Governance and social sustainability: The managerial perceptions influencing SME market expansion to sub-Saharan Africa

Abstract

​Sub-Saharan Africa is an increasingly significant player internationally; the development of the region is important on a global scale. Major global actors are basing their partnerships with sub-Saharan Africa on trade partnerships, requiring private sector input. Moreover, the role of small and medium sized enterprises (SMEs) is growing in these partnerships in the globalizing world.

​Our qualitative study conducted through semi-structured interviews finds that the governance structures in host countries do not strongly influence the market expansion decisions of SMEs from the Global North to sub-Saharan Africa. However, governance structures do have a major effect on business functions in the chosen host countries. Moreover, SMEs are operating with scarce resources, thus they may not understand all the factors related to governance, and therefore do not deem them important.

​Social sustainability is incorporated into the business operations, as products and services offered by companies aim to support societal development in host countries. The governance structures in host countries do not have major effects on the scope and nature of social impact initiatives. The requirements for social sustainability in business posed by host countries and supporting external organizations are on the rise; some companies may only include social sustainability in operations due to external requirements, and impact may thus be inadequate. The underdeveloped governance structures in host countries and lack of binding international regulation expose host countries to exploitation and allow for unethical business practices.