Total quality management – Literature review

Literature review

The world experienced the quality revolution in the early 1990’s. From that instance organisations were improving in overall quality of the organisation. The companies around the world competed with their quality of products and services, price and delivery. Organisations believed that by improving the quality, they can achieve lower cost, fewer failures and better marketability.

In this period total quality management became popular. TQM is applied in organisations to improve its effectiveness, flexibility and competitiveness, by improving the overall quality of the organisation. It is focused mainly on continuous improvement. TQM is nothing but a philosophy and guide to organisations, which helps them in ways towards continuous improvement. TQM is a combination of system of systems. All the companies have not achieved competitive advantage or benefits using TQM is because of implementation and usage in the organisation. To be successful with TQM the indicators which are to be achieved by an organisation are the leadership, continuous improvements, internal or external co- operation, customer focus, learning, employee fulfilment and process management.

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According to Hansson and Klefsjö (2003) TQM can be defined as a management system, which consists of three interdependent units, namely core values, techniques and tools. But the definitions for total quality management are vague. The aim of TQM is Zero defect and it mainly emphasis on quality. The core values of TQM which will lead to better quality in the organisation is summarised from the authors (Boulter and Bendell, 2002, Ehresman, 1995, Ghobadian and Gallear 1995, Hansson and Klefsjö 2003, 2006 ) it is divided into three parts, first the whole organisation has to committed and work towards common goal i.e. continuous improvement. Secondly the customers are to be focused, through better satisfaction in the products and services. The decisions made with regard to customers are to be given the highest priority by top level management. Thirdly the decisions must be taken with trusted facts and figures.

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  • Boulter, L., Bendell, T. (2002), “How can ISO 9000:2000 help companies achieve excellence? What the company think”, Measuring Business Excellence, Vol. 6 No.2, pp.37-41.
  • Ehresman, T. (1995), Small Business Success through TQM, ASQC Quality Press, Milwaukee, WI.
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From the definition and study it is stated that the environmental management is a part of quality management. When the organisation is moving towards total improvement in performance, the environmental performance has its presence. Governments and agencies around the world created quality systems to help the organisations to achieve their quality objectives through quality management systems and environmental performance in environmental management systems. The QM and EMS share a common aim and values. QM and EMS are integrated now.

According to Wilkinson and Dale, 1998 and Karapetrovic and Willborn, 1998 integration can be carried out in many different ways but, the results differ in terms of applying it and it is also called as system of systems.

  • Wilkinson, G., Dale, B.G. (1998), “System integration: the views and activities of certification bodies”, The TQM Magazine, Vol. 10 No.4, pp.288-92
  • Karapetrovic, S., Willborn, W. (1998), “Integration of quality and environmental management systems”, The TQM Magazine, Vol. 10 No.3, pp.204-13.

For example the ISO has developed management systems separately for quality management and environmental management i.e. ISO9000 for quality and ISO14000 for environmental management. Integration was done by the technical committee in 2004 between quality and environment systems. They had explored the common factors between two systems and modified ISO 14000-2004 to enable organisations to use both systems at once. This resulted in superior performance in many organisations. They introduced the PDCA which is common for both systems. Bernardo et al, 2008

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Environmental management and quality management are parallel to each other. They have common factors like zero defects and no wastage and the process of implementation with corrective and preventive actions. But some basic value does not integrate, exactly with each other. QMS mainly concentrates on consumer requirements and on the other had EMS focuses on the environment. According to Chinn a new concept was formed in late 90s which was named as QEMS which means quality and environment management system. It has stated the common elements they worked upon. They are planning, objectives, management responsibility, communication, training, control of records and many others.

So when an organisation need to equipped with total quality system, the EMS will also must be in place to monitor the environmental sustainability measures from the organisation.

What is Benchmarking?

In the present business scenario, quality has become a major criterion in all aspects of the organisation, so the managers have taken up quality improvement tools such as total quality management, quality function development and continuous improvement. The exertion of these tools is to discover the flaws in the organisational process. The next step is to convert these flaws and improving the component. Here the question rises of how to fix these inadequacies?

Benchmarking is the way to fix them. As benchmarking is a quality improvement process. It is a systematic process of searching and monitoring the best practices in the sector. Benchmarking has been the concept of imitating the best practices in the industry. Organizations have to achieve cost benefits, better operations and better environment by which it induces the company to learn quickly and cheaply from adopting the best practices and performance standards from other companies in order to get better competitive advantage over its competitors. This can be extended anywhere because the ultimate goal is to be best in class.

Benchmarking is commonly used tool in the organisations. This technique can be implemented in all sectors and it is due to increasing competitiveness. Benchmark means to a unit on a scale for measurement. It was a fashionable concept for the large manufacturing companies which predominantly uses quantitative economic parameters, such as inventory turnover, set-up times, lead time, direct labour time or working time, return on sales, return on equity are measured.(Miller et al.,1992). Nowadays benchmarking is used everywhere and it is used to measure any process, activity, procedure in an organisation which may be of products or services.

Many authors and literatures have given many different forms of definitions for benchmarking. Definitions from Sarkis, Andersen and pettersen and Marosszeky and Karim are benchmarking means comparing the practices, operations, results of an organisation with the best organisation in the sector and adopt and practice the techniques used in there to improve one’s own organisation. And it focuses on continuous improvement, in quality and helps to learn from the competitors. Through which the faults and breakthroughs in the organisation can be easily identified and systematically dealt with. It also helps in improving the overall quality and business environment carried out through learning from each other. It forms a continuous and systematic improvement in an organisation’s processes, products and services which are being monitored and adopted from the best practices globally or nation wide or in a particular sector.

Benchmarking is used to achieve and maintain high level of competitiveness. It monitors the continuous improvement by the process of measuring the products, services and business practices against the best practices in the industry. The organisations strengths and weakness can be easily identified and measured with the best and toughest competitors in the industry.

Best practices is finding and using the best ways to achieve the desired objectives in the organisation. It is done by imitating the practices and processes of the organisation who are leaders in the sector and measuring the ways it worked with.

Benchmarking can be done in five steps for an organisation. Firstly the required data are collected in a planned manner from the organisation and the data is converted into a report format, which make it easy for analyzing the situation. After creating a report the gaps are to be detected and corrective action has to be implemented to fill the gaps. When the gaps in the organisation are corrected, review has to be done in regular intervals and reported. It is compared with best practice in the industry.

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Many organisations are not aware of what needed to be benchmarked. because of the lack of management knowledge. A key issue is that what to benchmark in business or an organisation. It is mainly used to compare and measure of business and product performance and how it is extended to the business processes. Determining the issues to be benchmarked is a critical issue. The following questions can aid to the question of what to benchmark with environment (Cassell et. al.., 2001)

  • To find the critical factors which are of organisation’s success
  • To find the process causing the trouble in the system
  • To find the process which contribute to maximum customer satisfaction and in which the performance is not to the expectation
  • Examine and define the competitive pressures impacting the organisation
  • What the processes which have the greatest potential for differentiating in the business competitiveness?

Environmental benchmarking

The environmental benchmarking is derived from benchmarking and it mainly focuses on the natural environment. It helps the organisation to become green and eco efficient by adopting the practices from the leaders in industry. It is also a quality improvement tool and has become very essential to an organisation. They are used to achieve environmental performance in the organisation i.e. it helps the organisation to manipulate on the natural environment. It is adapted in many organisations due to the pressure from stake holders, public and authorises.

According to Greeno and Robinson 1992, “Demands on companies to measure, document and disclose information about environmental performance will become invasive….and environmental performance will become a critical factor to scrutinize”. It is been predicted a decade ago, and the governments has now made it mandatory and bought it to the legislations that organisations must be environmental conscious and friendly.

According to Szekely, et. al.., 1996, Makrinou et al 2008 and Mandaraka, et. al 2003 Environmental benchmarking is used by various organisation in their practices, process and in business operation to achieve environmental efficiency and environmental performance. The tool framed to rigorously concentrate on every activity of the organisation and examines and compares the process to achieve its objectives. The process is the elimination and rectification of weak activities and processes in the organisation and the objective is to identify and access the abilities and attributes in business to achieve maximum environmental performance.

Most of the weak activities cause heavy pollution and burden to the environment. The weak process and activities are very dangerous to the environment and life. The world in has seen many industrial disasters in last two decades due to unhealthy practices and operations by the environment. The best examples are the
Efficient and maximum usage of virgin materials in the organisation, recycling of waste, waste, treatment plant to neutralise end pipe discharge, maximum utilization of assets and machinery and power saving equipments and minimum usage of non renewable resource.

Minor modifications in the process of operations in the organisations, will lead to lesser impact on the environment and can avoid these kinds of disasters in future. The improved process, practices and operations can be identified from the best practices. Benchmarking tools helps in finding the best practices in national and international level. Environmental benchmarking is an integral part of environmental management systems. This helps in setting up of goals and targets for an organization towards environmental efficiency. It also helps in monitoring the performance of the targets which are to be achieved towards better environment. It is one of the tools used in management systems like EMS (Bolli and Emtairah 2001).

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Environmental management system

EMS is a management type system which aims in managing the environmental aspects of the organisation in a pro active way, and it directly relates to the organisation’s overall performance. It relates to the process, practices, products and services and day to day operations. The main objective of Ems is to continually improve the environmental performance of the organisation with overall performance.

Ems is a collection of policies, statements, assessments, plan and actions which directly or indirectly affects the organisation and its performance. Organisations achieve environmental performance with Ems in a systematic manner. It is a continuous cycle which plans, implements, reviews and improves the practices and processes of the organisation for continuous improvement towards environmental sustainability. Ems mainly focuses on minimizing the environmental impacts of the organisation on the natural environment.

The main objectives of Ems for the SMEs are

It induces the organisation to have an environmental management system. It assists the SMEs in understanding the concepts of Ems in their operations, in order to help the management to adopt precisely. This reduces the impacts on natural environment and it is easy to comply with the regulation. This helps in cost savings and increased productivity. The third objective is developing a awareness with the SMEs entrepreneurs, regarding the importance of environment and the organisation’s impact on them. It helps the SMEs in creating a strong foundation to implement the international standards like ISO and EMAS in organisations.

According to British standards institute, Ems is defined as “the organisational structure, responsibilities, practices, procedures, processes and resources for determining and implementing environmental policy. According to BSI is nothing but an environmental policy which outlines the organisation’s commitment to the environmental performance.

Many organisation in different countries follow and adopt the environmental management system such as BS8555, ISO 14000 series, EMAS, Green dragon. But in common it works on the Deming Cycle. “Plan, what you are going to do, do what you planned to do, check to ensure that you did what you planned to do and act to make improvements”.

SMEs adopt EMS

EMS is an unobserved quality. It can be examined only by the drivers, practices. The organisations are motivated to use EMS and its environmental strategies to increase their efficiency and legitimacy. It is very controversial because from the study of —— states those SMEs are not only motivated by the rewards and befits such as environmental performance, organisational/business performance and export orientation but they are pressurized to adopt EMS by their stake holders and institutional pressures.

According to Khanna and Anton 2002 EMS becomes complete when they are more environmental practices is undertaken in the organisation. The environmental practices are the environmental policy, evaluation, training for employees, regular audits of internal and external in nature, environmental performance and benchmarking with the best practices, goals and targets and public report.

Motivation and EMS

Motivation is the driving force behind for an organisation to implement a management techniques or tool or system in their operations and business process. The factors and statistics which can be used to motivate the organisations to implement EMS in their organisation and in the same time become environmentally sustainable and reduce the impact on natural environment. The factors are the organisation can achieve compliance with the regulations of the government, it creates an eco friendly image to the stake holders and better marketability options and it also reduces cost with greater organisational performance.

Export orientation

In the globalised world export and import has taken the centre stage. Export orientation becomes imperative when organisation operates within or depends on the foreign markets. When the goods are carried out of national borders EMS becomes essential to meet the demands of the importing country and the needs of diverse customers. Buyers gain trust of exporters by looking into the operations and eco friendly procedures and facilities implemented in the organisation.

EMS and organisational Performance

A management system is framed and practiced in the business is to gain from the management practices. The gain or benefit can be in the form of monetary benefit or non monetary benefit.

EMS and environmental performance

EMS and pressure on SMEs

SMEs are exposed to stakeholder’s pressure to adopt environmental management system. The stakeholders are person, group, organisation or the government which has a direct or indirect stake in the organisation and can or would be affected by the organisations policy, decision and operations. The stake holders for an SME are

Regulatory pressure

The regulatory pressure is created from the regulators, governments, insurers on the organisation to curb their pollution levels and employ eco friendly operations and which doesn’t impact the natural environment. If the organisations fail, it is imposed with fines, penalties, strategic actions or even closure of firms. The regulatory pressure creates an opportunity for the organisation to become more competitive and capitalize of the situation. But when the regulation becomes stricter, the SMEs are compelled to implement costly pollution control technologies. Better pollution control leads to lesser insurance premiums and better credit options from the bank and financial agencies.

Market pressure

In this competitive world the organisations are concerned about the market share. Customers have become concerned about the natural environment and they have started to use the products and services of the organisations which are eco efficient and sustainable towards the environment. When organisation adopts EMS it increases organisation’s reputation. The market pressures drive the managers to adopt EMS to survive in the business and to stay competitive.

Social pressure

An organisation must have a better public image to survive and competitive in the market. To gain the image the organisation need to become environmental friendly and work towards continual improvement. The word social include the environmental organisation, community groups, labour unions and association which regards to trade. There is been a increase in awareness towards the natural environment in recent times because of industrial accident like Bhopal disaster and Exxon oil spill which shock the world. When an organisation does not implement EMS in their organisation the worst scenario of boycott of goods and it may damage the image in the business environment.

Ownership pressure

This pressure is imposed on the organisation by their share holders. In SMEs the share holders are in the form of partnership within the company. The pressure is on the organisation to adopt EMS with wide-range of tools and techniques to create an environmental friendly organisation. Organisation is prone to financial liabilities when it has a poor reputation in terms of environment and performance.

Internal and external barriers to SMEs in adopting EMS

Internal barriers are of resources, understanding and perception, implementation and attitudes and company culture. SMEs are lack of time from the management and staff, to concentrate on EMS implementation and maintenance. Staffs in SMEs lack managerial skill and it is not possible for SMEs to give training due to the constraint of limited resources. When there is an inexperienced or unskilled staff force it becomes difficult to implement EMS, because lack of understanding of the procedures, policies and legal compliances. Implementation of EMS is very cumbersome. Minor breaches in the implementation would cause a heavy loss of resources to the organisation and possible deregistration from the standards. SMEs have to concentrate on continual improvement and it is very difficult to adopt in every stage on the process.

The external barriers are the obstacles and hindrances which arise from the external environment of the organisation. High costs of recruiting a consultant and verification/ certification is a major barrier to the SMEs. They are limited number of verifiers in each country and it becomes more expensive to hire. SMEs are not beneficial with EMS because of change in economic climate and Uncertainty which prevails within the market for the value of EMS standard.

Benefits and disbenefits of SMEs adopting EMS

Small and medium scale enterprises around the world share common characteristics. According to ———- SMEs around the world contribute 70 percent of pollution ie the SMEs cause great impact to the natural environment. So the EMS model was adapted to SMEs from large scales enterprises. SMEs adapting EMS face disbenefits or non materialization benefits from EMS in their organisation. They are being classified into three (i) resources (ii) surprises (iii) lack of rewards.

SMEs characteristics are it lacks professionalism, lack of knowledge, is has started with a minimum capital, lack of skills and time. They also have the barrier of specialized staff and skills to co ordinate the EMS activities in the organisation. The SME has to rely completely on consultants for the certification and adaption on EMS. It is evident that, some may misguide and it results in negative results and wastage of resources for the organisation. SMEs have to incur cost of certification and implementation which is of high capital expenditure to the organisation. which is beyond reach for many organisations. The EMS surprises the SMEs with resources and time spent to implement system which are complex in nature. The other surprises are it is difficult to meet the expectations of all stake holders, it difficult to synchronise with other management systems, complexity and non compliance. According to Eliot 1996 it is a double edged sword to the SMEs. They show dissatisfaction in adopting and compliance with EMS.

In this present scenario the companies and the governments had known the importance of an EMS to protect environment and move towards environmental performance and made mandatory for certain sectors to implement and practice in their organisation.

The need for improved environmental management is based on two types from the organisation (Mandaraka, et. al..,2003 pg 1)

  1. They think that by practising these will be beneficial for the planet and global sustainability.
  2. The second category thinks that it is important in the future for sustainable commerce.

But many studies have proved that adopting EMS in the SMEs is beneficial to the natural environment and the organisation in many ways. According to ———-, the focus of the EMS is to reduce the waste in the organisation. Reducing waste has many benefits to the organisation both internally and externally. It reduces the cost of production and operations by means of recycling and reducing the waste. The organisation increases its marketability options with these factors and results in improved relationship and company image with stakeholders. Implementing EMS will replace defective actions with corrective ones which would minimize the pollution incidents and better organisational performance. These activities will reduce the financial burdens through reduced environmental breach and penalties, better compliance, implementation of eco friendly technologies, can gain better control over operation, chances of better and new business opportunities and increase in employee morale and commitment towards environment. It consistently reduces the risk. The customer demands such as Green consumerism will lead to better performance in the market with better environmental profiles.

Environmental management system and standards in United Kingdom

In United Kingdom, any organisation which does business inside the national boundaries is bound to comply with laws of the European Union and the laws of the nation. Years back the organisations concentrated towards the trade offs total quality and laid emphasis in products and services, but now the organisations have become more conscious and proactive towards environmental performance parallel with organisational performance.

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In United Kingdom, organisation which has any one of these four standards is said to have reached the legal compliance with the legislation. The systems are namely ISO 14000 series, Eco EMAS, BS 8555 and Green dragon. British Standardization institute is the final approving authority.

Environmental management system and standards in India

From the day of linearization and globalization a lot of activities is happening in Indian organisations. According to The Hindu the minister for environment and forestry had stated that the environmental compliance standard and pollution control regulations in the country are three decades old. The pollution level in the country was low because the country’s primary occupation was agriculture. But due the industrialization and economic pacts and agreements it has become the safe haven for organisations throughout the world.

In the report by the minister it is stated that the environmental policy and compliance standard will be raised to standards of European Union and United States of America. The BIS (bureau of Indian standards) is the official agency to authorise environmental management system in India. They have advised only ISO 14000 as the environmental management system in Indian business.

Environmental management standards

ISO 14000 series

In 1990’s the way of doing business took a transformation and it was known as time of change and transition in the business environment. Earlier the organisations concentrated on quality and lead time which will bring cost benefits and other non financial benefits to the organisation. But now, managers are expected to concentrate more on environment and to be environmentally responsible and conscious.

An organisation is said to be environmentally responsible when it adopts and practice an Environmental management system. In 1996 the international organisation for standardization introduced ISO 14000 series for organisation around the world to achieve the organisation’s environmental objectives and targets of organisation parallel to organisation performance (Montabon 2000). It primary aim is “NO WASTE” for any organisation with ISO.

ISO14000 is an internationally voluntary standard. It can be divided into two categories. They are the specification standards and the guidance standards. It can be also called as guidelines which are to be followed towards environmental performance of organisation. It creates an environmental policy and adopts the gap analysis where the gaps in the organisation are identified and corrective measures are taken with ISO 14000 series. Nowadays this is used more as a marketing tool rather than an environmental protector (Seiffert 2008).

STAGES OF IMPLEAMENTING ISO 14000 SERIES

Environmental policy

Environmental policy is a formal and written statement with set of principles, company’s mission, objectives, targets with respect to the environment. All organisation which plans to start an EMS will have an environmental policy, which is a guide throughout the process. A policy must contain aims and objectives, commitment by the management and staff, towards continual improvement and to state that it is complying with the environmental legislations and other requirements of the nation.

Planning

The company’s aim and objectives has to comply with environmental policy in order to achieve the stated targets and objectives. The objectives created are very broad to the organisation, to improve its environmental performance it has relay on targets. A measure has to be taken to check whether the set of objectives and performance measures coincide one another. Every objective is be divided into many targets for the benefit of the company.

Implementation and operation

By successfully setting up the plan the company must put in all the elements and commitments from all the sources to reach the desired objectives. The support from the management, staff, stake holders, public and government is very crucial.

Checking corrective action

After the implementation, the company has to check the operations are driven towards the set objectives to meet the targets. If they are any deviations then a corrective action must be put in place and the process has to start from the first. This process should continue periodically throughout the company. This will improve the standard of operation in the organisation.

Management review

The review is done periodically to ensure the desired objectives are met accurately. The management can make any changes necessary for the efficient functioning of the organisation.

From Seiffert 2008, Balzarova and Castka 2008, Reilly et al., 2000, Morgon et al., 1999, ISO 2009, Hillary 2003, Rondineli and Vastag 2000 and Ofori, Gang, Biffett 2002. The advantages and disadvantages of ISO 14000 series are

ISO 14000 is recognised by all the governing bodies around the world. They are voluntary and flexible, and it is used by all kinds of organisations from micro to large corporations. It is very flexible that an organisation can easily upgrade its old environmental systems with ISO 14000 series without any hindrances. Implementation of ISO 14000 helps in reduction of costs through waste management, lower environmental taxes, better performance leads to better savings and deliver the product and services at a low cost, possible through efficient usage of resources. But it is very costly to implement. The cost of training the employees and staff adds to the cost. Certainly the cost of implementing it will certainly outweigh its benefits.

ISO 14000 is available is different languages which helps to understand better. But in developing and third world countries specialized and expertise are not available to guide the organisation towards their goals and objectives. But with a specialist the goals and objectives can be achieved easily. Tangible data can be easily collected and which are helpful but in practice the organisation doesn’t bring tangible benefits and it is difficult to ascertain actual performance of the organisation. It also helps in identifying the relationship between management and environmental performance.

Organisation’s external benefits are better public image, easy marketing of products, customer and stake holder’s pressure and sense of social responsibility. Benchmarking can be done easily which helps the industry to perform better by adopting the best practices available. But it is not a panacea for all environmental management problems and it does not answer to all questions to organisation’s environmental performance.

Basically ISO 14000 is an assumption. The guidelines are an assumption that a good environmental management system will reduce and eliminate the impacts on the environment by the organisation and path towards environmental performance. The implementation of EMS like 14000 series helps in selling the products around the world but, if the implementation often relies from the pressure from the peers, incentives and legislations that becomes ineffective. An organisation can hold its certificate, even when it’s not working towards environmental performance. There is no provision for de- certifying an organisation. This proves to be costly for the organisation which work towards environment and it is also demoralizing for the organisations that are in practice.

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British standards 8555 (BS 8555)

The world’s first environmental management system was developed by the British institute in the 1992. The BS 7750 was taken as a pilot research as it was published in the year 1994. (BSI, 2003)

The British standards institute and the department of trade and industry started with the project named Acorn from which the BS 8555 was developed in the 2003 to overcome the barriers to the fullest. This tool consists of 6 phases through which an organisation can get certified. This was mainly developed for the small and medium scale enterprises. The bs8555 designed to achieve environmental management systems either ISO or EMAS and by concentrating on environmental performance the scheme is to achieve competitive advantage, delivering measurable benefits and reports of performance to internal and external factors. To evaluate and improve through BS8555 it should be drawn on the six phase and they are

By implementation and following the BS8555 gives a organisation a better public image through conserving the environment and a better competitive advantage in the sector. The intention of the SMES is clear as the want to save cost and acquire befits at the earliest through reduced pollution and increased recycling. So the tool is designed in front load approach so that the rest of the process is carried on smoothly. The legal compliance of the organisation is improved and when the organisation goes to every phase the gaps and pitfalls can be rectified and leads to better management and improved staffing. Gunningham 2002, IEMA 2009, Crognale 2008

But the BS 8555 has some barriers which restricts the organisation to practice. According to Hilary the barriers are divided into internal and external to the enterprise. The basic blockade to SMES is the lack of resources in management, staff, technology, time, finance and understanding. There is no government which has made compulsory to implement EMS in all enterprises which has an effect of legal compliance. The cost of implementing and certifying causes dissatisfaction due to lesser return from practicing it. (Hillary 2007) The BS 8555 has not delivered its full potential because it has not worked out thoroughly by most of the organisation. Organisations tend to stop at the phase 3 in the implementation program. (Price 2007)

  • Crongnale 2008 http://web.ebscohost.com/ehost/pdf?vid=2&hid=103&sid=746a4689-c1f1-4a7e-8448-6aa5f42da827%40sessionmgr112
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  • Hillary, R,. (2004) Environmental management systems and the smaller enterprise, Journal of Cleaner Production, Vol 12, pp 561-569
  • Gunningham, N (2002), “Regulating Small and Medium Sized Enterprises”, Journal of Environmental Law, 14(1), pages 3-32.
  • BSI (2003) British standards BS 8555: 2003 environmental management systems, guide to the phase implementation an environmental management system including the use of environmental performance evaluations, British Standards Institute, London
  • http://www.bsigroup.com/en/Assessment-and-certification-services/management-systems/Standards-and-Schemes/BS-8555-STEMS/

Green dragon

Green dragon standard is unique; it is effectively used and recognised in Wales by local authorities, community groups and private sector companies. It is recognised as a effective environmental management system available to all types of companies from small to large in the region. This standard was developed to suit the business needs and it is mainly developed to help enterprises who are aspiring to get ISO or EMAS which is very daunting. Many enterprises have taken up steps to acquire a certification but the steps, efforts and resources utilized do not receive any recognition. (Groundwork 2009)

With the green standard there are five levels. When a business completes any level it receives a certificate stating its commitment to the environment. If the company goes pass the second level it is allowed to use the logo in its marketing campaign and its products. (Groundwork 2009)

By adopting green dragon the organisation can save cost, improved performance, environmental compliance and better public image. With this benefits to the company the relationship with the suppliers and stake holders will strengthen and better opportunities to market the products and services. But green dragon standard is practiced only in Wales and it doesn’t receive a universal acceptance like other standards. Due to the low cost of adopting the standard has given an upper hand in the state of Wales. The companies can receive assistance for £300 a day to achieve the received performance to fulfil the requirements for green dragon standard. (Groundwork 2009)

Read also  Damage to the Environment as a Consequence of Worldwide Improvement in the Standard of Living

GROUNDWORK is the only body in Wales which accredits the green dragon environmental standard.

  • Groundwork 2009, http://www.groundworkinwales.org.uk/11281.file.dld
  • Groundwork 2009, http://www.groundworkinwales.org.uk/greendragon/index.html

EMAS

The European eco management audit scheme is a environmental management tool for the companies to improve on its environmental performance. This standard was designed and made available in the year 1993 to the industrial sector. In 2001, the EMAS was modified to suit all forms of business and implemented in 27 member states of European Union and three countries. It is being used as a trademark in its products and services. It was designed only for the European Union and European economic area.

Basically, it is a voluntary scheme which aims in helping the participating organisations to identify and manage their impacts on the environment. EMAS is very closely related with Best value, Investor in people, quality management and performance management system. It is designed to give recognition and reward to company with minimum legal compliance and shows a continual improvement towards the environment. Unlike the ISO it is a certification of environmental compliance. When the external environmental audit is done and satisfied, the logo is given to the organisation (Kirkless Council, 2006).

Stages of implementing EMAS

The main objectives of EMAS are to achieve continual improvement towards the company’s performance on natural environment (EMAS 2009). The following steps have to be carried out to get the company registered against EMAS.

Environmental review

The review must contain all activities of the company i.e. from operations, products and services, production process, existing EMS and the basic legal framework.

Establish an EMS

After the review and the results, the data is used in establishing an effective EMS which would suit the company’s policies and objectives. The established EMS has to be effective when implemented in the organisation. The requirements of the framework are definite objectives, operational procedures, and need of timely training and monitoring other systems.

Environmental audit

Internal audits are normal feature of any management system. The audit evaluates the company based on the objectives farmed in the environmental programme. The audit is done to evaluate the company’s operations and other activities. To access whether the company is capable of achieving its environmental programme, objectives and targets are used. These audits must be carried out in regular intervals to monitor the organisation’s progress. Monitoring the progress will lead to corrective actions in the defective areas and it can replace the faulty ones and drives towards continuous improvement and to attain planned objectives and targets.

Prepare an environmental statement

Environment statement has to be drafted carefully, because it will be available to public. It should contain the result, that is achieved in process and it paves the way for better and continual improvement.

Get validation and register

When the procedures are completed an independent verifier certifies the company and checks whether the policy, audit and the environmental statement are in compliance with the EMAS regulation. Then it is sent to a central board for verification and it is would ask the organisation to publish the results and then the company is recognised and ready to use the logo.

The advantages and disadvantages of EMAS from Europa 2009, Emas 2002

EMAS guides in regulating a part or the whole organisation which includes its structure, planning process, practices, procedures and utilization of its resources. These activities and corrective actions give a better competitive advantage for the registered companies in the market arena through its marketability and cost options. The cost of operations can be reduced through recycling, and will prevent environmental accidents and disasters. The registered companies with the logo of EMAS in their products lead to a better public image and better relationships with the stake holders and communities.

But the registered companies are not guaranteed with competitive advantage, it is based on the management positive influence and approach with effective use of EMS. The cost of certification is very high and to organisations of small and medium scale it is difficult to bear them. The specialized staff and technical assistance is not available to SMES in the affordable cost. The return of investment is slow and can be achieved only in the long term. The advantages from adopting EMAS are more than its disadvantages. In UK and EU more than 25 percent of the business have adopted and been following the EMAS in their organisation.

Ref:-

  • http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFX-4WGMB4H-4&_user=7456521&_coverDate=11%2F30%2F2009&_alid=1107752576&_rdoc=4&_fmt=high&_orig=search&_cdi=6022&_sort=r&_st=4&_docanchor=&_ct=2394&_acct=C000011479&_version=1&_urlVersion=0&_userid=7456521&md5=7348f900a79c2caa4f61a519adb5b864
  • http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V9T-454TMD6-2&_user=7456521&_coverDate=04%2F30%2F2002&_alid=1107752576&_rdoc=6&_fmt=high&_orig=search&_cdi=5907&_sort=r&_st=4&_docanchor=&_ct=2394&_acct=C000011479&_version=1&_urlVersion=0&_userid=7456521&md5=002446f658e372b12319ce79d579f8da

SMES in United Kingdom

The small and medium scale enterprises have a major contribution to the country’s economic growth. It is been contributing to gross domestic product of the country. From the study it states that SMEs are playing an eminent role in bring the economy from this present recession by showing an increase in the level of employment, products, service and innovation. It is proved from the statistics from the department for business skills and innovation. There are about 4 million enterprises in UK.

The SMEs in UK has been generating employment for 13.7 million people with an increase in 2.7 percent every year. SMEs account for 1.48 trillion in GDP to the UK’s economy. The total number of SMEs accounts to 99.9 percent of all enterprises and they are contribute to 59.4 percent employment and 50.1 percent of turnover which is £1500 billion and increasing at a rate of 4.2 percent per annum. It also contributes to nearly 70 percent of environmental pollution from its activities. The World Bank rates UK’s economy in the top ten in the world because its importance towards SMEs and a place where the business is done with ease (BERR 2008).

The definition for small and medium scale enterprises differs from country to country. They classify the organisation according to employment, turnover or balance sheet. In United Kingdom, the BERR has defined small enterprises are organisations which has less than 49 employees and medium enterprisers are organisation which has less than 250 employees.

  • BERR 2008, Enterprise and small business [Online]. Available from: http://www.berr.gov.uk/whatwedo/enterprise/enterprisesmes/index.html [Accessed on 4th May 2009]
  • BERR 2008, Enterprise and small business [Online]. Available from: http://www.berr.gov.uk/whatwedo/enterprise/enterprisesmes/research-and-statistics/statistics/page38563.html [Accessed on 4th May 2009]
  • http://stats.berr.gov.uk/ed/sme/smestats2008-ukspr.pdf

BIS 2009 SMES in India

From the time of independence and the first industrial policy, the government has been concentrating on the small and medium scale enterprises. SMEs are given duo importance until 1991, when liberalization has begun and the market was open for all. Till date the sector is monitored thoroughly and restriction has been in place to protect the SMEs in India. Today the country is experiencing a planned growth in the economy with greater transition towards market friendliness. The restrictions like certain products are reserved for the SMEs and large enterprises are not allowed in certain geographical locations. The policies and has been framed in a manner to support SMEs to a larger extent. In present day scenario the SMEs are involved in activities of basic nature to sophisticated ones. In the present day condition India is the second fastest growing economy next to china. It accounts a growth rate of 8 percent. The market is growing rapidly and Indian industry is making remarkable progress with SMEs in various Industries like Manufacturing, Precision Engineering, Food Processing, Pharmaceuticals, Textile & Garments, Retail, IT, Agro and Service sectors.

But Indian SMEs are unorganised which is major barrier or constraint for the policy makers to frame policies for their overall growth. Un-doubtfully SMEs are the back bone to the growing Indian economy. It accounts for 90 percent of industrial units and 40 percent of value contribution in manufacturing sector. There are about 3.32 million units around the country producing about 8000 products. It has employed nearly 29.4 million people. In the case of India the SMEs contribution to environmental degradation is not available but the global figures can be adopted I.e., 70 percent. From the reports of Indian environmental and forest minister the country is behind two decades in environmental policy. Hence in November 2009 that has been updated to the standards of the European Union and in better standard than that of Untied States of America. The difficulty of impleamenting is caused due the large number of organisations which is unorganised in SMEs sector, financial constraints to employ eco friendly operation, low level of R&D, and lack of professionalism and lack of unilateral law for a better environment.

The government of India played an important role in developing the SMEs for almost three decades until the liberalization policy and still lends its support. Through which the SMEs have gained higher contribution to the domestic market, it has been supporting the government in import substitution and has been exporting a considerable percentage from all the sectors through which there is decline in trade deficit. SMEs are mostly labour intensive through which more employment is generated and with the support from the government and ministry of SMEs newer technologies are being used and also entered the technology market. It contributes to the defence production.

  • http://www.dsir.gov.in/reports/mitcon/chap2.pdf
  • http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1080505
  • http://india.smetoolkit.org/india/en/content/en/279/Creating-an-Environmental-Management-System-EMS-SME CHAMBER OF INDIA
  • http://www.smechamberofindia.com/rol_of_sme_sector.aspx
  • http://venus.unive.it/stocket/SMEs%20in%20global%20market.pdf

DISR 2009, ECOTEC 2000 and IIMA 2007

The SMEs are considered very important in every country, as it contributes to the two third of business happening around the world. The contributions to the world economy and to each country are very crucial and important. The small and medium scale enterprises share common characteristics around the world with minor changes according to the market conditions, legal structure and business factors.

SMEs are started with just one idea or product in mind. It is mostly controlled by the owner of the organisation with his managerial skills and experience and is operated with flexibility. Thus SMEs have greater operational flexibility when compared to the large organisations. They are mainly dependent on low cost production techniques due to their limited resources. Due to which, they have been concentrating only in the domestic markets and sometime they may enter the export sector but with limited production. They are mainly labour oriented and the level investment is very minimal. The risk of investment is entirely borne by the owner(s) of the organisation.

The SMEs have a unique characteristic, which is innovation in business and quick adoptability to market conditions. These characteristics help the SMEs to explore the foreign markets quickly. But they are mainly dependent on the available local resources and they play a vital role in stabilizing the imbalance in the regional level. Nowadays they are export oriented and which becomes economically important for developing countries.

But the SMEs have a number of barriers which stops their own growth and the growth of the economy. The governments and world organisations have stepped in to help the SMEs to overcome the barriers like limited resources in capital, raw materials, technology and labour force which form as a barrier to growth. To overcome these barriers the governments and the world organisation has been proving credit to certain SMEs and provides better technology.

SMEs in Coimbatore and Tirupur Districts

70 percent of industrial pollution by smes

  • http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFX-4B1SK17-2&_user=138221&_coverDate=08%2F31%2F2004&_fmt=full&_orig=search&_cdi=6022&view=c&_acct=C000011479&_version=1&_urlVersion=0&_userid=138221&md5=5243569a7130440842bd58c7ba90c359&ref=full
  • http://web.ebscohost.com/ehost/pdf?vid=2&hid=103&sid=fb9ecade-aa7e-4e98-9f02-d648361b2c93%40sessionmgr110

iso imp

  • http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2S-4BY3NFT-3&_user=138221&_coverDate=06%2F30%2F2005&_alid=1117351169&_rdoc=4&_fmt=high&_orig=search&_cdi=5710&_sort=r&_st=4&_docanchor=&_ct=575&_acct=C000011479&_version=1&_urlVersion=0&_userid=138221&md5=53e1a958e91cc66f3e98321d8659e3ff

Finance in India

  • http://siteresources.worldbank.org/INTACCESSFINANCE/64187549-1139518316481/20820511/AF2_Basu_article.pdf
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