Influence of dynamic capabilities on sustainability performance of SMEs within the construction industry in South Africa

Abstract

The research examines the use of dynamic capabilities to achieve sustainability of businesses, in the context of Small and Medium-sized Enterprises (SMEs) operating in the construction industry of South Africa. It is found that the integration of the two theoretical concepts has not been sufficiently discussed in relation to SMEs, particularly in the context of the construction industry, which is an important sector for the discussion of sustainability in business. The study is significant because it considers the increasing pressure on businesses to deliver on the social, environmental, and economic dimensions of sustainability, as well as the struggle by SMEs for survival. Most SMEs face this challenge leading to their winding up within the first few years. The study finds that the struggle for survival creates the tendency to focus exclusively on the economic dimension of sustainability, thereby missing the point that the triple bottom-line of sustainability is interlinked with longevity and profitability, especially in the modern-day business world. Thus, the study focuses on sensing, seizing and transformation, as dynamic capabilities necessary for SMEs to tackle the challenges. The study relies on evidence from empirical research and semi-structured one-on-one interviews with those individuals who are responsible for the sustainable performance of their SMEs in the construction sector of South Africa. In gathering the evidence, the research adopted a combination of methodologies involving interpretivism paradigm, qualitative inductive approach, mono methods, and exploratory design. The number of participants interviewed was 16 using the instrument of interview guide. The interviews of participants revealed findings that most SMEs share similar sentiments in sustainability practices by predominantly focusing on the economic aspect of business sustainability despite being aware of the social and environmental dimensions. Subscription in sustainability practices has a positive impact on the social, environmental, and economic performance of SMEs. The results and findings further revealed that commitment to sustainability affects company performance in a positive way; internal resources of SMEs must be equipped with the necessary competencies to achieve sustainability goals; SMEs in the construction industry must be externally and internally focused to ensure sustainability; must always focus on understanding and addressing the needs of their clients and must be service delivery focused to ensure sustainability in the company. Additionally, it was found that SMEs' performance on sustainability was positively correlated with their use of sustainable supply management strategies, and that effective leadership supports sustainability inside the organisation. ii Finally, the study's findings and conclusions showed that the performance of SMEs in terms of sustainability is strongly influenced by all three of the dynamic capabilities, namely sensing, seizing, and transforming.