Demystifying the Effects of Organizational Sensemaking and Green Dynamic Capabilities on Sustainability Performance

Abstract

The present study aims to investigate how organizational sensemaking contributes towards sustainability performance (i.e., environmental performance and social performance) by proposing green dynamic capabilities as underlying mechanisms. It uses time-lagged design and the data were collected in two waves, from 232 agribusiness organizations in Romania using an online survey. PLS-SEM was employed in WarpPLS 8.0 software to analyze the data and test the hypothesized relationships. Results showed that organizational sensemaking positively influences both dimensions of sustainability performance. Moreover, the results also supported the mediating role of green dynamic capabilities. Findings imply that organizations that are proficient in sensing and interpreting external events, cues, and changes can successfully strengthen internal business processes (by developing green dynamic capabilities) to address environmental concerns, which in turn helps these organizations to achieve enhanced sustainability performance. The novelty of this study is the development of a dynamic-capabilities-based integrated framework for sustainability performance.