Sustainable practices, stakeholder engagement and the growth of small and medium agro-processing enterprises in Uganda

Abstract

The study investigated the relationship between sustainable practices, stakeholder engagement, and the growth of agro-processing SMEs in Uganda, where many SMEs are still grappling to attain growth. Integrating the triple bottom line (TBL) and stakeholder theories, the study sought to examine how and the extent to which sustainable practices and stakeholder engagement can unlock the potential of agro-processing SMEs to attain improved growth. Utilizing a cross-sectional design and a sequential mixed-method approach, the study focused on agro-processing enterprises in the Greater Kampala Metropolitan Area (GKMA). The quantitative study selected a sample of 367 from a population of 4,229 SMEs using stratified random sampling, resulting in a 97% response rate. Quantitative data were analysed using SmartPLS version 4, while qualitative data were gathered from 30 purposively selected business owners and analysed through thematic analysis using NVIVO version 14. The findings reveal that environmental, social, and economic practices significantly enhance SME growth in the agro-processing sector, with stakeholder engagement partially mediates the relationship between sustainable practices and growth of SMEs. As such, the study recommends agro-processing SMEs should undertake; employee training, support personal growth of employees; ensure quality production to meet changing customer needs and undertake waste management through recycling as a measure for reducing operational costs to attain growth. On the other hand, the government should establish storage facilities for agro-processing SMEs in order to manage fluctuation in prices of the agricultural produce and encourage voluntary compliance to environmental, social and fiscal policies as strategic pathways for attaining growth.