat, S., G. Bertoluci, and D. Froelich, Integrating ecodesign by conducting changes in SMEs. Journal of Cleaner Production, 2007. 15: p. 671-680.
[34] Lefebvre, É., L.A. Lefebvre, and S. Talbot, Life Cycle Design Approach in SMEs. International Journal of Life Cycle Assessment, 2001. 6/5: p. 273-280.
[35] Petts, J., et al., The climate and culture of environmental compliance within SMEs. Business Strategy and the Environment, 1999. 8: p. 14-30.
[36] Envirowise, Attitudes 2000 - Attitudes and Barriers towards Improved Environmental Performance. 2000.
[37] Masurel, E., Why SMEs invest in environmental measures: Sustainability evidence from small and medium-sized printing firms. Business Strategy and the Environment, 2007. 16: p. 190- 201.
[38] Bansal, P. and K. Roth, Why companies go green: A model of ecological responsiveness. The Academy of Management Journal, 2000. 43(4): p. 717-736.
[39] Williamson, D. and G. Lynch-Wood, A new paradigm for SME environmental practice. The TQM Magazine, 2001. 13(6): p. 424- 432.
[40] Rodriguez, J. Internationalisation Awareness in the Small Firm. in International Council for Small Business 48th World Conference. 2003. Belfast.
[41] Hitchens, D., et al., Competitiveness, environmental performance and management of SMEs. Greener Management International, 2003(Winter).
[42] Bansal, P. and K. Roth, Why companies go green: A model of ecological responsiveness. Academy of Management Journal, 2000. 43(4): p. 717-736.
[43] Sharma, S., Managerial Interpretation and organisational context as predictors of corporate choice of environmental strategy. Academy of Management Journal, 2000. 43(4): p. 681-697.
[44] Epstein, M.J. and M.-J. Roy, Sustainability in Action: Identifying and Measuring the Key Performance Drivers. Long Range Planning, 2001. 34: p. 585-604.
[45] Schuman, M.C., Managing legitimacy: strategic and institutional approaches. Academy of Management Review, 1995. 20: p. 571- 610.
[46] Garvey, G.E., The Theory of the Firm, Managerial Responsibility, and Catholic Social Teaching. Journal of Markets & Morality, 2003. 6(2): p. 525-540.
[47] Menguc, B. and L.K. Ozanne, Challenges of the "green imperative": a natural resource-based approach to the environmental orientation-business performance relationship. Journal of Business Research, 2005. 58: p. 430-438.
[48] Hart, S.L., A natural resource-based view of the firm. Academy of Management Review, 1995. 20(4): p. 986-1014.
[49] Biondi, V., M. Frey, and F. Iraldo, Environmental Managment Systems and SMEs: Motivations, Barriers and Opportunities Related to EMAS and ISO 14001 Implementation. Greener Management International: The Journal of Corporate Environmental Strategy and Practice (GMI), 2000. Spring: p. 55- 69.
[50] Studer, S., R. Welford, and P. Hills, Drivers and barriers to engaging small and medium-sized companies in voluntary environmental initiatives. 2005, The University of Hong Kong: Hong Kong.
[51] Hillary, R., Environmental management systems and the smaller enterprise. Journal of Cleaner Production, 2004. 12(6): p. 561-569.
[52] Anglada, M.L., Small and medium-sized enterprises - perceptions of the environment: A study from Spain, in Small and Medium- Sized Enterprises and the Environment, R. Hillary, Editor. 2000, Greenleaf Publishing: Sheffield. p. 62-74.
[53] Simpson, M., N. Taylor, and K. Barker, Environmental responsibility in SMEs: Does it deliver competitive advantage? Business Strategy and the Environment, 2004. 13: p. 156-171.
[54] Shahbazpour, M. and R. Seidel. Using Sustainability for Competitive Advantage. in LCE 2006, 13th CIRP International Conference on Life Cycle Engineering. 2006. Leuven, Belgium.
[55] Allen, D., et al., Environmentally Benign Manufacturing: Trends in Europe, Japan, and the USA. Journal of Manufacturing Science and Engineering, 2002. 124: p. 908-920.