Introduction
Influence of sustainability practices in driving business excellence in
case of big corporate houses and multinational companies is evident.
These companies have their sustainable practices regularly audited and
in most cases the results form a part of their annual report. However in
case of small and medium enterprises sustainability practices especially
those related to social and environmental aspects of their operations
are grossly neglected. This is specifically true for SMEs of emerging
markets. Earlier studies have identified current level of social and
environmental initiatives being practiced by SMEs predominantly in the
context of developed nations (Evans and Sawyer, 2010), but
their contribution in improving the business performance of the SMEs or
in enhancing their competitive advantage is not very evident. Earlier
researchers have shown that, apart from government intervention some of
the important factors that help sustainable growth of SMEs are
development of entrepreneurial skill (Petkovic et al, 2016) ,
partnership and collaboration, internationalization and opportunity for
innovation (Lamberty & Noci, 2012) .
We restricted our study in SMEs only. This is firstly because
considerable research gap exists in this area. Most of the research in
the field of sustainability performance and firm performance
association, analyzed this relationship for big companies in developed
countries (Goyal, Rahman & Kazmi, 2015). Secondly, in spite of their
immense contribution to the economy of a country a large percentage of
SMEs in most of the countries encounter bankruptcy within few years of
incorporation or remain stagnant within a small scale of operation
(Reeg, 2013). SMEs together account for close to 90% of global
businesses and create 50-60% of the total employment worldwide. Thus it
is important to study the sustainability factors of this huge sector
with potential growth possibilities.
The objective of this paper is to develop a model and find out how
factors like collaborative approach of operation at industry level and
government intervention at policy level impact the sustainability
performance of SMEs in India and how in turn the improved sustainability
performance help to drive their business growth. Sustainability
literature has focused on main three dimensions of business
sustainability namely economic sustainability, environmental
sustainability and social sustainability. For obvious reason economic
viability has remained the main objective of business development. In
our current study we have considered other two so far neglected but
equally important dimensions of sustainability that is environmental and
social responsibilities of business operations.