The Influence of Systematic Strategic Planning and Strategic Business Innovation on the Sustainable Performance of Manufacturing SMEs: The Case of Palestine

Abstract

Small and Medium Enterprises’ (SMEs) impact on economic growth is widely acknowledged. Nevertheless, the literature lacks empirical evidence as to how the sustainable performance of manufacturing SMEs in developing countries with unstable and turbulent business environments, such as Palestine, could be enhanced. Relying on the Triple Bottom Line (TBL), Resource-based View (RBV) theory, and sustainable performance literature, this study explores the influence of systematic strategic planning (SSP) and strategic business innovation (SBI) on the sustainable performance (SP) of Palestinian manufacturing SMEs. Based on a sample of 377 manufacturing SMEs in Palestine, 245 valid surveys have been subjected to Partial Least Squares Structural Equation Modeling for analysis using Smart PLS 3.0 software. The results show that various factors can enhance manufacturing SMEs’ sustainability performance, such as adopting a supporting national policy to enhance the concept of sustainability at the policy level. However, implementing proper systematic strategic planning (SSP) and strategic business innovation (SBI) in a collaborative culture and a participatory management style at the firm level in manufacturing SMEs positively influences and enhances the sustainable performance of those firms. This study’s contribution to the literature expands the knowledge on sustainable performance in manufacturing SMEs in developing countries experiencing political and economic uncertainty. Hence, the research findings demonstrate how (SSP) and (SBI) are crucial management tools for businesses operating in a highly competitive and turbulent environment.