Best practices for SMEs outlined in new report

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Birmingham Jewellery Quarter analysed by Coventry University team.

A report on the jewellery industry carried out by Coventry University, the University of Salford and the University of Winchester is now available online, featuring the insights of businesses and customers who shop in Birmingham’s Jewellery Quarter.

The research, conducted by the Centre for Business in Society at Coventry University, is part of the Responsible Business Practices in SMEs: The Case of the Birmingham Jewellery Quarter project conducted by Prof Marylyn Carrigan, Dr Caroline Moraes and Dr Carmela Bosangit, with contributions from Dr Carlos Ferreira (CBiS), Dr Morven McEachern (University of Salford) and Dr Michelle McGrath (University of Winchester).

Titled Signalling Change: Jewellery SMEs and Corporate Social Responsibility, the report is aimed at the jewellery industry, CSR practitioners and policy-makers. It covers the opportunities and challenges faced by jewellery SMEs in implementing CSR in their day-to-day business, as well as the (potential) role of consumers in the process, with potential insights into how SMEs might do well by doing good.

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The results of this project will inform the upcoming BJA and CBiS Course: Understanding Jewellery Social Responsibility.

Key findings

“Jewellery SMEs in the Birmingham Jewellery Quarter feel they face increased pressure to engage in CSR activities. The increased engagement of larger jewellery companies and the added awareness raised by trade associations – both of which are motivated to avoid and minimise public opinion scandals – means jewellery SMEs are pressured into demonstrating their commitment to responsible jewellery. However, SMEs see themselves as only small pieces of a large industry, with very little capacity to make a substantial difference. They also feel that, as small players, they face disproportionate compliance costs.”

“Much of the work necessary for jewellery SMEs to comply with responsibility standards involves improved traceability of the provenance of materials. This is a tall order for small companies, which have neither the capital nor the information to provide full traceability of the products they sell. The business model of these companies consists of acquiring raw materials from suppliers and selling designed goods to consumers; as a result of only dealing with direct suppliers, they find it hard to ascertain what takes place upstream in their supply The small businesses can’t afford to be CSR audited. They can fill out some forms but they can’t afford an annual audit that might cost them a couple of grand. Scrap Metal Buyer and Recycler Signalling Change: Jewellery SMEs and Corporate Social Responsibility 6 chain. The sheer length of jewellery supply chains present obstacles to the adoption of CSR by small and medium enterprises.”

“The other challenging aspect of this business model is interpersonal. Because jewellery SMEs have a very small number of employees and typically deal with a small number of suppliers, business relationships become personal and extend over time. This is a necessity, as well as a feature, of the business: it is normal for SMEs to have repeated and frequent interactions with a small number of suppliers over time. Furthermore, these suppliers are often located close to the SME. The result is strong bonds of trust between individuals at the design, local manufacture and retail-end of the supply chain. Paradoxically, this high trust between individuals can be a negative factor in implementing supply chain traceability and CSR, as individuals’ mechanism for assuring the provenance of products is to ask their supplier and take the answer as a trustworthy, without hard evidence. Trust can be an obstacle to CSR adoption in jewellery SMEs."

“When it comes to responsibility, consumers trust jewellers to do the right thing. They have limited knowledge of the complexity of the jewellery industry, and rarely feel the need to research the ethics behind the products they acquire. When buying jewellery products, most consumers implicitly assume that they are not produced under contentious conditions, by an industry which behaves responsibly. While a few consumers will take ethical concerns to heart, once again trust (between consumers and jewellery retailers) results in reduced demand for CSR in the jewellery industry.”

"Despite this, jewellery SMEs appear comparatively unconvinced of the need for CSR."

"The over-reliance on consumers is a risky approach. As a group of specialists, the industry has a role in informing consumers, not waiting for them to demand responsible business practices. Furthermore, should the next PR scandal show that SMEs have not been pulling their weight on the responsibility front, it is possible that large retailers may gain even more competitive advantage against SMEs by being demonstrably ahead in the adoption and implementation of best practice. Adopting CSR could be a matter of survival for some jewellery SMEs."

 

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