Business strategy, spiritual capital and environmental sustainability performance: mediating role of environmental management process

Abstract

PurposeThis study aims to investigate the influence of business strategy and spiritual capital on environmental sustainability performance. Furthermore, it investigates whether the influence is mediated by environmental management process.Design/methodology/approachThis study is designed as a quantitative research. A survey method is employed for collecting 454 data from the managers/owners of Indonesian manufacturing micro, small and medium enterprises (MSMEs). The partial least squares-structural equation modeling (PLS-SEM) is used to test the hypothesis. A mediation research approach is employed to describe the relationship between research variables.FindingsThe findings demonstrate the following important results. First, business strategy affects environmental sustainability performance. Second, spiritual capital affects environmental sustainability performance. Third, environmental management process fully mediates the effect of business strategy on environmental sustainability performance. Fourth, environmental management process partially mediates the effect of spiritual capital on environmental sustainability performance.Originality/valueThis study addresses the issue of previous research gaps. By employing a mediation research framework, this study argues that environmental management process has a mediating role in business strategy–environmental sustainability performance relationships. Furthermore, it addresses the lack of empirical studies regarding the effect of spiritual capital on environmental sustainability performance via environmental management process. Thus, this research emphasizes the role of management or business process in developing resource-based view (RBV), natural resource-based view (NRBV), sustainability theory and MSMEs' management practices.