Abstract
Sustainability of small, medium, and micro enterprises has been an issue due to the lack of strategic capability of many entrepreneurs. This chapter examines the strategic capabilities that are necessary for the sustainability of small, medium, and micro-enterprises. A literature review approach was adopted by the authors to examine the relationship between the measures of strategic capability of small, medium, and micro-enterprises, and the sustainability measures of the small, medium, and micro-enterprises. The result shows that there is a positive relationship between strategic capability and sustainability of small, medium, and micro-enterprises. The measures of strategic capability include sensing, seizing, transforming, and innovative capabilities. The sustainability measures of the small, medium and micro enterprises are strategic objectives, customer satisfaction, and retention, organisational value, networking, availability of resources, innovation capability, profitability, and organisational competitiveness.
TopBackground
The evolution of SMMEs has been seen as quite a new occurrence, although different information gathered through research has shown that the adopted strategies is very vital for the continuous development of SMME sector worldwide. According to Volery and Mazzarol (2015), United States of America (USA) and Japan had already established strategic moves to encourage SMME sectors as far back as the 1940s and 1950s. This was due to their country’s understanding and critical awareness of the importance of SMMEs for economic development. However, during the 1980s and 1990s, there was a global interest in developing the SMME sector as it was seen as an essential factor for economic development. Subsequently, by the 21st century, there have been overall significant changes in the awareness and understanding of small business globally (Blackburn & Schaper, 2012). In addition, the impact of SMMEs on job creation, economic growth and development has now gained government awareness, public acceptance and deeply embedded in educational institutions of most countries in the world (Mudalige, 2015).
Key Terms in this Chapter
Seizing Capability: Is a capability located within the organisation. It involves the ability of the company to seize available opportunity in the business environment, thereafter utilise both organisational value and external knowledge to improve the business.
Sensing Capability: Sensing capability is the ability of an organisation to sense that there is a need to investigate and learn about its internal and external environment.
Innovative Capability: The ability of a business to embrace creative thinking and accommodative to change in its organisational strategy.
Transforming Capability: This involves transforming the knowledge acquired at the seizing capability stage into action.
Customer Satisfaction: Ability of a company to provide goods and services that meets the demand of customers in a competitive environment will lead to retention of customer and increased profitability.
Networking: SMMEs that are open to learning and collaborating with other business tend to be able to gain networking opportunities and lower its production cost to serve its customers better and business becoming sustainable.