How Green Organizational Culture Influences Green Entrepreneurial Orientation and Green Innovation in Small and Medium Sized Enterprises
DOI:
https://doi.org/10.52461/sabas.v7i1.4385Keywords:
Eco-friendly organizational culture, Eco-conscious entrepreneurial orientation, Eco-innovation, Eco-performance, SMEsAbstract
This study paper analyzes the effect of Green Organizational Culture (OGC) on Green Entrepreneurial Orientation (GEO) and Green Innovation (GI), as well as their combined influence on Green Performance (GP) in Small and Medium Enterprises (SMEs). The urgent challenges of climate change, environmental deterioration, and heightened consumer consciousness regarding sustainability have compelled companies to reevaluate conventional business structures. Although major firms possess the capacity to tackle these difficulties, SMEs encounter structural limitations; still, their impact on economies and communities renders their green transformation imperative.
This study employed a quantitative research design to gather data from 230 SMEs in Multan, Pakistan, a region contending with environmental degradation, including deforestation, industrial pollution, and unsustainable farming practices. OGC, GEO, GI, and GP constructs were assessed utilizing validated scales, and the data were analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM). Results indicated that OGC substantially influences GEO and GI, whereas GEO subsequently propels GI. Consequently, GI directly improves GP across environmental, social, and economic dimensions.
The findings substantiate the Resource-Based View (RBV) hypothesis, emphasizing intangible resources—such as cultural alignment and entrepreneurial proactivity—as essential assets for enduring competitive advantage. The paper offers theoretical insights by situating the dynamics of OGC, GEO, and GI inside South Asian SMEs, where empirical information is scarce. Recommendations entail enhancing leadership dedication to sustainability, offering training and incentives for environmentally conscious entrepreneurship, and integrating eco-innovation into strategic planning.
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