EXAMINING THE IMPACT OF STRATEGIC MANAGEMENT ON MSME SUSTAINABILITY IN A GREEN ECONOMY
Keywords:
Strategic Management, Green Economy, MSME Sustainability, Green Process Innovation, Strategic Orientation.Abstract
The transition to a green economy presents a critical juncture for Micro, Small, and Medium Enterprises (MSMEs), which must adapt their strategic management practices to achieve sustainability. This study examines the impact of strategic management, encompassing strategic orientations and green process innovation, on the environmental, social, and economic sustainability performance of MSMEs. A quantitative approach was employed, utilizing a survey questionnaire administered to 150 owner-managers of MSMEs in the manufacturing and service sectors. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results demonstrate that strategic management, proxied by a composite of market, learning, and entrepreneurial orientations, has a significant positive effect on both green process innovation (β = 0.587, p < 0.001) and overall sustainability performance (β = 0.452, p < 0.001). Furthermore, green process innovation significantly mediates this relationship (β = 0.234, p < 0.01), indicating its pivotal role in translating strategic intent into tangible sustainability outcomes. The findings reveal that social and environmental performance dimensions are more strongly influenced by strategic management and innovation than economic performance in the short term. The discussion contextualizes these results within the framework of the Resource-Based View and stakeholder theory, highlighting that proactive strategic management, coupled with green innovation, equips MSMEs with dynamic capabilities to navigate green economy demands. This study contributes to the literature by empirically validating an integrated model for MSME sustainability in emerging economies and offers practical insights for MSMEs and policymakers to foster sustainable development through targeted strategic and innovation support.
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