Strategic Planning Boosts Sustainability in Small Manufacturers, Study Suggests

15.08.2025

Wittenborg Researchers Explore How Structured Planning Drives Long-Term Performance in SMEs

A new academic study highlights how small and medium-sized manufacturing companies can unlock long-term sustainability and resilience through Systematic Strategic Planning (SSP), even in the face of economic uncertainty and limited resources.

Wittenborg researchers Ahmed Mehta and Rauf Abdul have co-authored the study, published in open-access journal PLOS One, titled ‘Strategic planning as a catalyst for sustainability: A mediated model of strategic intent and formulation in manufacturing SMEs’.

They collaborated with Syeeduz Zafar Qazi (University of Business and Technology, Saudi Arabia), Rasheedul Haque (MAHSA University, Malaysia), Abdul Rahman Senathirajah (INTI International University, Malaysia), Waqas Baig and Rabia Sajjad (both from Hailey College of Banking and Finance, Pakistan).

According to Mehta, the research is particularly relevant in volatile economic contexts such as Pakistan, where small and medium enterprises (SMEs) face ongoing political, financial and operational challenges.

“SMEs are often left out of the conversation when it comes to long-term sustainability strategy. We wanted to highlight how even smaller firms, operating with limited resources, can implement systematic planning to improve their performance across economic, environmental and social dimensions.”

He noted that the research offers a roadmap not just for individual businesses but also for policymakers seeking to strengthen SME ecosystems.

Understanding the model

The study draws on two widely recognised theories: the Triple Bottom Line (TBL), which approaches sustainability through the lens of People, Planet, and Profit; and the Resource-Based View (RBV), which emphasises the importance of a business’ internal capabilities and competitive advantages in achieving sustainability. Moreover, it incorporates the concepts of Strategic Intent (SI), reflecting an organisation’s long-term vision and commitment to its strategic goals, and Strategic Formulation (SF), which involves developing actionable strategies to realise those objectives.

Using data collected via questionnaires from 410 senior executives of Pakistani manufacturing SMEs, the researchers conducted a quantitative analysis to examine how Systematic Strategic Planning (SSP) influences Sustainable Performance (SP).

The results reveal that SSP significantly improves sustainable performance, and this effect is strengthened when companies have a clear strategic intent and a solid plan for executing it.

“Our findings show that it’s not just about having a strategy. What makes the difference is aligning that plan with a strategic purpose and translating it into well-defined initiatives. That’s how SMEs can improve their competitiveness, resilience and contribution to sustainable development goals,” Mehta explained.

Real-world relevance

The study is one of the first of its kind to focus on manufacturing SMEs in Pakistan, a sector that plays a vital role in the country’s economy but is often underserved in both research and policy. These businesses face structural challenges such as lack of formal governance, resource limitations and poor access to innovation infrastructure.

According to the authors, many Pakistani SMEs still rely on informal planning and ad hoc decision-making, which undermines their long-term resilience. The research suggests that embedding SSP, which includes continuous monitoring, strategic reviews and alignment with sustainability goals, could help overcome these barriers.

“Our research gives business owners a practical framework,” said Mehta. “It shows how breaking down strategy into manageable steps, guided by a clear intent and thoughtful formulation, can create lasting value not just for the company, but for society and the environment as well.”

Implications for managers and policymakers

The paper outlines a number of recommendations for SME managers and policymakers. These include promoting strategic planning training tailored to SME contexts, supporting the institutionalisation of planning and monitoring processes, encouraging SME leaders to adopt long-term visions rather than short-term fixes and creating incentive structures for sustainable innovation and performance.

It also emphasises the need for capacity-building programmes that improve not only strategic literacy but also the internal capabilities needed to execute plans effectively.

“From a managerial perspective, our study offers a blueprint for how to align a company’s internal processes with broader sustainability goals,” Mehta commented. “And from a policy angle, it points to areas where support structures could make a real difference.”

A broader academic contribution

Beyond its practical value, the study contributes to academic literature by integrating Strategic Intent and Strategic Formulation as mediators within the Systematic Strategic Planning – Sustainable Performance relationship. This offers a more nuanced understanding of how strategy works in small firms under pressure and strengthens the application of Triple Bottom Line and Resource-Based View theories in emerging-market contexts.

“Our framework is scalable,” Mehta added. “What we found in Pakistan could also apply to SMEs in other developing economies facing similar constraints. The key is in tailoring planning to the realities on the ground.”