The contribution of Small and Medium-Sized Enterprises (SMEs) to economic prosperity and expansion is widely acknowledged worldwide. However, the empirical evidence in the literature on enhancing sustainable performance in manufacturing industries, specifically SMEs in developing countries living under constant unstable economic and political environments such as Palestine, is still insufficient. Referring to the theory of Triple Bottom Line (TBL), Contingency Theory (CT), Natural Resource Based View (NRBV) and the relevant literature on sustainable performance in business firms, this study aims to explore the effect of competent human capital (CHC), strategic flexibility (SF) and turbulent environment (TE) on the sustainable performance (SP) of SMEs industries in the context of Palestine. Based on 380 random samples in manufacturing SME industries in the country, 245 useful questionnaires were analyzed using Partial Least Squares Structural Equation Modeling for analysis by the Smart PLS 4.0 software. The findings indicate that several enablers could improve the performance of SMEs in Palestinian industries in terms of sustainability. One of these aspects is adopting a supportive governmental policy to strengthen the sustainability concept in the industrial sector and encouraging industries to move toward circularity and greening their operations. Nevertheless, SMEs need to implement proper managerial tools at the firm’s level that enhance sustainable performance, including investment in competent human capital, developing flexible strategies and proper analysis of the surrounding turbulent environment, since all of these will positively impact and improve the sustainable performance of those SMEs. The contribution of this study to the literature develops current knowledge of sustainable performance in SMEs in manufacturing industries, specifically in countries that suffer from political and economic turbulence, by providing a conceptual framework focusing on managerial and business aspects that contributes to achieving desired sustainable performance. Consequently, the study’s findings also show how CHC, SF and TE are essential managerial tools for organizations and SMEs operating in an extremely competitive and turbulent market.

Small and Medium Enterprises’ (SMEs) impact on economic growth is widely acknowledged. Nevertheless, the literature lacks empirical evidence as to how the sustainable performance of manufacturing SMEs in developing countries with unstable and turbulent business environments, such as Palestine, could be enhanced. Relying on the Triple Bottom Line (TBL), Resource-based View (RBV) theory, and sustainable performance literature, this study explores the influence of systematic strategic planning (SSP) and strategic business innovation (SBI) on the sustainable performance (SP) of Palestinian manufacturing SMEs. Based on a sample of 377 manufacturing SMEs in Palestine, 245 valid surveys have been subjected to Partial Least Squares Structural Equation Modeling for analysis using Smart PLS 3.0 software. The results show that various factors can enhance manufacturing SMEs’ sustainability performance, such as adopting a supporting national policy to enhance the concept of sustainability at the policy level. However, implementing proper systematic strategic planning (SSP) and strategic business innovation (SBI) in a collaborative culture and a participatory management style at the firm level in manufacturing SMEs positively influences and enhances the sustainable performance of those firms. This study’s contribution to the literature expands the knowledge on sustainable performance in manufacturing SMEs in developing countries experiencing political and economic uncertainty. Hence, the research findings demonstrate how (SSP) and (SBI) are crucial management tools for businesses operating in a highly competitive and turbulent environment.

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