Sustainable business strategy for small and medium enterprises in KwaZulu-Natal, South Africa

Abstract

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 were on the decline and the majority (75%) of small and medium enterprises failed after operating for three years. The purpose of this research was to formulate a business strategy to achieve sustainability for small and medium enterprises. Small and medium enterprises in KwaZulu-Natal do not sustain themselves for long term periods due to the underlying problem being strategy formulation. Hence, the need for a strategy to achieve sustainability. The mixed methodology approach was used in this empirical study using the survey and interview methods. The target population of 488 000, a confidence level of 95%, margin of error of 5% and a 50% response rate was used which indicated a sample size of 384 respondents. Upon completion of the data collection, a total of 200 responses were obtained within a capped period of 30 days, which accounted for >52% of the target sample size. Furthermore, the grounded theory was employed on a target of 20 individuals, whereby the participants were interviewed to investigate opinions towards strategy development and sustainability in KwaZulu-Natal. 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’. Due cognisance should be taken by leaders, from the perspectives of ‘Change’, ‘Purpose’ and ‘Leadership’, to formulate a strategy which sustains the business. A conceptual framework was developed for small and medium enterprises to achieve a sustainable business strategy.