A sustainable business strategy framework for small and medium enterprises

Abstract

Orientation: Business sustainability in today’s world is primarily arduous owing to global economic and financial crises. In the first quarter of 2019, according to Statistics South Africa, the Gross Domestic Product deteriorated by 3.2%. Similarly, in KwaZulu-Natal, the state of sustainability of small and medium enterprises (SMEs) was on the decline and the majority (75%) of SMEs failed after operating for 3 years. Research purpose: To formulate a business strategy to assist SMEs achieve sustainability. Motivation for the study: Small and medium enterprises in KwaZulu-Natal do not sustain themselves for long-term periods, the underlying problem being poor strategy formulation and hence, the need for a strategy to achieve sustainability. Research design, approach and method: A mixed methodology approach was used in this empirical study. A target population of 488 000 SME’s were considered with a sample size of 384 expected respondents. A total of 200 responses(> 52% of the target sample size) were obtained from the questionnaire within a capped period of 30 days. The Social Package for Social Sciences software was used for the quantitative aspect. In particular cross tabulations, central tendencies, and group difference techniques were used to analyse the data. In addition, the grounded theory was employed on a target of 20 individuals who were interviewed to investigate opinions towards strategy development and sustainability in KZN and NVivo software was used for the qualitative aspect. Main findings: The core element of ‘Strategy’ and the sub-elements of ‘Change’, ‘Purpose’ and ‘Leadership’ were investigated. It was found that ‘Change’, ‘Purpose’ and ‘Leadership’ were the main contributors towards achieving sustainability. Furthermore, a systems thinking model was used successfully to indicate the interdependencies to purport the goal of achieving sustainability. Ultimately it was found that ‘Strategy’, ‘Change’, ‘Purpose’ and ‘Leadership’ were required to achieve a ‘sustainable business strategy’. Practical/managerial implications: Due cognisance should be taken by leaders, from the perspectives of ‘Change’, ‘Purpose’ and ‘Leadership’, to formulate a strategy that sustains the business. Contribution/value-add: A conceptual framework to achieve a sustainable business strategy was developed for small to medium enterprises.