The role of contingency factors on the relationship between sustainability practices and organizational performance

Abstract This study intends to clarify the understanding of the role of the contingency factors (i.e. long-term orientation, competitiveness and uncertainty) in the relation between sustainability practices (sustainability exploitation and sustainability exploration) and organizational performance. Using empirical data based on a large-scale survey among European organizations, this paper utilizes the regression analysis to gain insight into the relationship between sustainability practices and organizational performance. In general, the results support the contingency view of the relationship between sustainability practices and performance rather than relying upon “universal” view of sustainability practices. Particularly, the results show that in moderate environmental contexts (moderate competitiveness and uncertainty) sustainability exploitation practices seem to be a predominant predictor of organizational performance. Further, it appears that sustainability exploration practices are the most important predictor of innovation performance, especially when organizations are faced with high levels of competitiveness, uncertainty and long-term orientation. In contrast, sustainability exploitation practices seem to dominate in explaining the effects on quality performance. In this regard, we can argue that organizations with similar characteristics (capabilities, performance, and activity) may develop different and customised approaches for managing the interface between business and natural environment.