Abstract
Corporate social responsibility (CSR) and an organization’s financial performance are well discussed in the literature. However, the role of employees to spur the financial performance, especially the mediating effect of employees’ pro-environmental behavior between CSR and financial performance, is not well explored. Literature also shows that connectedness to nature can drive the pro-environmental behavior of individuals. However, the role of connectedness to nature in a CSR–financial performance framework has not been realized. Observing the above knowledge gaps, the current study investigates the CSR-financial performance relationship in the SME sector of a developing country with the mediating effect of employees’ pro-environmental behavior. The current study also notes the conditional indirect effect of connectedness to nature in the above-mediated relationship. A self-administered questionnaire (n = 489) with a paper–pencil technique was employed for data collection. Structural equation modeling was considered to validate the hypothesized relationships. The findings revealed that CSR could lead an SME to a higher level of financial performance via pro-environmental behavior. It was also noted that connectedness to nature produces a significant conditional indirect effect. Such findings have seminal implications for the SME sector, which are discussed in detail. One important implication is to realize the importance of employees’ pro-environmental behavior, through CSR and connectedness to nature, to thrive the financial performance of an SME.
Highlights
The current work may be regarded as an important contribution to the field as it presents a different perspective of pro-environmental behavior to spur the financial performance of an organization
Given that the small and medium organization (SME) sector faces a deficiency in resources, which is a major cause of their failure, the potential role of Corporate social responsibility (CSR) may be realized from a financial aspect
Pro-environmental behavior and CSR are important from the perspective of sustainability, the economic importance of these variables may appeal to the management to adopt a proactive approach, especially towards CSR orientation
Summary
Improving financial performance is always a top priority agenda for every organization. An enhanced financial performance enables an organization to earn a good reputation among shareholders and strengthens its decision-making capability [1]. This is why successful businesses throughout the globe continuously get involved in different strategies that can boost their financial performance [2]. Given that the financial position of an organization indicates the actual standing of an organization, intelligent businesses regularly evaluate their performance standpoint. This evaluation provides insight to the management about where they are heading and enables them to surpass their rivals.
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