IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i23p13091-d688604.html
   My bibliography  Save this article

Leaders’ Support of Sustainable Innovation and Business Sustainability in Developing Countries: Evidence from Small and Medium Food Processing Enterprises

Author

Listed:
  • Mukhamad Najib

    (Department of Management, IPB University, Bogor 16680, Indonesia)

  • Abdul Aziz Abdul Rahman

    (College of Business Administration, Kingdom University, Riffa 40434, Bahrain)

  • Abror Abror

    (Department of Management, Universitas Negeri Padang, Padang 25132, Indonesia)

  • Riani Rachmawati

    (Department of Management, Universitas Indonesia, Depok 10430, Indonesia)

  • Megawati Simanjuntak

    (Department of Family and Consumer Science, IPB University, Bogor 16680, Indonesia)

  • Prita Prasetya

    (School of Business and Economics, Universitas Prasetiya Mulya, Jakarta 12430, Indonesia)

  • Dwi Suhartanto

    (Department of Business Administration, Politeknik Negeri Bandung, Bandung 40012, Indonesia)

  • Farah Fahma

    (Department of Agroindustrial Technology, IPB University, Bogor 16680, Indonesia)

Abstract

Business sustainability has become obligatory in small and medium enterprises (SMEs). To remain competitive and survive in the market, sustainable innovation is the key. However, SMEs, especially in food processing in emerging markets, still lack resources to become more innovative. The objective of the article is to analyze factors affecting sustainable innovation in food processing SMEs and their impact on business sustainability. Cross-sectional quantitative research builds on a sample of 157 owners of food processing SMEs in Indonesia. The results show that organizational sustainable innovation in food processing SMEs depends on employees’ innovation potential and an organization’s innovation culture; meanwhile, both variables are influenced by leaders’ support of sustainable innovation. Promisingly, organizational sustainable innovation increases business sustainability. Thus, our research highlights the important role of leaders’ support in achieving organizational sustainable innovation and, finally, long term business success. Furthermore, this study uncovers the underlying mediatory mechanisms, which deepen our theoretical understanding and guide practitioners with a concise and comprehensive framework for sustainable innovation in SMEs.

Suggested Citation

  • Mukhamad Najib & Abdul Aziz Abdul Rahman & Abror Abror & Riani Rachmawati & Megawati Simanjuntak & Prita Prasetya & Dwi Suhartanto & Farah Fahma, 2021. "Leaders’ Support of Sustainable Innovation and Business Sustainability in Developing Countries: Evidence from Small and Medium Food Processing Enterprises," Sustainability, MDPI, vol. 13(23), pages 1-19, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:23:p:13091-:d:688604
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/23/13091/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/23/13091/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Burcu Fazlıoğlu & Başak Dalgıç & Ahmet Burçin Yereli, 2019. "The effect of innovation on productivity: evidence from Turkish manufacturing firms," Industry and Innovation, Taylor & Francis Journals, vol. 26(4), pages 439-460, April.
    2. Zhang Zhen & Zahid Yousaf & Magdalena Radulescu & Muhammad Yasir, 2021. "Nexus of Digital Organizational Culture, Capabilities, Organizational Readiness, and Innovation: Investigation of SMEs Operating in the Digital Economy," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    3. Fiordelisi, Franco & Renneboog, Luc & Ricci, Ornella & Lopes, Saverio Stentella, 2019. "Creative corporate culture and innovation," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 63(C).
    4. Michaelis, Timothy L. & Aladin, Roberly & Pollack, Jeffrey M., 2018. "Innovation culture and the performance of new product launches: A global study," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 116-127.
    5. Kremer, Hannah & Villamor, Isabel & Aguinis, Herman, 2019. "Innovation leadership: Best-practice recommendations for promoting employee creativity, voice, and knowledge sharing," Business Horizons, Elsevier, vol. 62(1), pages 65-74.
    6. Siti Nurlaela & Ujang Sumarwan & Mukhamad Najib, 2019. "Determinants of online journey and its influence on online customer satisfaction associated with online customer loyalty," International Journal of Electronic Marketing and Retailing, Inderscience Enterprises Ltd, vol. 10(3), pages 230-243.
    7. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    8. Ha-Won Jang & Soo-Bum Lee, 2020. "Serving Robots: Management and Applications for Restaurant Business Sustainability," Sustainability, MDPI, vol. 12(10), pages 1-15, May.
    9. Kianto, Aino & Sáenz, Josune & Aramburu, Nekane, 2017. "Knowledge-based human resource management practices, intellectual capital and innovation," Journal of Business Research, Elsevier, vol. 81(C), pages 11-20.
    10. Li, Jianqiang & Shan, Yaowen & Tian, Gary & Hao, Xiangchao, 2020. "Labor cost, government intervention, and corporate innovation: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 64(C).
    11. Kate V. Lewis & Sue Cassells & Hernan Roxas, 2015. "SMEs and the Potential for A Collaborative Path to Environmental Responsibility," Business Strategy and the Environment, Wiley Blackwell, vol. 24(8), pages 750-764, December.
    12. Subramony, Mahesh & Segers, Jesse & Chadwick, Clint & Shyamsunder, Aarti, 2018. "Leadership development practice bundles and organizational performance: The mediating role of human capital and social capital," Journal of Business Research, Elsevier, vol. 83(C), pages 120-129.
    13. Giorgia Nigri & Mara Del Baldo, 2018. "Sustainability Reporting and Performance Measurement Systems: How do Small- and Medium-Sized Benefit Corporations Manage Integration?," Sustainability, MDPI, vol. 10(12), pages 1-17, November.
    14. Borghesi, Simone & Cainelli, Giulio & Mazzanti, Massimiliano, 2015. "Linking emission trading to environmental innovation: Evidence from the Italian manufacturing industry," Research Policy, Elsevier, vol. 44(3), pages 669-683.
    15. Leonidas C. Leonidou & Paul Christodoulides & Lida P. Kyrgidou & Daydanda Palihawadana, 2017. "Internal Drivers and Performance Consequences of Small Firm Green Business Strategy: The Moderating Role of External Forces," Journal of Business Ethics, Springer, vol. 140(3), pages 585-606, February.
    16. Anna Katharina Provasnek & Erwin Schmid & Bernhard Geissler & Gerald Steiner, 2017. "Sustainable Corporate Entrepreneurship: Performance and Strategies Toward Innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 521-535, May.
    17. Qaisar Iqbal & Noor Hazlina Ahmad & Yongmei Li, 2021. "Sustainable Leadership in Frontier Asia Region: Managerial Discretion and Environmental Innovation," Sustainability, MDPI, vol. 13(9), pages 1-14, April.
    18. Elwira Gross-Gołacka & Marta Kusterka-Jefmańska & Bartłomiej Jefmański, 2020. "Can Elements of Intellectual Capital Improve Business Sustainability?—The Perspective of Managers of SMEs in Poland," Sustainability, MDPI, vol. 12(4), pages 1-23, February.
    19. Lopes de Sousa Jabbour, Ana Beatriz & Ndubisi, Nelson Oly & Roman Pais Seles, Bruno Michel, 2020. "Sustainable development in Asian manufacturing SMEs: Progress and directions," International Journal of Production Economics, Elsevier, vol. 225(C).
    20. Shampy Kamboj & Zillur Rahman, 2017. "Market orientation, marketing capabilities and sustainable innovation," Management Research Review, Emerald Group Publishing Limited, vol. 40(6), pages 698-724, June.
    21. Mukhamad Najib & Abdul Aziz Abdul Rahman & Farah Fahma, 2021. "Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation," Sustainability, MDPI, vol. 13(19), pages 1-16, September.
    22. Liao, Wenbin & Du, Jianing & Sun, Ping-Wen, 2020. "Heterogeneous institutional preferences and informativeness: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    23. Leonidas C. Leonidou & Paul Christodoulides & Lida P. Kyrgidou & Dayananda Palihawadana, 2017. "Erratum to: Internal Drivers and Performance Consequences of Small Firm Green Business Strategy: The Moderating Role of External Forces," Journal of Business Ethics, Springer, vol. 140(3), pages 607-607, February.
    24. Valentina Cillo & Antonio Messeni Petruzzelli & Lorenzo Ardito & Manlio Del Giudice, 2019. "Understanding sustainable innovation: A systematic literature review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(5), pages 1012-1025, September.
    25. Qaisar Iqbal & Noor Hazlina Ahmad & Hasliza Abdul Halim, 2020. "How Does Sustainable Leadership Influence Sustainable Performance? Empirical Evidence From Selected ASEAN Countries," SAGE Open, , vol. 10(4), pages 21582440209, November.
    26. Sun, Xiuli & Li, Haizheng & Ghosal, Vivek, 2020. "Firm-level human capital and innovation: Evidence from China," China Economic Review, Elsevier, vol. 59(C).
    27. Qaisar Iqbal, 2020. "The Era of Environmental Sustainability: Ensuring That Sustainability Stands on Human Resource Management," Global Business Review, International Management Institute, vol. 21(2), pages 377-391, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arnaldo Coelho & Jorge Ferreira & Catarina Proença, 2024. "The impact of green entrepreneurial orientation on sustainability performance through the effects of green product and process innovation: The moderating role of ambidexterity," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3184-3202, May.
    2. Sheikh Farhan Ashraf & Cai Li & Muhammad Umair Wattoo & Majid Murad & Babak Mahmood, 2024. "Green horizons: Unleashing green innovation through green business strategies and competencies," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4233-4251, July.
    3. Khalid Rasheed Memon & Say Keat Ooi & Heesup Han, 2024. "Responsible innovation and corporate sustainability performance: A structural equation modeling‐neural network approach," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 2712-2730, May.
    4. Qaisar Iqbal & Noor Hazlina Ahmad & Zeyun Li & Yongmei Li, 2022. "To walk in beauty: Sustainable leadership, frugal innovation and environmental performance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 738-750, April.
    5. Noorliza Karia, 2022. "Antecedents and Consequences of Environmental Capability towards Sustainability and Competitiveness," Sustainability, MDPI, vol. 14(19), pages 1-16, September.
    6. Zeeshan Ullah & Ahmad Arslan & Vesa Puhakka, 2021. "Corporate social responsibility strategy, sustainable product attributes, and export performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1840-1853, November.
    7. Michaela Kotkova Striteska & Katerina Myslivcova & Viktor Prokop & Lucie Zapletalova, 2024. "Employees' engagement, family ownership, or gender diversity? Searching for determinants of SMEs' green behaviors in CEE countries," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3065-3080, July.
    8. Mitja Ruzzier & Evan J. Douglas & Maja Konečnik Ruzzier & Jana Hojnik, 2020. "International Entrepreneurial Orientation and the Intention to Internationalize," Sustainability, MDPI, vol. 12(14), pages 1-19, July.
    9. Bhavesh Kumar & Love Kumar & Avinash Kumar & Ramna Kumari & Uroosa Tagar & Claudio Sassanelli, 2024. "Green finance in circular economy: a literature review," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 16419-16459, July.
    10. Chaiyawit Muangmee & Zdzisława Dacko-Pikiewicz & Nusanee Meekaewkunchorn & Nuttapon Kassakorn & Bilal Khalid, 2021. "Green Entrepreneurial Orientation and Green Innovation in Small and Medium-Sized Enterprises (SMEs)," Social Sciences, MDPI, vol. 10(4), pages 1-15, April.
    11. Lucía Muñoz-Pascual & Jesús Galende, 2020. "Ambidextrous Knowledge and Learning Capability: The Magic Potion for Employee Creativity and Sustainable Innovation Performance," Sustainability, MDPI, vol. 12(10), pages 1-27, May.
    12. Lu Chen & Ming Yuan & Han Lin & Yilong Han & Youyou Yu & Caihui Sun, 2023. "Organizational improvisation and corporate green innovation: A dynamic capability perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5686-5701, December.
    13. Ali Saleh Alshebami, 2023. "Green Innovation, Self-Efficacy, Entrepreneurial Orientation and Economic Performance: Interactions among Saudi Small Enterprises," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    14. Ying Guo & Lifang Wang, 2022. "Environmental Entrepreneurial Orientation and Firm Performance: The Role of Environmental Innovation and Stakeholder Pressure," SAGE Open, , vol. 12(1), pages 21582440211, February.
    15. Carmen Isensee & Kai-Michael Griese & Frank Teuteberg, 2021. "Sustainable artificial intelligence: A corporate culture perspective [Sustainable artificial intelligence: Eine unternehmenskulturelle Perspektive]," Sustainability Nexus Forum, Springer, vol. 29(3), pages 217-230, December.
    16. Jeremy Galbreath, 2019. "Drivers of Green Innovations: The Impact of Export Intensity, Women Leaders, and Absorptive Capacity," Journal of Business Ethics, Springer, vol. 158(1), pages 47-61, August.
    17. Zeeshan Ullah & Ahmad Arslan, 2022. "R&D contribution to sustainable product attributes development: The complementarity of human capital," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 902-915, October.
    18. Colin B. Gabler & Omar S. Itani & Raj Agnihotri, 2023. "Activating Corporate Environmental Ethics on the Frontline: A Natural Resource-Based View," Journal of Business Ethics, Springer, vol. 186(1), pages 63-86, August.
    19. Binh Do & Uyen Nguyen & Ninh Nguyen & Lester W. Johnson, 2019. "Exploring the Proactivity Levels and Drivers of Environmental Strategies Adopted by Vietnamese Seafood Export Processing Firms: A Qualitative Approach," Sustainability, MDPI, vol. 11(14), pages 1-22, July.
    20. Wei Xuecheng & Qaisar Iqbal, 2022. "Ethical Leadership, Bricolage, and Eco-Innovation in the Chinese Manufacturing Industry: A Multi-Theory Perspective," Sustainability, MDPI, vol. 14(12), pages 1-15, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:23:p:13091-:d:688604. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.