Flourish or perish in a turbulent environment : A qualitative study from the perspective of environmentally sustainable SMEs.

Abstract: Since the beginning of the 2020’s the world has drastically changed and forced organisations to re-adapt, adjust and reconfigure their business in order to survive. The Covid-19 pandemic rewrote the map of conducting business, as well as the war in Ukraine was a catalyst for inflation, and thereafter rising interest rates. Simultaneously, the climate is suffering greatly from the human footprints, forcing humanity to act swiftly to avoid collapse of ecosystems and an irreversible global warming. Organisations and societies are therefore forced to change their way of production and consumption, to be able to adapt to these changes. However, there is limited research inwhat successful aspects make environmentally sustainable SMEs outlast business environments embedded by turbulence. Therefore, this study aims to shed light on the capabilities required and answer the research question: How do Swedish SMEs maintain their environmentally sustainable business practices when faced with a turbulent business environment? The raison d'être of this thesis is to investigate and deliver insights on how Swedish Small- and Medium sized Enterprises (SME) manoeuvre their environmentally sustainable business practices in an uncertain environment, and what characteristics are proven to be successful to cope with such conditions. In order to answer the research question and fulfil the purpose of this study, semi-structured interviews with 8 top managers within environmentally sustainable SMEs, were conducted under an inductive approach. Henceforth, the primary data offers important insights in how environmentally sustainable SMEs navigate through business environments embedded by turbulence. The findings suggest how the turbulent conditions of today are both of economic, as well as environmental aspect, forcing SMEs to implement environmentally sustainable practices at the core of their operations to be able to succeed. Hence, the SME must constantly manage the balance between profitability and environmental sustainability in order to make a positive impact on society. The findings further indicate that in order tomanage these turbulent conditions, it is evident that it is vital to be close to the market and understand its changing conditions, in combination with having the ability to be proactive and reactive towards the changes. Aside from this, the findings also emphasise the importance of valuable stakeholder relationships, as well as having an active and independent owner, in order to stay competitive during tough times. In conclusion, this study contributes to the theoretical aspects of Dynamic Capabilities and VUCA with emphasis on environmentally sustainable SMEs. Nevertheless, it also contributes with practical knowledge regarding how these types of organisations manage their environmentally sustainable business practices when times are tough.