Do corporate sustainability practices enhance organizational economic performance?

Abstract

Purpose -Corporate sustainability is a growing area of importance for organizational development. Managing sustainability practices successfully is an imperative in achieving competitive advantage. This study intends to clarify the relation between sustainability practices and financial and market performance, and also, the role of non-financial performance outputs in this relation. Methodology/Approach -Using empirical data based on a large-scale survey among organizations in five countries (i.e. Germany, Poland, Serbia, Slovenia and Spain), this paper utilized mediation analysis to estimate and test the mediated effects in a multiple mediator model. As such, the sizes of indirect effects of sustainability practices on financial and market performance through potential mediators were estimated. Findings -The results showed that innovation performance exerts a mediation effect in the relation between sustainability practices and financial and market performance. The main conclusion is that a greater engagement in sustainability practices leads to an increased innovation performance, which in turn, leads to financial and market performance. Originality/value -This paper is one of the first attempts to empirically validate sustainability exploitation and sustainability exploration practices. Besides, the analysis of the direct and indirect effects of sustainability exploration and sustainability exploitation practices on financial and market performance has not been yet addressed to a great extent.

Sustainable development and economic performance: Gaps and trends for future research

“…A similar study by Mervelskemper, Kaltofen, and Stein () found that investors in German sustainability funds do not have to sacrifice financial performance. Other studies focused on the sustainability aspect and its relationship with firm financial performance (Adegbite, Guney, Kwabi, & Tahir, ; Al Abri, Bi, Mullally, & Hodges, ; Amacha & Dastane, ; del Alonso‐Almeida, Bagur‐Femenias, Llach, & Perramon, ; Kim & Lee, ; Maletic, Maletic, Dahlgaard, Dahlgaard‐Park, & Gomišcek, ; Paun, ).…”

Sustainable Growth in SMEs: A Review from the Malaysian Perspective

“…The firms would also have to enhance its human capital through retraining, retention and employee satisfaction. These form the social objectives (Maletic et al, 2015) under sustainability studies. Having employee commitment and skills development is one of the ingredients for successful firms.…”

The impact of sustainability exploration and sustainability exploitation practices on the organisational performance: a cross-country comparison

“…This study used existing scales from previous empirical studies (Maletič et al, 2014b;Maletič et al, 2015). Because organisational performance is recognized as a multi-dimensional concept (Chenhall and Langfield-Smith, 2007;Kaplan and Norton, 1996), this study considers a more balanced approach of measuring organisational performance in a way that includes both financial and non-financial performance measures.…”

“…This study adopts the conceptualisation of the study constructs proposed by Maletič et al (2014) and operationalization of the variables utilised in prior studies (Maletič et al, 2015). One key starting point in the debate on sustainability management is the inclusion of stakeholders and the integration of their respective demands (Seuring and Gold, 2013), which are considered by some researchers to be crucial to driving sustainability performance (e.g., Asif et al;2013;Searcy, 2011).…”

“…The intuitive appeal of this underlying idea has yet to be empirically tested. Accordingly, recent studies (Maletič et al, 2015) have empirically demonstrated that sustainability practices can be conceptualized within the framework of exploration and exploitation, and suggest that both types of sustainability practices positively affect economic performance.…”