I need the pages on the attached file rewritten to remove all plagiarism. This is part of a doctoral study.
Sustainability
Sustainability has many definitions throughout literature, and what is included or
excluded from a definition can vary. Sustainability is meeting needs today without
compromising the ability to meet needs in the future (Hashmi, Damanhouri, & Rana,
2015). Sustainability is having the ability to successfully maintain, grow, and survive
(Warren & Szustek, 2017). Additionally, sustainability is defined as using resources in a
manner to preserve them for the future and maintaining the ecosystem (Bird & Davis-
Nozemack, 2018; Tuntivivat, Jafar, Seelhammer, & Carlson, 2018). Researchers use the
definition of sustainability in a variety of ways, and most researchers have different views
on including and excluding organizations’ environmental impact. For this study, I will
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focus on sustainability as increasing the life of an organization and planning for the future
of the organization; I excluded the environmental impact of these strategies.
Small Business Criteria
The Small Business Act of 1953 is used to protect small businesses because of the
important role they play in the economy (Small Business Act of 1953). Through the
Small Business Act of 1953, Congress protects small businesses to stabilize the balance
of power because small businesses are an integral part of the free enterprise economy
(Dilger, 2017a). Additionally, the Small Business Act established criteria for small
businesses. Small businesses are the backbone of competition. Their protection eliminates
the monopolistic power of larger firms and enhances small business competition
internationally. Because small businesses receive congressional support, it is important to
have specific criteria defining a small business; otherwise, large firms could attempt to
receive the benefits afforded to small businesses.
Small businesses have a variety of definitions across literature. The Small
Business Administration even has two different ways to calculate eligibility; it outlines
criteria based on either the number of employees and dollar value of total receipts. The
criteria to be a small business depend on industry as well. The number of employee
criteria set by the small business association range from below 100 employees to below
1500 dependent on the industry (Small Business Administration, 2017a). In the United
States, 98.1% of employer firms have fewer than 100 employees (Dilger, 2017a).
There is not a uniform definition of small business but rather a set of criteria
(Dilger, 2017b). Therefore, there are multiple ways to categorize small businesses. Total
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receipts is one way to categorize small businesses. Total receipts means the annual
income of a business (Small Business Act of 1953). The government calculates total
receipts by using income tax returns or any other means available if income tax returns
are not available (Small Business Administration, 2015). The criteria are specific and
industry-dependent to ensure small businesses have appropriate protection under the law.
Small Business Success and Failure
Small business sustainability is critical to the U.S. economy. Small businesses
comprise 99.9% of all firms in the United States, and 99.7% of all firms with employees
according to Small Business Administration (2016a). Only about 50% of small
businesses survive past 5 years, and small businesses employ over half of all privatesector
employees (Small Business Administration, 2016a). Small businesses contribute
more to job creation than larger organizations (Spremo & Marjanović, 2017). Small
businesses in the construction industry typically have the lowest survival rates of any
industry (Bureau of Labor Statistics, 2016). Increasing sustainability of small businesses
can decrease unemployment, strengthen the labor market, and increase job creation.
Sustainability is important for small businesses. Small businesses employ half the
workforce and are a majority of businesses in the United States. The failure rates begin to
diminish as the age of a business increases (Bureau of Labor Statistics, 2017a).
Increasing the sustainability of small businesses can positively affect the economic
sustainability of a region (Sarra & Breman, 2017). Small business owners must develop
strategies to become sustainable beyond 5 years.
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Sustainability strategies are an important part of social change because small
businesses are the backbone of the U.S. economy. They are an important lifeline and
create 66% of new jobs (Small Business Administration, 2016a). Small businesses are the
most important source of employment because of the large percentage of employees
distributed among so many small businesses (Susu & Birsan, 2015). New jobs are
emerging due to the small business growth. If small businesses fail, then jobs are lost and
the economy suffers. Small businesses need sustainability strategies to aid in their
survival, and the business owner can implement these strategies. Sustainability strategies
can reduce the number of businesses failing and increase net job creation.
Small businesses fail for a variety of reasons. Lack of capital, lack of a business
plan, lack of innovation, and poor staffing are known reasons for small business failure
(Hyder & Lussier, 2016; Kostovski, Nanevski, & Gjurcevski, 2016). Capital is critical to
small business success. Lack of financial capital at critical times can negatively affect a
small business and lead to its failure (Hyder & Lussier, 2016). Lack of planning can be
another reason for small business failure. Lack of planning can occur due to a variety of
factors, including lack of education or lack of understanding of the need for a business
plan (Hyder & Lussier, 2016). Staffing is critical to the sustainability of small businesses.
Small businesses have fewer resources and employees are critical to an organization’s
success. Small businesses tend to have higher turnover rates due to increased
responsibilities and demands of employees (Hyder & Lussier, 2016). The lack of a stable
workforce increases the volatility of small businesses’ successes and is another reason
they fail.
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Small Business Economic Impact
Small businesses are the foundation of many countries, and they drive economic
development (Eijdenberg, Paas, & Masurel, 2015). Small business growth and job
creation aided in the recovery of the U.S. economy at the conclusion of the recession.
Small businesses account for over a third of all exports leaving the United States (Small
Business Administration, 2016a). U.S. lawmakers saw the importance of small businesses
and realized the great economic impact; therefore, they developed the Small Business Act
of 1953. The Small Business Association is a government agency that monitors small
businesses in the United States. Small businesses are an important part of creating a
sustainable gross domestic product (GDP) because of the reduced dependence on foreign
markets, and they provide diversification of resources because of the number of
independent small businesses (Baidoun, Lussier, Burbar, & Awashra, 2017). The
sustainability of small businesses is critical due to the number of jobs they create, the
financial impact in relation to GDP, and the diversification of resources.
Researchers measure economic growth by the changes in real GDP (Bureau of
Labor Statistics, 2017b). GDP is the sum of all consumption, investment, government
purchases, and net exports, and it is the most widely known measure of aggregate output
according to the Bureau of Labor Statistics (2017d). The Small Business Act ensures that
small businesses can compete as global exporters (Small Business Act of 1953). Small
businesses provide jobs and income to individuals who spend this income, which affects
GDP. Additionally, these small businesses purchase equipment as a business investment.
Business sector spending accounts for approximately 69% of the value of GDP (Bureau
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of Labor Statistics, 2017c). Small business sustainability is critical to the economic
stability of the United States, especially during tough economic times. Increasing any part
of GDP, excluding imports, impacts the U.S. economy positively. Small businesses are a
critical component of the U.S. economy not because of one individual businesses size but
rather because of the impact of a large number of small businesses.
The recession affected the United States in a major way, but small businesses
continued to maintain their value through these difficult times. Small businesses
continued to be the largest contributor to the number of jobs and number of businesses
(Hyder & Lussier, 2016). Small businesses account for a majority of jobs, job creation,
and innovation in the United States; therefore, the sustainability of these organizations is
critical to the stability of the U.S. economy (Eijdenberg et al, 2015; Hyder & Lussier,
2016; Small Business Administration, 2016a). As small businesses begin to increase their
sustainability, along with continued growth in small business startups, the job market will
continue to expand and offer greater opportunities for employment. To positively impact
the economy, small business owners must do their part to increase sustainability through
a variety of strategies.
Small Business Owner Strategies
Small business owners use a variety of strategies to increase the life of their
organization. Different views on the types of strategies necessary to increase the
sustainability exist in the literature; some of which overlap and contain similar strategies.
Blackburn, Hart, and Wainwright (2013) emphasized the need for a business plan for the
future of the organization, whereas Smith and Barrett (2016) and Kuhn, Galloway, and
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Collins-Williams (2016) emphasized the importance of owner growth, training, and
development. Lofsten (2016) found entrepreneurial behavior and competition to be
important.
A variety of themes has emerged from the literature about the importance of
leadership strategies. Holloway and Schaefer (2014) found three common themes of
successful business owners that include collaboration, mentoring, and people skills.
Blackburn et al. (2013) found a reoccurring theme of planning. Successful businesses
must have specific things in common and use a variety of strategies for success.
Planning
Planning gives an organization direction. The business owner establishes a plan
that includes where the organization is currently, the future goals of the organization, and
how to get there. Blackburn et al. (2013) studied business growth and profitability and
determined profitable businesses tend to have similar attributes that plan to grow at a
steady rate over a long time. Profitable organizations have long-term goals and plans,
which lead to long-term profitability. Mitchell, Hutchinson, Quinn, and Gilmore (2015)
discovered small businesses sacrifice strategic planning for day-to-day operational focus.
The lack of strategic planning of small business owners aids in lack of understanding of
direction and allows for a misunderstanding of direction between the business owner and
the employees.
Mitchell et al. (2015) determined that business owners may sacrifice strategic
planning to survive the day. Creativity is an important feature missing from strategic
thinking. Business owners need to plan strategically to create or protect their brand
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(Mitchell et al, 2015). Small businesses that use a strategic plan are using strategic
thinking, but to compete against larger firms, small businesses must find a way to gain a
competitive advantage. Creativity is an important aspect to incorporate into strategic
thinking, which should flow into the strategic plan.
Business model. Schaltegger, Ludeke-Freund, and Hansen (2016) examined
small businesses that use business models to increase sustainability. The business model
is not a one-size-fits-all approach. Schaltegger et al. (2016) found substantial research
contributing to the importance of the business model but small business owners lacked
knowledge of innovation and adaptation of the business model to their businesses.
Additionally, new business models are developed as time passes to take advantage of new
regulations, but organizations incorporating a new business model must plan for the
unexpected in the future (Medved, Lakic, Zupancic & Gubina, 2017). Businesses develop
a business model to increase the potential sustainability of the organization and plan for
the direction of the organization.
Business plans change in the infancy of the organization due to customer
acquisition and the continued necessity to evolve to meet consumer needs (Turner &
Endres, 2017). Sustainability of new business models falls on the owners of the business
(Medved et al, 2017). The need for adapting and changing is important for small business
survival, and small business owners can adapt the business models to be able to sustain
themselves. Small businesses can determine how they are finding a niche and filling it.
Initially, small businesses tend to have a plan of action, but as the business opens and
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matures, the plan must adapt. The business plan changes due to increased knowledge
about the business and consumer needs.
Marketing. Marketing can create brand recognition and give businesses an
advantage. Small businesses owners who capitalize on marketing can gain a competitive
advantage over other firms (Mitchell et al. 2015). Small business owners must find ways
to compete at a high level with fewer resources (Gholston, Kuofie, & Hakim, 2016).
Small businesses may lack resources and knowledge compared to larger organizations.
Small businesses must create a brand identity on a fewer number of primary brand
associations (Mitchell et al. 2015). Even with fewer resources, marketing strategies are a
key ingredient to future sustainability because they aid in the future direction of the
organization.
Social media marketing is growing at a rapid pace due to increased acceptance
and accessibility (Gholston et al. 2016). Organizations use social media marketing to
build a relationship directly with the customer (Venciute, 2018). This makes social media
a desirable medium for small business advertising. Small businesses tend to lack financial
resources to begin a sustainable marketing campaign, but a properly executed social
media campaign can target consumers and increase sales at a lower cost. Small
businesses can fail due to a lack in exposure, but social media use can increase exposure
and help small businesses compete with larger firms for market share.
Social media can aid in the growth of small businesses in a variety of ways. Social
media can aid in growing brand awareness, building relationships, and increase sales
(Jones, Borgman, & Ulusoy, 2015). Over time, brand awareness can become brand
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loyalty. High brand loyalty means consumers will continue to buy the same brand over
time compared to other brands (Ferreira & Coelho, 2015). Small business owners’
relationships with customers can grow an organization’s brand. These relationships grow
the organization and increase the potential for future sustainability. Additionally, sales
have a direct relationship with brand loyalty and customer relationships (Jones et al,
2015). Increasing sales and sustainable growth are important parts of long-term
sustainability.
Owner Capabilities
The owner of a small business is an important part of small businesses. Kuhn et al
(2016), Lofsten (2016), and Smith and Barrett (2016) discovered small business owners
lack many skills to be sustainable on their own. Anderson and Ullah (2014) found some
small business owners make decisions that inhibit growth for fear of leaving a comfort
zone. The lack of size and resources of small business owners is a contributing factor to
their lack of sustainability during the early years of their existence. Due to the continuous
changing markets, small business owners need to be able to adapt and change with the
markets.
Training. Training is one way small business owners can grow their own
capabilities and increase human capital. Smith and Barrett (2016) researched the growth
of small business owner success due to continued training and development. Online
training is an important feature Smith and Barrett (2016) emphasized due to the
accessibility and adaptability of training materials. Additionally, online resources are
emerging training tools that many small businesses are able to take advantage of today
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due to the increased accessibility of technology. Online training is a tool that is growing
in availability, but there is a variety of inexpensive training methods available to small
business owners. Kuhn et al. (2016) determined the importance of learning from other
firms through networking. Small business owners can use networking to strengthen their
business.
Networking. Small business owners can use networking as a way to learn and
grow without spending much money. Omri, Frikha, and Bouraoui (2015) concluded
networking size and small business profitability have a positive correlation. Kuhn et al.
(2016) found the need of small business owners to learn through peer advice. The
business owner obtains the peer advice many different ways. In the past, peer advice was
more difficult to obtain, whereas Kuhn et al. (2016) discovered tools for receiving and
sharing peer advice through social media. Lofsten (2016) determined networking with
other small businesses of a close proximity to be beneficial. Internal networking allows
ideas to flow through the organization and does not follow the traditional organizational
chart. Networking and building relationships with other small business owners can
increase sustainability through the sharing of ideas and resources that may not be
available to the small business owner.
Successful small business owners can learn from other small business owners.
Small business owners need other small business owners to increase profitability and
sustainability (Turner & Endres, 2017). Turner and Endres (2017) studied successful
small businesses and determined a common thread of active membership with the
Chamber of Commerce, attendance and participation in small business owner meetings,
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and the owners took part in small business mentor programs as network avenues to
increase sustainability. Successful small business owners can look outwardly for support
rather than attempting to learn every intricate business operation themselves. Small
businesses lack the resources of larger organizations, but through a partnership, the small
business owners can create a competitive advantage with one another and learn from one
another.
Another key attribute of small business networking is the opportunity to share
resources. Small businesses tend to lack the resources necessary to compete with larger
firms. Networking and cooperation among small businesses can reduce investment costs
and increase the competitive advantage (Nikayin & Reuver, 2015). Small business can
take networking to the next step and begin cooperating with one another to increase
efficiency while also reducing costs. Small business owners can form a cooperative to
collaborate with other small businesses that share similar problems (Benito-Hernandez,
Platero-Jaime, & Esteban-Sanchez 2016). Larger organizations benefit from
cooperatives, and small businesses need to take advantage of their flexibility while
benefiting from the use of shared resources (Benito-Hernandez et al. 2016). Business
owners use cooperatives to benefit one another.
Mentoring. Similar to networking is mentoring. For mentoring to be successful
there must be a relationship. Relationships grow through common ground and similarities
between the mentor and the mentee (Humberd & Rouse, 2016). Small businesses that use
mentoring can learn from an experienced business owner, and reap the benefits of their
expertise. Both parties of mentorship can benefit as the mentor can learn from the mentee
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as the relationship grows. Several factors are important to the mentor and mentee
relationship for the mentee to gain the greatest benefit. Knowledge and expertise,
experience and age, approachability, mutual respect, communication, trust and honesty,
passion and patience, willingness to learn, expectation alignment, and cultural issues are
common themes in determining how effective the mentorship was to the mentee
(Matabooe, Venter, & Rootman 2016). These factors are important to the growth and
development of the relationship because they are important for the mentee to be able to
grow the most, and this allows for greater respect of the mentor. When one of these
factors is missing or misaligned, it can hinder the relationship between the mentor and
mentee and decrease the chances of success. Educators use mentoring in education to
develop on the job skills, additionally with the lack of resources available to small
businesses; mentoring is a viable option to have the greatest gains (Woodley, Burgess,
Paguio, & Bingley, 2015). Mentoring is how young small business owners can receive on
the job training from successful experienced small business owners.
Entrepreneurial business behavior and competition. An entrepreneur’s
behavior can affect the future sustainability of small businesses. Lofsten (2016) identified
three critical behaviors that increase sustainability for small businesses: risk-taking,
frequently innovating, and pioneering nature. Adaptability is another key feature of small
businesses, and the ability to adapt and change is a key indicator of the sustainability of
the organization (Taneja, Pryor, & Hayek, 2016). The entrepreneur uses these
components to set the foundation of the organization and to determine if organizations
are moving towards goals or remaining constant.
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Risk taking is important because the entrepreneur must take strategic action when
faced with adversity according to Lofsten (2016). These risky actions are important
because they small business owners use them to make investment decisions and planning.
The strategic plan sets the organization up for the future direction of the organization. An
organization with direction and a plan for profitability has a greater potential for survival
beyond 5 years according to Blackburn et al (2013). Successful business owners develop
plans to give themselves an advantage for success. Small business owners develop these
plans to ensure the organization understands the future of the organization and allows for
strategy implementation in preparation for the future.
Small businesses must change and adapt to meet consumer wants and demands
and innovation of the small business is a strategy for sustainability. The frequency at
which an organization innovates its products is another important business strategy
(Loftsen, 2016). Product innovation allows the small business to position themselves as
leaders in the market (Lofsten, 2016). Positioning in the market allows small business to
take advantage and grow a strong customer base. Product innovation is not the only
innovation necessary for small business success. Innovation is an improvement in any
part of the organization, and small businesses must continuously improve to increase the
chance of sustainability (Taneja et al. 2016). The innovation of business practices is
being a pioneer in a specific area of business. Small businesses can try new things, adapt,
and change to meet the needs of the customer. Small businesses owners can use
flexibility and creativity to their advantage where larger corporations may not be able.
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The pioneering nature is the driving force behind the entrepreneur and is why the
small business owners compete aggressively. Lofsten (2016) concluded the pioneering
nature to compete is an important role of the small business owner's behavior. Omri et al
(2015) found increasing network size also increases innovation in an organization that
leads to greater profitability. Innovation can be increased in a variety of ways and is
important to consider when planning and implementing strategies for sustainability.
Owner perceptions. The small business owner’s view and direction of the
organization can be a determinant of growth. Small businesses have fewer regulations
than larger businesses and fewer restrictions. Greater flexibility in operations is an
important influencing factor of why small businesses make the decision to stay small and
inhibit growth (Anderson & Ullah, 2014). Small business owners have greater control of
the organization with fewer regulations. Braidford, Drummond, and Stone (2017)
determined small business owner’s perception of growth determined the amount of
resistance to growth. Business owners who perceive growth as an opportunity will tend to
grow more than owners become defensive towards growth. These perceptions of the
owner aid in the direction of the organization.
A strength of small businesses is greater flexibility and opportunities for growth.
The culture of the organization can affect the ability to capitalize on growth opportunities
and the ability to be flexible due to the size of the organization can aid in the innovation
and direction of the organization (Anderson & Ullah, 2014). Ghanavati (2014) found
culture did not directly affect the financial performance of small businesses. Indirectly
there are some connections (Ghanavati, 2014), and the lack of a direct effect can be
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because the industry studied or potential geographic location. Company culture is an
important driver of creativity (Chiaradonna, 2015). The culture of an organization studied
may affect the results of the relationship between culture and financial performance.
Education and Expertise
Knowledge and understanding are important to small business owners.
Insufficient owner expertise and education is one key indicator of small business failures
(Karadag, 2017). Small businesses owners who own a business that have survived
beyond 5 years acquire knowledge and expertise over the life of the business. The
expertise and education gained over time are why older businesses perform better than
younger businesses (Karadag, 2017). Entrepreneurship skills are believed to be
something which can be acquired so many colleges and institutions offer classes and
training to develop small business owners’ skills (Hodges et al. 2015). Small business
owners must continue to learn and grow with the business in order to maximize the
benefits of growing with the organization. Small business owners can gather expertise
from a variety of sources such as formal education, owner experience, or networking but
the most important feature is not one over the other but rather a combination of sources
for the small business owner to grow from.
Leadership Strategies
Small business owners need strategies for success. These strategies are designed
to strengthen the organization. The strategy developed is dependent on the desired
outcome. Dunne (2016) found a correlation between leadership strategies and the
sustainability of small businesses through new product innovation. Whereas, Holloway
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and Schaefer (2014) focused on reoccurring themes of successful business owners and
determined leadership strategies focused on people to ensure success. Some owners
emphasize continued learning where others emphasize developing a direction for the
organization. Literature offers very little insight into specific correlations of leadership
styles and sustainability, but there are some correlations of successful leadership traits,
principles, and leadership strategies. These strategies are important to the success of the
organization and small business owners can use them to enhance the effectiveness of the
owner’s capabilities. Focus and direction are important parts of successful businesses,
and the type of leadership strategy must match the need of the organization
Transformational learning. Learning is important for small businesses to adapt
to change. Transformational learning is the process of being open to change and receptive
to new beliefs and opinions according to Mason (2018). Leaders must be able to adapt to
the changing workforce in which they govern. Additionally, transformational learning is
dependent on mentor relationships (DeCapua, Marshall, & Frydland 2018). The mentor
and mentee relationship must be strong and both parties must be a part of the process
(DeCapua et al. 2018). Transformational learning allows the small business owner to
develop new strategies and adapt to the ever-changing market. Additionally, small
business owners are able to increase flexibility because the openness to change and new
beliefs when implementing transformational leadership strategies.
Sustainable leadership. A task of the leader is the sustainability of the
organization. Leaders use sustainable leadership as a strategy to balance individual parts
of the business for increasing the overall sustainability of the organization (Gerard,
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Mcmilan, & D’Annunzio-Green, 2017; Suriyankietkaew, 2016). The leaders of an
organization have major influences on the potential sustainability of the organization
(Gerard, et al. 2017). Gerard et al, (2017) found organizational leaders to be critical in
building stakeholder relationships, developing human capital (leader and employee), and
manage the external impact on the organization. Suriyankietkaew (2016) determined
sustainable leadership incorporates people, profits, and plans to enhance the future
longevity of the organization. Small business owners must focus on the entire
organization. Every part of the organization is important because of the various
interdependent systems. Sustainable leadership strategies focus on growing the leaders in
the organization and creating balance for long-term sustainability.
There is a variety of positive outcomes when incorporating sustainable leadership
strategies. Employee satisfaction is an important output of sustainable leadership
strategies (Moon & Jung, 2018). Additionally, sustainable leadership positively affects
customer satisfaction (Suriyankietkaew, 2016). People skills are critical to the
sustainability of small businesses, and the emphasis on people in the organization affects
how employees interact with customers (Holloway & Schaefer, 2014). These two outputs
are important for small businesses to reduce employee turnover, and create customer
loyalty that are both important for small business sustainability.
Each part of a business has a large effect on a small business. Variety and balance
are important features of sustainable leadership (Gerard et al. 2017; Suriyahkietkaew,
2016). One reason small businesses fail is due to the owners focusing on a specific area
of a small business instead of strategically planning for the entire organization.
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Addressing past issues, embracing past successes, and strategizing to meet future
customer demands will increase the future potential sustainability of the organization.
Innovation. Small businesses that gain a competitive advantage over larger firms
have a good chance of competing and staying in business. Consumers need to have a
reason to go to the smaller business, and the small business must efficiently serve its
customers. Innovation for small businesses can happen in variety of ways that include
products and strategies (Taneja et al, 2016). Small business leaders who focus on seeking
opportunities rather than small improvements tend to have greater success with
innovations (Cooper, Peake, & Watson, 2016). Small businesses can use innovative
strategies to enhance the sustainability of the organization because of the ability to
respond to the need for change in a timely manner (Taneja et al., 2016).
Innovation can be an important way that small businesses create an efficient and
effective comparative advantage. Small business owners use innovation to discover new
opportunities, meet the needs of a changing environment, and continue to gain a
competitive advantage (Li, Wang, van Jaarsveld, Lee, & Ma, 2018). Research shows the
definition innovation varies. Innovation is a unique or new product or process that
enhances the potential of resources (Almquist, 2016). Almquist (2016) discovered
innovation rarely comes from established enterprises. The role of innovation is to grow
and evolve products and processes to increase efficiency through the maximization of
resources.
Innovation is one way to increase profit. Businesses want to increase revenues
while reducing costs. Innovation is both market-driven and technology-driven. The
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market can determine the direction of the organization while technology can increase the
efficiency of the organization. Small businesses can use innovation to compete against
other firms. Not all innovation affects businesses in a positive way. Disruptive innovation
is a way small firms can use innovation to their advantage. Ojo (2017) defined disruptive
innovation as a smaller firm effectively challenging a larger established competitor. Most
firms sustain innovation where they have incremental increases where firms use
disruptive innovation to change the entire landscape of the market. Small business
owners can create new value through disruptive innovation (Karanja, Njeru, & Muhoho
2016). Disruptive innovation can play an important role in small business survival. Small
businesses are able to gain large amounts of market share or control the entire market
against larger competitors that can set them up for long-term success.
Small businesses owners can innovate in their business model. Through the rapid
growth of innovation, technology, and the ever-changing markets businesses and the
business model must adapt and change with the markets (Almquist, 2016). Some older
business models can be out of date now. Businesses have the opportunity to use new
emerging methods to reach customers such as social media or cellular ad campaigns. The
consumers are spending more time on their phones and this is a chance to adapt and
change with the markets with new apps, services, and platforms (Zott & Amit, 2017).
Additionally, technology is changing at such fast paces that businesses must be less rigid
and able to adapt to the changing needs of the workforce. Consumers and employees are
changing and businesses must adapt to meet these needs.
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Innovation, as with many strategies implemented by small businesses, is not a
stand-alone strategy. Small business owners must combine innovation with other
strategies such as marketing to be effective. Innovation and marketing when combined
can create a differentiated process (Hsu, 2015). Changing and adapting a business model
to target consumers while creating value and a new business model is business model
innovation (Ritter & Lettl, 2018). One strategy does not determine the entire success or
failure of an organization, but rather the combined strategies effectiveness is essential to
the sustainability of the organization.
Business Model Innovation. Business model innovation is the creation of a new
business model due to changes in the parts of the business model (Verhoeven & Johnson,
2017). Small business owners need to adapt the business model to fit their needs because
there are so many new ways to conduct business (Zott & Amit, 2017). The change must
create a new business model to be business model innovation. General systems theory is
the study of how changes in one part of a system affect the whole system. This is critical
to business model innovation because changes in parts of the business model will affect
the entire business.
Innovative strategies for small businesses can create a need for a changing
business model. Business model innovation is a way business can gain a competitive
advantage over their competitors (Purkayastha & Sharma, 2016; Zott & Amit, 2017).
Businesses that focus on business model innovation are able to capture revenue and
create value in the organization (Purkayastha & Sharma, 2016; Zott & Amit, 2017). The
value generated strengthens the organization because they are able to capitalize on new
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revenues. Additionally, small businesses owners distinguish their business through new
revenue generated by the business. Small business owners gain a competitive edge over
the competition through the new revenue.
Small business owners use four business model value drivers to drive business
model innovation. These include novelty, lock-in, complementarities, and efficiency
(Amit & Zott, 2012; Zott & Amit, 2017). Each part is critical and determines what drives
business model innovation. Each driver is an important part of business model innovation
and is important to determine how much change is taking place. Novelty is the degree of
change in the system (Zott & Amit, 2017). Which is how revolutionary and different the
innovation is. Large amounts of novelty require large amounts of change, and may not
resemble the old business model. Lock-in is the ability to create consumer loyalty for the
product, brand, and company (Zott & Amit, 2017). Complementarities is the creation of
complement goods that interact with one another. Lastly, efficiency is the cost savings
generated by business model innovation.
Business model innovation is more than just product innovation. The business
must be set up to foster creativity and innovation as well as implement the innovations.
Business owners use business model innovation to change one or more parts of its
business model and creates a business model that is new to this world (Zott & Amit,
2017). This does not happen by chance. Business model innovation is much more
complex than product innovation (Bashir & Verma, 2017). The complexity is so much
more because the entire business model changes. A failed innovation leaves a product or
service without a future, but failing at business model innovation can ruin an entire
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organization. This complexity is what allows firms that specialize in business model
innovation to really excel and gain the competitive advantage in the fields in which they
compete. Businesses must add new activities, link activities differently, or change pieces
of the business model. The new business model must be different from any other business
model to be business model innovation. The business must be doing things differently
than other businesses.
Quality management. Organizations use quality management strategies to focus
on the reduction of waste and provide the consumers with the best product and service
possible. Properly implemented quality management strategies save the organization
money while adding new revenue to the small business (Murphy & Leonard, 2016).
Murphy and Leaonard (2016) explained the importance of small businesses using quality
management strategies, and Assarlind and Gremyr (2016) added the critical steps of
proper implementation of quality management strategies. Both articles explained the
importance of quality management strategies. Assarlind and Gremyr (2016) went further
to explain the importance of each step to ensure the successful implementation of quality
management strategies.
Small businesses use management strategies to increase profitability. Small
business owners implement quality management in their business (Murphy & Leonard,
2016). A lack of resources compared to larger corporations is why many small businesses
do not implement quality management strategies (Assarlind & Gremyr, 2016). Small
businesses compete against larger corporations with more resources and the small
business owners implement strategies to compete. A competitive advantage is critical to
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competing against larger firms (Bashir & Verma 2017). Small firms have the ability to
change and adapt to meet the needs of consumers faster than larger firms do. The ability
to change quickly is a strength of small businesses and the ability to adapt to a quality
management strategy is important for future sustainability.
Quality management is a growing trend and field. Additionally, the understanding
of quality management has grown tremendously over the past 100 years (Weckemann,
Akkasoglu, & Werner 2015). Originally, businesses only used quality management for
finished products but quality management has evolved to include the workforce, goods,
and services of an organization (Weckemann, Akkasoglu, & Werner 2015). Small
businesses can implement a variety of strategies to ensure quality management. The
customers determine quality management and the quality needed to meet their needs
(Daneshjo, Majernik, Danishjoo, & Krivosudska 2017). The important part of quality
management strategies is to ensure the proper focus of the organization and ensure the
appropriate implementation strategies are in place.
Resistance to Change
Small businesses must implement many different strategies to survive beyond 5
years. Resistance to change can have large effects on small organizations where larger
organizations may absorb the negative effects (Bourdon & Jaouen, 2016). Small business
owners need change to affect sustainability to gain a comparative advantage over their
competition. Resistance to change is a common issue in organizations, and strategy
implementation must account for this resistance to change. There are a variety of types of
resistance to change, and resistance can be found while actors simultaneously supporting
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the change (Anderson, 2015). Members of the organization know that they need change,
accept change, but resist parts of the change.
To accept change there must be an anchor to meaning for the members of the
organization (Dickens, 2015). Resistance to change is almost inevitable, but with the
right purpose and meaning change can be implemented in a way that meats the least
amount of resistance. Small businesses must change and adapt to differentiate themselves
from the competition. Griffin (2015) determined employee relationships were a critical
component of industry diversification. Employees of the organization must understand
the change and have a positive relationship with the owners and managers of the
organization to reduce the amount of resistance to change. Emotionally tied employees
will exhibit the least amount of resistance to change, and be the greatest proponents of
implementation of the change (Dickens, 2015).
General Systems Theory
Many researchers use general systems theory to analyze small business
sustainability strategies. Von Bertalanffy introduced general systems theory to explain
general system interactions and applications (von Bertalanffy, 1972). Caws (2015)
explained general systems theory as a multiple discipline theory, whereas Colangelo
(2016) found researchers use general systems theory as an evolutionary theory to explain
a variety of different complex systems. General systems theory is broad and encompasses
many areas that researchers use to study the effects on the sustainability of the small
business. The growth and adapting of general systems theory are important to the future
of the theory and for future studies.
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Evolution of General Systems Theory
Von Bertalanffy introduced systems theory to explain cybernetics but has recently
evolved to include a variety of disciplines that include business (Colangelo, 2016). The
evolution of the theory is critical to the continued growth and survival of the theory.
General systems theory has evolved to explain various change related processes across
many different systems (Simola, 2018). Researchers examine relationships in many
different areas, and these relationships affect larger systems. Researchers use systems
theory in a variety of different aspects that strengthens the theory and increases the
credibility of the theory. Ludwig von Bertalanffy introduced general systems theory to
aid in the explanation of when multiple variables affect a larger system (von Bertalanffy,
1972). Systems can be complex and there was a need for a theory to aid in explaining
how parts of a system affect the whole system. Von Bertalanffy developed general
systems theory to be broad and reach multiple disciplines. Prior to general systems
theory, there was a lack of theory used to study relationships in systems (von Bertalanffy,
1972). Since its conception, researchers use general systems theory in a variety of
different studies and in a variety of different disciplines.
Researchers adapted general systems theory to include more than originally
theorized. Researchers now use general systems theory in studies beyond the original
sciences. This growth over time is important to the credibility and future longevity of
systems theory. Systems theory places an emphasis on structure and roles in the system
(Mania-Singer, 2017). The study of relationships described by von Bertalanffy (1972) is
still the foundation but the expansion of the theory is more inclusive of a variety of
35
complex systems (Mania-Singer, 2017). This is why researchers of general systems
theory are able to adapt and grow the theory. General systems theory is a very versatile
theory in which can be used to explain any system that affects a larger organization.
Application
Researchers use general systems theory to state the relationships of input
variables of a system (Micó, Caselles, Soler, & Romero, 2016). The relationship and
interaction of these variables are important to determine the effects on the system as a
whole. Additionally, researchers use systems theory to explain roles and responsibilities
in a system (Mania-Singer, 2017). This is why general systems theory is the study of
wholeness.
Researchers use general systems theory to determine the external effects of
internal operations (Malecic, 2017). Additionally, researchers apply general systems
theory to complex systems to aid in explaining the interactions of these systems (Mania-
Singer, 2017). Small business owners can use general systems theory to determine
sustainability strategies. The internal strategies and procedures of the small business
affect the external small business as a whole. Each system has a role and responsibility
and affects the organization differently. Even though the effects are different, each part of
the system is important to the sustainability of the entire organization. The small business
is the organization with each input variable being the different components that aid in the
success or failure of small businesses. Strategies for success are critical for small
businesses because small business owners use these strategies to manipulate input
variables to increase the sustainability of the organization.
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Rival Theories
Grey systems theory. Researchers use grey systems theory as a tool to analyze
and observe small sample sizes that lack information to make long-term predictions
according Liu, Yang, Xie, and Forrest (2016). Researchers use grey systems theory to fill
the void where information is missing and predict future outcomes (Meng, Liu, Liu, &
Wang, 2017). Researchers use grey systems theory in a variety of ways to predict or
estimate the outcome of a system such as small business strategies for sustainability.
Deng (1989) determined researchers use grey systems theory to aid in the development of
innovational techniques and concepts, as well as, replacing processes to find real
techniques rather than a statistical model when there was not enough data. Researchers
use these techniques and concepts for decision-making and future predictions.
Small business sustainability research is very broad. Sustainability is having the
ability to successfully maintain, grow, and survive (Warren & Szustek, 2017). Different
researchers define sustainability as preventing negative effects to the ecosystem (Bird &
Davis-Nozemack, 2018; Tuntivivat, Jafar, Seelhammer, & Carlson, 2018). Sustainability
of businesses is a continuously evolving study, and there are contrasting views. Some
reasons these contrasting views are prevalent is due to the nature of small businesses
using different strategies for success depending on the type of business or even the
location, and the different definitions of sustainability. It is important to view a small
business in a variety of different capacities to determine if there are strategies
implemented by small businesses that are cross-disciplinary. Additionally, grey systems
theory is difficult to view as a lens for qualitative research. Much of the research uses
37
grey theory as a quantitative theory to predict numerical results when there is a lack of
information.
Evolution of grey systems theory. Von Bertalanffy introduced grey systems
theory for researchers to fill the void when information, operational mechanism,
documentation, or structural message was missing or was not substantial enough (Deng,
1989). Lack of information can lead to results that are unclear, and grey systems theory is
has grown to be able to predict results even with small sample sizes. Liu et al, (2016)
determined researchers use grey systems theory to predict short and long-term results.
Researchers are able to use these results to further research that had become stagnant due
to lack of information or sample size. This evolution has aided in the growth and
development of grey systems theory from a quantitative theory into an inclusive theory
that includes quantitative and qualitative attributes.
Application of grey theory. Researchers can apply grey systems to a variety of
areas that lack information to develop concrete information. Researchers use grey theory
to solve uncertain problems that lack information (Liu et al. 2016; Stanujkic, Zavadkas,
Ghorabaee, & Turskis, 2017). When von Bertalanffy introduced grey systems,
researchers only applied as a quantitative lens to view a problem. As the study has begun
to evolve, researchers introduced qualitative applications to aid in the explanation in
areas where there is a lack of information or areas where misinformation are prevalent.
Diffusion of Innovation Theory
Innovation is a major influencing factor for small business sustainability.
Diffusion of innovation theory is a critical theory when determining how innovation
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affects organizations. E.M. Rogers introduced diffusion of innovation theory in 1962 to
develop a process to communicate innovation (Chang, 2010). Diffusion of innovation
theory is important to innovation because researchers study the dissemination of
information. Additionally, researchers use diffusion of innovation theory to determine
how perceived attributes of innovation affect organization adoption of innovation
(Jamshidi & Hussin, 2016; Smaldino, Janssen, Hillis, & Bednar, 2017). This is constantly
evolving and changing and researchers use diffusion of innovation theory to forecast
innovation in multiple fields for the future (Chang, 2010).
Researchers use diffusion of innovation theory to determine communication of the
adoption of innovation through an organization (Smaldino, Janssen, Hillis, & Bednar,
2017; Harvey, 2016). Additionally, researchers use this theory to determine how
organizations accept innovation is accepted (Harvey, 2016). These are critical
components of innovation theory because the process of communication and retention of
innovation are essential to the successful implementation of innovation.
Problems with the Rival Theories
Researchers use grey systems theory to fill in gaps where there is a lack of
information and/or lack of sample size (Liu et al. 2016). When using grey systems theory,
it is best implemented with a quantitative study as an accurate predictor when the sample
size is not large enough (Deng, 1989). Through enough research, the sample size for
small businesses sustainability can be very large, and there is a tremendous amount of
information, although differing, about small business sustainability. Grey systems theory
would best suit a similar study in a specific geographic location that only has a limited
39
number of small businesses in which had been successful. The limitations of the study
would enhance the use of grey systems theory, but without these limitations, there are
other theories that better fit small business sustainability.
Diffusion of innovation theory is relevant to innovation that is relevant to this
study. The main problem with using diffusion of innovation theory is that it is not
inclusive of the study but rather exclusive. Diffusion of innovation focuses only on how
organizations use innovation (Chang, 2010). Diffusion of innovation theory only focuses
on innovation (Blumberg, 2016). Small business sustainability is very diverse and can be
more substantial than just innovation. Since this theory only encompasses a part rather
than the whole study, it is not relevant to this study.
Transition
The purpose of Section 1 was to explain the background of the problem, and
develop the problem statement, purpose statement, nature of the study, research question,
interview questions, conceptual framework, operational definitions, assumptions,
limitations, and delimitations, significance of the study, and the literature review. I
explained and developed each one of these to validate there is a problem which needs
further research. I will further expand on this research to develop strategies small
business owners in the construction industry use to increase sustainability beyond 5
years.
In Section 2, I will explain the role of the researcher, participants research
method, research design, population and sampling, ethical research, data collection
instruments, data collection technique, data organization techniques, data analysis,
40
reliability, and validity of the study. I need to explain these in detail to determine which
research method and design is most appropriate. Additionally, I will explain how I will
use ethical research practices during the study to ensure protection of all participants.
In Section 3, I will present the findings from data collection and analysis. After
presenting the findings, I will apply the findings to professional practice and determine
the implications for social change. Lastly, I will make recommendations for both action
and future research.