Environmental Scanning and SME Performance: A Strategic Analysis of Dynamic Capabilities and Resource-Based Perspectives in Kabwe District, Zambia

Austin  Mwange; Ndila L. Yanda; John  Moose; Clement  Mwaanga

doi:10.59413/eafj/v4.i1.6

Authors

Austin Mwange The University of Zambia, Graduate School of Business, Lusaka, Zambia Author https://orcid.org/0000-0001-8568-3063
Ndila L. Yanda The University of Zambia, Institute of Distance Education, Lusaka, Zambia Author
John Moose The University of Zambia, Institute of Distance Education, Lusaka, Zambia Author
Clement Mwaanga Mulungushi University, School of Business, Kabwe, Zambia Author https://orcid.org/0000-0001-8198-3691

DOI:

https://doi.org/10.59413/eafj/v4.i1.6

Keywords:

Environmental scanning, SMEs, performance, strategic management, structural equation modeling, resource-based theory, dynamic capabilities theory

Abstract

This study investigates the impact of environmental scanning on the performance of small and medium enterprises (SMEs) in Kabwe District, Zambia. Grounded in the Resource-Based Theory (RBT) and Dynamic Capabilities Theory (DCT), the research evaluates the duration, frequency, and scope of environmental scanning activities among SMEs, exploring the processes involved and their effectiveness in enhancing business performance. Data were collected from 202 SME owners/managers through a structured Likert-scale questionnaire and semi-structured interviews. Quantitative data were analyzed using Structural Equation Modeling (SEM), while qualitative data were analyzed via Directed Content Analysis (DCA). The results indicate a positive relationship between environmental scanning and SME performance, though practical application of environmental scanning practices remains limited. The study recommends fostering a culture of experimentation, creativity, and continuous improvement, promoting cross-functional collaboration, and improving access to digital technologies and tools. Policy interventions to support SMEs in accessing financial, technological, and infrastructural resources are also suggested.

References

Abosede, A, J., Obasan, K, A., and Alese, O, J. (2016). Strategic Management and Small and Medium Enterprises (SMEs) Development: A Review of Literature. International Review of Management and Business Research Vol. 5 Issue.1.

Agbim, K. C., Oriarewo, G. O., & Zever, T. A. (2014). Moderating effects of individual entrepreneur and enterprise characteristics of the relationship between business environmental scanning behaviour and entrepreneurial performance. Journal of Business Studies Quarterly, 6(1), 249–268.

Agwu, M. E. (2018). Analysis of the impact of strategic management on the business performance of SMEs in Nigeria. Academy of Strategic Management Journal, 17(1), 1- 20.

Albright, K. S. (2004). Environmental scanning: radar for success. The Information Management Journal, (May/June), 38–44.

Babatunde, B. O., & Adebisi, A. O. (2012). Strategic environmental scanning and organisation performance in a competitive environment. Economic Insights Trends and Challenges, 64(1), 24–34.

Babbie, E. (2005). The basics of social research. Belmont: Thomson Wadsworth. Begg, M. (2007). The level of importance attached to competitive intelligence at a mass import-retailed organization. In MA dissertation. Johannesburg: University of Johannesburg (Unpublished).

Banda, M., and Mwange, A. (2023). Corporate Governance: A Theoretical Review. European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online), Vol.15, No.16, 2023.

Bassey, E., and Isayas, B. (2022). Factors impacting Strategic Management Practices Among SMEs in Nigeria. African Economic and Management Review (AEMR), Do. 10.53790/aemr.v2i1.31.

Bhardwaj, S. S., & Kumar, D. (2014). Environmental scanning of FMCG companies in India: a comparative study. International Journal of Management and International Business Studies, 4(1), 39–50.

Bondy, K, M. (2020). The Art and Science of Transition: A Descriptive Case Study between a Two- and a Four-Year Institution. Ph.D thesis. Grand Forks, North Dakota: University of North Dako

Cancellier, E. L. P. de L., Blageski, E. J. B., & Rossetto, C. R. (2014). Environmental scanning, strategic behaviour, organizational characteristics, and performance in small firms. Journal of Information Systems and Technology Management, 11(3), 611–628. DOI: https://doi.org/10.4301/S1807-17752014000300006

Cheng, W. H., Kadir, K. A., & Bohari, A. M. (2014). The strategic planning of SMEs in Malaysia: a view of external environmental scanning. International Journal of Business and Society, 15(3), 437–446.

Choo, C. W. (2001). Environmental scanning as information seeking and organizational learning. Information Research, 7(1), 28–35.

Creswell, J. 2014b. A Concise Introduction to Mixed Methods Research. Available at https://books.google.co.zm/books?isbn=1483359050

Creswell, J.W. 2014a. Research design: Qualitative, quantitative and mixed methods approaches. London: Sage.

Danilo, B. (2021). Environmental Management System and Performance in SMEs. Evidence from the Abruzzo Region. Advances in Management & Applied Economics, Vol. 11, No. 6, 2021, 79-97 ISSN: 1792-7544 (print version), 1792-7552(online). Scientific Press International Limited. DOI: https://doi.org/10.47260/amae/1165

David, F. R. (2017). Strategic management: Concepts and cases: A competitive advantage approach. Saddle River: Pearson.

Dawadi, S., Shrestha, S., & Giri, R. A. (2021). Mixed-Methods Research: A Discussion on its Types, Challenges, and Criticisms. Journal of Practical Studies in Education, 2(2), 25-36 DOI: https://doi.org/10.46809/jpse.v2i2.20

Du Toit, A. S. A. (1998). Information management in South African manufacturing enterprises. International Journal of Information Management, 18(3), 205–213. DOI: https://doi.org/10.1016/S0268-4012(98)00005-X

Du Toit, A. S. A., & Strauss, C. (2010). Competitive intelligence and Africa’s competitiveness: what’s happening in South Africa? Mousaion, 28(2), 17–32.

Dudovskiy, J. (2018). The Ultimate Guide to Writing a Dissertation in Business Studies: A Step-by-Step Assistance. An e-book. Available.

Fatti, A., & Du Toit, A. S. A. (2013). Competitive intelligence in the South African pharmaceutical industry? Journal of Intelligence Studies in Business, 3(1), 5–14. Fifth BRICS summit (2013). Harvard International Review, 35(2), 17–21. DOI: https://doi.org/10.37380/jisib.v3i1.53

Fleisher, C. S., & Bensoussan, B. E. (2003). Strategic and competitive analysis: methods and techniques for analysing business competition. Upper Saddle River: Prentice-Hall.

Ford, E. W., Huerta, T. R., Menachemi, N., & Babik, D. (2013). Aligning strategic orientation with information resources. Journal of Management and Strategy, 4(4), 33–43. DOI: https://doi.org/10.5430/jms.v4n4p32

Grulke, W. (2000). Ten lessons from the future. Pretoria: CTP Book Printers. Hyde, N. (2000). Environmental scanning: the need for an overview of environmental scanning systems. In MBA dissertation. Stellenbosch: University of Stellenbosch (Unpublished).

Hair, J., Tatham, R., Anderson, R., & Black, W. (2006). Multivariate data analysis. Englewood: Prentice Hall International, 1-758.

Hill, C. W., Jones, G. R., and Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.

Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of management, 35(6), 1404-1427. DOI: https://doi.org/10.1177/0149206309343469

Hu, L.-t., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modelling: A Multidisciplinary Journal, 6, 1-55. DOI: https://doi.org/10.1080/10705519909540118

Hunger, J.D. and Wheelen, T.L. (2007). Essentials of Strategic Management, 4th Edition, Pearson education.

Jansen Van Vuuren, P. (2002). Environmental scanning—a South African corporate communication perspective with special emphasis on the tertiary sector. In DPhil thesis. Pretoria: University of Pretoria (Unpublished).

Jayeola, O. (2015). The Impact of Environmental Sustainability Practice on the Financial Performance of SMEs: A Study of Some Selected SMEs in Sussex. International Journal of Business Management and Economic Research (IJBMER), Vol 6(4),2015,214-230.

Karami, A. (2008). An investigation on environmental scanning and growth strategy in high tech small and medium sized enterprises. In Proceedings of the High Technology Small Firms Conference, University of Twente Enschede, (pp. 211–220). DOI: https://doi.org/10.3990/2.268580687

Kenny, D. A. (2020). Measuring Model Fit. http://www.davidakenny.net/cm/fit.htm

Kim, W. C. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review press.

Kraja, Y., Osmani, E. (2013). Competitive advantage and its impact in Small and Medium Enterprises (SMEs) (Case of Albania). European Scientific Journal, 9(16), 76-85.

Lau, R. Y. K., Liao, S. S. Y., Wong, K. F., & Chiu, D. K. W. (2012). Web 2.0 environmental scanning and adaptive decision support for business mergers and acquisitions. Business Intelligence Research, 36(4), 1239–1268. DOI: https://doi.org/10.2307/41703506

Laverty, A. (2011). Globalization in emerging markets: how South Africa’s relationship to Africa serves the BRICS.

Lotayif, S. M. A. M. M. (2018). Environmental Scanning Mechanism and Its Effects on the Performance: Evidence from UAE. International Journal of Business and Management; Vol. 13, No. 1; 2018 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education. DOI: https://doi.org/10.5539/ijbm.v13n1p190

Magaisa, G, M., Duggal, S., and Muhwandavaka, R. (). Environmental Scanning Assessment in Zimbabwean SMEs. International Journal of Economy, Management and Social Sciences, 2(8) August 2013, Pages: 593-597.

Majama, N. S. (2017). Strategic planning in small and medium enterprises (SMEs): A case study of Botswana SMEs. Journal of Management and Strategy 8(1), 74-103. DOI: https://doi.org/10.5430/jms.v8n1p74

Mang’ana, R, O., Rotich, G., Hassan, G., and Orwa, G. (2017). Influence of Environmental Scanning on Performance of Matatu Savings And Credit Cooperatives In Kenya. Journal of Business and Strategic Management ISSN 2520-0402 (Online) Vol.2, Issue 4, No.3, pp 32 - 53, 2017. DOI: https://doi.org/10.47941/jbsm.198

Ministry of Commerce Trade and Industry. (2020). The impact of COVID-19 on SMEs in Zambia. The business Survey report, August 2020.

Mukosa, F., Mweemba, B., Mwitumwa, L., Mbewe, S. B., Sikazwe, W., & Sinkala, N. K. (2020). The impact of COVID-19 on small-medium enterprises in Zambia. Banking and Insurance academic journal, 2,6.

Murphy, K.R., Myors, B. & Wolach, A. (2014). Statistical power analysis: A simple and general model for traditional and modern hypothesis tests (4th Ed.). New York: Routledge.

Muuka, L, M. (2019). To Assess Effects of Business Environmental Factors on Profitability of Curio Business in Zambia: A Case of Mukuni Curio Park). The International Journal of Multi-Disciplinary Research ISSN: 3471-7102, ISBN: 978-9982- 70-318-5.

Muzata, K, K. (2017). Curriculum Implementation for Learners With Special Education Needs: The Case Of Selected Inclusive And Special Schools In Zambia. Ph.D Thesis. City of Tshwane: University of South Africa.

Mwaanga, C. (2022). Environmental Factors and the Formation of Students’ Entrepreneurial Intentions: Perspectives from Zambia. Ph.D thesis. City of Tshwane: University of South Africa.

Mwaanga, C., Mulenga,J., Lubinda, M., Siame,M., Kaliba-Chishimba, K., Mulenga, M, C., & Kafula, C, S. (2021). COVID-19 Pandemic and Its Implications on Small and Medium Enterprises (SMEs) Operations in Zambia. Journal of Business Administration Research Vol. 10, No. 1; 2021. http://jbar.sciedupress.com DOI: https://doi.org/10.5430/jbar.v10n1p32

Mwange, A. (2018). A Critical Review Of Strategic Directions For Enhanced Employment Creation In Zambia. EPH - International Journal of Business & Management Science ISSN (Online): 2208-2190Volume 04 Issue 04 October 2018.

Mwange, A., Mutambo, N., Manda, R., Chiseyeng, L., Mashiri, G., and Bwalya, J. (2022). Principles and Practices of Strategy for Effective and Efficient Performance of Business Organisations. European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)Vol.14, No.14, 2022.

Mwewa, K. (2018). A Study To Find Out The Factors Affecting The Economic Growth Of SMEs In Retail Sector (Case Study Of Mbala District). The International Journal of Multi-Disciplinary Research, 1(1), 1-40.

Mwika, D., Banda, A., Chembe, C., & Kunda, D. (2018). The impact of globalization on SMEs in emerging economies: A case study of Zambia. International Journal of Business and Social Science, 9(3), 59-68.

Ngamkroeckjoti, C., Speece, M., and Dimmitt, N, J. (2005). Environmental scanning in Thai food SMEs. British Food Journal Vol. 107 No. 5, 2005 pp. 285-305 q Emerald Group Publishing Limited 0007-070X DOI: https://doi.org/10.1108/00070700510596884

Nieuwenhuizen, C., Badenhorst-Weiss, H., Rossouw, D., Brevis, T., & Cant, M. (2009). Business management: a contemporary approach. South Africa: Juta.

Nyariki, R. N. (2013). Strategic management Practices as a competitive tool in enhancing performance of Small and Medium Enterprise in Kenya. 01-58.

Olanipekun, W.D., Abioro, M.A, Akanni, L.F., Arulogun, O.O. and Rabiu, R.O. (2015). Impact of strategic management on competitive advantage and organisational performance – evidence from Nigerian bottling company. Journal of Policy and Development Studies, Vol. 9, No. 2, pp. 185-198. DOI: https://doi.org/10.12816/0011216

Omsa et al. (2018). The effect of Strategic Management Practices on SME performances in Makassar, Indonesia. Journal of Strategic Management Journal, 80(2), 60- 95.

Onyekwelu, N.P. (2020). Effects of strategic management on organizational performance in manufacturing firms in South-East Nigeria. Asian Journal of Economics, Business and Accounting (AJEBA), Vol. 15, Issue, 2, pp. 24-31 DOI: https://doi.org/10.9734/ajeba/2020/v15i230211

Otieno, D.O., Namusonge, G.S. and Mugambi, F. (2018). Effect of strategic planning on the financial performance of small and medium size enterprises in professional service sector in Kenya. International Journal of Arts and Commerce, Vol. 7, No. 6, pp. 57-71.

Puttawong, D., And Kunanusorn, A. (2020). How Environmental Performance Influences SMEs’ Competitive Performance: A Case of Food Production Industry. 2020, Volume 14, International Conference Innovative Business Management & Global Entrepreneurship (IBMAGE 2020), pages: 349-368 DOI: https://doi.org/10.18662/lumproc/ibmage2020/26

Rabbil, M, Z and Nasution, Y. (2017). Analysis of Effects of Environmental Dynamism, Entrepreneurial Orientation, and Dynamic Capability on the Performance of SMEs. ternational Journal of Humanities and Management Sciences (IJHMS) Volume 5, Issue 1 (2017) ISSN 2320–4044 (Online)

Rosner, B. (2016). Fundamentals of Biostatistics 8th Edition. Boston

Rubĉić, N., & Sekan, S. B. (2012). Business environment scanning: prerequisite for sustainable learning company. In L. Galectić, & J. Ŝimurina (Eds.), An enterprise odyssey: corporate governance and public policy—path to sustainable future (pp. 31–52). Zagreb: University of Zagreb.

Saadeghvazir, Khaef, Motaqi & Estahani.(2012).Environmental Scanning and Performance .A studyof Iranian Automobile parts manufacturers .Africa Journal of Business Management Vol.6(14) DOI: https://doi.org/10.5897/AJBM11.2334

Samsudin, Z. B., & Ismail, M. D. (2019). The Concept of Theory of Dynamic Capabilities in Changing Environment. International Journal of Academic Research in Business and Social Sciences, 9(6), 1071–1078. DOI: https://doi.org/10.6007/IJARBSS/v9-i6/6068

Saunders, M.N.K., Lewis, P. and Thornhill, A. (2019) Research methods for business students. 8th edn. Harlow: Pearson.

Sekere, K., Kiriri, P., & Njenga, K. (2023). Influence of Environmental Scanning on the Performance of Small and Medium Enterprises in Kenya. The University Journal, 5(3), 91- 102. DOI: https://doi.org/10.59952/tuj.v5i3.259

Sewdass, N., & Du Toit, A. S. A. (2014). Current state of competitive intelligence in South Africa. International Journal of Information Management, 34(2), 185–190. DOI: https://doi.org/10.1016/j.ijinfomgt.2013.10.006

Shaikh, S. (2010). Business environment (2nd ed.). Calcutta: Pearson Education.

Smit, P. J., Cronje, G. J., Brewis, T., & Vrba, M. J. (2011). Management principles: a contemporary edition for Africa (5th ed.). Cape Town: Juta.

Teece, D. J. (2016). Dynamic capabilities and entrepreneurial management in large organizations: Toward a theory of the (entrepreneurial) firm. European Economic Review, 86, 202-216. DOI: https://doi.org/10.1016/j.euroecorev.2015.11.006

Teece, D. J. (2018). Dynamic capabilities as (workable) management systems theory. Journal of Management & Organization, 24(3), 359-368. DOI: https://doi.org/10.1017/jmo.2017.75

Teece, D., Peteraf, M., & Leih, S. (2016). Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California management review, 58(4), 13-35. DOI: https://doi.org/10.1525/cmr.2016.58.4.13

Vecchiato, R. (2012). Environmental uncertainty, foresight and strategic decision making: An integrated study. Technological Forecasting & Social Change, 79:436-447. DOI: https://doi.org/10.1016/j.techfore.2011.07.010

Vudzijena. L.S. (2015). An Analysis of the Impact of Environmental Scanning on the Performance of Small and Medium Retail Enterprises in Harare. Master of Business Administration Dissertation. Harare: University of Zimbabwe.