Environmental Scanning and SME Performance: A Strategic Analysis of Dynamic Capabilities and Resource-Based Perspectives in Kabwe District, Zambia

Austin Mwange, Ndila L. Yanda, John Moose and Clement Mwaanga
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Austin Mwange: Graduate School of Business, The University of Zambia, Lusaka, Zambia
Ndila L. Yanda: Institute of Distance Education, The University of Zambia, Lusaka, Zambia
John Moose: Institute of Distance Education, The University of Zambia, Lusaka, Zambia
Clement Mwaanga: School of Business, Mulungushi University, Kabwe, Zambia

East African Finance Journal, 2025, vol. 4, issue 1

Abstract: This study investigates the impact of environmental scanning on the performance of small and medium enterprises (SMEs) in Kabwe District, Zambia. Grounded in the Resource-Based Theory and Dynamic Capabilities Theory, the research evaluates the duration, frequency, and scope of environmental scanning activities among SMEs, as well as the processes involved and their effectiveness in enhancing business performance. Data were collected from 202 SME owners and managers through structured Likert-scale questionnaires and semi-structured interviews. Quantitative data were analyzed using Structural Equation Modeling, while qualitative data were examined through Directed Content Analysis. The findings indicate a positive relationship between environmental scanning and SME performance, although the practical application of systematic scanning practices remains limited. The study recommends fostering a culture of experimentation, creativity, and continuous improvement, strengthening cross-functional collaboration, enhancing access to digital technologies, and implementing policy interventions to improve SME access to financial, technological, and infrastructural resources.

Keywords: environmental scanning; SMEs; performance; strategic management; structural equation modeling; resource-based theory; dynamic capabilities theory (search for similar items in EconPapers)
JEL-codes: L25 M10 O12 O32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:eafjke:2025-06

DOI: 10.59413/eafj/v4.i1.6

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