Strategies for Implementing Green Business in Indonesian Small and Medium-Sized Enterprises

Abstract

Environmental problems are not only the responsibility of government but the responsibility of everyone. In the Indonesian business context, large-sized enterprises (LSEs) are required to control and manage environmental impacts caused by their operations. Small and medium-sized enterprises (SMEs), which have reached 59.2 million in number, have the potential to contribute to environmental impacts around the area of their operation. Green business is a relatively new concept that is not widely understood by SME entrepreneurs. The purpose of this study is to identify the antecedent variables of intention to implement green business by SMEs. By using extended TAM, this study covered six variables, four internal variables, and two external variables. The results show that the intention to adopt green business (IGB) was affected by the attitude (ATT) of SME entrepreneurs. Furthermore, ATT is only influenced by the perceived ease of use of green business (PEU). Trust as an external variable does not affect the perception of usefulness (PU), but affects the PEU. Risk negatively affects PU and positively affects PEU. Mastery of knowledge about green business becomes an obstacle in implementing green business. The government, universities, and NGOs need to work together to set standards, socialize, control, and evaluate the implementation of green business among SMEs.

Keywords: Green Business, SMEs, Risk, Trust, TAM

JEL Classification: M41