Arab Open University B327 TMA: Sustainable Enterprise and Innovation

This assignment explores sustainable enterprise and innovation, focusing on small and medium-sized enterprises (SMEs). It addresses the challenges of providing innovation support to SMEs, detailing different types of innovation such as product, process, market, and organizational innovation, with examples. The assignment further examines forms of corporate sustainability practices, including environmental sustainability, economic responsibility, ethical business practices, and direct philanthropic giving. It also outlines the characteristics of sustainable SMEs, their long-term decision-making, and the role of external learning and supply chain strategies. Finally, the assignment discusses the relationship between SME innovation and sustainability practices, highlighting how sustainability initiatives often drive innovation and competitiveness. The assignment draws from various references to support its arguments and analysis.

Running head: MANAGEMENT
Management
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Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................3
Answer to question 3:.................................................................................................................5
References:.................................................................................................................................8

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Answer to question 1:
Providing suitable innovation support to small and medium scale enterprises (SMEs)
is regarded as a challenging work. Governments provide wide range of creativities which
ranges from advice to research and developmental grants (Hillary 2017). Nevertheless, the
underlying methodological frameworks for such kind of intervention are not generally clear.
It is regularly assumed that small business or SMEs are very much enthusiastic when the
question of innovation arises. Providing adequate amount of support to SMEs for innovation
continues to remain a priority for the governments as it recognizes the value of SMEs in
driving innovations.
At the universal level innovation has been classified in numerous types in a large
scale business. These are product innovation, process innovation, market innovation and
organizational innovation.
Product Innovation: Product innovation might comprise of new product offerings or
improvements in the current products looks like the most common type of innovation. The
product innovation comprises of the presentation of new products as well as services for
marketing and major improvements in the functionality or characteristics of users of current
goods and services (Wynarczyk et al. 2016). For example, Kuwait Electrical Wiring Co.
W.L.L made the product innovation that included the invention in new product, technical
specifications and improvement in quality regarding the inclusion of new components and
needed functions in the current products.
Process Innovation: Process innovation comprises of creating or improving the methods of
production, services or administrative operations and growth in the process, systems and
reengineering activities that are undertaken for developing the new products. Process
innovation mainly comprises of changes in the methods, equipment’s and software (Khalique

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et al. 2015). For example, in Kuwait, private companies to support the manufacturing of new
products and improve the competitiveness of plant, process technologies, operations and
organization practices might be upgraded, modified or replaced with the new and advanced
procedure.
Market Innovation: Market innovation is mainly involved in increasing the sales of
company. The aim of marketing innovation is to respond to the needs of customers. The
market innovation is mainly open to new markets or relocating the products of company in
the market. For example, Nike in Kuwait it can be stated that the company has impeccable
social media existence. Nike is the great example of promoting positive company-customer
interaction. The company in large scale responses to customers with thoughtful and usually
helpful responses.
Organizational Innovation: There is also another type of innovation which is generally
referred as the organization innovation. This implies to innovation in management initiatives.
Organization innovation is known as the company level form of innovation. The
organizational innovations are better known as applying the new organizational method in the
commercial practices, workplace organization or external relations for the company
(Krishnan and Scullion 2017). For example, the success of Fiat’s under the CEO that died in
2018 started with the radical break-up of old hierarchies. When there is a situation of
avoiding bureaucracy and hierarchies, organizational innovations are driving innovation
leadership.
Answer to question 2:
Forms of corporate sustainability practices:
Sustainable development in the SMEs is known as the concept and practice that is
taken by the small, micro or medium sized business that ensures that business is performed in

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a socially accountable manner with respect to the manner they are related to local and global
social, economic and environmental issues (Assembly 2015). The definition involves long
term overall commitment of maintaining the equilibrium among the social, environmental
and economic concerns instead of short-term profits. Usually speaking, corporate
sustainability practices involves four different categories which includes;
a. Environmental sustainability practices
b. Direct philanthropic giving
c. Ethical business practices
d. Economic responsibility
Environmental sustainability practices: The main focus under this practice is to offer fair
labour practices for businesses, employees and employees of their suppliers. Fair business
practices of the employees comprise of equal pay for equal work and living wage
compensation initiatives (Carley and Christie 2017). Ethical labour practices for suppliers
comprises of use of products that are certified as meeting the standards of fair trade.
Focus on Economic Responsibility: Economic responsibility is another practices that
enables long term growth of business whereas also adhering with the standards for ethical,
environmental and philanthropic practices. By maintaining economic decision with the
overall impacts on society, companies can enhance their operations while simultaneously
indulging the sustainable practices.
Environmental sustainability Initiatives: The environmental sustainability initiatives that
are enacted by companies mainly focuses on restricting the populations and reducing the
greenhouse gases (Weaver et al. 2017). With the growth of environmental issues, business
which takes steps in reducing the air, water and land pollution as this can help in improving
the standings of corporate citizens while simultaneously benefiting the society as a whole.

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Direct philanthropic giving: Philanthropic initiatives comprises of donation of money or
resources to do charity and organizations that are at located local levels. These donations can
be directed through a variety of worthy causes together with the human rights, national
disaster relief, clean water and education programs in the undeveloped nations. For instance,
Wafra International Investment Company mission is to harness the best from the workforce
which reflects its emphasis on indulging with the employees in business. The company for
instance has transitioned around 39% of the company since 2010 the company has
undertaken employee stock ownership programme which ultimately makes the employees the
owners of business (Sachs 2015). The owner and president of the company has undertaken
this decision as the part of her belief that the strength of company remains in its people, their
community and its sense of community and the overall desire of continuous improvement.
Kuwait Industrial Projects Co approach towards sustainability is formalised. For
example, it employs the environmental manager for overseeing the certain elements of
sustainable strategy. Attempts have been made to assure that message regarding the
sustainability permeates the entire business. For Kuwait Industrial Projects Co the
engagement of finance function that has been central to the business strategy but mainly due
to the personal engagement of sustainability finance director Peter Hart.
Answer to question 3:
Characteristics of sustainable SMEs:
As the small and medium sized enterprises is accountable for the significant
proportion of global pollution, there are large number of calls for this type of companies to
indulge in the sustainable business practice (Broman and Robèrt 2017). However, it can be
stated that the characteristics still remains unclear what the actually means in the daily

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business operations. The study here identifies the vital characteristics of sustainable business
practices for the SMEs.
The characteristics of sustainable SMEs are as follows;
a. Higher level leaders of sustainable companies are perceived as taking the long-term
view when making decisions.
b. Around 72 per cent of the leaders in the sustainable companies are willing to take the
measured risks in chase of sustainability while only 40% of the leaders are willing
take up the risks in traditional companies.
c. Sustainable SMEs learn from the outside. By doing this, they are in all probability
going to encourage the employees to embrace knowledge from the external sources
for their company instead of traditional companies.
d. The sustainable SMEs encourage supply chains for adopting sustainable strategies.
e. The sustainable SMEs also introduces sustainability metrics in the capital budgeting
procedure because this helps in developing strong valuation procedure that takes into
the account the externalities (Welford 2016). The sustainable SMEs also set clear
targets regarding sustainability objectives and set up targeted programs that are linked
with the business objectives and results.
Relationship between SMEs innovation and sustainability practices:
The sustainability of the business can be regarded as the conventional method of
generating revenue to pay for the factors of production, replacing the assets and investing to
continue competition (Anadon et al. 2016). Consequently, there is nothing new regarding the
innovations, whether the technology in products, services and process or relates to business

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models or management. In some of the studies relationship between SMEs innovation and
sustainability practices is noticed that the organization leaders in sustainability were also the
leaders in innovation.
As some of the organizations complain regarding the limitation and regulations, there
are evidences to support the idea that working inside some boundaries actually makes
companies more innovative. Hence, if an organization is required to meet some sustainability
directives, they are more likely to be inspired by the limitations rather than being bound by
them.
As sustainability practices remains dependent on the fresh ideas to continuously
optimize and find efficiencies, innovating new ideas helps in constantly optimizing
efficiencies, producing ideas turns into second nature of the employees (França et al. 2017).
With respect to collaboration of innovation and sustainability it deals with formal relation
among the organization for developing the innovations and innovative projects. For example,
collaboration is very important for innovation in Kuwait because the public policies try to
promote the allocation of funds with the help of collaboration among the companies.
The continuous search for innovation within the organization has the main objective
to maintain the level of competitiveness among the companies operating in market and
achieving the sustainable competitiveness benefit.

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References:
Anadon, L.D., Chan, G., Harley, A.G., Matus, K., Moon, S., Murthy, S.L. and Clark, W.C.,
2016. Making technological innovation work for sustainable development. Proceedings of
the National Academy of Sciences, 113(35), pp.9682-9690.
Assembly, G., 2015. sustainable Development goals. SDGs), Transforming our world:
the, 2030.
Broman, G.I. and Robèrt, K.H., 2017. A framework for strategic sustainable
development. Journal of Cleaner Production, 140, pp.17-31.
Carley, M. and Christie, I., 2017. Managing sustainable development. Routledge.
França, C.L., Broman, G., Robèrt, K.H., Basile, G. and Trygg, L., 2017. An approach to
business model innovation and design for strategic sustainable development. Journal of
Cleaner Production, 140, pp.155-166.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Khalique, M., Bontis, N., Abdul Nassir bin Shaari, J. and Hassan Md. Isa, A., 2015.
Intellectual capital in small and medium enterprises in Pakistan. Journal of Intellectual
Capital, 16(1), pp.224-238.
Krishnan, T.N. and Scullion, H., 2017. Talent management and dynamic view of talent in
small and medium enterprises. Human Resource Management Review, 27(3), pp.431-441.
Sachs, J.D., 2015. The age of sustainable development. Columbia University Press.
Weaver, P., Jansen, L., Van Grootveld, G., Van Spiegel, E. and Vergragt, P.,
2017. Sustainable technology development. Routledge.

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Welford, R., 2016. Corporate environmental management 3: Towards sustainable
development. Routledge.
Wynarczyk, P., Watson, R., Storey, D.J., Short, H. and Keasey, K., 2016. Managerial labour
markets in small and medium-sized enterprises. Routledge.