Beyond Traditional Models: Assessing SME Sustainability in Thailand's Food Processing Sector Through Agility and Innovation Dimensions

Abstract

Background: Economic growth, food processing, security, and rural employment are all significantly influenced by small- and medium-sized enterprises (SMEs) in Thailand's food processing industry. These SMEs are subject to strict regulations and resource limitations.

Objective: The study aims to examine the influence of two core capabilities on SME sustainability in Thailand's food processing industry: (1) organisational agility, operationalised through the dimensions of flexibility, adaptability, and resilience, and (2) organisational innovation, measured through the dimensions of leadership and people.

Methodology: This study employed a quantitative, descriptive survey design. Data was collected via a structured questionnaire from a sample of 250 executives and business owners in Thailand's processed food industry. The hypothesised model was tested using Structural Equation Modelling (SEM) in SmartPLS 4.0.

Results: The results reveal that both organisational agility (notably through its dimensions of adaptability, flexibility and resilience) and organisational innovation (through leadership and people) have significant and positive effects on SMEs' sustainability. All five dimensions were found to be statistically significant predictors.

Conclusion: This study confirms the significant role of organisational agility and organisational innovation as key drivers of SME sustainability. The research provides a valuable reference for future studies by validating adapted scales for these constructs, which are tailored to the unique economic and social context of the food processing industry in Thailand.

Unique Contribution: This study is beneficial in theory and practice for measuring organisations' agility and innovation to assess the sustainability of small and medium-sized businesses.
It contributes to the theoretical and methodological discussion by incorporating governance into classic models (economic, social, and environmental).

Key Recommendation: Based on the above results, the author proposes six policy recommendations to enhance the organisational agility and innovation of small and medium enterprises within the context of development and integration in Thailand’s food processing industry. To capitalise on this opportunity, it is essential to implement the aforementioned solutions simultaneously to eliminate institutional bottlenecks and enhance the sustainability of SME in Thailand.