Abstract
Organizations have several objectives, including competitiveness, high profit and long-term survival. However, sustainability has become a diligent act of business and non-business organizations because it moves organizations toward superior performance. Sustainability does not come itself; it requires enough resources and capabilities. Extant studies have examined the factors that influence sustainability, but have rarely touched on innovation in this perspective. The present study examines the influence of management innovation and technological innovation on organization performance with the mediating role of sustainability. To test the model, we applied structural equation modeling in the analysis of a moment structures (AMOS) on the empirical evidence collected from 304 Pakistani CEOs and top managers. The results indicate that management innovation and technological innovation significantly positively contribute to sustainability and organization performance. Sustainability plays a partial mediating role between management innovation and organization performance and also a partial mediating role between technological innovation and organization performance. We recommend CEOs and top managers to give due attention to management innovation and technological innovation to enhance sustainability and survive the long run. Implications are discussed.
Highlights
Several management theories assume that the key objective of an organization is to earn a profit
This research provides a clear picture about competing theories related to the relationship between sustainability and financial performance, and Resource Base View (RBV) theory
The value creating theory believes in the significant positive influence of sustainability on financial performance while value destroying theory believes in losing financial performance by focusing on social and environmental practices
Summary
Several management theories (e.g., neoclassical theory) assume that the key objective of an organization is to earn a profit. A plethora of research has discussed the factors that influence sustainably practices such as strategic orientation [12], organizational change [13] and organization commitment [14] etc At this point, the existing studies have mainly focused on traditional factors while innovative predictors are rarely touched. Sustainability should not be restricted to only environment practices to gain environmental objectives but it can facilitate other advantages (e.g., gaining long-term survival and profitability) in a turbulent market when successfully achieved [3]. Considering the supposition that MI and TI do not always directly contribute to firm performance, we intend that both types of innovation help organizations in acquiring sustainability which in turn provides high profitability. This research recognizes the most critical factors that can help emerging organizations that face significant challenges; lack of resources, lack of support and lack of capabilities
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