A Dynamic Model for Assessing the Sustainability of Small and Medium Sized Enterprises

Subject Areas : Design of Experiment

Shohreh Alfi ¹ , Mohammad Taleghani ² , Mohammad Reza Vatanparast ³ , Mahdi Homayounfar ⁴

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Received: 2024-09-18 Accepted : 2024-10-25 Published : 2024-11-14

Keywords: System Dynamic, Sustainability, Small and medium-sized enterprises, Financial indicators,

Abstract :

The development of any country, particularly from an economic standpoint, largely depends on the success of its small and medium-sized enterprises (SMEs). Accordingly, this study aims to dynamically model the sustainability assessment of SMEs with a specific emphasis on financial indicators. The present research is descriptive-explanatory (non-experimental) and survey-based. The statistical population in this study comprises managers of SMEs in 2022, from which 12 individuals were selected through purposive sampling. To dynamically model the sustainability assessment of SMEs (growing) in Iran with an emphasis on financial indicators, a systematic review of the theoretical foundations identified sustainability assessment indicators across three dimensions: economic, social, and environmental. Subsequently, exploratory factor analysis using Principal Component Analysis (PCA) was employed to evaluate the indicators within each sustainability dimension and determine the key indicators. Based on the results, five social indicators (employee health and safety, employee satisfaction, organizational culture, diversity, equity, and inclusion, and compliance with laws and regulations), five environmental indicators (energy consumption optimization, recycling capability, use of renewable resources, green product design, and environmental commitment), and seven economic indicators (productivity increase, financial strength, resilience, profitability, investment management, quality, and economic value added) were identified as the main sustainability assessment indicators. Finally, based on the identified theoretical indicators, a causal model was drawn and used as the basis for simulating the sustainability assessment system of SMEs. The results of the six scenario tests showed that the sixth scenario leads to higher economic performance in SMEs over a 10-year period.

 

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