Sustainability Strategies and Satisfaction on Financial Outcome of Nano and Micro Enterprises: A Literature Review

March 11, 2020

Abstract

Sustainable entrepreneurship is often used as an umbrella term, and may include (combinations of) social entrepreneurship (e.g., not-for-profit entrepreneurship), ecopreneurship (e.g., customer focused eco-products) or intrapreneurship (e.g., sustainable innovations). Sustainable entrepreneurs conceive social or environmental problems primarily as new business opportunities. With their entrepreneurial activities, they contribute to social, ecological and economic developments in our society.

The purpose for this literature review was to explore strategies that student entrepreneurs use to achieve profitability and its relationship to the financial outcomes in their small business or nano enterprise.

Sustainopreneurship (entrepreneurship and innovation for sustainability) is a idea that has come out from the earlier concepts social entrepreneurship and ecopreneurship, via sustainability entrepreneurship. The thought way to use creative business organizing to explain problems related to sustainability to create social and environmental sustainability as a strategic objective and purpose, at the same time respecting the boundaries set in order to maintain the life support systems in the process. In other words, it is a "business with a cause" – where the world problems are twisted into business opportunities by use of sustainability innovations. (Wikipedia)

Keywords: nano enterprise, entrepreneurship, eco-preneurship, profitability, economic growth, sustainability, sustainopreneurship

Introduction

Sustainability serves as a company’s long term-commercial interest by maximizing opportunities and minimizing the negative impact their core operations have on the environment, and the communities and economies in places where they operate (Posner, 2014). Sustainability is increasingly important to start-up and forexisting business, but unfortunately, it is a business term often used to promote rather than implement.

For instance, many college graduates cannot get a job easily for many reasons.  According to Phil Gardner, director of Michigan State employment center, “college students are enjoying the longest run in job growth since the late 1990’s, but that doesnot mean navigating the job market is easy” (Selingo, 2017).

Some of the reasons why college graduates find it hard to get a job is due to increased competition.  The days when college was only accessible to the rich and elite are over. College has become more affordable and a lot of pressure has been put on students to attend college in order to find a good job, so the result would be thenumber of college applications across the nation, resulting in more college graduates, and thus, more competition for the limited number of jobs available on the market. The days when having a degree alone would get you a job are over. The “prestige” that comes with having a degree has now become diluted with the rampant number of students graduating. College graduates need something more than just a degree to get you that first job out of college.

Another reason why college graduates find it hard to get a job is they have little or no work experience. The grave mistake of assuming that their degree alone will qualify them for a job. They have no job experience, yet most of the jobs out there require it. So, they cannot get a job because they have little or no experience and in order to get a job, they need a job for work experience, but they cannot get a job without work experience and the cycle viciously continues (BrianKim.net)

In addition to these above-mentioned reasons, college graduates are lack of networking. Many people get jobs through referrals. Statistics show the majority of people get their jobs this way. The reason why word of mouth is so effective is because it cuts through all the worry of whether or not this person can do the job. If somebody has been working for a company for some time, then that employee knows what it takes to succeed, and if that employee knows somebody who can do it, it’s an easy fit. The employer will trust the employee referring the new candidate and the new candidate will most likely get the job. No uniqueness of skills, no follow up on resume, and a lack of people skills are also the reason of finding jobs difficult for college graduates (Kim, 2014).

Objectives

The study pursues the following:
     a)  Identify inconstancies: gaps in research, conflicts in previous studies, open questions left from other research
     b)  Develop hypothesis driven research paper
     c)  Identify areas of prior scholarship to prevent duplication and give credit to other researchers

Methods

This study utilized the narrative review. The narrative review is the classic literature review and is a long-standing tradition in research. Today it is the most common form of review in the humanities and parts of social sciences. The important contribution of a narrative review is the author’s interpretation and critique of the literature under scrutiny in the review (Hart, 2018).

Discussion

In the Philippines, in spite of rapid economic growth in recent years, unemployment remains a persistent problem. Unemployment and underemployment are the Philippines’ most important problems and the key indicators of the weaknesses of the economy. Today, around 4 million workers (about 12% of the labor force) are unemployed and another 5 million (around 17% of those employed) are underemployed (Felipe, J., & Lanzona, L. (2006).

One reason is that job creation has struggled to keep pace with an ever-expanding population. In three of the past five years, the number of people entering the job market has been greater than the number of jobs created. The conundrum highlights the difficulty of spreading the benefits of economic growth and suggests they have yet to trickle down to more deprived areas. Participation in the labour force remains relatively low. Only about 65% of the population aged 15 and above is looking for work, one of the lowest levels in the region. This compares with 78% in Vietnam, 72% in Thailand and 68% in Indonesia.

This is partly explained by the high value set on further education in the Philippines: young Filipinos typically spend some time in college before entering the labour market, contributing to the lower participation rate. Others in the region go to work earlier. Another factor may be the low quality of jobs available. Last year, just 58% of workers — in both formal and informal employment — were in what were described as paid jobs. Of the rest, 28% were self-employed, with no guaranteed income, and 11% worked on family-owned farms or other businesses where they typically receive food and lodging but no actual cash, according to official statistics.

Benjamin Diokno, an economist at the University of the Philippines and former budget minister, says this relatively large number of unpaid workers — about 4 million people — “bloats” the ranks of the employed and makes unemployment appear less serious than it is (Salvosa, 2015).

In National Capital Region, or called as Metro Manila,Filipinos and college graduates find it hard to get a job for almost the same reason, however, there were thousands of people from the country’s provinces relocate to Metro Manila, hoping to have a better life. Many Filipinos believe that the only way their lives will prosper is to find a job in Manila—if not abroad.

According to Kalibrr, one of the recruiting platform that uses assessments to drive faster hiring decisions, there were six (6) reasons to stop looking for jobs in Metro Manila. One is the case of overpopulation. If someone needs to go to a mall on a weekend to see the congestion is now a huge problem in Metro Manila. In 2014, Metro Manila, consists of sixteen cities, already had an overall population of 12 million. This number swells during the daytime to 15 million in the larger urban area, as students and employees start to flock the city as they go their respective schools and offices. This case of overpopulation presents a variety of problems in the city. Resources such as food, water, and land can become scarce, pollution gets worse, the cost of living rises, and conflicts occur among others.

Another reason is the surviving traffic, it is the biggest problems in Metro Manila. It’s so bad that people have to leave their house several hours early just to be able to arrive at their destination on time. A 30-minute drive can take up to two to three hours long, or more. Traffic jams are caused not only by overpopulation of people but also of vehicles on the street. In fact, according to the Land Transportation Office (LTO), the total number of vehicles in Metro Manila has already peaked at 2.5 million in 2015. Aside from this, typhoons, flooding, crazy drivers, and inefficient traffic control among others also contribute to the mess. By the time people get home, it's already late at night, and there's no time left for your hobbies or family. Besides, peoplemay become too tired from the commute that all you'll want to do is sleep so that you can get up early the next day to do the same routine again.On the contrary, provinces don't have to deal with these issues as much. If you need to go to your office every day, having to deal with this predicament can be detrimental to your health (Cassells, 2015).

The third one is the job opportunities. Contrary to popular thinking, Metro Manila is not the only place in the country where there is a multitude of career opportunities.  For instance, the hiring rate outside Metro Manila is expected to increase, particularly in the Business Process Outsourcing (BPO) industry. Studies show that some companies lose over 1,000 employees every month because they find it hard to commute every day to reach their office. In an effort to reduce the employee attrition rate, Business Process Outsourcing companies are now looking into building offices outside Metro Manila, near where their employees live. It is for this reason that jobseekers will find many available jobs in Baguio. For instance, many companies are also job hiring in Cebu and Clark (Cassells, 2015).

If college graduates in Metro Manilaseek for a job, they will experience heavy traffic and overpopulation in order to go to available jobs in province. Also, it has more difficult for them to find a suitable job that is not fit to their passion and knowledge in an industry.

At the same time, not many new jobs are created so start-up business has become a hot term, and it is considered as the solution to lessen the unemployment, overpopulation, heavy traffic, and miss-matched jobs of the college graduates in their chosen field. The insight is that sustainability practices of existing business add to operating costs and thus affect organizational profitability. Most of the jobs are created by small businesses (Cantor, 2011). So new businesses and startup have attention from government in order to have suitable solutions to recover economy system. At the moment, students have more chance to succeed by running their own start-up business, since start-ups are encouraged and supported well by government’s policies. Therefore, more students decide to establish and run their own business instead of finding a job in an existing company.

This study was conducted to find a correlation between sustainability strategies and satisfaction on financial outcome of nano and micro enterprises among student entrepreneurs in selected state universities and colleges (SUC’s) in the National Capital Region (NCR).By focusing on this kind of situation, the start-ups and existing company can boost their profit, italso helps to establish their brand in a long run among thousandsof competitors; and teachers who teach business related course can encourage entrepreneurial intention to their students.

Emerging Trends

Startup accelerators. This model was not even in vocabulary a few years ago, and now startup accelerator programs are popping up all over the country. Often privately funded and mostly used by tech startups, these accelerators help companies with the strongest potential of success obtain funding in exchange for equity (Ahmed & Quin 2015).

Student Sandbox and Business Lab. Further university are developing student sandboxes on and off their campuses to support student startups. Sandboxes run like business incubators except that they are more focused on developing and mentoring student startup teams and are often tied into some type of entrepreneurship degree program or course. Many sandbox programs provide students with the opportunity to win seed money, grants, business services and receive coaching and mentorship from successful startup founders. Some examples include Student Sandbox, Student Startup and Venture Lab (Guo & Peng2010).

Crowd funding, also known as social funding, is a new observable fact as well. Startups were naturally funded by way of bootstrapping, investors (venture capital or angel) and bank loans. Nowadays entrepreneurs and business owners, along with artists, nonprofit leaders and community groups, are using their social networks to raise money for their businesses, community projects, and events or to develop a new product.  ArtistShare, Indiegogo, Kickstarter, RocketHub and other crowd funding companies help individuals pitch their ideas to the masses to get financial support. Think of it as campaigning for investors and donors of a start-up (Estrin , Gozman  & Khavul 2018)

Coworking spaces. Also known as coworking communities, these spaces provide entrepreneurs and small business owners with a collaborative, open environment to work in. The concept is similar to a business incubator, except there are no actual office spaces or cubicles for individual businesses, and tenants are encouraged to collaborate and support one another.  It is described as “loft-style” incubator for entrepreneurs seeking a collaborative workspace, an alternative from the noise of working at a coffee shop, or a way to prevent feeling isolated when working at home (Bouncken & Reuschl 2018).

Bootcamps. An entrepreneurship bootcamp is an concentrated practical program for small business owners, startup founders and new entrepreneurs. Bootcamps will focus more of their attention on teaching the practical application for new venture creation and small business management within a short period of time. Their aim is to help teach, equip and direct entrepreneurs. There is a growing trend in entrepreneurship bootcamps dedicated to teaching and training military veterans (Kwong, Thompson, Cheung & Manzoor 2012).

Fully Online Entrepreneurship Degree. There used to be a lot of conflict to the idea of offering an entrepreneurship major fully online in higher education. Numerous academics and organizations felt that entrepreneurship must be taught in a traditional classroom by a fulltime business faculty. With the innovation in technology, growth in social media interaction for startups and funding options that are being generated online, more Universities have adopted a virtual option for their entrepreneurship seeking students (Jones, Jones., & Packham 2009)

Research Gaps

Lack of Financial Support

On behalf of startup owners who are not yet earning operating income, receiving monetary aid from the administration or obtaining a loan from banks in the Philippines seems to be unattainable. To get a loan, they must have a collateral or show some years of operating income. It seems that the ones who can borrow money are those who don’t need to borrow. They can understand the banks because it’s their business but for the government virgin.com

Lack of Marketing Skills

Entrepreneurs need to sell, build good customer relationships, earn lasting profits, and continuously grow their business. But many aspiring entrepreneurs in the Philippines don’t spend enough on marketing campaigns. They rely too much on their product while forgetting the other elements of marketing, such as place, price, people and promotion (virgin.com)

Ineffective Management

Many entrepreneurs have passion for business, but don’t have a passion for management and leadership. Managing and organizing things inside a business is a tough job. Leading people is an even tougher job. Without the ability to motivate employees and build stronger teams in their companies, entrepreneurs cannot succeed and grow their business.

Inability to Innovate

Technology evolves rapidly, so as the people. New business processes and marketing methods emerge. For example, online channels like search engines and social media are now vital for business promotion. Without adapting to these new strategies and changes, entrepreneurs cannot become competitive.

Lack of Customer Care

Businesses need to consistently satisfy and make their customers happy. Without giving satisfaction to customers, a business cannot survive in a long run. Many entrepreneurs focus on earning money rather than earning loyal customers. Consequently, their profit doesn’t last for long.

Lack of Self-Growth

Finally, what hinders the success of some Filipino entrepreneurs is the lack of personal development. They lack self-control to concentrate on their core goals. They lack self-leadership to lead others. They also lack patience, compassion and some love to always make their customers smile. Without good habits and personal qualities, an entrepreneur cannot advance. Without self-growth, an entrepreneur cannot also achieve business growth (Abrugar, (2014).

Directions for Further Research

The results of the study will be of great benefit to the following:

  • Place each work in the context of its contribution to understanding the research     problem being studied.
  • Describe the relationship of each work to the others under consideration.
  • Identify new ways to interpret prior research.
  • Resolve conflicts amongst seemingly contradictory previous studies.
  • Identify areas of prior scholarship to prevent duplication of effort.
  • Point the way in fulfilling a need for additional research.
  • Locate your own research within the context of existing literature

Conclusion

To endow with an indication of the thematic and methodological gaps in the field of entrepreneurship education that was as comprehensive as possible, extensive review papers and meta-analyses published in the field were collected in a way that was inspired by the systematic literature review. The selected papers were subjected to a content analysis with coding based on a mix of predetermined and emerging subcategories. The subcategories for subject were: objectives, impact measurement, and audience, content: curriculum and pedagogy, instructors and institutional context. The subcategories for methods were: type of research methods, quality of research methods, (inter)disciplinary approach and geographical setting. The fact that all research gaps were mentioned in multiple review papers gave a strong indication of the high prevalence and importance of these gaps for the field of entrepreneurship education. However, there are several possible limitations that could affect the external reliability of these results. First, the data collection focused on review papers only, which means that it may not have been exhaustive: there might be more research gaps that would be worth dedicating more attention and these review papers might have missed publications that actually address research gaps that they identify. For example, both Jansen et al. (2015) and Warhuus and Basaiawmoit (2014) actually dive into the appropriate content and institutional context of entrepreneurship education with a multiple, multi-country case study. However, as the included review papers are all published in leading journals with high standards, it was assumed that the accumulative results of their high-quality reviews would provide a sufficiently comprehensive, but not complete, overview. Second, only published scholarly papers were included which implies the possible risk of publication bias (O’Boyle Jr. et al, 2014). Also, only publications in English were included, again threatening the exhaustiveness of the data collection. Both of these can be considered as minor risks due to the specific topic (identifying clearly visible research gaps) and scope (internationally) of this study. Third, coding reliability could very well have been stronger with multiple reviewers. Coding in two rounds is hoped to provide an appropriate solution with sufficient consistency for the purposes of this study. Based on the findings, several main directions were sketched for future researchers that wish to make an impact in the field of entrepreneurship education by strongly contributing to new theory-building. It is recommended that future studies include elaborate contextual descriptions, an interdisciplinary theoretical base and a solid and mixed method study design Ideally, researchers have high(er) aspirations and are more entrepreneurial: reach out and are alert for opportunities or create opportunities to execute the type of studies suggested in this paper (van Ewijk, 2018).

Acknowledgement (Funders and Experts)

Literature Cited

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Article Contributed By:

LEO G. ALCARAZ
lgalcaraz@pup.edu.ph
ORCID # 0000-0002-7444-091X
PUP Sta. Mesa