Sustainable value creation in SMEs: a case study

The TQM JournalSustainable value creation in SMEs: a case studyMaria Vincenza Ciasullo Orlando Troisi

Article information:To cite this document:Maria Vincenza Ciasullo Orlando Troisi, (2013),"Sustainable value creation in SMEs: a case study", TheTQM Journal, Vol. 25 Iss 1 pp. 44 - 61Permanent link to this document:http://dx.doi.org/10.1108/17542731311286423

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Sustainable value creation inSMEs: a case study

Maria Vincenza Ciasullo and Orlando TroisiDepartment of Study and Business Research,

University of Salerno, Salerno, Italy

Abstract

Purpose – The purpose of this paper is to study how a small to medium-size enterprise (SME) inCampania (Italy) integrated sustainability into its corporate strategy, and how its sustainablecorporate strategies reflect on intangible assets.Design/methodology/approach – The paper, an exploratory study based on grounded theory,analyzes are interviews with the entrepreneurial team and top and middle management. Findings areintegrated with documentary analysis, internal process data and archival material.Findings – Ethics and value systems play a significant role in devising sustainable corporatestrategy. Competitive strategies, innovation, quality and responsibility are reflected in managementprocedures and the supply network system involving partners in sustainable innovation processes.Research limitations/implications – A single case study obviously limits the generalizing of thefindings.Practical implications – Entrepreneurs and managers can benefit from the study to build arelational network for sustainable development.Originality/value – The process of sustainable value creation, sharing and the co-creation ofknowledge emerges fully in the case study analyzed. The study pivots on issues of innovation andeco-sustainability as drivers for corporate sustainability and business ethics.

Keywords Italy, Small to medium-sized enterprises, Sustainable development, Corporate strategy,Value creation, Corporate sustainability, Intangible assets, Case study

Paper type Research paper

IntroductionCorporate behavior for sustainable development has acquired new relevance recently.Public opinion, sensitive and informed, reveals a propensity to legitimize firms thatact in a socio-responsible manner toward environmental impact. This underpins therelationship that firms establish with their consumers and stakeholders. Companiesinterested in value creation, and voluntary socio-environmental standards, tend toprivilege value chains based on safety, traceability and solid stakeholder relations.However, in theory, the issue is often focussed on a producer-supplier dyad (Perrini andMinoja, 2010). Value consequently is expressed in our current socio-economic context,where persons and needs are united in a real or potential collaborative circuits; the firmcreates value when its management privileges sustainability rather than mere productperformance. Our paper defines sustainability as the transparency underpinningcorporate action: its relations, proposals and ideas resulting an ethical and civicdriving force, a creative scenario in which principles and economic aims, cooperation,relations and public well-being can meet (Bruni, 2004, 2006; Gui and Sugden, 2005).In our knowledge economy, value derives from shared world making (Bruner, 1986;Semprini, 2003): product performance is secondary to the values the productincorporates – corporate value is enriched with relational meaning and dialogue,transparent aims and mutual responsibility. Corporate sustainability (CS) stems fromthe firm’s capacity to create sustainable value and its intellectual capital: human,

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/1754-2731.htm

Received 30 January 2012Revised 2 February 2012Accepted 26 March 2012

The TQM JournalVol. 25 No. 1, 2013pp. 44-61r Emerald Group Publishing Limited1754-2731DOI 10.1108/17542731311286423

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structural and relational (Edvinsson, 2002) which includes trust, loyalty, honestyand satisfactory stakeholder relations. The conceptual division of intellectual capitalclarifies the sources from which sustainable value is generated in terms of: individuals,organizational structures, processes and systems, relationship and networks(Subramaniam and Youndt, 2005). Currently research includes intangibles as anoutcome variable of CS strategies, considering that sustainability increases corporatereliability strengthening its stakeholder relationships (Arrigo, 2009; Barnett, 2007;Perrini and Vurro, 2010). The issue of sustainability has found fertile ground withreference to large, often multinational firms (Elke and Bos-Brouwers, 2009) similarly,there have also been developments in SMEs (Schaltegger and Wagner, 2011) theprincipal form of organization in OECD countries.

Our paper analyzes how SMEs integrate sustainability in their corporate strategyand the outcome on intangible assets.

Sustainability and value creation: literature reviewTheoretical concepts of sustainability in the literature, question whether sustainabilitymeans just “economic sustainability” (Banerjee, 2001; Dyllick and Hockerts, 2002;Fowler and Hope, 2007) or includes environmental and social issues. As concerns“economic sustainability,” a firm operates in the interest of its owners maximizing theirwealth. Scholars evidence the negative impact on performance of sustainability-relatedactivities, focussing on the costs incurred by engagement in socio-environmentalmanagement (Friedman, 1962, 1970; Jensen, 2001; Barnett, 2007). However, severalstudies have shown that businesses are linked to their natural environment, that thisimproves corporate performance and contributes to competitive advantage (Hart andAhuja, 1996; Sharma and Vredenburg, 1998). A vision of “ecological sustainability” isadvocated whereby the challenge for firms is to move beyond pollution control orprevention and to operate within the carrying capacity of ecosystems by minimizingresource use and their ecological footprint (Hart, 1995; Sharma, 2003). Radical shifts ingovernance are needed to reverse current levels of environmental destruction (Hart,1997; Shrivastava, 1995). The changing role of firms and their search for legitimizationand social consensus are widely debated in the literature: “Business, as the mostpowerful institution in society, must be the instrument of social justice” (Prahalad,2005); “Even the most private of business enterprises is an organ of society and servesa social function [y] the very nature of modern business imposes responsibilities onthe manager” (Drucker, 1955) and “it has to consider the impact of every businesspolicy and business action upon society” (Drucker, 1955, p. 382). “Social sustainability”requires firms to accept greater responsibilities toward stakeholders and the socialenvironment in which they operate (Carroll, 1999; Dunphy et al., 2003; Freeman, 1984).Studies concur in underlining that social sustainability means attention to internalorganization development, dealing proactively with the community and stakeholderinvolvement. Many studies highlight positive relations between social and economicperformance from firm capacity in managing the expectations of their social contextof reference (Waddock and Graves, 1997).

In a “holistic vision,” sustainability combines the three perspectives mentionedabove (Dyllick and Hockerts, 2002; Dunphy et al., 2003; Van Marrewijk, 2003; Youngand Tilley, 2006). Firms need to improve social and human welfare and reduce theirecological footprint for sustainable value creation besides achieving organizationalobjectives (Sharma, 2003). Thus, CS shapes environmental and socio-economic policiesfor corporate sustainable development in primis and for sustainable development in

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society tout court. Businesses have to consolidate sentiments of citizenship andrectitude, benefit society and the environment and improve firm competitiveness(Porter and Kramer, 2002, 2006; Husted and Allen, 2004). Economic success andcompetitive advantage, the efficient use of natural resources and social legitimacyare linked within a cycle of firm objectives (Tencati, 2007). Although the primeresponsibility of a firm is generating profits, its contribution to socio-environmentaldevelopment, through integrating sustainability as a strategic investment in itscore business, complies with legal expectations and invests “more” into human capital,environment and stakeholder relations. To create value sustainably, a firm has toinvolve and remunerate stakeholders whose resources are functional to a firm’ssuccess.

Consequently, value creating processes have to enhance and consolidaterelations thus creating sustainable value depends on constructive stakeholderrelations (Perrini and Tencati, 2008).

CS can as such be defined as a new model of management based on stakeholderrelationships and on firm capacity to incorporate social and environmental issues(Perrini et al., 2006; Lambin, 2009). Researchers are currently investigating how CSpolicies are integrated in the management of an organization and whether theyenhance market gains (Perrini et al., 2009). Furthermore, intangibles are beingconsidered an outcome variable of CS strategies seeing as they increase knowledge andreliability, key sources of competitive advantage (Perrini and Vurro, 2010).

SMEs and sustainability: literature reviewThe literature on sustainability to date has concentrated mainly on multinationalcompanies, where impacts are significant (Elke and Bos-Brouwers, 2009). However,European Commission policies (COM, 2007, 379 final) underline the role played bySMEs in the shift toward new, more sustainable models of production and consumptionfrom investing in human resources, social and environmental capital. SMEs –99 percent of European firms (COM, 2005, 551) generate great impact on the environment,75-90 percent unknowingly (NetRegs, 2007). European Union sustainability objectives areespecially valid for Italy with SMEs employing 65 percent of the total workforce andgenerating over 50 percent of national added value (Unicredit, 2009-2010).

Research on sustainable development in SMEs indicates from a review of theliterature on SMEs and sustainability focus has been mainly on the environmentaldimension of sustainability (Revell and Blackburn, 2007; Hillary, 2000, 2004; McKeiverand Gadenne, 2005; Rutherfoord et al., 2000; Merrit, 1998; Petts et al., 1999; Tilley, 2000).Comparative studies on sustainability in small and large firms are widespread( Jenkins, 2004; Perrini et al., 2007) and barriers and motivation discussed (Cunninghamet al., 2002; Longo et al., 2005). Researchers have pinpointed several motivatingfactors inducing firms to adopt “proactive” environmental strategies, resourceproductivity, cost-cutting, reducing waste outputs (Khanna and Anton, 2002). Proactiveenvironmental strategies improve corporate reputation and image and relations withclients, investors, local communities and other stakeholders (Biondi et al., 2000; Bansaland Roth, 2000; Khanna and Anton, 2002; Bansal and Hunter, 2003). Although someSMEs are leaders in environmental impact management, most lack knowledge on howto manage impact (Iraldo et al., 2010).

There is an evident gap in the literature on SMEs in this context (Lawrence et al.,2006), little research and still less on sustainability-related corporate social practices inSMEs (Foot and Ross, 2004; Sharma and Ruud, 2003) is available.

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However, as pointed out, sustainability principles are an intrinsic part of the SMEvalue creation process: on the one hand we find the centrality of ethical governance andentrepreneurial values (Vyakarnam et al., 1997; Spence and Lozano, 2000; Jenkins,2009); on the other, the importance of relational approaches and networking in SMEs(Baldarelli, 2007) and industrial districts (Molteni et al., 2006; Fugazza et al., 2006;Battaglia et al., 2006). In this context, belonging to a community acts as a driver forsustainable development. Studies on sustainable entrepreneurship evidence howsustainable entrepreneurs show personal competence (Senge, 1990) and consider theirprofessional life in creative terms. Differences between personal goals and perceivedreality are considered challenges rather than issues (Senge, 1990). Sustainableentrepreneurs furthermore, influence the firm (especially in small firms) with theirpersonal preferences which are reflected in corporate goals (Schaltegger andWagner, 2011).

Collaboration between SMEs and local, national, public and private institutions(Spence and Schmidpeter, 2003; Lepoutre, 2006; Orskov, 2006; Maass, 2006) is essentialfor successful sustainability strategies and policies.

Research objectives and methodologyOur paper pivoted on responding to some fundamental research questions:

. How is sustainability implemented and managed?

. How does sustainability enhance intangible assets?

. How does sustainability improve corporate performance?

. How can relevant contingency factors in relation to sustainability practices beclassified relative to positive cascading effects on the territory?

We proceeded using a qualitative case study approach (Yin, 1994, 2003; Fayolle, 2004).The dual aim was to “grasp in detail the main characteristics of phenomena beingstudied” (Adams, 2002) and to clarify the dynamics of a given process (Ryan et al.,2002). Case study methodology “a research strategy that focuses on understanding thedynamics characterizing specific contexts” (Eisenhardt, 1989), privileges a qualitativeapproach and ongoing research (action research) to describe, explain and clarifythe dynamics of business scenarios in an evolutionary perspective. Using a non-probabilistic technique (Neuman, 2000) and opting for a purposive case (Saunderset al., 2003) we selected Sabox S.R.L as it is:

. firmly established in the territory;

. a small-size firm located in the Nocera-Gragnano district; and

. a brand-owner whose supply system is rated “of high environmental impact.”

Sabox, established in 2004, is part of a group resulting from the merging of AntonioSada & Figli Spa and Aldo Savarese. Antonio Sada & Figli Spa, a family firmestablished in 1900 and spanning three generations when the Sada process ofindustrialization of secondary packaging became successful. Aldo Savarese bornlocally and manager since 1998 for Antonio Sada & Figli spa, shares goals and valuesthat have created solid relations and the company Sabox srl.

The Nocera-Gragnano district (Campania, Southern Italy) active in the pasta andfood-canning industry is particularly attentive to socio-environmental sustainability.In 2002 they were awarded recognition for a project of environmental innovation linked

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to eco-sustainability (Cariani, 2002). As a brand-owner, Sabox is vulnerable to negativepublicity on social or environmental conditions in its network system seeing as the paperindustry is characterized by high-critical mass in socio-environmental impact terms.

In an Italian context Sabox is seen as a “unique” or “extreme” (Eisenhardt, 1989;Pettigrew, 1990). As is well known, extreme cases facilitate theory-building because,their characteristics highlight both the unusual and the typical (Patton, 2002).

Data analysis: collection and processingIn line with Eisenhardt’s suggestions, various methods of data collection were combinedas “triangulation made possible by multiple data collection methods provides strongersubstantiation of constructs and hypotheses” (1989, p. 538), not only in hypothesis testingbut also in theory-building research (Glaser and Strauss, 1967; Yin, 2003).

Our analysis, based on the retrieval of quali-quantitative data obtained frominterviews with the entrepreneurial team, consisted in semi-structured questionnaires,observation during visits, perusal of company web site documents (content analysis)and printed documentary sources such as corporate socio-sustainability reports,brochures, educational and promotional materials.

The sources of empirical findings were:

. Semi-structured interviews: the primary method of data collection involved atotal of ten semi-structured interviews with members of the organization: chiefexecutive officer (CEO), product development manager, sustainabilitysupervisor, three members of the green team, sales manager, supply-chainmanager, human resource manager and head of management control, qualityand safety. The non-standardized interviews ensured respondent involvementand margins for non-prescriptive answers and insights (Kvale, 1996).

. Annual reports and other external communication tools: the corporate code ofconduct, code of ethics and socio-environmental reports were all analyzedtogether with the corporate web site, press releases and other documentsintended for external communication.

. Field observation: the firm was visited between March and May 2011 to observeroutine business practice.

Data analysisFollowing data retrieved, on the basis of grounded theory, an iterative coding processand theoretical categories were put in place. Initial codes were generated fromstatements relative to interviewee perceptions of strategic CS. In parallel, CS practiceswere analyzed in terms of enhancement of intangibles and their link with value creation.

As codes became consolidated across interviews, they were aggregated andclassified in open to axial coding; theory was created iteratively from observation and dataand by comparing intuitions with archival data and the literature to validate findings andto inform interpretation. Coding was carried out separately by two researchers (Silverman,2001). A comparative analysis was put in place to discuss and resolve discrepancies.Where this was not possible, clarification was sought from the interviewee.

FindingsThe firm and its corporate value structureSabox’s core business, FSC-certified design, production and sale of corrugatedcardboard packaging and specific products designed for recycling waste, employs 31

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staff members, at the end of 2010, reported an annual turnover of more than 8 millioneuros. Sabox, leader in its regional market, caters mainly for the food industry,floriculture and personal care. The firm’s sustainability project has created an“eco-friendly company” innovative, dynamic and flexible, offering customized goodquality products specifically in the Nocera-Gragnano district. The relationshipbetween the Sada family and the Sabox CEO has meant growth based onenvironmental safeguarding and social value creation for the territory. The firmrespects Global Compact ethical principles and values: human rights and workingenvironment. As the CEO states: “Sabox’s vision stems from the need to enhanceecologically and environmentally, a complex territory (an instance was the rubbishemergency in Naples in 2008 which continued well into 2011).” Awareness of theneed for ecologically responsible practices and production is a priority. Recyclingwaste and an ecological culture by upgrading secondary packaging – generallyconsidered a scarce value commodity – is implemented by means of an appropriatebranding strategy where packaging – not only contents – is considered asa crucial vector of communication and enhancement. Corporate strategiesunderpin policies in a strategic market (corrugated cardboard for packaging);classified R&D procedures, steady supplier/client relations, attention to employees,community and territory. Sabox’s CS strategies for value creation and growthinclude:

. branding strategies for enhancing secondary packaging and contents;

. R&D innovation and creativity for development of eco-sustainableproduction;

. enhancing environmental sustainability by monitoring and optimizing corporateprocedures and global production toward eco-sustainable products;

. excellence in client relations, quality customized product offers and services,co-marketing and partnership initiatives;

. supplier relations, collaboration with local authorities, institutions, non-profitassociations and schools, influencing and spreading a culture of sustainability inthe territory; and

. staff professional development.

The above drivers of intellectual capital are analyzed to illustrate how Sabox hasenhanced intangible assets in the sustainable perspective of a recycling society.

Sustainability and enviromental managementSabox’s industrial project “Green Project” (GP) is an innovate program a system ofenvironmental management in a corporate culture characterizing the firm’s “modusoperandi” inside the plant and with its stakeholders. The project was awarded the“Paper Recycling Award 2009” in the category “Technology Improvement and R&D,”in the event “From Paper to Publishing: creating a Value for Europe” promoted by theEuropean Recovered Paper Council.

Sabox in collaboration with the Sada Group has produced an innovative type ofrecycled paper created from raw material of post-consumption pulp collected in theCampania area. Eco-design by specialized engineers and innovation guarantee itstechnical value.

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Post-consumption waste is used for furniture design. The CEO states: “waste” isa precious resource for the environment, the territory and the economy. During2009-2010, sales of green products rose by 40 percent. Our objective is to reach100 percent by 2012. Sabox’s customized production starting from eco-design tosocio-environmentally responsible products, benefits client, firm and environment.Eco-design principles are supported and optimized by life-cycle assessment (LCA),conducted in conformity with UNI EN ISO 14040:2006; 14044:2006 standardregulations, the EPD and FSC certification for environmental safeguarding completethe plan. The Sada Group was the first in Italy to obtain FSC multi-plan certification in2009, guaranteeing product traceability of recycled cardboard from the pulp to productstage. The FSC promotes responsible management of forests and the controlled use ofrecycled paper through wood derivatives managed responsibly or as in Sabox’s case,paper products obtained from post-consumption pulp. Sabox policy for environmentalconservation is manifest even in the case of products that do not have FSC certification,where a high percentage of recycled cardboard is used and those made exclusivelywith pure fiber amount to little more than 1 percent of overall production. Sabox wasalso the first firm in the sector to put in place eco-compatible – in particular leanthinking models – production processes, reducing waste, improving energy efficiency,limiting consumption and losses and recovering and recycling production waste.Other programs for reducing energy consumption (energy and water) concern energyobtained directly from renewable sources from agreements endorsed with a localprivate sector company. Water destined for productive processes is obtained froman artesian well. To limit water consumption, same color orders are put togetherand cleaning machinery is reduced to a minimum. To avoid toxic waste, the use ofwater-based ink (supplied by WBS) is privileged together with ecological glues notcontaining plasticized composites. The distilling plant recycles most of the water forsubsequent uses. Cardboard scraps are compacted into balls, tied up and sent to theGroup’s paper mill which is also a platform for recycling and subsequent reuse.The outcome is a virtuous chain whereby paper is produced, discarded and recycledlocally (see Figure 1).

Customers

Box plant

Corrugator

Paper mill

Recyclingplatform

Separatewaste

disposal

Consumers

Figure 1.The integrated cycle

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Sustainability and internal organizationThe value and quality of Sabox’s production are equated to staff quality. Enhancinghuman resource capital is a priority. Attention to staff in a sustainable culture ispossible only through awareness raising and involvement. The firm and its corporatestructure, considering the territory a source of excellent professional and personalresources, employs local staff living within a radius of 40 km. Teamwork on innovationand customized projects, motivation, sense of belonging and staff satisfaction areencouraged through:

(1) A familiar corporate atmosphere encouraging dynamism, knowledge sharingand common policy, what the CEO defines as “a fun environment” foradvanced skill development and innovation.

(2) Professional training and updating skills courses for quality corporatemanagement. The CEO states: “Sabox’s decision to invest in training derivesfrom the awareness that constant updating and firm improvement is theproduct of the professional growth of its human resources.” Over 95 percent ofthe human resources are periodically involved in training programs and/orinitiatives. Besides training activities, management and staff participate inseminars, conferences, trade fairs on sustainability issues.

(3) Job rotation and promotion schemes are onging together with economicincentives and productivity bonuses. The firm believes in generous premiumsfor flexibility, punctuality, work sharing, teamwork, problem solving. Saboxalso offers generous leave and involvement in cultural-artistic events promotedin the territory.

(4) A safe working environment. Sabox’s voluntary project for managementand staff checkups guarantee their health and well-being duringworking hours. The CEO has appointed a Health and Safety Manager and aRisk Assessment Document has been drawn up and approved. Sabox’sprevention policies resulted in “0” injuries in 2009, confirmed also for 2010(see Table AI).

Sustainability and the client centered marketSabox privileges client relations, customized products and partnerships starting fromdesign to socio-environmentally responsible production. Respect for customers,transparency, communication and information equal quality and value creation.Transforming packaging or boxes into a vehicle of communication enhances content.The Green area staff respect qualitative standards and provide the knowhow fordesigning packaging systems that are not only functional to client needs but reflect onperformance and socio-environmental impact. Packaging is integrated with: firm-clientproduction cycles, functional tools for the highly customized supply chain andawareness of critical mass.

Sabox promotes relations with local firms in a “Km 0” distance perspective ofgrowth and development (see Figure 2) for environmental sustainability and valuecreation for the territory.

Sabox’s clients are mainly located in the Campania Region in the Nocera-Gragnanodistrict. Client commitment underpins an “infinite recycling process” and theadvantages of a culture of recycling and reuse. Initiatives developed jointly with clientsare promoted to spread eco-sustainable value chain growth. Sabox has underwritten

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many collaboration ventures: “Pastificio Lucio Garofalo SpA” Gragnano(about 20 km from the Sabox firm) and “Doria S.p.A” Angri (less than 10 km fromSabox’s premises).

The Pastificio Garofalo SpA, uses Green BoxX packaging for its eco-sustainablepolicies; to limit the waste of natural resources and CO2 emissions. Studies on carbonFootprint carried out by Sabox, evidence that the use of Green BoxX packaging, during2010, prevented over five thousand trees being chopped, the saving of 150 million litersof water, almost 2 million kWh of electricity and limiting over 400 tons of CO2

emissions.The successful initiative led to the launch of a product “Garofalo Numero Zero,”

a packet for pasta produced with “zero km” raw materials and “eco-sustainablepackaging.”

“La Doria SpA,” the main Italian manufacturer of tomato derivatives and cannedvegetables and the second most important for fruit juices, also uses Green BoxX. Saboxand La Doria devised a joint project of co-marketing for the 15th edition of Cibus, theinternational Salon of Foodstuffs and Dolce Italia with a production program andthe use of sustainable packaging in common. This highlights how a client-supplierrelationship has become a supplier-partner relationship.

Sustainability and supply-chain managementThe short supply chain has also influenced Sabox’s suppliers who use firms outside thedistrict only when skills are not available locally. 95 percent of supplies come fromfirms located o35 km from Sabox’s production plants and 99 percent o65 km. Sabox’slong-term relationships with few suppliers pays. The purchasing manager confirms:“our supply-chain strategy guarantees supplies all along the chain. Success meansefficient, innovative suppliers and long-term perspectives. Collaboration is the key.An excellent supply chain involves engagement in the paper, industrial manufacturing,logistics and recycling process.” Sabox also focusses on quality as well as socio-environmental issues and offers formal training to suppliers on business management;its system of supplier management and integrated management control system verifiesthe process.

Finally, the firm’s code of conduct defines what suppliers can expect from Sabox,and vice versa. Direct relationships with suppliers in the territory is reflected in weeklyvisits by the purchasing teams. Sabox’s network of supplier relations highlights howintegrated skills create new knowledge, while inter-firm collaboration and theintegrated management of the chain (paper mill, corrugator, box warehouse, recoveryand recycling) contribute to sustainability, environmental quality and traceabilityof productive processes (FSC multiplant certification). Numerous projects, cross-fertilization of skills result in innovative solutions. A project with WBS ink suppliersresulted in a product compatible with water-based inks with low-metal content andorganic compounds. The Sabox initiative with WBS and the Consorzio Italiano dei

0-20 km (82%)

21-40 km (8%)

41-55 km (10%)Figure 2.Distribution ofSabox clients on aterritorial scale

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Compostori (CIC) produced a fibrous chemical pollutant free fertilizer for crops.With Henkel Italia Spa, Sabox produced a glue for quality packaging which limitedvolatile substance emissions during manufacturing processes. Sabox’s positiverelations with suppliers means efficient distribution of costs throughout the supplychain, added value, stability, security and shared profits.

Sustainability and the contextThe CEO states: “We are indebted to our territory and try to repay some of the valueproduced.” Sabox participates in events and trade fairs to showcase its products,its culture of sustainable growth and corporate gifts and social solidarity policyevidencing its clear link to the territory. Projects have also been launched withLegambiente, COMIECO, CONAI packaging and with local authorities to promote“training for recycling.”

Awareness raising and environmental education are promoted by Sabox in localschools, consumer communication on environmental preservation and the dangersof misusing natural resources and the promotion of eco-friendly, traceable products(food and non-food) are privileged.

Finally, Sabox, collaborates with local universities, to promote centers of excellencefor paper production and its applications. The fulcrum of the center is an “energystation” an industrial area where waste is utilized in a complex self-supportingrenewable system that eliminates non-renewable territory resources (see Figure 3).

Discussion and conclusionOur paper using a case study to illustrate how a SME embarks on a sustainableresponsibility corporate strategy approach, analyzed how it creates strategicintegrated sustainable value and how CS dynamics reflect on enhancing intangibleassets. In particular, findings show that the firm’s corporate strategy derives froma system of embedded ownership values and beliefs, addressed to entrepreneurialdevelopment, environmental safeguarding and social value creation for the territory.Moreover, a personal value system, codified by means of a clear definition of vision and

Territorial context

Box plant

Corrugator

Paper mill

Recyclingplatform

UniversitiesPrivate research

centers

Energystation

Figure 3.The Sabox center of

excellence

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mission in terms of basic strategies (Freeman and Gilbert, 1988; Hamel and Prahalad,1989; Coda, 1985) underpins trust, dialogue, stakeholder involvement, skills andknowledge development; in short responsible citizenship.

The firm’s traditional links with the territory enhances a brand of market value builton strategies sustained by structural, human and relational capital. Specific indicatorsof performance are illustrated in Appendix.

Sabox applying CS strategies has created a system of eco-innovation: an ongoingprocess of R&D and product-process innovation and by combining environmentalawareness and product differentiation, high quality and innovation standards hasplaced the firm leader in the green industry (see Table AIII).

Its model of lean thinking to reduce waste during production, rationalize energy,limit consumption, recycle waste and improve corporate efficiency epitomizes Sabox’sinnovation process (see Table AI).

Sabox’s sustainability project is explicated in an integrated supplier-clientmanagement model: R&D, knowhow, human resource skills and expertise, staffenhancement and training are priorities. Sabox’ strategic patrimony of human resourcecapital is reflected in a family type corporate climate, collaboration, joint policies andknowledge sharing. Advanced skills are developed through professional trainingcourses and motivation. Sense of belonging and human resource satisfaction havecontributed to the growth of human resource capital (see Table AII).

The firm’s values, dictate its corporate strategy; employee awareness andcommitment is shown by the corporate leadership quality index (see Table AII).

Attention to relations, cooperation and coordination, has meant value sharing alongthe chain and concomitant knowledge-transfer processes. Many projects thanks to skillcross-fertilization have resulted in innovation.

Stringent selection criteria and dialogue guarantee involvement and loyalty,confirmed by the non-turnover of suppliers (see Table AIII).

Sabox fosters client relations and promotes partnerships. Cornerstones areinteraction, respect for customers, transparency, openness to dialogue and cooperation.Sabox has enhanced its reputation as evidenced by the indicator of relational capital(see Table AIII). Sabox’s network of relations for sustainability triggers virtuous andsynergic cycles where stakeholder value is created, impacting positively on theterritory. Sustainable value creation is nurtured by knowledge and trust built on jointprojects that reinforce corporate reputation and generate competitive advantage.

Findings from case studies cannot be subject to statistical generalization or theorytesting. However, they can generate theoretical constructs, propositions and/ormidrange theories (Eisenhardt, 1989; Yin, 2003). Our study is a preliminary approachto understanding the relational effects of integrating sustainability into corporatestrategy and on enhancing intangible assets. In this context, Sabox as a “business tobusiness” medium-sized, mainly family firm, with its strong relational approach,motivates partners and other stakeholders to set up sustainability projects; a relationalsystem (Pellicano, 2004; Pellicano and Ciasullo, 2010) nurtured above all by immaterial(intangible) resources (i.e. information, knowledge, trust) the systemic nature ofwhich is characterized by the implicit content of the service. Unwritten rulesunderpinning relations favor sharing, joint responsibility and synergy in the value co-creation process. Moreover, a relational vision involves factors of a cognitive typegenerating innovation, engagement in interaction and collaboration fundamental tosocial, environmental and sustainable development (Hall and Vredenburg, 2003).In conclusion, value creation represents the product of inter-systemic dynamic

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interaction underpinned by values resulting in responsible action and governanceskills creating project-based stakeholder relations and CS-oriented vision andvalues. Value creation is linked therefore, to the capacity for garnering andsharing critical resources and creating mutually beneficial stable and trustworthyrelations.

The implications for further research emerging from our findings suggest thata culture of voluntary integration of social and environmental objectives in sharedcorporate strategies and processes is the life sap of loyal and transparent attitudeswhich create sustainable value. Such sustainable supply-chain management – aninnovative process of short chain production for eco-sustainability as emerges from ourcase study – could inspire other firms in developing innovative ecological modelsof sustainable development.

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Appendix

Indicator 2009 2010

Investments in machinery and technology (investments/revenue) (%) 2.13 2.48Index of computerization (PC/number of employees) 0.666 0.689Index of packages (members office/number employees) 0.666 0.689Innovation index (number of project on commission) 350 380Investments in product development and innovation (R&D/revenue) (%) 3.0 3.5Effectiveness index of innovation (number of projects put into production/total projects) (%) 49.50 52.70Injury severity index 0 0Index of non-compliance (credit notes/sales) (%) 0.59 0.40Energy (kWh/mq products)� 100 3.52 2.86Gas (mc/mq products)� 100,000 13.89 8.60Water (mc/mq products)� 100,000 5.28 4.09Waste water CER 080308 (kg waste water/mq worked)� 100 1.62 1.33Cardboard scarps (kg di waste/mq worked)� 100 1.77 1.50Total waste (kg di refuse/mq worked)� 100 1.96 2.07Transports IN (km/mq transported)� 1,000 3.51 3.14Transports OUT (km/mq transported)� 1,000 5.23 6.23

Table AI.Structural capital

Indicator 2009 2010

Average age of staff 35 35Percentage of turnover invested in training (%) 0.29 0.34Houses of training employee (total trainings hours/number of employees) 228 252Team home schooling (sum of scores assigned according to the degree: 1 elementaryeducation; 2 middle school; 3 high school; 4 graduation) 79 85Turnover output (number of resignation/number of employees) 0 0Average length of service innovation (simple average years from the date ofemployment) 6.33 6.12Synthetic index of employee satisfaction (1¼ completely dissatisfied; 2¼ partiallysatisfied; 3¼ fairly satisfied; 4¼ fully satisfied) 3.1 3.3Synthetic index of quality of leadership (1¼ completely dissatisfied; 2¼ partiallysatisfied; 3¼ fairly satisfied; 4¼ fully satisfied) 2.8 3.4

Table AII.Human capital

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About the authors

Maria Vincenza Ciasullo is an Associate Professor of Business Management at Salerno’sUniversity (Italy) where she teaches Business Administration. She has PhD in BusinessManagement from the University of Naples “Federico II”. She is a member of the body of PhD inMarketing & Communication at the University of Salerno’s Department of Study and BusinessResearch. Since 1995 she has been coordinator and member of several research projects. She is anexpert in strategic business management for both private and public sectors, focusing oncorporate social responsibility and business ethics. Her current research interests are aimed atanalysing the role that universities can play in contributing to the development of spinoffs. Infact, a paper (co-Author Giulia Monetta) on this topic will be published by Routledge Taylor &Francis in the Spring of 2012. She successfully combines theoretical and empirical research andhas been published, both nationally and internationally. Maria Vincenza Ciasullo is thecorresponding author and can be contacted at: [email protected]

Orlando Troisi is a PhD student in Public Management at University of Salerno’s Departmentof Study and Business Research. He researches themes regarding strategic management andcorporate governance of public and private firms. His publications are the result of empiricalresearch.

Indicator 2009 2010

Change in turnover (%) �3.8 27.5Sell green (%) 6 25.7Market share green (district Nocera-Gragnano) (%) 100 100Market share no green (district Nocera-Gragnano) (%) 28 34Average revenue customers (h) 25.803 34.771Contentious with customers 3 1Index of revenue concentration (%) 55.51 (first ten

customers)70.69 (first20 customers)

59.47 (first tencustomers)74.80 (first20 customers)

Revenue from new customers (h) 4.500 4.650Customer satisfaction (1¼ completely dissatisfied; 2¼ partiallysatisfied; 3¼ fairly satisfied; 4¼ fully satisfied) 3.3 3.45Incidents investments in marketing and communication (costincurred for marketing and communication/total revenue) (%) 0.55 0.62Turnover of suppliers (%) 0 0

Table AIII.Relational capital

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