Sustainability of Small and Medium Enterprises in Tanzania: A competency-based perspective, Dr. Ismail Juma Ismail
Dr. Ismail Juma Ismail
Department of Business Administration and Management, College of Business and Economics, The University of Dodoma, Dodoma,
United Republic of Tanzania
Purpose: Many Small and Medium Enterprises (SMEs) in developing countries do not often survive beyond five years. The major challenge is the transition from the maturity stage to a sustainable stage. This study, therefore, aims at looking into the effects of competencies of the owner-managers on the sustainability of SMEs in Tanzania.
Design/methodology/approach: The study used a cross-sectional design, of which a structured questionnaire was adopted to capture information from 384 sampled SMEs. The study used Structural Equation Modeling (SEM) to conduct a confirmatory factor analysis and path analysis on the effect of competencies of the owner-managers on the SMEs sustainability.
Findings: The findings show that competencies have positive and significant effects on SMEs’ sustainability. When owner-managers possess professional, social, and personal competencies, they balance their daily operations regarding social, economic, and environmental aspects, increasing SMEs’ sustainability.
Originality/value: Established SME sustainability is the outcome of several factors. Nevertheless, little is known on how owner-manager professional, social, and personal competencies can affect sustainability, especially in Tanzania. Therefore, this study’s findings can help enrich limited literature on the competencies of owner-managers and increase the chances of SME sustainability, which is considered the critical initiative for economic development.
Practical implications: The current study adds to the body of knowledge by demonstrating the effect of owner-managers competencies on the sustainability of SMEs. Also, providing owner-managers with business competencies training-related programs would assist them in successfully expanding their businesses. This knowledge will also help policymakers, and other stakeholders develop relevant and successful policies and programs to enhance SME's sustainability.
Keywords: SMEs’ Sustainability, Competency-based Perspective, Professional Competencies, Social Competencies, Personal Competencies.