EMS: Environmental Management Systems in Small and Medium Enterprises

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Table of Contents

Introduction
Environmental Management System and ISO 14000 certification
Mitigation of barriers to the implementation of ISO 14001
Reasons for implementation of EMS by SMEs
Comparison of SMEs and Large Scale Organizations against EMS
Conclusion
Reference List

Introduction

Environmental management has different definitions like; coming up with planes and environmental policies that help in the evaluation of environmental results and control of procedures that pursue with special attention paid to cost. Some define it as part of a management system that encompasses the structure of an organization’s planning activities and its resources used in environmental protection. Moreover, some scholars say environmental management has much to do with public policies used to check public actions. Talal (2006 p.2) argues that environmental management is part of a management system rich in administrative aspects like planning, organizing, directing and exercising control. ISO14000 formulation aimed at establishing free trade while still guaranteeing environmental conservation.

Its other objectives were supposed to come up with procedures that identify rules, procedures and social pressures; encourage enterprises to manage and evaluate their environmental actions; improve environmental actions in manufacturing plants; enable national and international standards to complement; increase credibility and come up with one language for international environment management (Talal, 2006 p.3).

Many Small and Medium-sized Enterprises have taken to formulating and adopting environmental management systems in order for them to meet public authority regulatory measures; live up to the demands of the local communities, customers and consumers; and conform to whatever the public expects of such enterprises in opinion polls. Adoption of the environmental management systems (EMS) by small and medium-sized enterprises are supposed to help them in managing, monitoring and have some efficacy in the improvement of the performance of the environment (Biondi, Rey and Ivaldo, 2000 p.1).

The adoption of EMS has its inherent advantages and disadvantages. The major challenge that EMS has imposed on these enterprises has been the barriers associated with the EMS implementation. Some of the barriers encountered in the formation stages of the implementation of these initiatives include the need for a generous supply of human, financial and technical resources. This research paper is going to cover the barriers that small and medium-sized enterprises have to contend with in their effort to implement environmental management systems and overcome the barriers to implementation.

Environmental Management System and ISO 14000 certification

EMS according to ISO 14000 was composed of a formulation of environmental policy, planning, implementation and operation, checking and correcting actions, management review. Environmental policies encompass the planes, principles and goals that company managers have towards the environment (Quazi, 2001 p.253). Planning restricts environmental undertakings while identifying the requirements of the law. It finally helps in developing goals for mitigating environmental effects (Quazi, 2001 p.252). Objectives and targets of a management system should apply to all parts of the enterprise wherever necessary.

Environmental management is the final stage for the planning of environmental management system. Implementation and operation need the input of all employees of an organization. The stage has seven steps. Structure and responsibility require an efficient environmental management system built by the identification of roles and responsibilities of every individual in the system. Its implementation also depends on acquiring the necessary resources to help in the implementation and control of EMS. Training of the employees with a view to creating environmental awareness among them should involve identifying training needs and put a special program for the action (Quazi, 2001 p.252).

The mode of communication should be simple to allow internal and external parties to communicate effectively thereby averting any possible conflicts. Documentation of EMS should be in a position to keep all the information about EMS in a simplified way to ease access to information. Documentation control of SMEs must be able to control information audit, an obtaination of documentation, isolation of omitted documents from usage (Quazi, 2001 p.252).

Operation control obliges SMEs to identify activities that create dangerous environmental concerns. Checking and corrective actions should entail doing the follow-up and assessment, identification of unsuitable conditions and proposing corrective measures that are supposed to be taken to correct them, protection of recordation of the performance of the environment, and auditing of the environment (Quazi, 2001 p.253). This is a managerial tool that helps in the evaluation of the management of the environment to protect the environment by simplifying environmental practices. It also ensures that entity policy rules.

Mitigation of barriers to the implementation of ISO 14001

Biondi et al., in an effort to come up with effective ways that can be used to solve barriers to implementation of EMS by the small and medium-sized enterprises, suggested the development of effective tools and incentives (Biondi, Frey and Ivaldo, 2002 p.1). Research conducted to this effect involved 39 pilot projects managed by both private and public actors. A total of 358 companies were involved. Pilot projects were coordinated by making it easier for exchange of contacts and information with the intention of promoting the act of sharing experience; creation of networks that bring together the promoters and the instigators of the projects (Biondi, Frey and Ivaldo, 2002 p.1).

This was supposed to encourage constant interaction as well as collection and sorting of the finished project results. Alternatively, the results of the final project were evaluated on different levels. The first level involved evaluation on a general level, where the most important issues and problems from the previous cases were focused on while making attempts to identify areas of further research were considered (Biondi, Frey and Ivaldo, 2002 p.1).

Then, a breakdown analysis of the results was done at a specific level based on the industrial sector, the size and the resources, and the geographical region (Biondi, Frey and Ivaldo, 2000 p.2). Questionnaires were used to do the evaluation. These were given to 39 promoters. Biondi et al posit that these SMEs are normally cash trapped and are expected by the regulatory authorities to take part in embracing environmental conservation exercises. These enterprises have major problems related to raising money that is supposed to be used in environmental conservation exercises (Biondi, Frey and Ivaldo, 2002 p.1).

The first barrier that SMEs face in their effort to implement EMS and adopt voluntary scheme is therefore cost that accompany such initiatives. But research that was done showed that costs are not a major impediment for the participating SMEs. Costs are divided into those that relate to technical aspects that help in improving the performance of the environment; costs related to EMS implementation; and costs that come as a result of obtaination of third party verification (Biondi, Frey and Ivaldo, 2002 p.1).

Owing to the fact that these SMEs had done some reasonable investment in environmental conservation previously, EMS legislation came into force and when they had adequate preparations for financial cost relating to environmental management. Business operators spent on control and maintenance of the plants and seedlings instead of buying new equipment (Biondi, Frey and Ivaldo, 2002 p.1). As per the questionnaire given, outputting more resources in technological development and plant also increases operational costs of SMEs in their quest to implement EMS and conservation initiatives. This was estimated at 15.91 percent of the total costs incurred (Biondi, Frey and Ivaldo, 2002 p.1). The SMEs that were involved in the study had not reached a stage where they would incur technological costs but most of the SMEs were aware of its impacts on their future operations.

The costs that SMEs incur when they are implementing the EMS are so significant and come about due to review done at formative stages of environmental conservation initiatives (Biondi, Frey and Ivaldo, 2002 p.2). This is attributed to the hiring of external technical staff that helps in overseeing the implementation bit. There are also costs of management time, informing and training of personnel, and costs that come because of environmental auditing (Biondi, Frey and Ivaldo, 2002 p.3).

Other costs incurred related to the compliance with the standards, although the research did not shed more light on this. These come in the form of registration fees that depend on dimensions and turn over. Direct as well as indirect costs frustrate the implementation process of the EMS by the SMEs (Biondi, Frey and Ivaldo, 2002 p.4). Smaller firms will definitely focus their attention on maximizing their profits at the expense of initiatives geared towards environmental conservation, as this will make them incur costs that will eat into their profit margin. Small firms will therefore face many problems in the implementation of the EMS they rely on the services of their staff (Biondi, Frey and Ivaldo, 2000 p.5).

Other than cost-related issues, lack of human resources is also a major drawback to the implementation of EMS. This makes the SMEs escape problems like the inability to evaluate the effects, define criteria for a section of significant aspects and measurement of continuous improvement. ISO 14001 that only provided guidelines for adequate implementation of EMS to the bigger organization did not cater to SMEs because its requirements seemed too complex for SMEs (Raftopoulou, Charalampos and Panagirtisk, 2004 p.3).

The SMEs also encounter problems like the definition of environmental policy and programs because of a lack of environmental culture. These enterprises are not used to programming and planning their activities in a detailed manner because they seem to show no interest in activities that are outside the scope of their business operations. The process of fixing and defining environmental objectives is new to many SMEs. Questionnaire results also showed that firms are not confident about the organization and management of EMS. This is exhibited by SMEs pumping more resources on the adoption of technical solutions at initial stages than in rationalization of environment management (Raftopoulou, Charalampos and Panagirtisk, 2004 p.3).

Documentation associated with EMS can be some rather burden to SMEs hence an impediment to the implementation of EMS.

Environmental audit spells doom to implementation of EMS by SMEs who have no technical expertise to undertake such initiatives. Many SMEs are not acquainted with issues pertaining to environment audits because most of them had actually implemented such a tool before. (Raftopoulou, Charalampos and Panagirtisk, 2004 p.4).

Even SMEs who had ISO 9002 certification standards that had previously used the audit tool on quality management had problems with ISO 14000 (EMSs) and in particular, ISO 14001 that concerns SMEs. Therefore, the introduction of such tools implied an overnight change in the management of their environmental concerns. Most SMEs that were involved in the study had put in place a simplified environmental audit tool and made use of the internal staff who served their business with the help of external auditors. (Raftopoulou, Charalampos and Panagirtisk, 2004 p.5).

As a result, most SMEs that relied on succession deterred the processes of implementing the Environmental Management System in ISO 14000, citing various reasons. Due to the predominant case system in the Small and medium business operations of Asians, some of them claimed that ISO 14000 certification was expensive. In particular, ISO 14001 was perceived to cost most businesses a lot of fortune including loss of the entire business. In India, Thailand and Hong Kong, most SME owners claimed that ISO 14000 certification would interfere with the succession of the business since they do not subscribe to the nationalization of these enterprises.

In dealing with this barrier, Environmental Protection Agencies in Asia embarked on community-based campaigns to sensitize SME owners about the benefits of ISO 14 001 certifications. In developing cities where most SMEs are located, the business and residential areas are usually centralized. Therefore, the sensitization program focused on environmental protection methods as well as the cost benefits of implementing EMSs policies. In the end, environmental authorities in Asia and the pacific overcame the barrier and another obstacle cited by SME owners claiming that the process of ISO 14000 is cumbersome. (Raftopoulou, Charalampos and Panagirtisk, 2004 p.5).

At the same time, the process of incorporating EMSs in Asian SMEs faced the impediment of ignorance about the social benefits of EMS in their businesses. In many instances do the Asians believe that risks occurring to business are normal acts of god and therefore fail to recognize the policies in EMS supporting compensation in case their businesses are hit by environmental dangers. In their own views, most successful SMEs in Asia rely on family advocates and attorneys for suits related to environmental offenses.

On the other hand, this appeared as moral escapism that would hinder the implementation of EMS because it would adversely affect even those who had already regained the confidence of implementing its policies. Consequently, the environmental agencies involved government departments in WTO and UN talks concerning EMS leading to its acceptance.(Biondi, Frey and Ivaldo, 2000 p.7).

The research indicates that despite the major barriers that small and medium-sized enterprises have faced in the implementation of the environmental management system, some have managed to overcome the impediments and have managed to get the ISO 14001 certification (Biondi, Frey and Ivaldo, 2000 p.7).

Reasons for implementation of EMS by SMEs

Different SMEs have derived motivation from different quarters to implement the environmental management systems. Some SMEs simply wanted to comply with the legal requirements already instituted. They suppose that compliance with the government environmental laws may act as an important tool that helps in managing, controlling and monitoring compliance to the demands of the law (Biondi, Frey and Ivaldo, 2000 p.7).

Some implemented the EMS because they were willing to anticipate and respond to their client’s demands. The SMEs that took part in this study were major suppliers of multinational companies. These companies insisted that these enterprises had to comply with the environmental certification standards living these SMEs with limited options other than going for the certification. Some of the owners of the SMEs thought that implementation of the EMS would present them with opportunities hence considered implementing it (Biondi, Frey and Ivaldo, 2000 p.8).

Some of the perceived benefits of implementing EMS by SMEs are the efficiency in management and organization; never ceasing monitoring of compliance; and the betterment of how the public views the enterprise (Kehbila, Ertel and Brent, 2006 p.1).

Implementation of EMS by SMEs serves to improve the SMEs ability to manage and control the environment by the continuous monitoring of their activities, systematic registering, evaluation of environmental effects and eventual verification of the effectiveness of the environmental conservation exercise(Biondi, Frey and Ivaldo, 2000 p.8).

Implementations also help to improve the definition of responsibilities and tasks when formal documents are used. By this, employees find it easy to identity responsible people who can give direction on issues pertaining to environmental conservation (Biondi, Frey and Ivaldo, 2000 p.9).

Documentation helps SMEs to rationalize their activities and enhance their quality and efficiency. Staff went about their office requirement with a lot of diligence by sticking to the laid down procedures and instructions that obliterated the operations of the SMEs. Employees’ skills get to improve because of the training on environmental conservations that they are taught. This creates some quest for investment into technological betterment (Biondi, Frey and Ivaldo, 2000 p.10).

Research showed, although to a lesser extent than the implementation of EMS by SMEs could probably improve the image of an enterprise as people will start seeing them as an environmentally conscious business enterprise.

Economic benefits also accrued to enterprises from the implementation of the Environmental management systems leading to a position where they are able to recycle wastes, energy and water while reducing the raw material. Benefits can also be achieved by managing wastes (Biondi, Frey and Ivaldo, 2000 p.10).

Comparison of SMEs and Large Scale Organizations against EMS

This comparison mainly concerns EMS cost saving against other changes occurring in a business organization. Among other variations between SMEs and large organizations is the value addition aspect of EMS; the process of implementing EMS policies leads to greater value addition in Large Scale business operations as compared to SMEs that were reluctant to implement the policies in the beginning. Due to the size of large business holdings with corresponding market share in the region in the globe, EMS leads to their staff greater awareness of environmental management. This improved the image of such operators, particularly in the motor industry.

The staffs’ involvement in environmental appreciation activities through CSR turned out to be an important incentive for large-scale business operators as contrasted with SMEs. Research into the regulatory compliance of both SME and large-scale businesses revealed an equal response. Since EMS provides a uniform way of analyzing, implementing and auditing business performance while considering environmental implications, within the first two years of its implementation, improved regulation compliance of traditionally managed business was attributed to the implementation of EMS and ISO14001(Rohtz-Arriaza, 1997 p.7)..

As large organizations experienced significant reduction in costs related to environmental management, some recording up to 74%, most SME struggled to learn substantial reduction in environmental management cost as single units. Nonetheless, auditing of centralized SMEs indicated a drastic reduction in environmental management costs and associated expenses at regional levels. Trade benefits of EMS mainly benefited SMEs by legalizing their regional marketing functions accompanied with low costs of production and levies. On the contrary, large-scale business enterprises in the Asian and Pacific regions received slightly short of their expectations since ISO 14000 had not established systems in the international markets (Rohtz-Arriaza, 1997 p.23).

Conclusion

The bottlenecks that frustrate implementation of ISO 14001 as an environmental management initiative that is supposed to be adopted by both the SMEs and the established enterprises voluntarily are not only cost-related. Other underlying limitations show a lack of services of environmental experts that are supposed to oversee the implementation process. Other problems indicate to lack of clear environmental policy, the burden of documentation associated with EMS, communication breakdown among the stakeholders and drafting of the statement, selecting of information content and coming up with a draft that stakeholders can perceive to be addressing their needs.

Reference List

Biondi, V., Frey, M., & Ivaldo, F. (2000). Environmental Management System and Small and Medium-sized Enterprises: Motivations Opportunities and Barriers related to EMAS and ISO 14001 implementation. Bocconi: BUP.

Kehbila, A.G., Ertel, J., and Brent, A.L. (2006). Uptake of voluntary environmental management system initiatives by South African automotive industries. Pretoria: World Bank.

Raftopoulou, C., Charalampos, N.K., and Panagirtisk (2004). EMS of the environmental service department of Athens international airport. Athens: ENC.

Rohtz-Arriaza, N. (1997). EMS and environmental protection: can ISO 14001 be useful in the context of APEC. Journal of Environmental Development. 6 (3).

Selih, J. (2007) EMS and Construction SMEs a case study for Slovenia. 13(217).

Talal, M.B. (2006). Role of Environmental Management in the improvement of competition in manufacturing companies. Journal of Social Sciences.2(2).

Quazi, H.A., Khoo, Y.K., Ching-Meng, T., Poh-Seng, W., (2001). Motivation for ISO 14000 certification: development of a predictive model. International Journal of Management Science. 29(525-542).

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