Exploring sustainability management control system and eco-innovation matter sustainable financial performance: The role of supply chain management and digital adaptability in indonesian context

Abstract

This research delves into the intricate dynamics of sustainable financial performance, driven by the interplay between Sustainable Management Control Systems (SMCS) and Eco-Innovation. Additionally, it evaluates the pivotal mediating roles of Supply Chain Management (SCM) and Digital Adaptability within this relationship, specifically within the context of Indonesian companies. Employing a survey methodology via carefully designed questionnaires, responses were collected from managerial representatives of the companies. The results underscore the significance of most hypotheses, revealing a notable influence of SMCS and eco-innovation on sustainable financial performance. However, some hypotheses regarding the mediating role of SCM and digital adaptability exhibit mixed outcomes. These findings emphasize the essential roles of SCM and digital adaptability in amplifying the effects of SMCS and eco-innovation on sustainable financial performance. Nevertheless, the intricate interdependencies suggest the presence of other influential factors affecting the relationship between digital adaptability and sustainable financial performance, warranting further exploration. The study's limitations include its focus on Indonesian organizations, reliance on self-reported data with response bias potential, cross-sectional design lacking causality establishment, and unexplored alternative mediating variables. This study enriches managerial decision-making and contributes valuable insights to sustainability management, especially in Indonesia, opening new avenues for academic research and inquiry.