The role of innovation and organisational agility to drive strategic capabilities: a case of Eswatini revenue services (ERS)

Abstract

Innovation and agility serve as key pillars of the Eswatini Revenue Services (ERS) strategic capabilities, therefore critical in driving its strategic success and fulfilling its mandate to enforce tax compliance, improve risk management and boost efficient revenue collection. The study closely examined ERS's strategic capabilities, focusing on how it employs the constructs of innovation and agility to develop and renew its capabilities and achieve its strategic objectives under limited resources. A turbulent landscape of geopolitical tensions and policy uncertainties demands capabilities to continually navigate rapid disruptions, digital transformation under the constant rise of artificial intelligence. The research aimed to explore the distinct roles of innovation and agility in driving Eswatini Revenue Services’ strategic capabilities within the Resource-Based View and dynamic capabilities as theoretical anchors. A qualitative research method was employed to explore the experiences and perspectives of current ERS employees on these study constructs. This study used semi-structured interviews to collect data from a total of 15 interview participants in executive management, middle management, and employees in strategic roles. The study offers new insights into the role of innovation and agility in strategic capabilities, suggesting potential improvements to existing literature on strategic capabilities. The ERS study provides a unique examination of innovation, agility and the possible limitations of strategic capabilities within the operational constraints of state-owned enterprises operating under restrictive legislation, limited financial autonomy, and reliance solely on government budget cycles and decisions. It also tentatively addresses a research gap in strategic capabilities research in the public sector and emerging economies, which are generally less studied than their private-sector profit-oriented counterparts. Additionally, the study emphasises a regulatory focus on the use of data analytics and partnership strategies for fiscal enforcement and taxpayer compliance.