Encouraging sustainable business practices using incentives: a practitioner's view

Abstract

Purpose – This conceptual paper aims to present a new framework for the use of incentives when encouraging small businesses to adopt more sustainable business practices. It seeks to identify and categorize various types of incentives. Design/methodology/approach – The incentives framework was designed as a practical tool for use during the development of a small business sustainability program. Although conceptual in nature, the framework is based on research conducted by the Washington State (USA) Department of Ecology that used, in part, a modified grounded theory approach. Findings – In addition to identifying and categorizing potential incentives, the paper presents an overview of mainstream thought on incentives and argues that incentives and disincentives are significantly different concepts. The paper identifies seven potential barriers to implementing incentives and summarizes potential solutions to those barriers. It also explains how incentives can be used to encourage sustainable behavior and corporate social responsibility reporting. Practical implications – The framework presented is intended to assist practitioners develop and structure incentive programs. It is also intended to provide guidance to practitioners regarding the current mainstream paradigm on incentives and recommends changes to that paradigm. Originality/value – The framework presented is entirely original. No similar framework appears to currently exist.