The decision making processes of small business owner-managers : an environmental focus

Large business is often the focus when environmental issues are discussed because their individual impact on the environment is viewed as larger than that of the smaller business. However due to the large size of the small business sector it has been recognised that reducing their collective impact is critical to achieving a sustainable future. A lack of engagement by small businesses in environmental management invoked an interest in understanding how to better engage the owner-managers in this area, but more specifically what influenced their decision. With an emphasis on the day to day running of the business, many small business owner-managers place more emphasis on core business operations and often neglect the impact their business has on the natural environment. Considering 96% of all business in Australia is classified as small, their collective impact on the natural environment is significant. As many small business owner-managers see their environmental impact as minimal, improving their environmental behaviour is challenging. The aim of this study was therefore to explore the decision making approaches of the small business owner-manager to environmental management issues. Nine small businesses from three industries were chosen and using the Critical Incident Technique to explore their decision making process, this study sought to understand from the owner-managers perspective how and why business decisions are made. Semi structured interviews were used to identify the decision making approaches for four different business decisions: economic, legislative, social and environmental. Over a series of interviews the owner-managers were able to freely describe their decision process and rich data was able to be obtained. Results indicated that owner-managers base business decisions on many factors and use a range of decision making styles depending on the type, and importance, of the decision to be made, that is core business decision are more often rationally made, whilst discretionary decisions will often be made intuitively based on the information at hand. Therefore to better engage them in ways to improve environmental management practices, increasing the knowledge and understanding to the benefits of these improvements is imperative. In addition this information is more readily accepted when the information is relevant to their business and presented in a clear manner by someone with whom the owner-manager has established a pre-existing relationship