SMEs’ social and environmental initiatives in Indonesia: an institutional and resource-based analysis

Purpose The purpose of this study is to explore the motivation of social and environmental initiatives among small- and medium-sized enterprises (SMEs) in Indonesia. Design/methodology/approach Using institutional and resource-based theory, this study uses qualitative approach, and data were collected by interviewing 17 SMEs owners who adopt social and environmental initiatives in their business. Findings This study found that SME engagement in social and environmental practices is more by the intrinsic values of the owners with strong morality-based motives than the organisational need for competitive advantage. This finding indicates that the SME owner's personal values are translated into corporate values with limited consideration for organisational capacity. Nevertheless, there are various antecedent factors related to SMEs' social and environmental engagement. SMEs' social motives are driven more by the religious values of the owners, while environmental initiatives are generated as a result of the internalisation of knowledge and insight from the education system of the owners. Practical implications This study finding revealed that experiences of SME owners during their school time significantly affect their environmental interests. Accordingly, the authors argued that the education for sustainable development agendas should be thoughtfully designed in higher education's curriculum and ecosystem. So, the mindset of social and environmental awareness had been cultivated as the core value of future entrepreneurs. Originality/value The paper describes antecedent factors of social and environmental interests of SMEs in Indonesia.