Presenter Zeeshan Iqbal Bahauddin Zakariya University Multan-Pakistan Entrepreneurial Orientation and Engagement of Pakistani SMEs in Sustainable Development Practices: Mediating Role of Knowledge Management Presenter Zeeshan Iqbal Bahauddin Zakariya University Multan-Pakistan Co-Author Maimoona Malik Bahauddin Zakariya University, Multan-Pakistan

Introduction After the emergence of the concept of Sustainable Development (SD) more than 20 years ago, when the World Commission on Environment and Development published its report to the United Nations (WCED, 1987), it remains a valid concept in the current political, economic, and social world scenario. Specifically to the business world, SD implies the adoption of those strategies and activities that meet both companies’ needs and current and future societal expectations. This means that it should not compromise future generations’ ability to meet their needs.

Introduction Sustainable development is a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. Generally, the mechanism of SD has been seen in the large firms, however, SMEs are also considered to engage in the practices of SD. This is because, individually, SMEs have relatively small environmental and social impacts. However, as a group the impacts are much larger; SMEs account for about 90% of all businesses. This raises the importance of SD practices in the context of SMEs.

Theoretical Framework Engagement in SD Practices Entrepreneurial Orientation Knowledge Management Environment Human Resource Management Community and Local Development

Methodology Positivist Research Approach Research Questionnaire was used for data collection First part of questionnaire: Demographic Information Second part of questionnaire: Data about latent variables on five points Likert scale. The measurement scales were adapted from prior studies (as shown in next slide). Respondents: Senior Management of SMEs Targeted Population: Major Cities of Pakistan i.e. Karachi, Faisalabad, Lahore, Sialkot, Multan etc. The researcher distributed 500 questionnaires, from which 435 were correctly responded.

Methodology Measurement Scales Construct No. of Items Adapted from: Entrepreneurial Orientation 9 Covin and Slevin (1989); Miller (1983) Knowledge Management 12 Gold et al. (2001); Lin and Lee (2005) Environmental Practices Courrent et al. (2013) HRM Practices Community Practices 8

Results Results of Direct Effects Relationships Path Coefficients T Statistics P Values EO  KM 0.664 9.547 < 0.001 KM  ENV 0.369 4.778 KM  HRM 0.532 4.955 KM  CLD 0.812 12.518 Note: EO= entrepreneurial orientation, KM= knowledge management, ENV= environment, HRM= human resource management, CLD= community & local development

Indirect effects (a x b) Results Results of the Mediating Effects Total Effects Direct Effects (c’) Indirect effects (a x b) Relationships Path Coefficients Hypothesis No. Point Estimate VAF (%) EO  ENV 0.696 0.448 H3a 0.245 35.203 EO  HRM 0.621 0.269 H3b 0.353 56.884 EO  CLD 0.631 0.089 H3c 0.539 85.447 Note: EO= entrepreneurial orientation, KM= knowledge management, ENV= environment, HRM= human resource management, CLD= community & local development

Findings The empirical results revealed that EO exerts a positive influence on KM (β= 0.664, t= 9.547, p< 0.001). Furthermore, KM is positively associated with each dimension of SD (1) environment (β= 0.369, t= 4.778, p< 0.001), (2) human resource management (β= 0.532, t= 4.955, p< 0.001) and (3) community and local development (β= 0.812, t= 12.518, p< 0.001). Moreover, the results indicated that KM powerfully mediates the relationship between EO and each dimension of engagement of SMEs in SD (1) environment (VAF= 35.203 percent), (2) human resource management (VAF= 56.884 percent) and community and local development (VAF= 85.447 percent).

Findings The overall findings of research concluded that proposed research model has strong explanatory power such as: KM (R-square= 44.2 percent), dimensions of SD practices viz., (1) environment (R-square= 55.7 percent), (2) human resource management (R-square= 54.5 percent) and (3) community and local development (R-square= 76.3 percent).

Graphical Representation

Recommendations For SMEs’ managers, our findings suggest that they should promote the culture of SD by encouraging the mechanism of EO and KM, rather than adhering to formal CSR strategies. SMEs are closely attached with their customers, employees, business partners and local community (Johnson, 2015; Ayuso and Navarrete‐Báez, 2018) and they have less formalized business structure, therefore, SMEs’ managers should try to identify and handle the issues relevant to environment, human resource management and community & local development. The managers of SMEs should attend awareness seminars regarding SD practices and should train and encourage their employees towards SD.

Recommendations From a policy viewpoint, the government of Pakistan, with the collaboration of other regulatory bodies such as Small and Medium Enterprises Development Authority (SMEDA), Chamber of Commerce, Corporate Social Responsibility Centre Pakistan (CSRCP) etc., should take measures for promoting the culture of SD and should offer guidelines, training seminars and benefits of engaging in SD practices.

Recommendations Furthermore, it appears that an effective way to increase SD engagement in SMEs is by encouraging EO and KM. Thus, public policies should focus on promoting a proactive way of dealing with sustainability related challenges, more than formulating regulations and bureaucracy burdens that force companies to consider social and environmental sustainability issues. Policy-makers and other actors interested in fostering sustainable business practices should develop context specific tools to help companies spot sustainable business opportunities relevant to their operations.

Recommendations End of Presentation For example, this could be done by focusing on potential market trends linked to sustainability or providing appropriate support, training, and networking possibilities to SMEs End of Presentation