Examining the relationship between organizational capabilities and business sustainability among start-ups: a dynamic capability view

Abstract

Purpose

Start-ups require a competitive advantage to integrate sustainable practices and develop organizational capabilities to thrive in dynamic business environments. However, implementation of these practices presents several ethical challenges. This study aims to quantify the influence of organizational capabilities (information technology capabilities and organizational virtues) on start-ups' competitive advantage and readiness to implement environmental, social and governance practices.

Design/methodology/approach

This study employed a survey design, and data were collected from 320 start-up founders and/or managers in India. The data were analyzed using Smart PLS 4.0.

Findings

The findings suggest that organizational capabilities, including information technology capabilities and organizational virtues, play an important role in enhancing start-ups' competitive advantage and readiness to implement sustainable practices. Dynamic capability mediates these relationships, while entrepreneurial orientation moderates the relationship between organizational virtues and dynamic capability.

Practical implications

This study has significant implications for organizations implementing sustainable business practices through the development and nurturance of organizational virtues and information technology capabilities. The study is also useful for leaders, managers and entrepreneurs in training and development, managing tradeoffs and maintaining important organizational capabilities to establish a balance between people’s concerns, the environment and profits.

Originality/value

Few studies have examined the role of organizational capabilities, sustainable business practices and competitive advantage in the context of start-ups. This study contributes to the literature on sustainable entrepreneurship and organizational capabilities.