Keywords

1 Introduction

In the industrial sector, concerns regarding sustainability are more prevalent than ever. Manufacturers must pay increasing attention to resource use, waste management, water pollution, employee welfare, and other issues as they face increased product demand. If these sustainability issues are not addressed, the company's reputation will suffer, and its performance will suffer as well. The concept of business sustainability is based on the idea of long-term growth. This is defined as “development that meets current demands without risking future generations’ ability to meet their own needs.” [1]. The present study offers a broad view, arguing that manufacturing SME performance is impacted more by the creation of a specific unique approach towards implementing proactive strategic orientations than just by the application of a particular sustainable manufacturing technique. As such, innovation and sustainable performance in SMEs in developing economies are required to promote resource use, improved products, and unprecedented industrialization.

As a result, the article investigates the effect of four dimensions of strategic orientation that underpins organizational success, i.e., the dimensions through which sustainable manufacturing manifests, and assesses their impact on SME's performance [2]. Second, this article proposes many causal reasons for the link between strategic orientations in manufacturing SMEs and implementation, implying that the strategic orientation functions play an important role in the company's strategic planning process and, in general, should be strengthened. Thus, a questionnaire was used to collect data from SMEs within Western Africa, Eastern Africa, and Southern African (South Africa) manufacturing sector as part of the research project “The development of a sustainable manufacturing implementation model for small and medium-sized enterprises.” This paper's findings can be utilized as a guideline to encourage the systematic deployment of Proactive Strategic Orientation (PSO) in manufacturing SMEs; in particular, 1) learning orientation; 2) entrepreneurial orientation; 3) technology orientation; and 4) environmental orientation to increase organizational innovation and sustainable performance in developing countries.

2 Theoretical Background

Accordingly, proactivity substantially influences the innovation process, the “willingness to act and make a competitor response” [3]. In manufacturing, a proactive strategy improves cost advantage and competitiveness by creating and acquiring new competencies [4]. Innovation is associated with creating a new product, service, or even a method that differs from the current. In contrast, innovation readiness, or innovativeness, is defined as the propensity to innovate. Also, meeting Sustainable Performance (SP) is crucial to fostering employee success while providing discretion in decision-making and distributing knowledge that can aid in the alignment of the company's financial, environmental, and social objectives in achieving its primary business objectives [5]. Research [6,7,8] suggests that monitoring the trends and indicators of sustainable performance is critical to measuring progress. Integrating new efforts and aligning them with corporate goals is vital while the number of studies on PSO is steadily rising. The present research aims to understand better the interaction between entrepreneurial orientation, learning orientation, technological orientation, and environmental orientation in manufacturing SMEs.

Entrepreneurial Orientation (EO) is an essential notion to consider when discussing business strategies. EO is a critical aspect that assists an organization in discovering new market possibilities [9, 10]. It is argued that a business that uses EO is more likely to identify new market possibilities [11, 12] and manage new obstacles such as an unpredictable environment and competition [13]. Learning orientation (LO) is a fundamental attitude toward learning, i.e., organizational and management traits that enhance the corporate learning process [14]. In this context, LO is defined as a company's values that impact the company's propensity to produce and use knowledge for business development [14], which is a significant predictor of SMEs Performance [15]. Recently, Technology Orientation (TO) has received much attention for supporting innovation [16,17,18].

Gatignon and Xuereb investigated the effect of TO in boosting the success of new product creation. They concluded that organizations with a strong TO are more likely to create new products and processes [19]. However, the direct link between TO and company performance has received less attention in the literature [20], and the relationships between these two variables remain equivocal. Environmental Orientation (EVO) denotes the strategic choice to include environmental goals into a firm's tactical, operational, and inventive actions to meet internal values while also responding to external market constraints [21,22,23,24,25]. EVO depend on selection, monitoring, and collaboration criteria to bolster firm performance. Moreover, research concerning the effects of environmental orientations on the likelihood that SMEs introduce a product or process innovations is trending [12]. This research offers a conceptual model illustrated in Fig. 1 for manufacturing SMEs as a result of analyzing the impact of proactive strategic orientation on SME performance. Thus, the model examines the relationship between learning orientation, entrepreneurial orientation, technology orientation, and environmental orientation as elements of the variable proactive strategic orientations on the variable SME performance by measuring sustainable performance and organizational innovativeness.

Fig. 1.
figure 1

Conceptual model of the implication of PSO on SME performance

Full size image

3 Materials and Methods

This section describes the study and techniques, operationalized constructs, target groups, and data collection instruments.

3.1 Description of Variables and Questionnaire Development

The purpose of this study was to see how four independent factors affected the dependent variable, which was business performance. The independent variable in this article was proactive strategic orientation, which was based on the work of [26,27,28], and resulted in a set of indicators for 1) learning orientation 2), entrepreneurial orientation 3), technological orientation 4), and environmental orientation. Though the present study focuses on these four dimensions as a key component of proactive strategic orientation, our discussion may differ because we debated each dimension separately in each situation. Two follow-up questions were used to assess the dependent variable business performance: 1) whether the implemented orientations aided in improving sustainable practices (to measure sustainable performance, (SP) and 2) if it enhanced the organization's ability to deploy additional forms of innovation (to measure organizational innovativeness, OI). These inquiries were developed in response to theoretical concerns, and they were only asked if PSO had previously been implemented.

On a seven-point scale, the independent and dependent factors describing the SME performance were rated from 1 (not utilized) to 7 (completely implemented). Questions, which indicated the contribution to corporate duties, were scored on the scale ranging from one (strongly disagree) to seven (strongly agree). On an interval scale, variables capable of measuring follow-up parameters were derived and quantitatively examined. Intellectuals and professionals familiar with the research topic reviewed the planned survey questionnaires, and some were changed based on expert suggestions. This research focuses on the impact of proactive strategic orientations on sustainable performance and organizational innovation in manufacturing SMEs, allowing for separation between organizations that have done well based on the adoption of specific reputation ratings and innovations to bolster business performance. The survey also helps us determine the extent to which sustainable performance and innovation have been adopted (from not being adopted at all to being applied throughout the company).

3.2 Sample and Data Collection

The questionnaire was addressed to commercially involved manufacturing SMEs in Nigeria, Ghana, Kenya, Ethiopia, Uganda, Botswana, Zimbabwe, and South Africa. This paper is based on the European Commission Recommendation 2003/361 on the definition of micro, small, and medium-sized companies (SMEs), which employs the staff headcount criterion to identify businesses with fewer than 250 employees. The simple random method was utilized, which allowed us to acquire a significant number of responses and data from over 400 firms. To exclude responders that were not structurally developed or unable to adequately describe their corporate obligations and innovation processes, must have been at minimum three years old. The group contacted 1,842 manufacturing SMEs and completed 472 interviews with top managers, with seven surveys being deleted owing to missing data of more than 25%. As a result, the final sample totaled 465. From August 2020 to January 2021, a response rate of 25.24% was recorded. In terms of the industry type, wood manufacturing (e.g., manufacturing of wood and wood products, pulp and paper and paper products), basic metal manufacturing (e.g., metal and fabricated metal products), and other manufacturing enterprises account for 32.87%, 34.40%, and 32.73%, respectively (e.g., non-metallic mineral products, rubber and plastic products, and textile and textile products). The authors investigate significant links between the research variables in the proposed research model using one-way ANOVA and Pearson Correlation.

4 Results

Following the study’s descriptive statistics, entrepreneurial orientation is the most widely used form of proactive strategic orientation (PSO) in manufacturing SMEs (mean score: 5.79), followed by environmental orientation (mean score: 5.31), technology orientation (mean score: 4.85), and learning orientation (mean score: 3.89), according to senior managers. More than half of the businesses questioned (61.3%) had not implemented a learning strategy. 11.5% had it implemented across the board, 34.7% had not implemented environmental orientation, 17.6% had it fully implemented, and 19.5% had not implemented entrepreneurial orientation. 21.4% had completely implemented it, whereas 33.7% had not, compared to 19.4% who had implemented the technology orientation. Several factors affected PSO's implementation.

The first factor is the number of employees: the greater an organization's workforce, the more likely it is to adopt PSO. For example, 71.4% of micro-firms had not implemented learning orientation, compared to 53.9% of small and 41.4% of medium-sized companies; 46.2% of micro-companies had not implemented environmental orientation, particularly compared to 19.9% of small and 21.4% of medium-sized companies; and 44.8% had not implemented technology orientation, compared to 31.9% of small and 29.3% of medium-sized enterprises. Learning orientation (F (2,395) = 22.357, p = .000), environmental orientation (F (2,885) = 10.720, p = .004), and technology orientation (F (2,995) = 21.800, p = .001) were all statistically significant, with the exception of entrepreneurial orientation, as determined by one-way ANOVA. Second, PSO adoption was tied to annual turnover, much like the number of personnel. Learning orientation (F (8,885) = 11.558, p = .010), environmental orientation (F (8,387) = 4.679, p = .001), entrepreneurial (F (7,395) = 2.226, p = .010), and technology orientation (F (7,495) = 8.120, p = .000) were all statistically significant. Third, the one-way ANOVA revealed a statistically significant difference in entrepreneurial (F (3,795) = 4.150, p = .070) and technology orientation (F (4,985) = 4.927, p = .001), based on the type of business. Fourth, the study discovered regional differences in the likelihood of manufacturing SMEs employing PSOs. When considering the regions or countries of large economies, one-way ANOVA revealed a statistically significant difference between groups for learning orientation (F (3,295) = 3.345, p = .041) and environmental orientation (F (3,785) = 3.715, p = .011). In contrast, when considering smaller economic countries, one-way ANOVA revealed a statistically significant difference between groups for learning orientation (F (5,095) = 3.074, p = .021).

Furthermore, when it came to the influence of strategic orientations on sustainable performance and organizational innovation, top managers from the companies implementing PSO agreed that it had helped them become more dynamic and accountable for corporate sustainability. More than half of senior managers (57.6%) said that implementing PSO helped them increase SP; 19.6% gave this statement a five or higher rating, while 17.11% gave it a three or lower rating. Similarly, 68.5% of top executives acknowledged that the organization's ability to implement OI and other innovations, such as newer products, services, or marketing strategies; 41.2% gave it a five or higher rating, while 11.7% gave it a three or lower rating.

The impact on SP was rated as 5.14 for organizations which had implemented at least one type of PSO to an average (above 5), 5.61 for those who had implemented two forms of PSO, and 5.44 for those who had implemented three or four types of PSO. Similarly, firms that had not implemented any PSO evaluated the effect on OI on aggregate at 4.34, for those who had deployed one type of PSO, 4.38 for those who had deployed two forms of PSO, and 5.80 and 5.20 for those who had deployed three or four kinds of PSO, respectively. The Pearson correlation for the overall PSO index between SP and OI was 0.494, and 0.425. Table 1 illustrates the Pearson correlation coefficients for each category, based on only those businesses that had adopted a certain type of PSO. Environmental orientation was the most successful form of PSO in terms of SP (Pearson correlation 0.484) and OI (Pearson correlation 0.402), technology orientation (Pearson correlation 0.417 for SP and 0.391 for OI). Firms who considered PSO advantageous towards meeting SP also saw it as beneficial for OI (Pearson correlation 0.776, for medium-sized business 0.780). This confirms that PSO is beneficial for manufacturing SMEs since organizational innovativeness (OI) improves sustainable performance (SP), and SP catalyses OI.

Table 1. Correlation matrix for sustainable performance and organizational innovation
Full size table

5 Discussion

When it comes to PSO implementation, senior management reports suggest that entrepreneurial orientation is the most widely used form of PSO in manufacturing SMEs in Sub-Saharan Africa, followed by environmental and technological orientations, while learning orientation is the least commonly used. 11.8% of the enterprises polled had not adopted any type of PSO, while 38.4% had partly implemented all strategic forms of PSO. At the same time, 28.8% of businesses had not implemented any PSO, 35.9% had implemented one type of PSO, 21.8% had implemented two, and 19.2% had executed more than two types of PSO. As a result, a variety of factors impacted the implementation of PSO. The more employees a company had, the more likely they were to adopt PSO (as reported in literature [29, 30]). The bigger the yearly turnover, the more probable PSO will be implemented, given accessible resources for new initiatives [31, 32]. Larger companies were more likely to innovate and contribute to corporate sustainability, mainly via learning and environmental orientation. This might be explained by the more diversified environment and more fierce competition in larger economies, which forces businesses to differentiate themselves more.

6 Conclusions and Research Prospects

The findings imply that proactive strategic orientation can influence organizational innovation and sustainable performance. Small businesses are more innovative than medium-sized enterprises, which are more innovative than microbusinesses. In addition, companies with a higher turnover are more innovative. Metal manufacturing businesses are more likely to include environmental orientation, wood manufacturing firms are more likely to incorporate entrepreneurialism, and ‘other’ manufacturing firms are less likely to innovate but eager to promote corporate responsibility. Furthermore, the proactive strategies identified in the study [33] were shown to be advantageous to enterprise innovation and sustainable performance; the more an organization uses organizational innovation, the more beneficial it is to that firm. The findings of the study imply that manufacturing SMEs, owners, or managers create and promote an organizational culture that encourages varied PSOs, resulting in higher dedication to the business and society and better opportunities for innovation. According to the study, manufacturing SMEs’ owners and managers should involve members of their organizations in relatively new strategy development, resulting in a common understanding of the organization's vision and objectives as well as capturing fairly long-term innovation and development ideas that improve corporate performance.