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

Abstract

Corporate sustainability challenges organisations with tensions between complex economic, environmental, and social issues. We draw on concepts in the innovation literature—namely exploration and exploitation—to examine corporate sustainability practices as well as the ensuing tensions between efficiency and innovativeness in achieving organisational performance. In particular, this paper draws upon institutional theory to enhance the understanding of sustainability-related phenomena, mainly from a perspective that has not yet been widely investigated in prior empirical studies. Therefore, the paper addresses the research question of whether sustainability exploitation and sustainability exploration practices are characterized by an organisation's country of origin. The target respondents of a large-scale web-based survey were manufacturing and service industry targets distributed across five countries: Germany, Poland, Serbia, Slovenia and Spain. Multiple regression with categorical predictors (dummy variables) was utilized to examine country effects on each of the performance measures. The outcome of the regression analysis provides some evidence that organisations based in different countries may have substantially different perspectives regarding the achieved levels of organisational performance as a consequence of deploying sustainability practices. In general, the results suggest that organisations in different countries show more differences in relation to sustainability practices and organisational performance compared to organisations within the same country. The findings of this paper contribute to the research on corporate sustainability by differentiating two aspects of corporate sustainability practices, namely exploitation and exploration, and by suggesting that institutional mechanisms may be a plausible explanation for differences in the deployment of sustainability practices and the effects of sustainability practices on organisational performance. Therefore, the paper contributes to the literature by providing more clarity and better understanding of how organisations may pursue sustainability practices to gain performance benefits.