Faculty of Commerce

Department of Strategic Management

RESEARCH PROJECT

The impact of Strategic Leadership on sustainable growth of SMEs in

Zimbabwe. A case of SMEs in Harare

By

Russell Sayine

Student Number: M122116

Submitted in part-fulfilment of the requirements for the Masters of Commerce in

Strategic Management

2024
Abstract

Policy makers, a pool of scholars and managerial analysts concur that the future sustainable
development of any country rests on the shoulders of Small and Medium Enterprises (SMEs). In
contrary, in spite of the enormity of benefits that can be cultivated from SMEs, research will
ascertain that poor growth of majority SMEs are infested by a high failure rate largely based on a
mediocre in managerial skills and ineffective leadership. This invite for a continuous assessment
of strategic leadership’s effectiveness so that counteractive action can be taken where leadership
is found to be fruitless. The purpose of the study is to assess the effectiveness of strategic
leadership in cultivation of a sustainable growth of SMEs in Harare, Zimbabwe. A quantitative
research will be conducted using a survey strategy and primary data will be collected using
closed-ended questionnaire from the population target that is participants from Harare’s Central
Business Area (CBD). A review will be conducted on the strategic leadership theories, models
and past literature done by other researchers to adopt the numerous determinants that impact
cultivation of a sustainable growth of SMEs. A theoretical framework will be established
considering three major independent variables which are leadership vision, strategic scope,
research and development (R&D) and innovation capability and dependent variable:
organizational performance. A set of questionnaire with structured questions was generated and
measured using a Norminal Scale. The primary data will be collected from the top management
using convenience sampling. The sample size consists of 100 respondents who are directors,
CEO, managers and top executives of 10 SMEs in Harare. The study will ascertain strategic
leadership ways in rewarding management, resource management, total quality management and
resource based view as conveyor belts towards attainment of a sustainable growth of SMEs in
Harare so as to harness employee motivating, engagement and commitment.
 CHAPTER 1

GENERAL INTRODUCTION

1.1 Introduction

The quality of leadership is a fundamental factor in any country’s economic growth as cited by
Jones & Olkens, (2005). Strategic leadership can be well-defined as “the leader’s ability to
predict, and maintain flexibility and to empower others to create strategic change as necessary”
(Hitt et al., 2012; Voelpel et al., 2006). Hallberg (2000) asserts that the SME sector has a
significant role to play in the current and futuristic economic development, poverty reduction and
employment creation in developing economies. Considering the Zimbabwean context as an
economically developing county, strategic leadership is multi-functional and relates to managing
others as well as organisations in managing the challenges of today’s glocalized business
environment that is also dynamic.

This chapter will explore the origins of strategic leadership on a global scale, its transition to
Africa and implementation in Zimbabwean context and how strategic leadership helps SMEs in
Zimbabwe towards attainment of a sustainable growth.

1.2 Background of the study

Owoye and Onafowora, (2020) asserted that perception of the influence of leadership on
economic growth of a country has evolved from before, during, and after World War II. Studies
show that there is a positive link between a leader’s education level and the level of economic
growth known by the country which he leads. The leader’s education level is a fundamental
element in defining the difference between developed and underdeveloped countries. The
concept of strategic leadership is back dated to the 1960s, with its roots to be found mainly in the
seminal of publications by Alfred Chandler (1962). Since then, it has evolved significantly
becoming an ever more mature and consolidated field within the realm of management. The
classical definition of strategy as it was coined by Alfred Chandler (1962), is that strategy is the
determination of the basic long term goals of an enterprise, and adoption of courses of action and
allocation of resources necessary for carrying out these goals. In his theory, Chandler (1962)
empasised establishment of functional structures to increase efficiency, adoption of growth and
diversification strategy ; diversification into new markets and products to overcome limits of the
home markets ; creation of the then-revolutionary divisional form to manage large
conglomerates. The theory of Chandler (1962) continue to be enhanced to the development of
the contemporary strategic leadership where strategy formulation, structures, allocation and
mobilisation of resources are the key components of strategic leadership which seeks to drive
enterprises towards a sustainable growth which encompasses development and externalisation of
new markets, product development, human capital development, production, sales and profits.

In Africa, Nigeria is an exemplary nation which can tell us well about the impact of leadership
on economic growth of a nation. Iyoha (2010 noted that after Nigeria’s independence in 1960,
the newly independent republic was ruled by poorly trained military groups who imposed a
regime of terror. It is noted that from 1960 to 2000, the economic growth of Nigeria was
negative or otherwise qualified as very weak, with an average of 0.4% of growth. This
predicament placed the nation among the poorest in the World. It was until 2003, when civilians
and educated leaders entered power, an act personified by Olesegun Obasanjo that Nigeria
underwent regular, organized, and sustained reforms that enabled the country to become the
largest African economic power to date.

Hence, in Zimbabwe, small and medium enterprises adopt strategic leadership style since they
largely contribute to the economic growth of the nation and is the key towards attainment of a
sustainable growth. Mudavanhu et al, (2011) advocates for a turnaround from ancient leadership
style and embrace the contemporary loudmouth strategic leadership style for SMEs to spearhead
attainment of a sustainable growth. Jones and Olkens, (2005) articulated that the quality of
leadership is a key factor in a country’s economic growth, hence contemporary SMEs in
Zimbabwe are embracing strategic leadership as an major ingredient towards attainment of a
sustainable growth. SMEs in textile, agribusiness, ICT and those in construction in Harare have
largely embraces strategic leadership to maneuver in a competitive business environment while
creating uniqueness in products and service provision.
1.3 Justification

However, my research is going to scrutinize further from prior researches and examine how
strategic leadership assist SMEs to obtain a sustainable growth, specifically in Zimbabwe,
Harare. This study will examine SMEs found in various industries such as those in clothing and
textile, agriculture and fisheries, food stuff retailers and manufacturing of steel and iron products.
This study will examine the contribution of strategic leadership towards attainment of a
sustainable growth of SMEs in the highlighted industries. In this case, sustainable growth of
SMEs will be defined considering increase in market share, market development, competitive
advantage and employee development.

A study by Paul Nemashakwe (2022) focuses on the relationship between leadership and growth
of SMEs in Zimbabwe. This research seeks to ascertain the effectiveness of leadership on SMEs
growth. This research fails to specify the nature of SMEs but rather generalized. This research
also failed to give specifications to measurements of growth of SMEs, rater it hammered on
Human Resources development as key element measures of growth of SMEs.

Furthermore, a study carried out by Normy Rafida Abdul Rahmana et al (2018) focuses on the
impact of strategic leadership on operational strategy and organizational performance of the
automobile industry in Malaysia with a particular focus on Proton (Perusahaan Otomobil
Malaysia). This research only pay attention to automobile industry and neglected other industries
across SMEs.

Paul G. Kimiti1 et al (2020) carried a study on cost leadership as a key strategy on the increment
of performance and competitive advantage on SME in milk processing. This study also focus on
a single SME in a particular industry. Moreover, the study indicated performance and
competitive advantages as key indicators of SME growth.

1.4 Problem
SMEs are essential to the Zimbabwean economy especially those in the capital Harare since they
increase creation of employment, they serve as an instrument towards generation of foreign
currency and also plays a significant role in tourism forum. Nemashakwe (2023) discussed that
anomalies dilute the benefits cultivated from SMEs because their capacity is militated by high
failure rates largely impugned on ineffective leadership. To reverse failure rate and accelerate
SMEs to attain sustainable growth, Mashingaidze at al (2021) recommended that this can be
achieved through the implementation of strategic leadership style.

1.5 Research Model

Survey and sample

A survey will be conducted to collect data and test the hypotheses. A pilot study will be
conducted to test the measuring instrument prior to the self-administered questionnaire survey.
The results of the pilot study helps to refine the questionnaires. 400 questionnaires will be
distributed to selected owner-managers, managers and frontline employees between March and
April 2024.Their responsibilities in their organisations give them a unique accreditation and
comprehensive view of strategic leadership activities. Sustainable growth of these organisations
will be measured by self-reported performance including increase of market growth, extensive
increase of market share, product or service development and development of the human capital
skills and knowledge.

Measurement instrument

A measurement instrument will be adopted and adapted to measure the impact of strategic
leadership on human capital development, and attainment of high performance workforce. The
instrument will be validated by Serfontein and Hough (2011) which measures:

Strategic leadership (independent variable)

 Action.
 Coherence.
 Discipline.
 Strategic orientation (dependent variable).
 Strategy creation and formulation.
 Strategic execution.

Sustainable growth of SME (dependent variable)

  Human capital development (skills and knowledge).
 Cost management.
 Product differentiation.
 Integration.
 Self-reported performance

1.6 Statements of the hypotheses

This research aims to systematically address the following hypotheses:

H1: Strategic leadership is directly and positively associated with attainment of a sustainable
growth of SMEs.

H2: Strategic leadership directly and positively mitigate challenges faced by SMEs towards
attainment of a sustainable growth.

H3: Strategic leadership promote human capital development which is key towards attainment of
a sustainable growth of SMEs.

H4: Strategic leadership directly and positively promotes conjusive organisational culture which
helps in cultivation of high performance workforce which is essential towards attainment of a
sustainable growth of SMEs.

2.0 Literature Review

Strategic leadership is defined as the organisation’s leader with the responsibility of strategizing
the management process which include the formulation, the implementation, the performance of
the strategies on a continuous basis, the capability for change adjustment due to the
characteristics of the environment, the resources of the organization and the attitudes of the
managerial team (Hosmer, 1986). In fact, understanding strategic leadership involves
highlighting what effective top leaders actually do in order to come up with a strategy-focused
organisation (Rumsey, 2013). Furthermore, strategic leaders need to be able to concentrate on
critical resources which are most likely to make a transformation in the assurance of sustained
future success. This opinion is supported by Hitt and Ireland (2002) who mention that strategic
leadership is about gaining access to key resources such as alliances with partner firms “social
capital” and the ability to build great teams “human capital” as the most important firm
resources. The strategic literature review empasised that effective strategic leadership
capabilities are needed in the new competitive landscape expected for the 21 st century (Ireland &
Hitt, 2005).

According to Carey et al. (2012), “Internally, a company is likely to suffer a crisis of morale,
confidence and productivity among employees and similarly, stockholders may panic when a
company is left riddles and worry about the safety and future of their investments. When a public
company is left with a void in leadership, for whatever reason, the ripple effects are widely felt
both within and outside the organization”. Strategic leadership is the aptitude to operate
successfully and deliver extraordinary performance (Deeboonmee & Ariratana, 2014).

3. Research Methodology
A positivist methodology will be adopted guiding tool for collecting and analysis for this study.
Therefore, a deductive approach is well suited to assess the relationships between strategic
leadership and sustainable growth of SMEs in Zimbabwe, Harare. The researchers used the
quantitative research approach to fulfil the primary objective as it is most appropriate in finding
causal relationships between study variables (Cooper & Schindler, 20140). A cross-sectional
design will be employed to collect data from all essential stakeholders which are owner-
managers, managers and frontline employees of SMEs. A simple random sampling technique
will be used to select the enterprises in the informal sector that participated in the study. The
random sampling technique is deemed appropriate for the study as it ensured that all targeted
enterprises in the informal sector have an equal opportunity of participating in the study (Wilson,
2010). The targeted population will be all SMEs in the afore mentioned industries which are
registered in accordance to the Zimbabwean business statutory instrument Act 13.
Sloven’s Formula will be used as a sampling technique to select a sample on the targeted
population. According to Racidon P. Bernarte, (2021) the formula states that n = N / (1 + Ne²).
Where:
n = number of samples
N = total population
e = error margin (.05 or .01)
Or level of confidence

For example, in a targeted total population of 1000 enterprises, the number of considered sample
is 285.71 samplings.
Where:
n = 1000 / (1 + 1000 * 0.05²)
n = 1000 / (1 + .0025)
n = 285.71 samplings
The study will strictly require information from owner-managers, managers and frontline
employees since they are the significant personnel who provides strategic information. The
researcher will explain the purpose of the study before distributing the questionnaires to the
respondents. Structured questionnaire will be used and this will comprise of four sections.
Section A will gather personal information of the owner or manager and company demographics
such as gender, education levels, position, as well as years of business existence. Section B will
collect data about the degree to which management is mitigating challenges being faced by
SMEs towards growth. Section C comprehend the participants’ responsiveness to which
management is facilitating human resource development as a key measurement towards
attainment of a sustainable growth of SME. Section D will solicits the participants’ view of their
business’ contribution towards the economy of Zimbabwe. Validity will also be ensured by
ensuring that instrument development will be guided by the research objectives and theoretical
and empirical literature.

3.1 Conceptual Framework

Scholars, policy makers and analysts agree that the future development of any country rests on
Small and Medium Enterprises (SMEs) (Albloshi and Nawar, 2015). Small and medium-sized
enterprises (SMEs) are defined by Paul Nemashakwe (2022 as a group or an individual who have
qualification and experience in a particular field or work process. Chipangura and Kaseke (2012)
defined SMEs as an individual or group of people by education, training or experience is a
recognised expert on a particular subject, topic or system. It have noted by Daka, Sandada and
Mbasera, (2017) that the high failure rate hounding SMEs has been attributed mainly on a dearth
in managerial skills and ineffective and incompetent leadership. Therefore, the demand for
strategic leadership have been escalating to build a companies’ capacity for change and to take
the company forward with workable strategies to sustain in the challenging global business
environment (Wheeler, Mc-Farland and Kleiner, 2007). Strategic direction is very critical for
SMEs performance as it is linked with the long-term vision of the organisation, which is five to
ten years ahead and its strategic goals as cited by Albloshi FA, Nawar YS (2015). Strategic
leadership would be able to consider the external and internal business environment when
providing the strategic direction especially in predicting the future requirements of the
organization to be positioned in the pathway to meet those demands and to stay in the forefront
of its competitors (Brecken, 2004). This was described by Mashingaidze at al (2021) as dynamic
capabilities. Strategic leadership is essential in Zimbabwean SMEs since it is essential in setting
strategic direction of a firm by identify the internal strength and weaknesses, external threats and
opportunities, the marketing strategies, product development, the financial strategies, human
resource and technology for maximum market penetration leading to high business performance
(Proctor, 1997). Core competencies of strategic leadership which include the governance
process, the technology and the collective learning within the organisation that will produce core
products to gain market share and competitive advantage will make the organisation unique and
tough for competitors to copy (Gupta, 2017). Strategic leadership with its strategic thinking,
managing politics and change management will have the ability to permeate and implant the
whole organisation with competency (Norzailan, Yusof and Othman, 2016). Strategic leadership
ill monitor these core competencies and align them towards firm growth while monitoring that
they will not lead to disruptive innovation, cope up to emerging technologies and the rising
capabilities of competitors and strategise for a differentiation to stay afloat in the competition
(Gupta, 2017). Hence a proper alignment of strategic leadership competencies to firm practices
will result to attainment of a sustainable growth of a firm.

3.2 Significance of the study

This study will help managers and owners of SMEs in, Harare and those across Zimbabwe in
understanding the role of strategic leadership as a fashionable leadership style that have to be
implemented in order to attain a sustainable growth. Through this study, SMEs stakeholders will
be enlightened on challenges they face as brickwall to growth and have an insight on how
strategic leadership mitigate these challenges and apprehend a sustainable growth. This is
supported by modern scholars such as Mashingaidze et al. (2021), who attributed that growth is a
central characteristic of entrepreneurial behaviour since most SMEs in Zimbabwe, Harare are
born out of entrepreneurship. This study will highlight how strategic leadership helps to develop
human resources capabilities and strategically aligning them to firm internal practices so as to
foster external needs in obtaining competitive advantage which is a measure of growth. The
study will also serve to add value to the board of knowledge as future studies may be conducted
based on the findings from this study.

3.3 Delimitations of the study

This study will be conducted based on the prevailing economic environment in Zimbabwe and
not futuristic since it is difficult to predict the future of business environment since business laws
and economic policies of Zimbabwe are dynamic. The study is Zimbabwean centric hence it
might not be generalised to other countries which have different economic laws and business
practices, hence the study is limited to Zimbabwean context. The study will be cross-sectional,
denoting that the relationship between strategic leadership and sustainable growth of SMEs will
be assessed at one particular moment. Longitudinal research can help to test the true causality of
the behaviour of variables. Moreover, the study will holding other factors constant that will
affect attainment of a sustainable growth of SMEs, strategic leadership positively influences
growth of SMEs. However, other nonsensical variables that might moderate this relationship
were not addressed and these include enterprise age, location, firm resources, industry
competition to disentangle but a few.

3.4 Limitations of study.

Financial constrains will present shortcomings to the research which could be the result of
unavailability of resources. Small sample size findings will be broadly generalised to SMEs in
Zimbabwe, Harare. The researcher may inject his personal opinion into the case study and this
results to research bias.

3.5 Definition of terms

SMEs refers to Small and Medium Enterprises.
ICT refers to Information Communication Technology.
Conclusion
This research will ascertain the relationship between strategic leadership and sustainable growth
of SMEs in Zimbabwe, Harare. T This research will enlighten SMEs’ stakeholder on how to
align strategic competencies and firm practices and able to blend firm practices and strategic
leadership competencies so as to cultivate a sustainable growth which encompass market growth,
increase in market share, product development and human resource development.
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