Investigating the effect of multidimensional network capability and eco-innovation orientation for sustainable performance

Abstract

Small and medium enterprises cannot achieve environmental sustainability goals in isolation. They need to acquire capabilities to perform within networks of professional and social relations with other organizations. However, network relationships are often insufficient due to lack of sustainability in network capability. This multidimensional concept involves four components: coordination, relational skills, partner knowledge, and internal communication. This study proposes a new dimension related to the collaborative environmental relationship. This component addresses an enterprise’s ability to enhance environmental collaboration, share knowledge, and increase environmental awareness. This study, therefore, suggests testing and comparing the five-dimensional scale of network capability with the existing four-dimensional scale, and examining its impact on eco-innovation capability and sustainable performance. This has not been tested previously. Using partial least squares path modelling, this study tests a set of hypothesised relationships that focus on a sample of 237 Tunisian enterprises. The findings reveal that: (1) the sample supports measurement properties of the updated network capability and indicates that the new dimension in network capability research and sustainable development is important and can be added to the finalised network capability construct, (2) network capability, with the updated five dimensions, directly and positively influences eco-innovation capability and sustainable performance, and the impacts are more effective than in the previous four-dimensional construct, and (3) eco-innovation mediates the relationship between network capability with the updated five dimensions and enterprises’ sustainable performance, and the impact is more effective than in the previous four-dimensional construct. Therefore, our study will help strengthen the enterprise’s performance in promoting sustainable development.