Integrating Sustainability into Strategic Management: A Pathway for Family Businesses to Achieve Long-Term Success

Abstract

Strategic sustainability management in small and medium-sized enterprises (SMEs) entails embedding envi-ronmental, social, and economic dimensions of sustainability into core business strategies. Unlike larger corporations, SMEs face distinct challenges in balancing profitability and growth with sustainable practices, primarily due to constraints in resources and scale. Nevertheless, many SMEs are increasingly recognizing sustainability as a strategic lever for enhancing competitiveness, resilience, and innovation, extending be-yond mere regulatory compliance. Integrating sustainability into strategic management enables SMEs to navigate emerging trends, adapt to regulatory shifts, and respond to evolving consumer demands, while simultaneously mitigating risks, improving operational efficiency, and attracting investment. The aim of this case study is to explore current sustainability level, the establishment of sustainability goals, and the creation of a sustainability brand, while addressing the challenges posed by new regulations, client expectations, and market demands. By analyzing these key elements, the study seeks to provide insights into how organizations can effectively navigate the complexities of sustainability integration and meet evolving external pressures and simultaneously align their operations with long-term sustainability objec-tives. Through the application of diverse methodologies, including brainstorming, development of an emis-sion reduction roadmap, and utilization of the EcoVadis platform, this study seeks to examine the integra-tion of sustainability into strategic frameworks, ensuring its implementation across all operational levels. Additionally, it explores the necessary operational transformations and specific actions required to achieve these goals Through a mixed-methods research approach, including document analysis, interview, carbon footprint assessments, surveys, OHSEQ system audits and using EcoVadis platform, the study evaluates the compa-ny's current sustainability practices, identifies existing challenges, and proposes solutions aimed at aligning its operations with the sustainability expectations of customers, investors, and authorities. The research highlights key customer and investor demands, such as transparency, ambitious environmental targets, and demonstrable progress. To achieve full integration of sustainability, the company must prioritize critical sustainability drivers and risks, align its strategies with external regulatory frameworks, and implement necessary changes such as transitioning to renewable energy, improving energy efficiency, and fostering collaboration across the supply chain. The mixed-methods approach, combining qualitative and quantita-tive data, provides a comprehensive and nuanced understanding of the company’s sustainability potential. Key challenges identified include limited employee engagement and the complexity of embedding sus-tainability across all operational processes. The outcomes of sustainability development processes, which the thesis presents, are a roadmap for enhancing sustainability practices, recommendations for employee training, increase transparency, promote sustainable innovation, and address biodiversity concerns. These findings offer valuable insights not only for the case company but also for other family-owned businesses and SMEs, contributing to the broader discourse on integrating sustainability into business strategy.