Despite the growing research on the influence of stakeholder integration on organizational outcomes, our understanding of the specific firm-level conditions that may mediate the relationship between stakeholder integration and financial performance is lacking. Using primary data gathered from 233 small and medium-sized enterprises in Ghana, we found empirical support for our contention that the link between stakeholder integration and financial performance is mediated by a firm’s environmental sustainability orientation. In addition, our study demonstrated that competitive intensity moderates the indirect relationship between stakeholder integration and financial performance in such a way that the indirect effect through environmental sustainability orientation is stronger for higher levels of industry competition. We discuss theoretical and managerial implications of these findings.
Extant research has established that environmental sustainability orientation (ESO) has a positive influence on performance outcomes. Nevertheless, several contingencies tend to affect the strength of this relationship. In this study, we draw on natural resource-based theory to introduce competitive strategies as moderators in the ESO-performance nexus. Using time-lagged data obtained from 269 firms in Ghana, this study finds that firms pursuing the differentiation strategy can positively boost performance outcomes with ESO than without differentiation strategy. We also find that firms can use the low-cost or the integrated strategy to get higher impact on performance with ESO respectively. Based on the results, firms in Ghana do not need differentiation strategy in order to boost the effect of ESO on financial performance. Theoretical and practical implications are discussed.
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