Article2025

How organizational rationale drives sustainable performance: the roles of green culture and environmental regulations

Zahid Sarwar · Zhihong Song · Syed Tauseef Ali · Muhammad Asif Khan · Farman Ali

6 citations0/0 files storedSustainability Accounting Management and Policy Journal

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Environmental Sustainability in Business Corporate Social Responsibility Reporting Sustainability and Innovation in Business

Abstract

Purpose This paper aims to examine how organizational rationale for sustainability (ORS) influences sustainable development performance. It further examines how green organizational culture and environmental regulations shape this relationship. Addressing limited understanding of these dynamics, this study advances theory and practice. Design/methodology/approach Grounded in the natural resource-based view, this study develops and validates a second-order model using structural equation modeling, based on 417 matched-pair responses from 600 Chinese manufacturing firms. A total of 1,200 questionnaires were distributed (two per firm), supporting a rigorous matched-pair data collection process that enhances the reliability and validity of the findings. Findings The findings demonstrate that ORS significantly enhances sustainable development performance. Furthermore, they unveil that green organizational culture acts as a key mediating mechanism, while both green organizational culture and environmental regulations strengthen the relationship between ORS and sustainable development performance. Practical implications The empirical findings provide actionable insights for managers seeking to embed green initiatives and enhance sustainable development performance. Social implications Organizations can drive societal legitimacy through strengthening ORS, cultivating green organizational culture and complying with environmental regulations. Originality/value Unlike prior research, this study links ORS to sustainable development performance. It also introduces green organizational culture and environmental regulations in this relationship. In addition, it offers a significant contextual novelty by validating a second-order model within the Chinese context, a setting of profound global industrial significance.

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References

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