The role of organizational capabilities in attaining corporate sustainability practices and economic performance: Evidence from Italian wine industry

Abstract

Corporate sustainability assigns firms the key role of integrating and pursuing economic, environmental and social goals. Thus, firms struggle to link corporate sustainability practices and organizational performance. These efforts require enabling factors, namely organizational capabilities, which have yet to be identified and studied. Applying a dynamic resource-based perspective, the present study aims to explore the role of three organizational capabilities for implementing proactive socio-environmental practices and related economic performance: collaboration with partners-suppliers, adoption of advanced technologies and product innovation. By estimation of a structural equation model with survey data from 357 firms in the Italian wine industry, the results indicate that collaboration with partners-suppliers and product innovation capability foster the implementation of proactive socio-environmental practices. Hence, the role of fostering corporate sustainability is not accidental but can be managed by taking different dimensions into account, namely motivation within the firm and interaction at organizational as well as systemic levels. In addition, the direct link between the proactive socio-environmental practices and economic performance, and their positive mediating effect on the capabilities identified and economic performance highlight the opportunity to trigger a virtuous circle to address corporate sustainability because organizations are involved at strategic and operational levels. These results provide important managerial implications. First, companies oriented towards sustainability should identify and develop specific capabilities rooted in the organization to implement practices that are a source of competitive advantage in a market increasingly conscious and attentive to sustainability issues, such as the wine industry. Second, the development of specific organizational capabilities can overcome some possible disadvantages associated with young and small-medium enterprises interested in implementing the concept of corporate sustainability.