Driving Toward Sustainable Development Goals (SDGs) in the Ready-Made Garments (RMGs) Sector: The Role of Digital Capabilities and Operational Transparency

Abstract

In today's digital transformation era, the importance of developing dynamic capabilities has significantly increased. However, the literature has not fully explored the significance of dynamic capabilities in sustainable development. Hence, in this article, we examine the impact of digital capabilities (DCs) and operational transparency (OT) on achieving sustainable development goals (SDGs). Drawing upon the dynamic capability view (DCV), we analyze the impact of DC on decent work conditions (DWCs), reduced inequalities (RIs), responsible consumption and production (RCP), and reduced carbon footprint (RCF) through the mediating effect of OT. We conduct 14 semistructured interviews to understand how developing dynamic capabilities can drive organizations toward achieving SDGs. Subsequently, we apply a cross-sectional survey to gather data from 257 respondents in the Bangladeshi ready-made garments industry. We use the variance-based structural equation modeling technique to test our research hypotheses. Our findings suggest that DC significantly enhances OT and that OT can positively impact DWC, RI, RCP, and RCF. Additionally, we find that OT partially mediates the link between DC and SDGs. Our study provides valuable insights into the DCV, offering a better theoretical understanding of the role of DC in enhancing OT to achieve SDGs. It can also encourage firms to take advantage of emerging digital technologies and the trend toward digitalization by demonstrating a strong commitment to adopting new advanced technologies, developing dynamic capabilities, and striving to achieve SDGs.