Internal Capabilities and SMEs Sustainability: The Role of Results-Based Management and Deep Knowledge Implementation in Mozambique

Abstract: This study investigates the impact of internal capabilities, particularly Results-Based Management (RBM) and Deep Knowledge Implementation (DKI), on the sustainability of Small and Medium Enterprises (SMEs) in Mozambique, between 2005-2023. Using Structural Equation Modeling (SEM) and Principal Component Analysis (PCA), we analyze data from Mozambican SMEs to explore how these management practices influence organizational resilience and long-term survival. Our findings reveal that while RBM significantly contributes to SME sustainability, DKI presents mixed effects, suggesting the need for a more integrated approach to internal knowledge application. Additionally, statistical models reveal that firms with high absorptive capacity benefit more from DKI, emphasizing the moderating role of organizational learning. This study contributes to the literature on SME management by providing empirical insights into the role of internal capabilities in emerging markets.