Assessing the influence of social capital and innovations on environmental performance of manufacturing SMEs

Abstract

Pursuing sustainable development has become a necessity for all types of businesses, including small medium enterprises (SMEs). Owing to the increasing stakeholder pressures towards environmental conservation, innovations may be required given SMEs' limited resources. Drawing upon the resource‐based view, this study aims to shed light on how social capital helps small manufacturing firms to innovate, and how innovations, in turn, enhance their environmental performance. Based on data gathered from 203 small Malaysian manufacturers and analysed using partial least squares structural equation modelling (PLS‐SEM), the findings emphasised the crucial role of social capital, process innovation and digital innovation in enhancing a small firm's environmental performance. Both process innovation and digital innovation mediate the relationship between social capital and environmental performance, of which digital innovation held a stronger effect. Additionally, findings from the Importance Performance Map Analysis (IPMA) specified that digital innovation has a high importance for environmental performance but showed a low performance. Overall, the model exhibits medium predictive power, and provides theoretical and practical implications for guiding future directions in enhancing the environmental performance of manufacturing SMEs.

Responsible innovation and corporate sustainability performance: A structural equation modeling‐neural network approach

“…Experiential resources pertain to the knowledge gained from operational experiences, enabling the identification of consumer demands and anticipation of future market trends (Daily et al, 2000;Kim et al, 2021). These intangible resources develop over time through exposure to other businesses' environmental practices, internal environmental audits, and insights from industry advisory boards, among other sources (Darnall & Edwards, 2006;Ooi et al, 2023;Zollo & Winter, 2002). As a company implements internal procedures and accumulates information about environmental and social responsibility, it broadens and deepens its experiential resources, catalyzing the development of eco-friendly and responsible product development strategies (Leonidou et al, 2013(Leonidou et al, , 2017Ooi et al, 2023).…”

“…Researchers suggest that organizations can achieve sustainability performance, both socially and environmentally, by displaying care and concern for society and the environment (Iranmanesh et al, 2019;Ooi et al, 2023). Studies on manufacturing firms by Zhu and Sarkis (2004) and Golini et al (2014) Classification System (Bakar & Ahmad, 2010).…”

“…The nonprobability purposive sampling technique was utilized to select firms involved in the innovation process of manufacturing their products (Bakar & Ahmad, 2010;Ooi et al, 2023). The chosen firms had to be at least 5 years old, excluding start-ups.…”

“…The chosen firms had to be at least 5 years old, excluding start-ups. Data were collected from senior-level personnel of these organizations, well-versed in firm performance and competitive advantage issues (Ooi et al, 2023). Two Before the actual data collection, the questionnaire underwent review by two experienced academicians and two practitioners (consultants), and a pretest with 10 company executives was conducted to ensure clarity (Yeap et al, 2022).…”

Changing consumer attitudes to make the Corporate Social Responsibility investment in sustainable fish production, a worthwhile investment to corporates

“…CSR practices may include the sustainable use of limited natural environmental resources (Frey & George, 2010), such as fish stocks, the use of biomaterials, green transport, automated food waste and optical scanning systems (Cosimato & Vona, 2021), selecting suppliers based on sustainability criteria or certification, waste reduction, reducing environmental impacts, and efficient energy consumption in production processes, investing in sustainable products, implementing social sustainability practices such as codes of ethics or equal employment policies, and collaboration and communication with various stakeholders about sustainability to increase sensitization to the topic (Scarpato et al, 2020). Ooi et al (2023) advise that small and medium enterprises can enhance their environmental performance through networking and social capital to develop green digital and process innovations. While green process innovations include those mentioned above, digital innovations which assist in achieving CSR may include blockchain technologies, artificial intelligence, big data analytics, predictive analytics and cloud manufacturing (Cosimato & Vona, 2021).…”