Tag Archives: SMEs

RESEARCH: The Small Business Owner-Managers’ Attitudes toward Digital Media

An Excerpt from my latest paper: Camilleri, M.A. (2018). The SMEs’ Technology Acceptance of Digital Media for Stakeholder Engagement. Journal of Small Business and Enterprise Development (Forthcoming).


small-businesses-social-media

This contribution sheds light on the SME owner-managers’ attitudes toward the pace of technological innovation, perceived use and ease of use of digital media; as they communicate and interact with interested stakeholders online. It also explored their stance on responsible entrepreneurship, specifically on commercial, ethical and social responsibilities, as well as on their willingness to support other responsible stakeholders.

This empirical study and its theoretical underpinnings contribute to an improved understanding as to why today’s SMEs are expected to communicate with stakeholders through digital media. At the same time, it raises awareness of responsible entrepreneurial initiatives that could be promoted through digital media, including; corporate websites, social media and blogs, among others.

Generally, the results reported that there were high mean scores and low standard deviations, particularly when the participants were expected to indicate their attitudes on their commercial and ethical responsibilities. The nature of the SMEs’ CSR activities is usually integrated into their company culture, often implicitly in habits and routines that are inspired by highly motivated owner-managers; rather than explicitly in job descriptions or formalized procedures (Jenkins, 2006). The factor analysis indicated that the SME owner-managers were increasingly perceiving the usefulness of digital media to engage with marketplace stakeholders, including; consumers, suppliers and other businesses, as they promoted their responsible entrepreneurship behaviors.

The communications on their businesses’ social responsibility and environmentally-sound practices also served them well to engage with other interested groups; including; human resources, shareholders and investors, among others. This finding mirrors Baumann Pauly et al.’s (2013) argumentation as these authors remarked that each business decision on economic, social, and environmental aspects must take into account all stakeholders. Notwithstanding, the businesses and their marketers need to possess relevant knowledge on their stakeholders, as this will impact on the effectiveness of their CSR communication (Morsing and Schultz, 2006; Vorvoreanu, 2009).

The value of their communications lies in their ability to open-up lines of dialogue through stories and ideas that reflect their stakeholders’ interests (Fieseler and Fleck, 2013; Moreno and Capriotti, 2009). For these reasons, companies cannot afford to overstate or misrepresent their CSR communications. Their online communication with stakeholders could foster positive behaviors or compel remedial actions, and will pay off in terms of corporate reputation, customer loyalty and market standing (Tantalo and Priem, 2016; Du et al, 2010).

This study suggests that the SME owner-managers were recognizing that they had to keep up with the pace of technological innovation. Yet there were a few participants, particularly the older ones, who were still apprehensive toward the use of digital media. Eventually, these respondents should realize that it is in their interest to forge relationships with key stakeholders (Lamberton and Stephen, 2016; Taiminen and Karjaluoto, 2015; Rauniar et al., 2014; Uhlaner et al., 2004). This research posits that the owner-managers or their members of staff should possess relevant digital skills and competences to communicate online with interested parties.

Likewise, Baumann Pauly et al., (2013) also recommended that the managers must be trained, and that their CSR activities must be evaluated. These findings are in line with other contributions (Spence and Perrini, 2011; Perrini et al., 2007) that have theoretically or anecdotally challenged the business case perspective for societal engagement (Penwar et al., 2017; Baden and Harwood 2013; Brammer et al. 2012).

The regression analysis has identified and analyzed the determinants which explain the rationale behind the SME owner-managers’ utilization of digital media for stakeholder engagement and for the promotion of responsible entrepreneurship. It reported that the respondents’ technology acceptance depended on their perceived “use” and “ease of use” of digital media; and on their willingness to communicate online on their commercial, ethical and social responsibilities.

The results from the regression analysis reported positive and significant relationships between the SMEs’ online stakeholder engagement and the pace of technological innovation; and between the SMEs’ online engagement and the owner-managers’ perceived usefulness of digital media. This study indicated that the pace of technological innovation, the owner-managers’ perceived ease of use of the digital media, as well as their commercial responsibility were significant antecedents for their businesses’ online communication of their responsible behaviors. Arguably, the use of technology is facilitated when individuals will perceive its usefulness and its ease of use (Davis, 1989).

In fact, the findings from this research have specified that the owner-managers’ intention was to use digital media to communicate about their responsible entrepreneurship. They also indicated their desire to use this innovation to engage with stakeholders on other topics, including commercial and ethical issues. This is in stark contrast with Penwar et al.’s (2017) findings, as the authors contended that the SME owner-managers’ perceptions on social engagement did not hold the same virility when compared to the context of their larger counterparts. These authors argued that the tangible benefits of CSR engagement had no effect on SMEs. In a similar vein, Baumann Pauly et al.’s (2013) study reported that the larger businesses were more effective than SMEs in their CSR communications.

However, the findings from this study’s second, third and fourth regression
equations indicated that the small and micro businesses were using digital media to improve their stakeholder engagement and to communicate about their responsible entrepreneurship issues.

Implications and Conclusions

SME managers and executives are in a position to enhance the effectiveness of their businesses’ communication efforts. This study has identified and analyzed the SME owner-managers’ attitudes toward the utilization of digital media for the communication of commercial, ethical and social responsibility issues.

Previous academic research has paid limited attention to the technology acceptance of digital media among small businesses, albeit a few exceptions (Taiminen and Karjaluoto, 2015; Baumann Pauly, Wickert, Spence and Scherer, 2013; Durkin et al., 2013; Taylor and Murphy, 2004). In this case, the research findings indicated that digital technologies and applications were perceived as useful by the SME owner-managers. This implies that the utilization of digital media can be viewed as a critical success factor that may lead to an improved engagement with stakeholders.

Several SMEs are already communicating about their responsible entrepreneurship through conventional and interactive media, including; social media, review sites, blogs, et cetera. These savvy businesses are leveraging their communications as they utilize digital media outlets (e.g., The Guardian Sustainability Blog, CSRwire, Triple Pundit and The CSR Blog in Forbes among others) to improve their reach, frequency and impact of their message.

In addition, there are instances where consumers themselves, out of their own volition are becoming ambassadors of trustworthy businesses on digital media (Du et al., 2010). Whilst other stakeholders may perceive these businesses’ posturing behaviors and greenwashing (Camilleri, 2017; Vorvoreanu, 2009).

A thorough literature review suggested that the positive word-of-mouth publicity through digital media may lead to strategic and financial benefits (Camilleri, 2017; Taiminen and Karjaluoto, 2015; Durkin et al., 2013). Therefore, businesses, including SMEs, are increasingly joining conversations in social media networks and online review sites. These sites are being used by millions of users every day. Indeed, there is potential for SMEs to engage with their prospects and web visitors in real-time.

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Filed under Business, Corporate Social Responsibility, digital media, Marketing, Small Business, SMEs, Stakeholder Engagement

Financing Small Business Enterprises in Europe

THR

Excerpt from: Camilleri M.A. (2015). Nurturing Travel and Tourism Enterprises for Economic Growth and Competitiveness. Tourism and Hospitality Research. Sage DOI: 10.1177/1467358415621947

“This contribution has featured some relevant EU practitioner-oriented policies and instruments that are currently helping European enterprises to raise capital for further investment. It has identified how crowdfunding could unlock significant amounts of capital to start-ups, investments and projects. In addition, it suggested that crowdfunding could be a viable alternative to either investor or creditor-based funding, including banks, business angels, or even venture capital”.

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Responsible Tourism that Creates Shared Value Among Stakeholders

Excerpt from the paper entitled; “Responsible Tourism that Creates Shared Value among Stakeholders” This contribution will shortly be published by  Tourism Planning and Development Journal.

This study revealed how different tourism organisations were engaging in responsible behaviours with varying degrees of intensity and success. It has identified cost effective and efficient operations. There was mention of some measures which enhance the human resources productivity. Other measures sought to reduce the negative environmental impacts. At the same time, it was recognised that it was in the businesses’ interest to maintain good relations with different stakeholders, including the regulatory ones.

rtThe researcher believes that responsible tourism can truly bring a competitive advantage when there are fruitful communications and continuous dialogue among all stakeholder groups (including the employees, customers, marketplace and societal groups). The tourism enterprises ought to engage themselves in societal relationships and sustainable environmental practices (Chiu, Lee and Chen, 2014). The tourism owner-managers admitted that responsible behaviours have brought reputational benefits, enhanced the firms’ image among external stakeholders and led to a favourable climate of trust and cooperation within the company. Similar findings were reported by Nunkoo and Smith (2013). This study reported that a participative leadership boosts employee morale and job satisfaction which may often lead to lower staff turnover and greater productivity in the workplace (Davidson et al., 2010). Evidently, stakeholder relationships are needed to bring external knowledge sources, which may in turn enhance organisational skills and performance (Frey and George, 2010).

The governments may also have an important role to play in this regard. The governments can take an active leading role in triggering responsible behaviours. Booyens (2010) also reiterated that greater efforts are required by governments, the private sector and other stakeholders to translate responsible tourism principles into policies, strategies and regulations. Governments may give incentives (through financial resources in the form of grants or tax relief) and enforce regulation in certain areas where responsible behaviour is required. The regulatory changes may possibly involve the use of eco-label and certifications. Alternatively, the government may encourage efficient and timely reporting and audits of sustainability (and social) practices. The governments may provide structured compliance procedures to tourism enterprises. Responsible tourism practices and their measurement, reporting and accreditation should be as clear and understandable as possible. The governments’ reporting standards and guidelines may possibly be drawn from the international reporting instruments (e.g. ISO, SA, AA, and GRI).

This research posits that sustainable and responsible environmental practices leverage the tourism enterprises performance as innovations can help to improve their bottom-line. This finding was also consonant with Bohdanowicz’s (2006) contribution. This research indicated that the investigated enterprises were increasingly pledging their commitment for discretionary investments in environmental sustainability, including; energy and water conservation, alternative energy generation, waste minimisation, reducing, reusing and recycling policies, pollution prevention, environmental protection, carbon offsetting programmes and the like. Indeed, some of the interviewees have proved that they were truly capable of reducing their operational costs through better efficiencies. Nevertheless, there may be still room for improvement as tourism enterprises can increase their investments in the latest technological innovations. This study indicates that there are small tourism enterprises that still need to realise the business case for responsible tourism. Their organisational culture and business ethos will have to become attuned to embrace responsible behavioural practices.

Nevertheless, it must be recognised that the tourism industry is made up of various ownership structures, sizes and clienteles. In addition, there are many stakeholder influences, which affect the firms’ level of social and environmental responsibility (Carroll and Shabana, 2010). Acquiring new knowledge must be accompanied by mechanisms for dissemination. Perhaps, there is scope in sharing best practices, even with rival firms. It is necessary for responsible businesses to realise that they need to work in tandem with other organisations in order to create shared value and to move the responsible tourism agenda forward. Therefore, this study’s findings encourage inter-firm collaboration and networking across different sectors of the tourism industry.

“…responsible behaviours have brought reputational benefits, enhanced the firms’ image among external stakeholders and led to a favourable climate of trust and cooperation within the company”.

This contribution contends that the notion of shared value is opening up new opportunities for responsible tourism and the sustainability agenda, particularly with its innovative approach to configure the value chain (Pfitzer, et al, 2013; Porter and Kramer 2011). There are competitive advantages that may arise from creating and measuring shared value. Evidently, there is more to responsible tourism than, ‘doing good by doing well’ (Garay and Font, 2012). As firms reap profits and grow, they can generate virtuous circles of positive multiplier effects. This paper has indicated that the tourism enterprises, who engage themselves in responsible and sustainable practices, are creating value for themselves and for society. In conclusion, this research puts forward the following key recommendations for the responsible tourism agenda:

• Promotion of laudable business processes that bring economic, social and environmental value;
• Encouragement of innovative and creative approaches, which foster the right environment for further development and application of sustainable and responsible practices;
• Enhancement of collaborations and partnership agreements with governments, trade unions and society in general, including the marketplace stakeholders;
• Ensuring that there are adequate levels of performance in areas such as health and safety, suitable working conditions and sustainable environmental practices;
• Increased awareness, constructive communication, dialogue and trust;
• National governments may create a regulatory framework which encourages and enables the implementation of sustainable and responsible behavioural practices by tourism enterprises.


References (a complete list of references that were cited in this paper)

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Bohdanowicz, P. (2006). Environmental awareness and initiatives in the Swedish and Polish hotel industries—survey results. International Journal of Hospitality Management, 25(4), 662-682.

Booyens, I. (2010). Rethinking township tourism: towards responsible tourism development in South African townships. Development Southern Africa, 27(2), 273-287.

Bramwell, B., & Lane, B. (1993). Sustainable tourism: An evolving global approach. Journal of Sustainable Tourism, 1(1), 1-5.

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Bramwell, B., Lane, B., McCabe, S., Mosedale, J., & Scarles, C. (2008). Research perspectives on responsible tourism.

Buckley, R. (2012). Sustainable tourism: Research and reality. Annals of Tourism Research, 39(2), 528-546

Camilleri, M.A. (2014). Advancing the Sustainable Tourism Agenda Through Strategic CSR Perspectives, Tourism Planning & Development, 11:1, 42-56.

Camilleri, M.A. (2015) “Valuing Stakeholder Engagement and Sustainability Reporting”. Corporate Reputation Review, Vol. 18 (3).

Carroll, A.B., and Shabana, K.M (2010), The business case for corporate social responsibility: a review of concepts, research and practice. International Journal of Management Reviews 12 (1), 85-105.

Chiu, Y. T. H., Lee, W. I., & Chen, T. H. (2014). Environmentally responsible behavior in ecotourism: Antecedents and implications. Tourism Management, 40, 321-329.

Cooper, C. P. & Ozdil, I. (1992). From mass to ‘responsible’tourism: the Turkish experience. Tourism Management, 13(4), 377-386.

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Davidson, M. C., Timo, N. & Wang, Y. (2010). How much does labour turnover cost?: A case study of Australian four-and five-star hotels. International Journal of Contemporary Hospitality Management, 22(4), 451-466.

EU (2007). Agenda for a sustainable and competitive European tourism. http://ec.europa.eu/enterprise/sectors/tourism/documents/communications/commissioncommunication- accessed on the 12th December 2014.
EU (2012). European charter for a sustainable and responsible tourism http://ec.europa.eu/enterprise/sectors/tourism/sustainable-tourism/charter/index_en.htm accessed on the 12th December 2014.

Fleischer, A., & Felsenstein, D. (2000). Support for rural tourism: Does it make a difference?. Annals of tourism research, 27(4), 1007-1024.

Frey, N., & George, R. (2010). Responsible tourism management: The missing link between business owners’ attitudes and behaviour in the Cape Town tourism industry. Tourism Management, 31(5), 621-628.

Garay, L., & Font, X. (2012). Doing good to do well? Corporate social responsibility reasons, practices and impacts in small and medium accommodation enterprises. International Journal of Hospitality Management, 31(2), 329-337.

Getz, D., & Carlsen, J. (2000). Characteristics and goals of family and owner-operated businesses in the rural tourism and hospitality sectors. Tourism management, 21(6), 547-560.

Goodwin, H., & Francis, J. (2003). Ethical and responsible tourism: Consumer trends in the UK. Journal of Vacation Marketing, 9(3), 271-284.

Goodwin, H. (2007). Responsible tourism in destinations. http://haroldgoodwin.info/blog/?p=2745 accessed on the 11th December 2013.

Goodwin, H. (2011). Taking responsibility for tourism. Woodeaton, UK: Goodfellow Publishers Limited.

Goodwin (2013) What role does certification play in ensuring Responsible Tourism? – in WTM blog. http://www.wtmlondon.com/library/What-role-does-certification-play-in-ensuring-Responsible-Tourism#sthash.azaYgVZj.dpuf accessed on the 18th January 2014.

Goodwin (2015) Using Tourism to create shared value http://blog.wtmresponsibletourism.com/2015/02/16/using-tourism-to-create-shared-value-in-kerala/

Graci, S., & Dodds, R. (2008). Why go green? The business case for environmental commitment in the Canadian hotel industry. Anatolia, 19(2), 251-270.

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Hall, C. M., & Lew, A. A. (1998). Sustainable tourism. A geographical perspective. Addison Wesley Longman Ltd.

Hall, C. M. (2010). Changing paradigms and global change: From sustainable to steady-state tourism. Tourism Recreation Research, 35(2), 131-143.

Hall, C. M. (2011). A typology of governance and its implications for tourism policy analysis. Journal of Sustainable Tourism, 19(4-5), 437-457.

Haywood, K. M. (1988). Responsible and responsive tourism planning in the community. Tourism management, 9(2), 105-118.

Iglesias, A., Garrote, L., Flores, F., & Moneo, M. (2007). Challenges to manage the risk of water scarcity and climate change in the Mediterranean. Water Resources Management, 21(5), 775-788.

IHG (2012a). Intercontintental Hotel Group: CSR Report 2012. http://www.ihgplc.com/files/pdf/2012_cr_report.pdf accessed on the 15th January 2014.

IHG (2012b). Intercontinental Hotel Group: CSR Report IHG Green Engage. http://www.ihgplc.com/index.asp?pageid=742 accessed on the 15th January 2014.
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King, C. (2010). “One size doesn’t fit all” Tourism and hospitality employees’ response to internal brand management. International Journal of Contemporary Hospitality Management, 22(4), 517-534.

Kirk, D. (1998). Attitudes to environmental management held by a group of hotel managers in Edinburgh. International Journal of Hospitality Management, 17(1), 33-47.

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Krippendorf, J. (1987). Ecological approach to tourism marketing. Tourism Management, 8(2), 174-176.

Lee, T. H., Jan, F. H., & Yang, C. C. (2013). Conceptualizing and measuring environmentally responsible behaviors from the perspective of community-based tourists. Tourism Management, 36, 454-468.

Lloyd, B. (2015). Addressing Sustainable Development Goals: Shared value on the agenda at the 2015 World Economic Forum in Davos http://sharedvalue.org/groups/addressing-sustainable-development-goals-shared-value-agenda-2015-world-economic-forum-davos Accessed online on the 12th March 2015.

McIntyre, G. (1993). Sustainable tourism development: guide for local planners. World Tourism Organization (WTO).

Merwe, M. and Wöcke, A. (2007). An investigation into responsible tourism practices in the South African hotel industry. S. Afr. J. Bus. Manage, 38(2), 2

Miller, G. (2001). Corporate responsibility in the UK tourism industry. Tourism Management, 22(6), 589-598.
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Nunkoo, R., & Smith, S. L. (2013). Political economy of tourism: Trust in government actors, political support, and their determinants. Tourism management, 36, 120-132.

Pavesic, D. V., & Brymer, R. A. (1990). Job satisfaction: What’s happening to the young managers?. The Cornell Hotel and Restaurant Administration Quarterly, 30(4), 90-96.

Pfitzer, M., Bocksette, V., & Stamp, M. (2013). Innovating for Shared Value. Harvard Business Review.

Porter, M.E. & Kramer, M.R. (2011). Creating shared value: How to reinvent capitalism – and unleash a wave of innovation and growth. Harvard Business Review, (January/February), 62-77.

Poulston, J. M. (2009). Working conditions in hospitality: Employees’ views of the dissatisfactory hygiene factors. Journal of Quality Assurance in Hospitality & Tourism, 10(1), 23-43.

Sharpley, R. (2000). Tourism and sustainable development: Exploring the theoretical divide. Journal of Sustainable tourism, 8(1), 1-19.

Sharpley, R. (2014). Teaching responsible tourism. The Routledge Handbook of Tourism and Hospitality Education, 171.

Shaw, G., Bailey, A., & Williams, A. (2011). Aspects of service-dominant logic and its implications for tourism management: Examples from the hotel industry. Tourism Management, 32(2), 207-214.

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UNWTO – UNEP (2012). Tourism in the Green Economy: Background Report. http://sdt.unwto.org/en/content/publications-1 accessed on the 29th June 2013.

Wheeller, B. (1991). Tourism’s troubled times: Responsible tourism is not the answer. Tourism Management, 12(2), 91-96.

WTTC (2002). Speeches and Presentations. Retrieved from http://www.wttc.org/eng/Tourism_News/Speeches_and_Presentations/2002_Speeches_and_Presentations/accessed on the 10th March 2012.

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Better Access to Finance for European Enterprises

Although there has been substantial research on enterprises; information on their financing needs is quite limited. Small business entities are often viewed by financial institutions as relatively risky. In this light, the European Union (EU) continues to reaffirm its support for the small and medium sized enterprises (SMEs). As a matter of fact, the EU has drafted the ‘Small Business Act’ in 2008 and has refined it again in 2011. Another example of the EU’s commitment in this regard is conspicuous as it frequently calls for research and training schemes in the subject area of ‘SMEs’, where grants are issued under ‘Marie Curie’ and ‘Cordis FP7’ programmes.

Very often, small firms tend to find themselves in an equity gap, where it may prove quite hard to acquire capital. Although commercial banks are key providers of finance for many enterprises through the provision of loans; unsecured debt finance without collateral is very limited. Therefore, SMEs’ growth into viable investment opportunities may be severely restricted. Throughout the years, the EU has dedicated several funds to help these small (and micro) enterprises. Recently, the EU’s Enterprise and Industry Division has reiterated the importance of improving access to finance for SMEs. This interesting development has led to numerous funding schemes and to a new generation of financial instruments that support SMEs’ financing needs. Evidently, the EU has committed itself to boost its support for SMEs through various financing programmes, as illustrated in Table 1.

Table 1: EU measures that support SMEs

EU SMESource: EU (2015).

Europe is responding to the contentious issues facing SMEs by providing a mix of flexible, financial instruments under programmes, such as; the Competitiveness and Innovation Framework Programme (CIP), Progress Microfinance, the Risk Sharing Instrument (FP7), EIB loans and Structural Funds. For instance, the EU (in 2013) allocated a budget of €2.3bn specifically to bolster the “Competitiveness of Enterprises and Small and Medium-sized Enterprises” (COSME) during the period between 2014 to 2020. This initiative has been designed to support European SMEs in four key areas:

  • Developing entrepreneurship;
  • Helping SMEs access finance;
  • Supporting SMEs who wish to internationalise their business, and
  • Reducing the legislative and regulatory burden on SMEs.

Almost 220,000 SMEs profited from the Commission’s Competitiveness and Innovation Framework Programme (CIP) programme (EU, 2013). CIP has proved to be a very successful programme over the past few years. Since 2007, there were many SMEs that had benefited from CIP Funding . In fact, CIP was able to stimulate more than €15 billion of financing for SMEs, so far (EU, 2013). With a budget of €1.1 billion (CIP) has helped to mobilise over €13 billion of loans and €2.3 billion of venture capital for SMEs across Europe. Under its SME guarantee facility, CIP has helped nearly 220,000 SMEs to access loans.

These loan guarantees are required by individual entrepreneurs or  small enterprises that do not possess sufficient collateral.  Every euro that is dedicated to guarantees will in turn stimulate 30 euros in bank loans (EU, 2013).

Sources:

EU (2015) Improving the financing environment in Europe. http://ec.europa.eu/enterprise/policies/finance/financing-environment/index_en.htm accessed on the 20th January 2015.

EU (2013) Improving access to finance for SMEs: key to economic recovery. http://europa.eu/rapid/press-release_IP-13-387_en.htm?locale=FR accessed on the 20th January 2015.

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‘Crowdfunding’ for economic growth and competitiveness

crowdfunding

 

Recently the European Commission has launched a consultation programme (between the 3rd October to 31st December 2013) to explore the costs and benefits of ‘crowdfunding’ as an alternative form of finance. Contributions are sought from competent authorities, crowdfunding platforms, entrepreneurs and individuals who launched crowdfunding campaigns. Stakeholders are invited to share their views about crowdfunding opportunities and to help in the design of an optimal policy framework which will untap the potential of this new form of financing. Crowdfunding entails the collection of funds through small contributions from many parties in order to raise capital for a particular project or venture. This alternative source of financing has the potential to bridge the equity gap many start-ups face. It is hoped that this initiative stimulates entrepreneurship amid different regulatory, supervisory, fiscal and social structures of the European Union. Evidently, the European Commission is delving through extant national legal frameworks to understand better how businesses can raise their capital through such open forms of financing. Whereas some crowdfunding campaigns are local in nature, there may be others who are benefiting from easier access to financing within the single European market.

Certain safeguards may be necessary to maintain the stakeholders’ trust and engagement. The ultimate objective of the European Commission’s consultation is to gather data about the needs of market participants and to identify the areas where there is an opportunity for the sustainable growth of enterprises though debt-based or equity-based crowdfunding. The consultation covers all forms of crowdfunding; ranging from donations and rewards to financial investments. Everyone is invited to share their opinions and perceptions, including citizens who might contribute to crowdfunding campaigns and entrepreneurs who may launch such campaigns. National authorities and crowdfunding platforms are also encouraged to reply.

In a similar vein, the United States’ Securities and Exchange Commission (SEC) is currently considering crowdfunding as it was featured in “Jumpstart Our Business Startups Act” (JOBS Act). It is very likely that the proposal for crowdfunding will bring a major shift in how small U.S. companies can raise their money in the private securities market. Alternative sources of finance which are already secured via the internet include; monetary contributions in exchange for rewards, product pre-ordering, lending and / or investment. With crowdfunding now there’s the possibility that smaller businesses will be able to raise up to $1 million a year by tapping unaccredited investors. Any type of project with a promising ROI may soon opt for crowdfunding. Hopefully, it will be the micro entrepreneurs and researchers who will be capable of soliciting such ‘crowdfunding’ opportunities.

These plans can be successful only if the regulatory costs are kept as low as possible. Otherwise, small enterprises may not be intrigued by such a financing proposition. From the outset, crowdfunding may still seem a bit unclear at this stage. There are many companies including startups that can take advantage of these rules. Probably, one of the main causes of concern will be any reporting requirements for small companies to file their annual financial statements. For instance, SEC’s crowdfunding proposals may suggest certain disclosures, such as; “information about officers and directors, how proceeds from the offering will be used, and financial statements”. It transpires that the crowdfunding proposals are limiting how much money an unaccredited investor can contribute each year. The proposal says that investors with a net worth and income of less than $100,000 can contribute only $2,000 or 5 percent of their net worth or income, whichever is greater. Those with a net worth or income of more than $100,000 can contribute more. In an effort to reduce burdens on companies and portals, SEC’s plan would not explicitly force them to take steps to verify income levels and the net worth of investors in crowdfunding. At the same time, SEC would require companies using crowdfunding to release financial statements and other information that could prove costly.

No doubt that the most experienced entrepreneurs and their intermediaries will have no difficulty in meeting such crowdfunding rules and regulations. Perhaps, it is the first-time entrepreneurs who may require further support. At present the smaller businesses earning revenues (and profits) below a certain threshold are not legally obliged to provide audited financial statements. Moreover, small enterprises may not always have historical financials. This means that financial services authorities will find it quite difficult to determine how small companies are true and fair in their financial reports. According to the US proposals, the businesses who consider crowdfunding as a source of finance will have to audit their accounts.

By the end of this year the European stakeholders would have consulted about this ‘new’ source of finance. It is hoped that any discourse in this regard will translate into facilitative, soft-law measures leading to legislative action. If the crowdfunding proposals will be implemented; more capital will be unlocked for start-ups, investments and projects. This capital finance will surely help to spur economic growth and competitiveness.

More information is available here:

http://ec.europa.eu/internal_market/finances/crowdfunding/

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Unleashing Shared Value through Content Marketing

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Companies have to deal with different stakeholders’ opinions, attitudes and perceptions about their behaviour. They need to strike a balance in satisfying numerous stakeholders’ expectations. Businesses can’t please everyone. However, they should try to engage in fruitful and collaborative working relationships with external stakeholders, as dialogue often leads to improvements in mutual trust and understanding. Continuous communication also translates to benefits for the businesses’ reputation, its brand image, customer loyalty and investor confidence. Companies cannot afford to overstate or misrepresent their Corporate Responsibility (CR) initiatives. Although, they often manage to control their internal communication paths, it is much harder to control external media. As a result, it has never been more necessary to turn the businesses’ stakeholders into potential advocates for both the cause and the company. This can happen if CR realms are a good fit for the businesses’ mission and vision. It is advisable that CR communications reflect the ethos of the practicing organisations. Therefore CR (and sustainability) reporting should be clear in their intentions, with specific and relevant information featuring the companies’ credentials, and how stakeholders will benefit.

CR behaviour is directed at the organisations’ stakeholders comprising human resources, suppliers, customers and the community at large. Well laid down policies and initiatives are usually communicated through formal statements in annual reports as well as through corporate websites. CR reporting cover areas like training and development opportunities for employees, employee consultation and dialogue, health, safety and security issues and also measures for work-life balance. Apparently, business organisations are increasingly pledging their commitment for more innovative environmental investments. For instance, energy and water conservation, waste minimisation and recycling, pollution prevention, environmental protection as well as sustainable transport options. These sustainable practices bring strategic benefits such as operational efficiencies and cost savings. Several empirical studies (including mine) have indicated that discretionary investments in CR, whether they are driven from  strategic intents or from ‘posturing behaviours’ often result in improved relationships with internal and external stakeholders. The rationale for societal engagement is to anticipate third party pressures, lower the criticisms from the public and to minimise legal cases through compliance with regulations.  

CR should not be merely presented as goodwill or as a philanthropic venture. It should be featured as a realistic business case for stakeholders. This shared value proposition requires particular areas of focus within the businesses’ context. Yet, at the same time it looks after the society’s wellbeing. This notion contributes towards sustainability by addressing societal and community deficits. Presumably, shared value can be sustained only if there is a genuine commitment to organisational learning, and if there is a genuine willingness to forge relationships with key stakeholders, including customers and employees. Free publicity and informal word of mouth can either bring supportive or damaging effects. There is scope for businesses to foster strong relationships with particular community and marketplace beneficiaries. Such stakeholders can possibly serve as a buffer against potentially negative and harmful reviews. Recently, companies are increasingly focusing their attention on content and inbound marketing. In a nutshell, content marketing necessitates an integrated marketing approach through different channels of communication with stakeholders. This has to be carried out at all times. Many local businesses are becoming proficient in their customer engagement. They realise that this marketing approach brings customer loyalty, particularly if the business is delivering consistent, ongoing business propositions. In a similar vein, inbound marketing tactics also draw customers to businesses. Successful businesses are continuously coming up with informative yet interesting, original content through innovative marketing and interactive methods such as blogs, podcasts and social media networking, enewsletters et cetera. Online content comprise refreshing information which tell stakeholders how to connect the dots. It goes without saying that corporate internet sites are serving their purpose. The general public is continuously presented a better picture of the companies’ communications; containing the latest news, elements of the marketing mix endeavours and marketing fads. It transpires that content marketing has become a valuable tool for CR communications. Businesses who make use of the right content to explain their CR behaviours will gain a competitive advantage relative to others. On the other hand, stakeholders have become acquainted with businesses communicating their motives and rationale behind CR programmes. CR practices provide a good opportunity for businesses to raise their profile through their laudable behaviours.

At times, businesses can obtain decent coverage by third parties, especially media enterprises who are renowned for their sense of objectivity. Strategic communications help to improve the corporate image of firms, leading to reputational benefits and rapports of trust with stakeholders. This short contribution suggests that content and inbound marketing can be successfully employed for CR communications and to enhance customer and employee engagements.

DrMarkCamilleri.com

Google News

Times of Malta

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Sustainable Tourism Indicators for EU Destinations

The European Commission has developed a European Tourism Indicators System (ETIS) for Sustainable Management at Destination Level, which is a comprehensive system, simple to use, flexible and suitable for all tourism destinations.

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The system is designed to be used by tourism destinations to monitor, manage, measure and enhance their sustainability performances, without the need of any specific training. Motivations for tourism destination monitoring include:

•Improved information for decision making
•Effective risk management
•Prioritization of action projects
•Performance benchmarking
•Improved community buy-in and support for tourism stakeholders
•Enhanced visitor experience
•Increased bottom-line / cost savings
•Increased value per visitor

Source: http://ec.europa.eu/enterprise/sectors/tourism/sustainable-tourism/indicators/documents_indicators/eu_toolkit_indicators_en.pdf

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Employment Laws and Industry Codes of Practice in Malta

 

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June 25, 2013 · 10:01 am

EU pledges financial support to SMEs

No longer are smaller businesses considered as reactive and peripheral forces in terms of innovation, employment and productivity.SMEs prevail in their contribution to the GDP of the world economies. The countries with a high percentage of SMEs tend to exhibit a relatively equal distribution of income. Therefore, SMEs may cause higher social stability in their local environmental setting. There are more than ninety-nine per cent of all businesses worldwide which are SMEs with less than 250 members of staff. Within the European Union there are more than 19 million SMEs, which provide employment for more than 74 million citizens. In aggregate, they are providing two out of three of the private sector jobs of the EU labour market. What might possibly be even more intriguing is that nine out of ten SMEs are actually micro-enterprises with less than 10 employees.

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It may be argued that SMEs are the true back-bone of the European economy, as they are responsible for wealth and economic growth, along with their key role in innovation, research and development. The perceived importance of SMEs in Europe is reiterated at the political level as well. For instance, in a recent communication, the European Union’s Enterprise and Industry Division has reiterated the importance of improving access to finance for SMEs. It is hoped that the small and medium sized enterprises (SMEs) will drive the recovery in Europe. On the 2nd May the European Commission / European Investment Bank (EIB) joint report maintained that their support for SMEs has reached €13 billion in 2012. In addition, the Commission-funded guarantees have helped to mobilise loans worth more than €13 billion, boosting nearly 220,000 small businesses across Europe. This latest report covers the results of the current funding schemes as well as the new generation of financial instruments for SMEs. It transpired that the financial resources for SMEs were significantly enhanced through the €10 billion increase in the EIB’s capital.

During a meeting of the SME Finance Forum, on the eve of an Informal Competitiveness Council on the 2nd and 3rd of May in Dublin, the European Commission launched a new single online portal on all EU financial instruments (for SMEs) and an information guide to promote SMEs’ stock listings. The Commissioner for Industry and Entrepreneurship held that access to finance of SMEs remains difficult and it is still one of the main reasons for the current economic downturn. Therefore, EU authorities will boost loan guarantees to SMEs under the new COSME programme (as from 2014). Every euro dedicated to guarantees will possibly have the power to stimulate 30 euros in bank loans.  Almost 220,000 SMEs profited from the Commission’s Competitiveness and Innovation Framework Programme (CIP) programme. CIP was able to stimulate more than €15 billion of financing for SMEs, so far. With a budget of €1.1 billion (CIP) has helped to mobilise over €13 billion of loans and €2.3 billion of venture capital for SMEs across Europe. Under its SME guarantee facility, CIP has helped nearly 220,000 SMEs to access loans. These loan guarantees are used where the individual entrepreneur or the small enterprises do not have sufficient collateral. In many cases, banks will not provide them with a loan (debt financing).

More than 90% of the beneficiaries of loan guarantees are micro-enterprises, with less than 10 employees. Such enterprises struggle to raise their capital. They find themselves in an equity gap, where it is very difficult to acquire finance to operate efficiently. Although banks are key providers of finance for most small firms through the provision of loans, unsecured bank finance is very limited. Therefore, the SMEs’s growth into viable investment opportunities may be severely restricted. Cashflow-based lending is relatively rare and growing businesses rarely have unused security available. Despite the changing debt market, one of the main reasons why small businesses fail to get the debt finance they need; is their inability to provide adequate collateral. Even small businesses with high growth potential can experience difficulty in raising relatively modest amounts of risk capital, which is inevitably required to fund their ambitions for growth. Moreover, the external forces and potential threats in the business environment may impact harder on the small businesses than on the larger corporations. For instance, changes in government regulations, tax laws, labour legislation and interest rates may usually affect a greater percentage of expenses for the smaller businesses than they do for their larger counterparts.

Europe is responding to the contentious issues facing SMEs by providing a mix of flexible financial instruments under programmes such as the Competitiveness and Innovation Framework Programme (CIP), Progress Microfinance, the Risk Sharing Instrument (FP7), EIB loans and Structural Funds.

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