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The dark side of sustainability orientation for SME performance

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  • Kautonen, Teemu
  • Schillebeeckx, Simon J.D.
  • Gartner, Johannes
  • Hakala, Henri
  • Salmela-Aro, Katariina
  • Snellman, Kirsi

Abstract

This article examines how a firm’s willingness to make trade-offs that favour sustainability over commercial goals attenuates the relationship between firm-level sustainability orientation and subsequent performance. The hypothesis development draws on stakeholder theory and the literature on mission and revenue drifts, while the empirical analysis is based on two waves of original survey data on Finnish manufacturing SMEs. We find that sustainability orientation is positively associated with performance only when the willingness to make sustainability trade-offs is low, whereas the relationship becomes negative when the willingness to make such trade-offs is high. Our findings thus suggest that the popular adage of doing well by doing good might only hold if doing good does not conflict with business interests. The results add to stakeholder theory by showing how conforming to stakeholder expectations can be good for business – but only if doing so does not seriously compromise the pursuit of profits.

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  • Kautonen, Teemu & Schillebeeckx, Simon J.D. & Gartner, Johannes & Hakala, Henri & Salmela-Aro, Katariina & Snellman, Kirsi, 2020. "The dark side of sustainability orientation for SME performance," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    • Handle: RePEc:eee:jobuve:v:14:y:2020:i:c:s2352673420300548
    DOI: 10.1016/j.jbvi.2020.e00198
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    3. Alexandra Bertschi-Michel & Philipp Sieger & Thomas Wittig & Andreas Hack, 2023. "Sacrifice, Protect, and Hope for the Best: Family Ownership, Turnaround Moves, and Crisis Survival," Entrepreneurship Theory and Practice, , vol. 47(4), pages 1132-1168, July.
    4. Rakshit, Sandip & Islam, Nazrul & Mondal, Sandeep & Paul, Tripti, 2021. "Mobile apps for SME business sustainability during COVID-19 and onwards," Journal of Business Research, Elsevier, vol. 135(C), pages 28-39.
    5. Snellman, Kirsi & Fink, Matthias & Hakala, Henri & Bor, Sanne, 2023. "The creation of desirable futures: A call for supererogatory management to foster sustainability transitions," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    6. Danilo Boffa, 2021. "Environmental Management System and Performance in SMEs. Evidence from the Abruzzo Region," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 11(6), pages 1-5.
    7. Sorin-Romulus Berinde & Laura-Maria Herța, 2021. "Performance Improvements for Romanian SMEs and Their Predictors," Sustainability, MDPI, vol. 13(15), pages 1-13, July.
    8. Hafiz Muhammad Usman Khizar & Muhammad Jawad Iqbal & Muhammad Imran Rasheed, 2021. "Business orientation and sustainable development: A systematic review of sustainability orientation literature and future research avenues," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 1001-1017, September.
    9. Suparak Suriyankietkaew & Krittawit Krittayaruangroj & Nacharee Iamsawan, 2022. "Sustainable Leadership Practices and Competencies of SMEs for Sustainability and Resilience: A Community-Based Social Enterprise Study," Sustainability, MDPI, vol. 14(10), pages 1-36, May.
    10. Lasse Torkkeli & Susanne Durst, 2022. "Corporate Social Responsibility of SMEs: Learning Orientation and Performance Outcomes," Sustainability, MDPI, vol. 14(11), pages 1-12, May.

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