Date of Award

2024

Degree Name

Doctor of Philosophy (School of Law & Business)

First Supervisor

Alessandro Bressan

Second Supervisor

Professor. Helene de Burgh-Woodman

Abstract

In Australia, small and medium-sized enterprises (SMEs) occupy important positions within their communities, contributing to employment and national economic growth. Despite their significance, it remains unclear how SME owners, as individuals, navigate and respond to the tensions arising from their unique business characteristics and the adoption of social and environmental activities. This research aims to bridge this knowledge gap by investigating how SME owners manage and respond to paradoxical tensions in implementing social and environmental responsibility practices within the SME context. The conventional definition of corporate social responsibility (CSR) does not integrate with the lexicon or landscape of SMEs. This research uses pluralistic logic theory to unpack and analyse the competing demands that confront SME owners and influence their cognitive, emotional, and behavioural responses to paradoxical tensions. This study adopts phenomenology as the methodological framework and theoretical perspective to produce insight into the participants' experiences. In this thesis, a total of thirty (30) in-depth interviews were conducted as the primary data collection tool to best capture, in the participants' own words, their thoughts, feelings, emotions, and perceptions about their experiences.

The findings of this research highlight that SME owners exhibit ethical perspectives towards social and environmental responsibility, shaped by their religious values, personal morals, and childhood upbringing. However, despite their commitment to social and environmental practices, SME owners lack the paradoxical mindset to effectively manage the tensions between their values and ethical decision-making. Instead, they resort to defensive measures such as temporal separation, prioritising short-term survival and profitability over long-term social and environmental commitments. Resource constraints and a lack of strategic thinking skills further exacerbate this short-term mindset, which hinders the systematic integration of values logic into business operations. Furthermore, the informal nature of SMEs and the ingrained personal values of owners contribute to the challenge of formally embedding social and environmental values logic into the business. While personal values drive positive engagement in CSR, the absence of formal structures and processes impedes their systematic integration. Finally, the short-term orientation of SMEs poses barriers to the long-term adoption of social and environmental practices. SME owners prioritise immediate business concerns such as cash flow and survival, often at the expense of longer-term and more strategic considerations.

This research makes two contributions. Firstly, it demonstrates the misalignment between SME features (such as informality, short-term orientation, and ethical values of owners) and traditional CSR concepts. Secondly, this study enriches the theoretical discourse on CSR and SMEs by using the paradoxical approach to investigate how SME owners cognitively, emotionally, and behaviourally respond to social and environmental responsibility paradoxes. Whilst previous research explores tensions in SMEs arising from innovation, family governance, R&D, and autonomy versus control, this study uniquely focuses on social and environmental responsibility paradoxes in SMEs from an individual perspective.

This research has practical implications, offering insights into social and environmental responsibility within SMEs, considering SME owners' cognitive, emotional, and behavioural responses. Through a reconceptualisation of CSR that more closely aligns with the distinctive business model of SMEs, policymakers can benefit from a more nuanced understanding of how SMEs manage paradoxical tensions between their unique firms and conventional CSR requirements, enabling more accurate policymaking decisions. Future research avenues can examine relationships between paradoxes or the consequences of these tensions. This research can encompass various SME sizes, sectors, and geographical locations. One of the main limitations of this study is that it primarily draws on responses from SMEs located in NSW, Australia, and therefore limits sample heterogeneity by excluding data from other states around the country. Another limitation is the potentially small sample size, mainly due to the lack of accessibility to SME owners, primarily owing to the researcher’s time and resource constraints.

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