Triple bottom-line framework as a tool for measuring the sustainability of manufacturing SMEs in the Cape metropole

Abstract

Over the past two decades, the triple bottom line (TBL) framework has gained prominence as an acquainting tool to enhance the operations of various companies by providing lenses of sustainability. TBL is a contemporary tool for reporting and accounting, encompassing environmental and societal aspects of business operations. Different sectors and enterprises have become aware of TBL and are increasingly becoming adapted with utilising the TBL tool. It serves as a fundamental tool on matters of profitability and sustainability. The high failure rate of South African Small and Medium Enterprises (SMEs) remains a national challenge requiring attention. The survival battle that these SMEs face does not only threaten their sustainability but also impair their future competitive advantage. This is even more prevalent among manufacturing SMEs. Manufacturing SMEs are commonly endowed with the potential capability for providing opportunities and eradicating poverty more sustainably. They act as catalysts for socio-economic growth and industrial development. At the same time, they are acknowledged for their extensive contribution towards the national Gross Domestic Product (GDP). They are recognised for being champions of job creation that promotes rural economies and rural development. Manufacturing SMEs in urbanised and peri-urban centres such as the Cape Metropole are becoming more actively engaged in environmental and social programs. Although they are increasingly becoming active, SMEs operating in emerging markets such as South Africa are still struggling with issues pertaining to sustainability, a focal matter of this study. This research was conducted with the main objective to determine the extent to which manufacturing SMEs in South Africa utilise the TBL framework as a tool to measure the sustainability of their enterprises. The researcher would want to know if all manufacturing SMEs operate with some form of sustainability lenses, focusing on balancing social and environmental programmes in their operations. It would be interesting to find the balance in the three pillars of sustainability. The subjects of this study were the manufacturing SMEs operating in the Cape Metropole, located in the Southern Peninsula of the Western Cape Province, with a coastline of 294 km. The importance of this study lies in the fact that until now, there has been relatively limited research conducted in the Cape Metropole concerning the research topic of this nature. The study focuses on providing the content which obtain a comprehensive understanding of sustainable business advancement, and also the research that investigated the knowledge of SMEs management on the importance of acknowledging and finding balance in the three pillars of sustainability. The study is also pursued to establish SMEs accounting for social and environmental aspects of operations, resulting in a better rate of their sustainability. This study applied a quantitative design to purposively select a sample of 200 respondents who were considered the decision-makers of manufacturing SMEs in the Cape Metropole. The researcher distributed questionnaires to the directors of operations, supervisors, owners, and managers. These respondents were classified to be at the decision-making equivalent positions in manufacturing SMEs. The respondents were also deemed to be suitable to report the decisions made regarding the operational strategies and the results of the environmental and social agendas implemented by manufacturing SMEs. As such, for this study, the importance lies in providing the proof to whether there exists a relationship between the dimensions of sustainability, business performance, and the usage of TBL within manufacturing SMEs. Stemming from the results, it is revealed that manufacturing SMEs drive for profitability at the expense of sustainability and their sparse investment on environmental and social programmes, threatens their efforts to induce positive business outcomes. The latter mentioned behaviour affected their business sustainability as well as their future business performance. Furthermore, it was discovered to be the possible reason that abrades their potential leverage for competitiveness. The study concludes by highlighting the implications of such behaviours and attitudes which led to the high failure rate of manufacturing SMEs, as well as proposing future possible research.