Entrepreneurship

Authors

  • Collective Authors

Abstract

The study at hand explored the impact of practising environmental sustainability by South
African SMEs on their firm performance. With a contemporary view, the study considered a
multidimensional viewpoint by measuring firm performance through financial, customer satisfaction
and employee satisfaction as constructs of firm performance. Herein, three hypotheses were postulated
which stated that environmental sustainable development (ESD) was significantly and positively related
to (1) financial performance (2) customer satisfaction performance and (3) employee satisfaction
performance amongst SMEs in South Africa. A questionnaire was distributed in the month of August
2017 with a sample size of 222 participants being subsequently utilised. Convenience sampling method
was employed and data was subsequently analysed with the structural equation modelling (SEM) being
the primary technique. Descriptive statistics and factor analysis were also utilised in data analysis. Of
the postulated hypotheses, all were supported. Thus, established in this study is that environmental
sustainable development was significantly and positively associated to financial performance, customer
satisfaction performance and employee satisfaction performance. Hence, recommendations are put
forward for policy formulations that take cognisance of the multidimensionality of firm performance
which is ideal for the future and contemporary sustainable development dispensation.

References

Adebanjo, D.; Teh, P. & Ahmed, P.K. (2016). The impact of external pressure and sustainable
management practices on manufacturing performance and environmental outcomes. International
Journal of Operations & Production Management, 36(9), pp. 995-1013.
Al-Matari, E.M.; Al-Swidi, A.K. & Fadzil, F.H.B. (2014). The Measurements of Firm Performance’s
Dimensions. Asian Journal of Finance & Accounting, 6(1), pp. 24-49.
Borim-de-Souza, R.; Balbinot, Z.; Travis, E.F.; Munck, L. & Takahashi, A.R.W. (2015). Sustainable
development and sustainability as study objects for comparative management theory. Cross Cultural
Management, 22(2), pp. 201-235.
Bulak, M.E. & Turkyilmaz, A. (2014). Performance assessment of manufacturing SMEs: a frontier
approach. Industrial Management & Data Systems, 114(5), pp. 797-816.
Burke, M.E. (2007). Making choices: research paradigms and information management: Practical
Applications of philosophy in IM research. Library Review, 56(6), 476-484.
Chang, D. & Kuo, L.R. (2008). The effects of sustainable development on firms’ financial performance
– an empirical approach. Sustainable Development, 16(6), 365-80.
Curkovic, S. & Sroufe, R. (2016). A Literature Review and Taxonomy of Environmentally Responsible
Manufacturing. American Journal of Industrial and Business Management, 6, 323-346.
Fornell, C.D. & Lacker, D.F. (1981). Evaluating structural equation models with unobservable variables
and measurement error. Journal of Marketing Research, 18, 39-50.
Gadenne, D.; Mia, L.; Sands, J.; Winata, L. & Hooi, G. (2012). The influence of sustainability
performance management practices on organisational sustainability performance. Journal of
Accounting and Organisational Change, 8(2), 210-235.
Gharakhani, D. & Mousakhani, M. (2012). Knowledge management capabilities and SMEs'
organizational performance. Journal of Chinese Entrepreneurship, 4(1), 35-49.
Ghazilla,R.A.R.; Sakundarini, N.; Abdul-Rashid, S.H.; Ayub, N.S.; Olugu, E.U. & Musa, S.N. (2015).
Drivers and barriers analysis for green manufacturing practices in Malaysian SMEs: A Preliminary
Findings. Procedia CIRP, 26, 658-663.
Gomes, S.F.; Eugénio, T.C.P. & Branco, M.C. (2015). Sustainability reporting and assurance in
Portugal. Corporate Governance, 15(3), 281-292.
Goyal, P.; Rahman, Z. & Kazmi, A.A. (2013). Corporate sustainability performance and firm
performance research. Management Decision, 51(2), 361-379.
Groenewald, D. & Powell, J. (2016). Relationship between sustainable development initiatives and
improved company financial performance: A South African perspective. Acta Commercii, 16(1), 1-14.
Ha-Brookshire, J.E. (2009). Does the firm size matter on firm entrepreneurship and performance? US
apparel import intermediary case. Journal of Small Business and Enterprise Development, 16(1), 132-
146.
Høgevold, N.M.; Svensson, G.; Klopper, H.B.; Wagner, B.; Valera, J.C.S.; Padin, C.; Ferro, C. &
Petzer, D. (2015). A triple bottom line construct and reasons for implementing sustainable business
practices in companies and their business networks. Corporate Governance. 15, 427-443.
Hull, C.E. & Rothenberg, S. (2008). Firm performance: the interactions of corporate social performance
with innovation and industry differentiation. Strategic Management Journal, 29(7), 781-789.
Jalali, A.; Jaafar, M. & Ramayah, T. (2014). Entrepreneurial orientation and performance: the
interaction effect of customer capital. World Journal of Entrepreneurship, Management and
Sustainable Development, 10(1), 48–68.
Jӓmsӓ, P.; Tӓhtinen, J.; Ryan, A. & Pallari, M. (2011). Sustainable SMEs network utilization: the case
of food enterprises. Journal of Small Business and Enterprise Development, 18(1), 141–15.
Lankoski, L. (2009). Cost and revenue impacts of corporate responsibility: comparisons across
sustainability dimensions and product chain stages. Scandinavian Journal of Management, 25(1), 57-
67.
Liozu, S.M. & Hinterhuber, A. (2013). Pricing orientation, pricing capabilities and firm performance.
Management Decision, 51(3), 594 – 614.
Lopez, M.V.; Garcia, A. & Rodriguez, L. (2007). Sustainable development and corporate performance:
a study based on the Dow Jones Sustainability Index. Journal of Business Ethics, 75(3), 285-300.
Mandl, I. & Dorr, A. (2007). CSR and competitiveness. European SMEs’ good practice. Consolidated
European Report, Vienna.
Martinez-Conesa, I.; Soto-Acosta, P. & Palacios-Manzano, M. (2017). Corporate social responsibility
and its effect on innovation and firm performance: An empirical research in SMEs. Journal of Cleaner
Production, (142), 2374-2383.
Mishra, P. (2015). Business Research Method, Oxford University Press, New Dehli, India, 620-627.
Moneva, E.O.J.M. & Álvarez, I. (2014). Sustainable supply chain and company performance. Supply
Chain Management: An International Journal, 19(3), 332 – 350.
Musa, H. & Chinniah, M. (2016). Malaysian SMEs Development: Future and Challenges on Going
Green. Procedia - Social and Behavioral Sciences, 224, 254 – 262.
NFSD, (2008). People, Planet, Prosperity: A National Framework for Sustainable Development in
South Africa, ONLINE. AVAILABLE:
http://www.gov.za/sites/www.gov.za/files/nationalframeworkfor Accessed: 02/05/2016.
Pérez-Cabañero, C.; González-Cruz, T. & Cruz-Ros, S. (2012). Do family SME managers value
marketing capabilities' contribution to firm performance? Marketing Intelligence & Planning, 30(2),
116-142.
Ratiu, C. & Anderson, B.B. (2015). The multiple identities of sustainability. World Journal of Science,
Technology and Sustainable Development, 12(3), 194 – 205.
Revell, A. & Blackburn, R. (2007). The business case for sustainability? An examination of small firms
in the UK's construction and restaurant sectors. Business Strategy and the Environment, 16(6), 404-
420.
Rodríguez-Gutiérrez, M.J.; Moreno, P. & Tejada, P. (2015). Entrepreneurial orientation and
performance of SMEs in the services industry. Journal of Organizational Change Management, 28(2),
194 – 212.
Russo, A. & Tencati, A. (2009). Formal vs. informal CSR strategies: evidence from Italian micro, small,
medium‐sized, and large firms. Journal of Business Ethics, 85(2), 339‐353.
Santos, J.B. & Brito, L.A.L. (2012). Toward a Subjective Measurement Model for Firm Performance.
Brazilian Academic Review, 9(6), 95-117.
Saunila, M. (2017). Understanding innovation performance measurement in SMEs. Measuring
Business Excellence, 21(1): -
Schreiber, J.B.; Stage, F.K.; King, J.; Nora, A. & Barlow, E.A. (2006). Reporting Structural Equation
Modeling and Confirmatory Factor Analysis Results: A Review. The Journal of Educational Research,
(99)6, 323-337.
Sen, S.K. (2014). Symbiotic linkage of sustainability, development and differentiation. Competitiveness
Review, 24(2), 95-106.
Shankar, C. & Chin, K.K. (2011). A Study of the relationship between customer marketing mix and
customer retention for herbal coffee in Malaysia. International Conference on Business and Economics
Research, No. 2011-279.
Stubblefield Loucks, E.; Martens, M.L. & Cho, C.H. (2010). Engaging small-and medium-sized
businesses in sustainability. Sustainability Accounting Management and Policy Journal, 1(2), 178-200.
Sun, W. & Price, J.M. (2016). The impact of environmental uncertainty on increasing customer
satisfaction through corporate social responsibility. European Journal of Marketing, 50(7/8), 1209-
1238.
Tachizawa, E.M.; Gimenez, C. & Sierra, V. (2015). Green supply chain management approaches:
drivers and performance implications. International Journal of Operations & Production Management,
35(11), 1546-1566.
Turyakira, P.; Venter, E. & Smith, E. (2014). The impact of corporate social responsibility factors on
the competitiveness of Small and Medium-sized Enterprises. South African Journal of Economic and
Management Sciences, 17(1), 157-172.
Urban, B. & Naidoo, R. (2012). Business sustainability: empirical evidence on operational skills in
SMEs in South Africa. Journal of Small Business and Enterprise Development, 19(1), 146 – 163.
Wagner, M. (2010). The role of corporate sustainability performance for economic performance: a firmlevel
analysis of moderation effects. Ecological Economics, 69(7), 1553-1560.
Zindiye, S. (2008). An empirical investigation into the factors affecting the performance of Small and
Medium Enterprises in the manufacturing sector of Harare: Zimbabwe. Fort Hare University.

Published

2021-06-25

Issue

Section

Articles