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Title: Role of non-governmental organizations (NGOs) in the environmental reform of small and medium-sized enterprises (SMEs) in Peru

Primary Researcher: Walter Castro
Email address:
Submitted on: December 1, 2006

Start date: 01 September 2006
End date: 01 September 2009


Small and Medium-sized Enterprises (SMEs) constitute a major source of employment and income in developing countries (Mead and Liedholm 1998; for Latin America, Peres and Stumpo 2000). However, they are also responsible for substantial environmental problems. Realizing environmental improvement in SMEs has proved to be much harder than in large scale industries. Most SMEs lack the capital, personal skills, and technologies required. Investing resources in environmental reform becomes even more difficult where SMEs are marginalized by foreign competition and limited access to national and international markets (Pimenova and Van der Vorst 2004, Del Brio and Junquera 2003) In environmental policies worldwide, increasing attention is paid to the roles of other societal actors than governments in promoting clean alternatives for the industrial sector (Thorpe 1994; Verheul 1999; Brilhante 2001). As intermediary organizations, NGOs can play a pivotal role in improving both environmental and competitive performances of SMEs. They can support SMEs with 'green' (micro-)credits, technical support, and employee training; they can facilitate links with business partners, government, and development agencies; and they can promote institutional conditions under which SMEs can improve both environmental performance and competitiveness (Gombault and Versteege 1999; Frijns and Van Vliet 1999; Bianchi and Noci 1998; Korten 1987). NGOs can also give a voice to their target groups in the media, and thereby influence citizen and consumer opinions (Landtm 1987). In less developed countries efforts of NGOs in promoting environmental management in SMEs are often linked with community development and poverty reduction strategies (e.g. Lee 1998). However, the potentials of NGOs in supporting environmental reform of SMEs are realized to a very limited degree. On one hand a complex set of factors is limiting the innovative power of SMEs, while on the other hand NGOs have to reinvent their roles in a global context of shifting agendas of business and government. To shed more light on actual and potential roles of NGOs in this changing societal context, this research will employ the theories of ecological modernization and network society. Ecological modernization theory is one of the major sociological theories aimed at understanding how modern societies are dealing with environmental change. Coined in Germany and elaborated by Dutch sociologists, among others, it has broadened its range of theoretical and empirical considerations to developing and transition countries, and to the global dynamics of environmental transformation (Huber 1982, Jänicke 1988, Spaargaren & Mol 1992, Mol 2001). In general, ecological modernization theory argues that in the course of environmental transformation processes, environmental NGOs will shift from protest and confrontation to more cooperative stances toward government and industry, encouraging environment-oriented business practices (Mol, 2000). This is in line with research on collaborative partnerships between environmental NGOs and businesses pursuing mutually beneficial ecological goals, in so-called 'green alliances' (Brand and De Bruijn, 1999; Stafford 2000; Arts 2002). Most of these studies, however, are based on alliances with large corporations, and even then show that collaboration faces several problems (cf. Rossi et al., 2000). As yet, little research has been done on base of ecological modernization theory to illuminate such problems and to provide strategies for overcoming them, particularly with regard to SMEs. While utilizing ecological modernization theory as a frame for understanding environment-oriented institutional change, the research will contribute to ecological modernization theory in further elaborating such NGO-business relationships. In analyzing the 'network society', Castells argues that SMEs are increasingly linked up into networks with other small and medium businesses as well as large corporations (Castells, 2000). Cooperation in networks has become a key issue in global economy, in order to have access to markets and to be able to compete. Cooperation with larger companies within industrial networks can motivate SMEs and provide them with resources for better environmental management (Korhonen 2000). To facilitate access of SMEs to networks, NGOs have to simultaneously operate at local, national and international levels, while interacting with large companies and international sponsors on one hand (i.e. multinationals, development cooperation organizations), and with target groups on the other hand (i.e. local organizations, community representatives, small entrepreneurs). In other words, they constitute bridges between government, market and civil society, and between the global north and the global south (Biekart, 2005). In incorporating aspects of network society and international flows into its theory framework, the research is in line with current developments in ecological modernization theory and other strands of environmental sociology (Spaargaren et al. 2006)


Central research aim:
 Provide better understanding of the roles of NGOs in environmental reform of SMEs in developing countries countries, in particular in Peru.

Specific research questions:
  (a) What actual and potential roles do NGOs play in supporting environmental reform of SMEs in Peru, and what kind of intermediary relationships with large businesses and development cooperation agencies are implied in these roles?
 (b) In supporting environmental reform of SMEs in Peru, how do local and international NGOs cooperate in international networks, and how do these international networks influence the access of small enterprises to capital, technology, and markets?
 (c) Which recommendations for environmental policy makers and NGOs can be derived from the findings on the previous questions, and in what way do these findings provide better understanding of the position of NGOs in ecological modernization and network society theories?


Case study research is adopted as the main methodology. Five case studies are planned. For each case semi-structured interviews will be made with local NGOs, SMEs and other relevant stakeholders (e.g. government, large industries). To determine the most relevant stakeholders, a method of mapping networks on base of document research and key informant interviews will be combined with an inductive method of following relevant network links that emerge from the interviews. In particular in the research of SMEs and local NGOs, other research tools (personal observation, and focus group) will be used as well. Interviews will be also held with international NGOs which belong to international networks promoting more sustainable business in Peru, with a focus on the international NGOs strongly involved in the case studies. The unit of analysis are networks of NGOs engaged in initiatives towards SMEs that bring the social and environmental concern in their business and market. Four approaches will be central: (a) Business Social Responsibility (BSR), (b) Organic Production, (c) Cleaner Production and (d) Economic Development. Each of the approaches represents a particular configuration of actors networks and discourses. Roughly characterized, BSR stems from business strategies, OP from civil society strategies, CP from techno-economics and ED from economics.

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Funding via University


Research Group

WUR - Environmental Policy

Last modified on Dec 4, 2006 09:59:08 AM by SENSE Administrator