Substitution and complementarity dynamics in configurations of sustainable management practices

Abstract

Purpose Previous research tends to study various sustainable management practices (SMPs) in isolation, leading to inconsistent conclusions about the effect of SMP on firm profit. This research aims to advance the understanding of the linkage between SMP configurations and financial performance by revealing the dynamics of substitutions and complementarities among these SMPs. Design/methodology/approach The authors conducted an exploratory study based on the theoretical lens of the practice-based view (PBV). An integrated text-mining approach is used in gathering data from 302 corporate reports of cross-sectional firms, followed by a fuzzy-set qualitative comparative analysis method to examine the configurations of SMPs in achieving high and low financial performance. Findings The findings show that green innovation practices (GIP) and cleaner production practices work together as complements for small firms in configurations associated with high profits. However, large companies in high-competition industries often adopt a minimalist configuration focusing on product quality and safety management (PQSM). PQSM and GIP are complements in configuration for small firms in high-competition industries, while they work together as substitutes for small firms in low-competition industries. Practical implications This research provides managers with a new way of thinking to support decision-making in sustainable operations management. The complementary and substitutive view of management practice can guide operations managers to design and implement effective practice configurations to achieve synergistic effects. Originality/value This is among the first studies to reveal the complex relationship between various configurations of SMPs and firm performance. In addition, this research offers new insights into previously inconsistent findings from a PBV and configuration perspective.

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