Collaborative Approach of Operation
For SMEs considering their resource constraint, collaboration is the only way to their sustenance and also the best way to realise their sustainability goals. Santos (2014) mentioned that challenges like resource constraints can be overcome through collaboration. However alliances and networks can only be leveraged to solve common problems and share best practice CSRs if the SMEs are willing, able and prepared for disclosing and sharing of environmental information which is the precondition for decreasing the information asymmetry in this field (Jozica, 2004). Literature has suggested that through collaborative operations SMEs can become instrumental in transmitting sustainability requirements of their customers and thus effectively diffuse the sustainability practices across the supply chain (Silvia et al, 2013). Being a part of the social network, proximity and reciprocity with local communities help them to address the resource and capacity challenges to implement effective sustainability practices. Individuals with very positive attitudes about their local communities were more likely to serve in leadership positions and make financial and technical contributions to the community (Margaret et al, 2010).
A shift from auditing and monitoring to more open dialogue among different stakeholders especially suppliers and customers will prevent the SMEs to resort to unethical practices of mock compliance (Huq et al, 2014). Growth through proper communication to all stakeholders including the internal stakeholders like employees and external stakeholders like supplier, customer and local community is necessary for sustainable development (Cader and Leatherman, 2011). These views put together form the basis of our second research proposition that collaborative operations help to improve sustainability performance.
In line with the recommendations available in the literature we develop the construct ‘Collaborative Approach of Operations’ considering the factors like firm’s registration with SME association and trade promotion councils, formation of cluster and sharing data related to sustainability best practices within the SME cluster, following any sustainability practice requirements from customers, inclusion of sustainability practices in supplier selection criteria, sharing of sustainability performance data externally through websites or reports to customers. High value of factor loading and Cronbach Alpha (> 0.8) establishes the validity of our construct (Ref Table 1)