Sustainability - Oriented Innovation and Performance of Small and Medium Enterprises in South Africa
Abstract
The purpose of this study is to investigate the effect of sustainability-oriented innovation (SOI) on the performance of small and medium enterprises (SMEs) in South Africa. The study adopted a multi-dimensional measure of performance (financial, social, environmental, innovation and quality). The study used the quantitative research approach and the descriptive and causal research design. Data was collected from one hundred and ninety eight owners/managers of SMEs in the manufacturing sector. The cross-sectional survey method (self-administered questionnaire) was used for data collection. The participants in the study were conveniently sampled. Descriptive statistics, factor analysis, correlation and regression analysis were used for data analysis. The Cronbach’s alpha was used as a measure of reliability. The findings of the study indicate that economic, environmental and social dimensions of SOI have significant positive relationships with the five measures of performance. Limitations, areas for further study and recommendations to improve the SOI of SMEs are suggested.
References
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[43] Rahman, M., Daroodian, M., Kamarulzaman, Y., and Muhamad, N. 2015. Designing and Validating a Model for Measuring Sustainability of Overall Innovation Capability of Small and Medium-Sized Enterprises, Sustainability, 7(1): 537-562 DOI:10.3390/su7010537
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[49] Shashi; C., Centobelli, R., and Shabani, A. 2018. Sustainability orientation, supply chain integration, and SMEs performance: a causal analysis. Benchmarking: An International Journal, 25(9): 3679-3701. DOI: https://doi.org/10.1108/BIJ-08-2017-0236
[50] Simpson, P., Siguaw, S., and Enz, C. 2016. Innovation orientation outcomes: The good and the bad. Journal of Business Research, 59: 1133 - 1341. doi: 10.1016/j.jbusres.2006.08.001
[51] Van de Berg, U., Labuschagne, J., and Van de Berg, H.2013. The effects of greening the supplier and innovation on environmental performance and competitive advantage. Journal of Transport and Supply Chain Management, 7: 1 - 7.DOI:http://dx.doi.org/10.4102/ jtscm.v7i1.121
[52] Wagner, M. 2010. The role of corporate sustainability performance for economic performance: A firm-level analysis of moderation effects. Ecological Economics, 69: 1553 – 1560. DOI: 10.1016/j.ecolecon.2010.02.017
[53] Wentzel, L., and de Hart, K. 2015. Incentives for the manufacturing sector: what South Africa can learn from Malaysia and Singapore. Journal of Economic and Financial Sciences, 8: 105 – 24.
[54] Wu, W., Liu, Y., Chin, T., and Zhu, W. 2018. Will Green CSR Enhance Innovation? A Perspective of Public Visibility and Firm Transparency. International Journal Environmental Research and Public Health, 15: 1 - 14. DOI: 10.3390/ijerph15020268
[55] Yang, M., Hong, P., and Modi, S. 2011.Impact of Lean Manufacturing and Environmental Management on Business Performance: An Empirical Study of Manufacturing Firms. International Journal of Production Economics, 129: 251 – 261. DOI: 10.1016/j.ijpe.2010.10.017
[2] Adams, R., et al. 2016. Sustainability-oriented Innovation: A Systematic Review. International Journal of Management Reviews, 18: 180–205. DOI: https://doi.org/10.1111/ijmr.12068
[3] Aguilera-Caracuel, J., and Ortiz-de-Mandojana. N.2013. Green Innovation and Financial Performance: An Institutional Approach. Organization & Environment, 26: 365–385. DOI: https://doi.org/10.1177/1086026613507931
[4] Ahmedova, S. 2015. Factors for Increasing the Competitiveness of Small and Medium-Sized Enterprises (SMEs) In Bulgaria. Procedia—Social and Behavioral Sciences, 195: 1104 - 1112. DOI: https://doi.org/10.1016/j.sbspro.2015.06.155
[5] Alarape, A. 2013. Entrepreneurial orientation and the growth performance of small and medium enterprises in Southwestern Nigeria. Journal of Small Business & Entrepreneurship, 26: 553-577. DOI: https://doi.org/10.1080/08276331.2014.892308
[6] Amini, M., and Bienstock, C. 2014. Corporate sustainability: an integrative definition and framework to evaluate corporate practice and guide academic research. Journal of Cleaner Production, 76: 12 - 19. DOI: 10.1016/j.jclepro.2014.02.016
[7] Amores-Salvadó, J., and Navas-lópez. J. 2014. Green corporate image: Moderating the connection between environmental product innovation and firm performance. Journal of Cleaner Production, 83: 356–365. DOI: 10.1016/j.jclepro.2014.07.059
[8] Antunes, M., Quirós, J., and Justino, M. 2017. The relationship between innovation and total quality management and the innovation effects on organizational performance. International Journal of Quality & Reliability Management, 34: 1 - 29. DOI: 10.1108/IJQRM-02-2016-0025
[9] Barney, J. 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management, 17: 99–120. DOI: https://doi.org/10.1177/014920639101700108
[10] Caiado, R. et al. 2017. Measurement of sustainability performance in Brazilian organizations. International Journal of Sustainable Development & World Ecology, 1: 1 - 15. DOI: https://doi.org/10.1080/13504509.2017.1406875
[11] Cant, M., and Wiid, J. 2013. Establishing the Challenges Affecting South African SMEs. International. Business and Economics. Research Journal, 12: 707–716. DOI: 10.19030/iber.v12i6.7869
[12] Cantele, S., and Zardini, A. 2018. Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability-financial performance relationship. Journal of Cleaner Production, 182: 166 - 176. DOI: 10.1016/j.jclepro.2018.02.016
[13] Chiou, T., Chan., Lettice, F., and Chung, S. 2011. The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan. Logistics and Transportation Review, 47: 822 - 836. DOI: 10.1016/j.tre.2011.05.016
[14] Chong, G. 2008. Measuring performance of small-and-medium sized enterprises: the grounded theory approach. Journal of Business and Public Affairs, 3: 1 - 10.
[15] Ciegis, R., Ramanauskiene, J., and Martinkus, B. 2009. The Concept of Sustainable Development and its Use for Sustainability Scenarios. Inzinerine Ekonomika-Engineering Economics, 2: 28 - 37.
[16] Cordeiro, A., and Vieira. F. 2012. Innovation: A Strategy That Leads to Competitiveness In SMEs. Iberoamerican Journal of Industrial Engineering, 4: 146 - 162. DOI: 10.13084/2175-8018.v04n08a10
[17] Distanont, A., and Khongmalai K. 2018. The role of innovation in creating a competitive advantage. Kasetsart Journal of Social Sciences, 1: 1 - 7. DOI: https://doi.org/10.1016/j.kjss.2018.07.009
[18] Dogson, M., Gann, G., and Phillips, N. 2014. The Oxford Handbook of Innovation Management. Oxford University Press.
[19] Elkington, J. 1997. Cannibals with forks – Triple bottom line of 21st century business. New Society Publishers.
[20] Ezzi, F., and Jarboui, A. 2016. Does innovation strategy affect financial, social and environmental performance? Journal of Economics, Finance and Administrative Science, 2: 14 - 21. DOI: https://doi.org/10.1016/j.jefas.2016.03.001
[21] Freeman, E. 1984. Strategic Management: A stakeholder Approach. Pitman.
[22] Garay, L., Font, X., and Corrons, A. 2018. Sustainability-Oriented Innovation in Tourism: An Analysis Based on the Decomposed Theory of Planned Behavior. Journal of Travel Research, 1: 1 - 9. DOI: https://doi.org/10.1177/0047287518771215
[23] Ghassim, B. 2018. Sustainability-Oriented Innovation in the Minerals Industry: An Empirical Study on the Effect of Non-Geographical Proximity Dimensions. Sustainability, 10: 282 - 300. DOI: https://doi.org/10.3390/su10010282
[24] Goodman, J., Korsunova, A., and Halme. M. 2017. Our Collaborative Future: Activities and Roles of Stakeholders in Sustainability-Oriented Innovation. Business Strategy and the Environment, 26: 731 - 753. DOI: https://doi.org/10.1002/bse.1941
[25] Government Gazette of the Republic of South Africa. 2003. National Small Business Amendment Act. http://saflii.org/za/legis/num_act/nsbaa2003331.pdf (accessed August 15, 2018).
[26] Hansen, E., and Grosse-Dunker, F.2013. Sustainability-Oriented Innovation. Springer-Verlag.
[27] Hart, S. 1995. Natural-resource-based view of the firm. Academy of Management Review, 20: 986 - 1014.
[28] Hourneaux, F., Carneiro-da-Cunha, J., and Corrêa, H. 2017. Performance measurement and management systems: Different usages in Brazilian manufacturing companies. Managerial Auditing Journal, 32: 148 - 166. DOI: https://doi.org/10.1108/MAJ-11-2015-1277
[29] Kaplan, R., and Norton, D. 1992. The Balanced Scorecard: Measures that Drive Performance. Harvard Business Review, January-February: 71-79.
[30] Klewitz, J., and Hansen, E. 2014. Sustainability-Oriented Innovation of SMEs: A Systematic Review. Journal of Cleaner Production, 65: 57 - 75. DOI: http://dx.doi.org/10.1016/j.jclepro.2013.07.017
[31] Kogabayev, T., and Maziliauskas, A. 2017. The definition and classification of innovation. Holistica, 8: 59-72. DOI: https://doi.org/10.1515/hjbpa-2017-0005
[32] Krstić B., Sekulić, V., and Ivanović, V. 2014. How to Apply the Sustainability Balanced Scorecard Concept. Economic Themes, 52: 65 - 80. DOI 10.1515/ethemes-2014-0005
[33] Kuhl, M., Cunha, J., Macaneiro, M., and Cunha, S. 2016 Relationship between innovation and sustainable performance. International Journal of Innovation Management, 20: 1 - 17. DOI: 10.1142/S136391961650047X
[34] Little, D. 2014. Defining Sustainability in Meaningful Ways for Educators. Journal of Sustainability Education, 7: 1 - 18.
[35] Ma, Y., Guisheng, H., and Guisheng, X. 2017.Green Process Innovation and Innovation Benefit: The Mediating Effect of Firm Image. Sustainability, 9: 1778 - 1792. doi:10.3390/su9101778
[36] Maletic, M., et al. 2016. Effect of sustainability-oriented innovation practices on the overall organisational performance: an empirical examination. Total Quality Management and Business Excellence, 9/10: 1171-1190. DOI: https://doi.org/10.1080/14783363.2015.1064767
[37] Mittelstaedt, D., Shultz, DJ., Kilbourne, WE., and Peterson, M. 2014. Sustainability as Megatrend: Two Schools of Macromarketing Thought, Journal of Macromarketing, 34(3): 1-12. https://journals.sagepub.com/doi/10.1177/0276146713520551
[38] Muhamad, N., Auzair, S., Amir, A., and Ismail, D. 2016. Measuring Sustainability Performance Measurement System. Acta Universitatis Danubius. OEconomica, 12(3): 182-199.
[39] Neneh, BN., and van Zyl, J. 2017. Entrepreneurial orientation and its impact on firm growth amongst SMEs in South Africa. Problems and Perspectives in Management, 15(3): 166 - 178. DOI: http://dx.doi.org/10.21511/ppm.15(3).2017.14
[40] Pandya, V.M. 2012. Comparative analysis of development of SMEs in developed and developing countries. The 2012 International Conference on Business and Management. 6-7 September 2012, Phuket, Thailand.
[41] Poussing, N. 2016. Investigating the role of Corporate Social Responsibility in the adoption of sustainability oriented innovation. RIODD 2016, Jul 2016, Saint-Étienne, France.
[42] Qorri, A., Mujkić, Z., and Kraslawski, A. 2018. A conceptual framework for measuring sustainability performance of supply chains. Journal of Cleaner Production, 189: 570 - 589. DOI: 10.1016/j.jclepro.2018.04.073
[43] Rahman, M., Daroodian, M., Kamarulzaman, Y., and Muhamad, N. 2015. Designing and Validating a Model for Measuring Sustainability of Overall Innovation Capability of Small and Medium-Sized Enterprises, Sustainability, 7(1): 537-562 DOI:10.3390/su7010537
[44] Rexhäuser, S., and Rammer, C. 2014. Environmental innovations and firm profitability: Unmasking the Porter hypothesis. Environmental and Resource Economics, 57: 145-167. DOI: 10.1007/s10640-013-9671-x
[45] Saizarbitoria, H., and Azorin. M. 2011. ISO 14001 certification and financial performance: Selection-effect versus treatment-effect. Journal of Cleaner Production, 19: 1–12. DOI: 10.1016/j.jclepro.2010.09.002
[46] Schaltegger, S. and Wagner, M. 2011. Sustainable Entrepreneurship and Sustainability Innovation: Categories and Interactions. Business Strategy and the Environment, 20: 222–237. DOI: https://doi.org/10.1002/bse.682
[47] Schumpeter, J.A. 1934, The theory of economic development: an inquiry into profits, capital, credit, interest and the business cycle, Harvard Economic Studies, Cambridge, .
[48] Sebhatu, S.P. 2008. The challenges and opportunities in creating sustainable shared values at the base of the pyramid - Cases from sub-Saharan Africa, in Kandachar, P. and Halme, M. (Eds.) Sustainability challenges and solutions at the base-of-the-pyramid: Business, technology and the poor, Green Leaf Publishing, Sheffield, pp.146-162.
[49] Shashi; C., Centobelli, R., and Shabani, A. 2018. Sustainability orientation, supply chain integration, and SMEs performance: a causal analysis. Benchmarking: An International Journal, 25(9): 3679-3701. DOI: https://doi.org/10.1108/BIJ-08-2017-0236
[50] Simpson, P., Siguaw, S., and Enz, C. 2016. Innovation orientation outcomes: The good and the bad. Journal of Business Research, 59: 1133 - 1341. doi: 10.1016/j.jbusres.2006.08.001
[51] Van de Berg, U., Labuschagne, J., and Van de Berg, H.2013. The effects of greening the supplier and innovation on environmental performance and competitive advantage. Journal of Transport and Supply Chain Management, 7: 1 - 7.DOI:http://dx.doi.org/10.4102/ jtscm.v7i1.121
[52] Wagner, M. 2010. The role of corporate sustainability performance for economic performance: A firm-level analysis of moderation effects. Ecological Economics, 69: 1553 – 1560. DOI: 10.1016/j.ecolecon.2010.02.017
[53] Wentzel, L., and de Hart, K. 2015. Incentives for the manufacturing sector: what South Africa can learn from Malaysia and Singapore. Journal of Economic and Financial Sciences, 8: 105 – 24.
[54] Wu, W., Liu, Y., Chin, T., and Zhu, W. 2018. Will Green CSR Enhance Innovation? A Perspective of Public Visibility and Firm Transparency. International Journal Environmental Research and Public Health, 15: 1 - 14. DOI: 10.3390/ijerph15020268
[55] Yang, M., Hong, P., and Modi, S. 2011.Impact of Lean Manufacturing and Environmental Management on Business Performance: An Empirical Study of Manufacturing Firms. International Journal of Production Economics, 129: 251 – 261. DOI: 10.1016/j.ijpe.2010.10.017
Published
2019-05-19
How to Cite
FATOKI, Olawale.
Sustainability - Oriented Innovation and Performance of Small and Medium Enterprises in South Africa.
Journal of Environmental Management and Tourism, [S.l.], v. 10, n. 1, p. 231-243, may 2019.
ISSN 2068-7729.
Available at: <https://journals.aserspublishing.eu/jemt/article/view/3228>. Date accessed: 25 apr. 2024.
doi: https://doi.org/10.14505//jemt.v10.1(33).23.
Section
Article
Copyright© 2023 The Author(s). Published by ASERS Publishing 2023. This is an open access article distributed under the terms of CC-BY 4.0 license.