The Varying Effects of Four Components of Employee Psychological Capital on Sustainable-Business-Model Innovation in the New Normal

Abstract

In view of the intensification of market uncertainty and complexity, interest in sustainable-business-model innovation (SBMI) has increased among both global companies and educational institutions in the new normal. However, although many organisations find it challenging to accomplish their sustainability goals, limited research has delved into SBMI in the post-pandemic era. To address this research gap, we adopt a unique micro-foundational approach to investigate how the four components of employees’ psychological capital (PsyCap) affect SBMI. Based on a primary survey of 430 employees of small and medium-sized Chinese enterprises using online and offline methods, we used structural equation modelling to analyse the results. We found that optimism, hope, and self-efficacy were each positively related to SBMI, with resilience moderating these positive associations. The main theoretical contribution of our study is the use of a micro-foundational approach to unravel the different effects of the four dimensions of PsyCap on SBMI, thus offering novel insights into a deeper, more comprehensive understanding of relevant issues in the age of the COVID-19 pandemic. Practically, our findings can help global managers to develop strategies to leverage the psychological resources of individuals in order to cope with firm-level innovation challenges during this turbulent time.