The Moderating Role of Innovation in the Relationship Between Business Sustainability and Organizational Performance in Companies of an Emerging Economy

Abstract

Throughout the world, the implementation of innovative strategies to improves organizational performance is widely accepted. Therefore, it is becoming more and more common for companies, especially in developed countries, to implement such practices as opposed to emerging economies where their implementation is very uncommon. To understand this phenomenon, the objective of this paper is to analyze the role of innovation in the relationship between business sustainability and organizational performance in the context of an emerging economy. To achieve this goal, the study conducted a 73 items online questionnaire survey aimed at Colombian company managers, which was designed on a Likert scale from 1 to 7 and was open from March to October 2021. A total of 293 managers from an equal number of medium and large companies from different economic sectors in Colombia were surveyed using non-probability sampling techniques. The information was then analyzed using a Structural Equation Model. The results show that innovation plays a very limited positive role in the relationship between business sustainability and the companies organizational performance. Likewise, the results also indicate that companies give little or no importance to the circular economy practices as an innovation strategy that contributes to environmental care and better organizational performance.