Influence of strategic management practices on the sustainable growth of Small and Medium Enterprises in Uganda’s oil and gas sector

Abstract

Small and Medium Enterprises (SMEs) play a critical role in Uganda’s economic development, particularly in the emerging oil and gas sector, where local content policies have created opportunities for local firms to participate in service provision. Despite this potential, many SMEs struggle to achieve sustainable growth due to limited adoption of structured strategic management practices. This study, therefore, examined the influence of strategic management practices on the sustainable growth of SMEs operating within Uganda’s oil and gas sector. Grounded in the Dynamic Capabilities and Institutional Theories, the study focused on four key strategic management practices: environmental scanning, strategy formulation, strategy implementation, and strategy monitoring and evaluation. A descriptive, cross-sectional research design was adopted, and data were collected using structured questionnaires administered to 121 SMEs registered on the Petroleum Authority of Uganda’s National Supplier Database and operating within the Central Region of Uganda. Statistical analysis was conducted using SPSS Version 27, including descriptive statistics, correlation, and multiple regression. The findings revealed that all four strategic management practices are positively associated with the perceived sustainable growth of SMEs. Among these, environmental scanning emerged as the strongest predictor, highlighting the importance of continuously monitoring regulatory changes, market conditions, and competitive dynamics in a highly regulated and evolving sector. Strategy implementation and monitoring and evaluation were also found to make meaningful contributions to growth, particularly where firms demonstrated alignment between strategic plans and operational activities. In contrast, strategy formulation showed a comparatively weaker influence, suggesting that the existence of formal plans alone does not guarantee improved performance without effective execution and adaptation. The findings suggested that SMEs should adopt practical, resource-sensitive approaches to strategy. For policymakers, the study recommended targeted support mechanisms that address the structural challenges faced by SMEs, such as provision of practical capacity-building programmes and financial support linked to managerial and organisational development rather than short-term operational needs. In conclusion, the study contributed to the understanding of SME development in emerging and regulated sectors by demonstrating that while strategic management practices are important, their effectiveness is context-dependent and influenced by resource constraints, firm capabilities, and institutional environments. The findings underscore the importance of adopting an integrated yet pragmatic approach to strategy to achieve sustainable business growth.