Is Scalability Necessary for Economic Sustainability?

Abstract

The objective of this paper is to investigate the impact of scalability on the sustainability of any entity (ecological, environmental, human, or enterprise) anywhere. Scalability refers to the ability of the enterprise to grow without losing customers, diminishing quality, or changing the core value proposition of the organization.  The question to be addressed is whether or not growth is necessary. The author has developed a framework for a sustainable entity that addresses five abilities for an entity to be sustainable: availability, dependability, capability, affordability and marketability. Scalability, as an addition to these five abilities, represents a unique challenge for some institutions, especially small ones.  Scalability attempts to describe the sensitivity of the entity to changes in the scope of operations, specifically in the context of SMEs (Small and Medium sized Enterprises) because their challenges are unique.  Larger organizations have the luxury of established practices, cultures, and recognition.  Small businesses and new ventures face an environment where their brands and cultures may still be evolving, and the quality of their products and services could change with increases in scale. Consequently, this paper explores the theory that entities may not be scalable because, through growth, they might intrinsically change their core businesses and suffer losses.

 

Keywords:  economic sustainability, scalability, SME sustainability, sustainability abilities, small business growth.