The Impact of Sustainability Orientation and Practices on Financial Performance: A Combined Sufficiency and Necessity Logic Approach DOI: https://doi.org/10.33093/ijomfa.2026.7.1.5
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Abstract
This study aims to examine the interplay of corporate sustainability orientation and sustainability practices, namely social and environmental dimensions and their impact on the financial performance of Small and Medium-sized Enterprises (SMEs) using Stakeholder theory. This study empirically tested 126 valid questionnaire responses received from the SMEs’ services sector in Malaysia using Partial Least Squares Structural Equation Modelling (PLS-SEM) analysis. The result reveals that corporate sustainability orientation and social dimension influence financial performance, while the environmental dimension does not. The supplementary combined importance performance map analysis (cIPMA) analysis indicates that the environmental dimension is necessary for the financial performance outcome, albeit its effect is not significant in the regression analysis. This study acknowledges the contribution of stakeholder theory in providing insights into how the social dimension and environmental dimension of sustainability and corporate sustainability orientation influence SME’s financial performance. These findings provide practical insights to practitioners when re-strategizing their business strategies and goals which in turn, resulting SMEs to becoming sustainability-oriented firms, thus achieving SDG 8 of Decent Work and Economic Growth.
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