The influence of stakeholder orientation on sustainability performance: Evidence from micro, small, and medium enterprises (MSMEs)

Abstract

Today’s businesses are urged to focus on assessing sustainable business practices and attaining sustainable performance. However, many micro, small and medium enterprises (MSMEs) are not well aware of the importance of sustainable practices. To date, sustainability performance is mostly emphasized in large organizations. Therefore, there remains a lacuna in understanding sustainability performance among MSMEs. Moreover, existing studies have overlooked the stakeholder orientation of MSMEs in determining their directions and goals for sustainability compliance. Therefore, this study was geared towards examine the influence of stakeholder orientation on sustainability performance of MSMEs. A quantitative research design was utilized. A self-administered questionnaire survey was conducted among 354 owner-managers of MSMEs. This study concluded that firms could enhance their sustainability performance by adopting a multi-faceted stakeholder orientation approach, which include customer, competitor, shareholder and employee. This study was significant in providing new insights on sustainability performance. It helped in expediting the use of sustainable principle as highlighted in various governmental policies. In addition, it also contributed to the literature by demonstrating the importance of stakeholder orientation in driving sustainability performance. Future studies are urged to explore further on the influence of stakeholder orientation on specific sustainability dimensions.