Leaders’ Support of Sustainable Innovation and Business Sustainability in Developing Countries: Evidence from Small and Medium Food Processing Enterprises

Mukhamad Najib (), Abdul Aziz Abdul Rahman, Abror Abror, Riani Rachmawati, Megawati Simanjuntak, Prita Prasetya, Dwi Suhartanto and Farah Fahma
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Abdul Aziz Abdul Rahman: College of Business Administration, Kingdom University, Riffa 40434, Bahrain
Abror Abror: Department of Management, Universitas Negeri Padang, Padang 25132, Indonesia
Riani Rachmawati: Department of Management, Universitas Indonesia, Depok 10430, Indonesia
Megawati Simanjuntak: Department of Family and Consumer Science, IPB University, Bogor 16680, Indonesia
Prita Prasetya: School of Business and Economics, Universitas Prasetiya Mulya, Jakarta 12430, Indonesia
Dwi Suhartanto: Department of Business Administration, Politeknik Negeri Bandung, Bandung 40012, Indonesia
Farah Fahma: Department of Agroindustrial Technology, IPB University, Bogor 16680, Indonesia

Sustainability, 2021, vol. 13, issue 23, 1-19

Abstract: Business sustainability has become obligatory in small and medium enterprises (SMEs). To remain competitive and survive in the market, sustainable innovation is the key. However, SMEs, especially in food processing in emerging markets, still lack resources to become more innovative. The objective of the article is to analyze factors affecting sustainable innovation in food processing SMEs and their impact on business sustainability. Cross-sectional quantitative research builds on a sample of 157 owners of food processing SMEs in Indonesia. The results show that organizational sustainable innovation in food processing SMEs depends on employees’ innovation potential and an organization’s innovation culture; meanwhile, both variables are influenced by leaders’ support of sustainable innovation. Promisingly, organizational sustainable innovation increases business sustainability. Thus, our research highlights the important role of leaders’ support in achieving organizational sustainable innovation and, finally, long term business success. Furthermore, this study uncovers the underlying mediatory mechanisms, which deepen our theoretical understanding and guide practitioners with a concise and comprehensive framework for sustainable innovation in SMEs.

Keywords: sustainability; innovation; leader’s support; employee capability; SMEs; developing countries (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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